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The Other Side
 John Adams |
Don’t disparage airline’s
success -- build on itHawaiian Airlines' bankruptcy trustee Josh Gotbaum's opinion piece in the Jan. 4 Star-Bulletin contained inaccuracies about the condition of Hawaiian Airlines, and provided a dire prognosis for Hawaiian's future if its employees do not "face the facts." Gotbaum's statements do a disservice to Hawaiians' employees. As the CEO who led the company's turnaround and as a continual target of Gotbaum's criticism, I must stand up for what we accomplished during the last several years.
Hawaiian Airlines now is within short grasp of realizing a sound and bright future. While there are several steps to complete the restructuring process we began before he arrived, Gotbaum needs to build on, not disparage, our airline's success.
Gotbaum is quite critical of the restructuring steps we took. He claims that, under my management, Hawaiian brought in "an expensive new fleet, even though its routes and costs meant it couldn't afford them." To the contrary, after careful analysis we determined that we couldn't afford not to have new planes and to open new routes. Our decision in large part was based on the input and advice of outside consultants -- the very same consultants Gotbaum has brought on for around $100,000 per month (that figure is considerably more than we were charged).
Obtaining more efficient airplanes was one of several structural changes that, by March 2003, had resulted in significant reductions in basic operating expenses. Maintenance costs were down 49 percent. Fuel costs, which would have gone through the roof with Hawaiian's gas-guzzling older planes, are manageable. Our team's hard work and the foresight to bring in new airplanes played a large role in Hawaiian's reversing its 2002 losses and positioning itself for a bright future.
Hawaiian is indeed bearing the fruits of our efforts. In January 1996 the airline was literally hours away from liquidation when other parties and I invested new capital in the airline. This was followed by six years of reinvesting the significant cash generated by the airline in the company's infrastructure, coupled with the substantial sacrifices and hard work by Hawaiian's dedicated employees.
Our efforts have paid off. Last month Hawaiian posted its eighth consecutive month of profitability and had an operating profit for the year of $46.6 million (even before an Emergency Wartime Act credit). The carrier has been named No. 1 domestic carrier by Conde Nast magazine and is the nation's top-rated airline for on-time performance. These outcomes did not happen overnight. Yet Gotbaum wants those around him to believe our past decisions were dreadful and the sky is falling on Hawaiian Airlines' future.
Gotbaum's modus operandi, negotiation by disparagement and alarm, runs the risk of undoing what Hawaiian Airlines has accomplished. He should instead build on the foundation we have laid. Market conditions have changed since we entered into the aircraft leases, and their restructuring needs to be completed. Indeed, Hawaiian needs to keep examining labor productivity and efficiency, and to resolve the underfunding of the pilots' pension plan.
These matters need to be dealt with through respect and consensus, not by dropping on the table a plan that will leave people "screaming," as Gotbaum promises he will do. Hawaiian Airlines is in the service business, and it cannot afford to alienate employees who have direct contact with its customers. It is not the way to treat people, especially in Hawaii.
Hawaii residents should be concerned that Gotbaum apparently intends to make significant operational changes, such as the consolidation of airport operations. He also says he intends to "disappear" as soon as the airline is brought out of bankruptcy. Operational decisions ought to be made by the management team that will remain at the airline and who will assume responsibility for its implementation and success, not by someone who will make the decisions and then disappear.
Gotbaum should focus on bringing Hawaiian Airlines out of what is a very simple bankruptcy, and he should do so in a way that demonstrates respect for this venerable airline's employees and vendors.
John Adams is the chairman of Hawaiian Holdings Inc., Hawaiian Airlines' parent company. Last May a bankruptcy judge, citing alleged financial irregularities, removed Adams as chairman and CEO of the airline. Adams says he was unjustly removed.