Judge urges Aloha, unions to make deal
The bankrupt carrier is seeking to impose concessions on pilots and flight attendants
A federal bankruptcy judge urged Aloha Airlines and its pilots and flight attendants yesterday to reach an out-of-court agreement over contract concessions that the bankrupt airline says it needs to survive.
"It sounds like a lot of talking has been going on over the weekend, and I'm very glad to hear about it," said U.S. Bankruptcy Judge Robert Faris.
"If there's a (court-imposed) resolution, then nobody wins."
Faris' comments concluded a second full day of testimony on a request by Aloha to dissolve collective-bargaining agreements with the pilots and flight attendants.
The move would also terminate the pilots' defined-benefit pension plan and medical benefits for retired pilots.
The pilots and flight attendants say they have given repeated concessions to Aloha and that the givebacks have enabled the carrier to begin turning an operating profit, an assertion corroborated by financial statements Aloha has submitted in court.
In exchange for previous concessions, Aloha management promised the pilots and flight attendants it would not seek to terminate their contracts in bankruptcy court.
The fact that the airline is now in court doing just that is a clear violation of the airline's promise, the pilots and flight attendants say.
Aloha management says much has changed since it entered the contracts: Rising fuel prices have increased operating expenses, an anxious lender has required the airline to find an investor quickly and no investor has been willing to invest without significant changes to the contracts.
During yesterday's hearing, lawyers for the two sides delved into the details of the employees' contracts, including the work rules that Aloha wants to change.
But by the end of the day, it had become clear that what was meant to be a two-day hearing could last considerably longer. Faris scheduled up to three more days of hearings next week, beginning on Tuesday.
In the meantime, Faris urged the sides to settle, saying that a decision imposed by the court would be a loss for everyone involved.
"No matter who seems to have won," Faris said, "nobody wins."