Hawaiian Air may cancel jet order
Hawaiian Airlines said yesterday it may cancel a $4.4 billion deal to purchase up to 24 new aircraft because of a standoff with pilots over the terms of the agreement.
The deal for the Airbus A330 and A350 jets, announced in late November, was expected to be finalized this week to meet a deadline set by Airbus and Rolls-Royce, the companies manufacturing the aircraft. Pilots say terms need to be approved by them.
"They went out and they negotiated this deal and think we should just be jumping up and down for joy saying, 'Thank you very much for getting these airplanes for us,' and we'll go fly them," said Capt. Eric Sampson, chairman of the Hawaiian Airlines unit of the Air Lines Pilots Association. "The collective-bargaining agreement doesn't let them do that. This has to be a negotiation."
The deal would result in the complete overhaul of Hawaiian's long-haul fleet and allow the carrier to fly nonstop from Hawaii to Asia, Australasia, the Americas and Europe. It represents the largest single investment in Hawaiian's 78-year history.
Stock analyst Nick Capuano, who covers the airline for Los Angeles-based Imperial Capital LLC, said the Airbus deal is a bonus, not a necessity, for Hawaiian.
"It is certainly not necessary in terms of the health of the company," he said. "If they can't come to an agreement with the pilots, it's better that they not do it."
Pilots are asking for an adjustment to their sick-leave accrual, improved rest facilities on long-haul flights and the end to contract negotiations that have dragged on for more than a year. Sampson said the pilots association provided several proposals this week and spent yesterday in discussions with Hawaiian.
Hawaiian spokesman Keoni Wagner said the company won't comment on the ongoing negotiations.
"We certainly can't commit our company to a future it can't afford, and we felt an obligation to warn the financial markets today that we have reached a point in negotiations with our pilots that suggests we may not be able to move forward with our fleet plan," he said in an e-mailed statement.
Hawaiian's flight attendants reached a contract agreement with the airline late Wednesday. Sharon Soper, president of the Hawaiian Airlines unit of the Association of Flight Attendants, declined to discuss terms of the agreement because it will remain tentative until a deal is reached with the pilots association.
"The whole deal is all contingent upon everyone reaching an agreement," she said. "It is specific to working rules and conditions surrounding these new aircraft."
If the deal falls through, Hawaiian may be forced to renegotiate leases coming due in the next two years on four planes it was planning to replace. Hawaiian's long-haul fleet currently consists of 18 Boeing 767-300s.
The agreement calls for Hawaiian to acquire six 305-seat A330-200s and six 322-seat A350XWB-800s. Hawaiian also has the purchase rights to buy an additional six of each aircraft. The first A330-200 would be due to be delivered to Hawaiian in 2012, with the first A350XWB-800 scheduled for delivery in 2017.