Concessions
plan on holdHawaiian Airlines trustee Joshua
Gotbaum, faced with a competing
reorganization bid, is taking another
look at the issue of union givebacks
Hawaiian Airlines trustee Joshua Gotbaum has put his request for $11.2 million in labor concessions on hold in the wake of a competing reorganization plan that doesn't include any givebacks.
Gotbaum, who caused a ripple among union members when he unveiled in his business plan last month that he was seeking employee concessions, is now reevaluating that part of his plan, said Hawaiian spokesman Keoni Wagner, who described the concession request as being in "abeyance."
The reorganization plan filed on Feb. 10 by Corporate Recovery Group LLC and Boeing Capital Corp. included a $30 million cash infusion by CRG for 90 percent of the company and no employee givebacks. A year ago, then-Hawaiian Chief Executive John Adams, who has since been ousted for alleged financial irregularities, got more than $15 million in labor concessions from the airline's employees.
Gotbaum had been seeking $4.8 million from the Air Line Pilots Association, $3.8 million from the Association of Flight Attendants and $1.5 million from the International Association of Machinists. He also was seeking $1.2 million in concessions from noncontract employees.
"The labor part of the business plan is being set aside for the time being while he evaluates the CRG proposal and any others that may follow it," Wagner said. "It's (Gotbaum's) obligation to suggest the best possible plan to the court, so while other plans are being proposed, he's obligated to carefully review and evaluate each one."
IAM spokesman Randy Kauhane said the CRG-Boeing proposal gave the employees new hope that they could avoid further concessions.
"We were going to start (talking about concessions with management) and then CRG made the announcement and everything came to a screeching halt," said Kauhane, assistant general chairman of IAM District Lodge 141, which represents customer service agents, reservation agents, baggage handlers and clerical workers.
Hawaiian, which filed for Chapter 11 reorganization on March 21, is fast approaching its one-year anniversary of being in bankruptcy. The airline, which industry experts say was in far worse shape a decade ago when it last filed for Chapter 11, emerged from the previous reorganization in less than a year. It filed on Sept. 21, 1993, and emerged on Sept. 12, 1994.
Meanwhile, Wagner said other parts of Gotbaum's business plan are still going "full speed ahead" and the company plans to announce airfares to Sydney, Australia, later this week. The airline, which is still awaiting all the required government approvals, said in January that it intends to begin nonstop flights four times a week on May 17.
Gotbaum, who has not yet filed a reorganization plan, has been contemplating teaming up with the unsecured creditors' committee and asking U.S. Bankruptcy Judge Robert Faris for a bidding process that would allow them to pick the best offer for reorganizing the company.
The trustee and creditors' committee would then team up with the winning bidder and present a reorganization plan to creditors for a vote, sources said.
