Hawaiian Airlines
may seek to force
concessions on pilots

The company also plans
to request to delay a key
Bankruptcy Court hearing

Hawaiian Airlines, which has reached labor agreements with five of six union groups, may file a motion as early as today asking the federal Bankruptcy Court to impose a contract on its pilots.

The company also plans to request that the court postpone a reorganization plan hearing next Tuesday that was to have determined whether the company can emerge from bankruptcy. Hawaiian officials confirmed that the hearing will be rescheduled for Feb. 8 to give the airline more time to try to work out an agreement with its pilots.

Hawaiian Air Hawaiian Airlines trustee Joshua Gotbaum declined to comment on the motion or any other aspect of negotiations with the pilots.

However, people familiar with the situation said the filing of such a motion was imminent. Minutes of a teleconference call held Friday between the pilots union, attorneys for the trustee and the unsecured creditors committee also said that Hawaiian may file the motion against its pilots as early as today.

Hawaiian has been unable to come to terms with the Air Line Pilots Association unit that represents 304 Hawaiian Airlines pilots. The key issues involve retirement, disability, health care and compensation. Hearing dates on the motion -- if it gets filed -- have been scheduled for Feb. 14 and 15. If those hearings are held, the date to confirm the reorganization plan would need to be pushed back again.

No discussions between the two sides were scheduled yesterday.

Jim Giddings, negotiating committee chairman for ALPA's Hawaiian Airlines unit, said the pilots don't feel any additional pressure to strike a deal because of agreements reached with the other unions.

"You can look at it any different way," he said. "I think (with the motion) or not, we take our contract negotiations very seriously and it's important for us that we reach a fair agreement that reflects the current situation with the company."

Giddings said he didn't know the particulars of other unions' contracts but he was "glad that they were able to reach agreements that were fair."

Reaching an agreement with the pilots union is paramount for the airline to emerge from bankruptcy. No union contracts go into effect unless agreements are reached with all unions.

Giddings said he believes the two sides can reach an agreement without putting the matter in the hands of Bankruptcy Judge Robert Faris.

"We have told the company that we're totally willing to negotiate and I think a negotiated settlement is the best way to go," Giddings said. "They told us they want to negotiate and I think there is a desire on both sides to continue negotiating. I thing it's certainly possible we could reach an agreement. I don't think the differences are insurmountable."

For Faris to impose contract changes on the pilots, the airline would have to prove that the changes are necessary for the company to reorganize and that the changes are equitable.

"If the creditors are getting 100 cents on the dollar and the shareholders get to keep their value and the employees take big concessions, then that's not fair and equitable," Giddings said.

Earlier this month, a bankruptcy judge in Chicago rejected a cost-cutting agreement between United Airlines and its pilots because he said it essentially would give the pilots veto power over other labor groups' negotiations with the airline. The pilots union would have been able to terminate its agreement and be paid $28 million a month if United continued pensions for other unions or failed to win concessions from them.

A reorganization plan for Hawaiian proposed by Gotbaum, the unsecured creditors' committee and investment group RC Aviation LLC was scheduled to be presented to Faris for confirmation at next Tuesday's hearing.

With that hearing postponed, the door is now open for a competing group to have a hearing on its own plan next Tuesday to determine whether the plan is feasible enough to be sent to creditors. The group, which claims it has $500 million available and will put up to $300 million into the airline, comprises the Hawaiian Reorganization Committee LLC, Hawaiian Investment Partners Group LLC and Hawaiian Airlines pilot Robert Konop.

"I think so far for Hawaiian's bankruptcy that competition in terms of potential reorganization plans has been a good thing for the airline and for the ultimate plan for creditors and shareholders," Giddings said. "I don't see any reason why continued competition wouldn't continue to be a good thing for the airline."

Hawaiian Airlines

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