Aloha Air’s chief The merger of Hawaiian and Aloha airlines is not a "bailout" of Aloha, which is doing better financially than Hawaiian, according to Glenn R. Zander, president and chief executive officer of Aloha.
defends carrier’s
financial health
Zander dismisses talk that the
merger with Hawaiian is a life ringBy Russ Lynch
rlynch@starbulletin.comZander defended the airline earlier this week in a letter to Aloha employees.
"Let me assure you that the principals in Smith Management, the controlling shareholders in Hawaiian Airlines, did not enter into this agreement in order to be charitable to Aloha Airlines," Zander said in the letter. "They are not interested in saving Aloha Airlines. If they thought Aloha Airlines would go out of business without the benefit of this deal, they never would have agreed to a merger of equals. The same is true on our side."
Paul Casey, Hawaiian's vice chairman and chief executive officer, declined to comment. So did Greg Brenneman, the former Continental Airlines executive who is putting together the merger through his own company, Turnworks.
A local spokeswoman for Brenneman, Alison Russell, said yesterday that Brenneman will not comment on any communications between the top executives of the airlines and their employees.
Zander said in his note to employees that Hawaiian lost $39.7 million from 1998 through 2000, while Aloha lost $3.6 million over the same period. Those figures check with public disclosures by the airlines.
In the first nine months of 2001, with millions of dollars of federal compensation for post-Sept. 11 losses, Hawaiian had a profit of $15.2 million. In the same period, Aloha had a profit of $925,000, according to its filings at the Department of Transportation in Washington.
Zander said this week that those 2001 numbers may change because, as the merger approaches, family-owned Aloha has been redoing its accounting to bring its figures in line with those required by the Securities and Exchange Commission in filings by public companies.
Both airlines' owners have agreed to a merger, deciding that the time has come when losses make cooperation better than competition, particularly because of Sept. 11's disastrous effect on worldwide air travel.
But Zander, as head of privately owned Aloha AirGroup Inc., decided to respond to employees because of stories in local and national media that said it was his airline at risk of going under.
The two airlines are being put together mostly from the efforts of Brenneman, who will become head of the combined airline. Zander and Casey will lose their jobs if the merger takes place. It has months of regulatory approvals to get through before it can happen.
"While I am not thrilled with Aloha's results over this period (the last three years), the assertion that Hawaiian is entering into this transaction to 'bail out' Aloha is simply not true," Zander said.
"Aloha and Hawaiian are both proud companies who have competed in this marketplace for over half a century. The market has changed and we both need to adapt. This merger agreement is the right answer for both companies, an agreement that both managements and owner groups came to following Sept. 11," Zander told employees.
Meanwhile, management of the two airlines are talking about merger details with Brenneman and each other, discussions that could not legally have happened before they agreed to merge.
Aloha and Hawaiian compete head to head in the interisland market, and both have launched Hawaii-mainland services in recent years.