Hawaiian Air nearing
pact on jet leasesThe carrier is close to
a deal with 2 lessors, but
is still talking with a third
Hawaiian Airlines is getting close to finalizing deals with two of its three aircraft lessors.
Chief Financial Officer Christine Deister testified yesterday during a creditors' meeting that Hawaiian has "essentially reached terms" with lessor International Lease Finance Corp.
Deister, who announced the progress in a U.S. Trustee's hearing in Honolulu, also said the airline was close to reaching a new leasing pact with Ansett Worldwide. She said the airline has reached agreement on general lease terms with Ansett but there are still matters to be discussed before a formal agreement can be finalized. Deister said the airline continues to negotiate with Boeing Capital Corp.
Hawaiian filed for Chapter 11 reorganization bankruptcy March 21 after it was unable to renegotiate leases with its three lessors. Ten days later, Boeing Capital filed a motion requesting a trustee be appointed lead the carrier through reorganization. Hawaiian management has opposed the motion.
ILFC, based in Century City, Calif., leases four Boeing 767-300ERs to Hawaiian. Boeing Capital, the financing arm of Boeing Co., leases 13 717-200 aircraft and three 767s while New York-based Ansett leases seven 767s. Hawaiian uses the 717s on its interisland routes while the 767s are used on its transpacific routes.
ILFC President John Plueger did not return a call for comment.
Hawaiian's seven-member unsecured creditors' committee filed a response yesterday requesting it be given until Friday to decide whether to support Boeing Capital or Hawaiian's management on the trustee issue.
The committee was supposed to decide yesterday, but said it needed more time in light of a six-hour meeting with Hawaiian management Monday in Los Angeles.
"I think the committee's position would be influential with the court," said Curtis Ching, a trial attorney with the U.S. Trustee's Office.
If Bankruptcy Court Judge Robert Faris rules in favor of a trustee, then the U.S. Trustee's Office would consult with Boeing Capital, Hawaiian Airlines and the creditors' committee about possible candidates. Ultimately, though, the decision would be made by the Trustee's Office.
In yesterday's creditors' meeting, Deister acknowledged progress was being made in restructuring the aircraft leases but said it was too early in the reorganization process to talk about the company's overall plan. She also said the company has been current with employees' medical and dental benefits but admitted many of the airline's critical vendors who Hawaiian received permission in first-day motions to pay still have not been paid.
About 20 people -- many of them creditors -- attended yesterday's meeting. Only two creditors asked questions and in both cases they related to personnel issues. One involved workers' compensation and the other wrongful termination.
The meeting was continued until 10 a.m. May 23 so that creditors can examine financial information that Hawaiian is due to release Monday.
That data will include an update on Hawaiian's financial affairs as well as its assets and liabilities.
Hawaiian Airlines