Aloha Airlines workers Unions representing some 3,000 employees at Aloha Airlines have agreed to an across-the-board pay cut that will trim $37 million in labor costs over three years, a move that will help the airline seal a pending federal loan guarantee, Aloha announced yesterday.
take cut in pay
Union concessions of $37 million
over 3 years will assure the
struggling airline’s loan guarantee
By Tim Ruel
truel@starbulletin.comThere will be no layoffs.
The tentative agreements will go through a ratification process, which will be completed by the middle of December, Aloha said.
Aloha received a conditional loan guarantee earlier this month from the Air Transportation Stabilization Board which would cover $45 million in financing Aloha has arranged from the private sector.
In the event of a default, the federal government would repay $40.5 million.
"We are grateful for the cooperation we have been getting from employees, and we are moving expeditiously to meet all of the conditions set forth by the ATSB," said Glenn Zander, president and chief executive of Aloha.
Aloha, stung by Sept. 11, 2001, has had a net loss of $13.2 million in the first nine months of this year, according to filings with the U.S. Department of Transportation.
The Honolulu-based carrier has already received $8.5 million under a federal grant program.
Hawaiian Airlines, which lost $43.2 million in the first nine months of this year, has not applied for a loan guarantee, though it has received $31 million in grant money.
Aloha reached the agreements with the Air Line Pilots Association, Association of Flight Attendants, Transport Workers Union and the International Association of Machinists and Aerospace Workers Union. Aloha spokesman Stu Glauberman declined to provide details of the impact on employee pay.
The airline is continuing to talk with lenders and aircraft leasing companies about ways to reduce costs, Glauberman said.
Aloha also plans to reduce its interisland service by about 15 percent next month as part of an arrangement with Hawaiian.
