Hawaiian Air forges
2 more labor pacts

The carrier's pilots remain
the only group with which
the airline must reach a deal
to get out of bankruptcy

Hawaiian Airlines took a big step forward yesterday in its labor negotiations by reaching new contract agreements with its flight attendants and network engineers.

The deals with the two unions leave the pilots as the only remaining group needed to agree to a new contract. The company is attempting to negotiate agreements with all its unions before a Jan. 25 confirmation hearing that will determine whether the airline can emerge from reorganization.

Reaching an accord with the pilots has proved to be the most difficult of all the negotiations because of philosophical differences between the two sides about what contract changes are necessary. Earlier this week, the Hawaiian Airlines unit of the Air Line Pilots Association, which represents 304 pilots, filed a motion in federal Bankruptcy Court objecting to the company's bankruptcy reorganization plan.

Hawaiian has now reached labor agreements with five groups representing 89 percent of the company's 2,878 unionized workers. Earlier agreements were reached with dispatchers, clerical workers and mechanics.

The latest agreements cover 824 members of the Association of Flight Attendants and the eight members of the Network Engineering Group and still need to be ratified by union members. None of the company's agreements will go into effect until similar agreements are reached with all unions.

Hawaiian Airlines trustee Joshua Gotbaum said the agreements reached so far recognize the company's competitive needs. He said he hopes the pilots will come on board as well.

"Since all of our other unions have now negotiated agreements they think are fair, we hope the pilots will, too," Gotbaum said.

But Jim Giddings, negotiating committee chairman for Hawaiian's pilots union, said earlier this week that the company's management has failed to show any need for its members to accept more concessions on top of the $8 million it agreed to last year.

"They are simply misusing bankruptcy to try and compel the employees to underwrite future business risks and to recover the costs of bankruptcy," Giddings said.

The company declined to provide any details on the latest agreements. But Sharon Soper, president of the AFA unit for Hawaiian, confirmed the contract was for three years.

She declined to provide additional information because the members had not been briefed yet.

"We got the best deal we could under the circumstances," Soper said.

In federal Bankruptcy Court yesterday, a competing group's attempt to get its reorganization plan put before creditors was dealt another delay.

Judge Robert Faris postponed a disclosure hearing to discuss the plan's structure after attorneys for Hawaiian Reorganization Committee LLC, Hawaiian Investment Partners Group LLC and Hawaiian Airlines pilot Robert Konop distributed an amended filing shortly after the hearing was scheduled to start.

The amended statement addressed some objections from a group comprised of Gotbaum, the unsecured creditors' committee and investors RC Aviation LLC.

The new hearing has been set for Jan. 25 and will follow a confirmation hearing on that same day that will determine whether a Gotbaum-backed reorganization plan is feasible to bring the company out of reorganization.

Faris said the trustee-backed plan already has "momentum" but that it's uncertain whether that plan will be confirmed.

Atlanta-based attorney Steven Kratsch, who represents the competing group, said the delay wasn't harmful since time constraints would have resulted in his group's plan being sent to creditors after the Jan. 25 hearing.

The main objection against the Hawaiian Reorganization Committee plan was that it didn't address where investors were getting their financing.

However, Kratsch said yesterday's amended disclosure statement demonstrated that the group has $500 million in a Wachovia Bank account that has been set aside by Delaware-based Hawaiian Airlines Joint Venture.

Kratsch told Faris that his group would like to go forward "as soon as practical" and said after the hearing that he didn't think the trustee-backed plan would be approved.

"But if it is, that's the end of the ball game," he said.