Hawaiian close
to deal with pilots,
union official says

A key set of hearings is
scheduled to start today
in Bankruptcy Court

The negotiating committee chairman for Hawaiian Airlines' pilots union said the company has made significant movement on a contract proposal and said the two sides may avert what promises to be a heated three-day showdown scheduled to begin this morning in federal Bankruptcy Court.

Hawaiian Airlines' officials and the local unit of the Air Line Pilots Association resumed negotiations yesterday afternoon after talks accelerated last week. The carrier filed a motion last month seeking legal authority to impose contract terms on the pilots, and hearings on the motion are scheduled to start today.

"If you had asked me a week ago, I would have said that it was almost certain that the hearing would go forward as scheduled," said Jim Giddings, ALPA's negotiating committee chairman. "Since then, the company has made some significant movement. At this point, the parties are negotiating, and I'm feeling that there is a chance that we will be able to settle our contract instead of going to court."

Hawaiian Airlines trustee Joshua Gotbaum said he was hopeful a resolution could be reached.

"Our goal remains to negotiate an agreement that serves both Hawaiian and its pilots," he said.

According to a motion filed by Hawaiian Airlines pilot Robert Konop, if Bankruptcy Judge Robert Faris were to give Hawaiian the green light to impose a contract, it would be the first time that a bankruptcy court has enforced a contract on a labor group when a company's creditors are to receive a 100 percent payout for their claims. Konop is part of a group that is proposing an alternative reorganization plan for Hawaiian "that rejects the concept of employee contract rejection," he said.

Gotbaum, the airline's unsecured creditors' committee and an investor group have sent their joint reorganization plan for Hawaiian to creditors and have a hearing set for Monday to have that plan confirmed by Faris. That hearing, however, likely will be rescheduled until the pilots' situation is rectified and Hawaiian's flight attendants ratify their contract.

The airline, which has ratified agreements with four of its six union groups, reached an agreement in principle late Friday on a new three-year contract with the Association of Flight Attendants. The contract still needs to be sent to members for a ratification vote that would extend past the Feb. 28 confirmation date. Hawaiian flight attendants previously failed to ratify an earlier tentative agreement by 20 votes.

If the confirmation hearing is postponed, that could open the door for the group that has an alternative reorganization plan to have its proposal brought before the judge to seek permission to send the plan to the airline's creditors.

Gotbaum, whose proposal for the airline is financed by an investor group of Ranch Capital LLC, said the competing plan for the carrier is not viable.

"The Ranch plan is a plan that was carefully negotiated and fully financed," Gotbaum said. "The so-called Hawaiian investors plan, by comparison, has yet to produce any evidence that they have a dime."