Aloha Airlines to ask court to throw out union contracts
Aloha Airlines, which earlier this year won concessions from each of its five labor groups, wants to ratchet up the pressure on its unions for more givebacks.
The bankrupt carrier said it intends to file a motion as early as today seeking court approval to reject collective-bargaining agreements with its unions and terminate their defined-benefit pension plans. Aloha plans to seek a new contract with more work-rule changes for its unionized employees, but no additional pay cuts.
The company has requested hearings in bankruptcy court on Oct. 28 and 31.
"We're optimistic we'll reach consensual agreement with our employee groups (before the hearing)," said David Banmiller, Aloha's chief executive and president.
Former Aloha pilot Steve Brenessel, who went on medical retirement in early January, called Aloha's move "outrageous" and said the pilots were going to fight it "every inch of the way."
"That was a totally unexpected filing," he said. "They had said they wanted to negotiate with the pilots and almost simultaneously they went to the court and filed it. (The pilots) used the analogy of being in a prison camp where the guard says, 'If you try to escape you'll be shot, but meanwhile I want to tell you you'll be executed in the morning.'"
Separately, financially strapped Aloha is to receive a $1.3 million payment to cover about half of the $2.5 million the carrier has said it is owed by now-defunct ground tour and transportation company Trans Hawaiian Services. Trans Hawaiian was bought in 2000 by its local competitor, Roberts Hawaii, then filed bankruptcy. Aloha was one of Trans Hawaiian's biggest creditors.
Aloha, which is aiming to leave Chapter 11 reorganization before the end of this year, has said one of the conditions of its new Los Angeles-based investors is that its unions' pension plans be terminated. Airlines around the country have been seeking to replace their workers' defined-benefit pensions with defined-contribution plans.
Aloha, which filed for bankruptcy at the end of last year, won concessions earlier this year from its pilots, flight attendants, mechanics, clerical workers and dispatchers, including 10 percent pay cuts and work-rule changes. The concessions also included the forgiveness of additional 10 percent wage snapbacks that the unions had agreed to after 9/11. In addition, the unions gave up 2 percent pay increases that they were due.
If the pension plans are terminated, affected employees would receive benefits -- some of them reduced -- by the federal agency that insures pensions. All of Aloha's unions except the Association of Flight Attendants have defined-benefit plans.
Brenessel, the former pilot, called the situation the "biggest crisis the pilots have ever faced" and said the company promised in negotiations earlier this year it wouldn't take such an action.
"If we don't accept their rules, there will be total radical destruction of the pilots' work rules, compensation, hourly pay, number of flight hours, pension plans, medical insurance, everything that's covered in the contract. ... It's a complete destruction of the whole structure of the relationship between management and employees," Brenessel said.