Aloha seeks quick
OK on labor pacts

The airline wants to implement
newly ratified contracts so it can
immediately save $357,000

In a move that could indicate the seriousness of Aloha Airlines' financial position, the company has asked federal Bankruptcy Court for an expedited hearing Tuesday so that the airline can immediately implement cost savings from newly ratified contracts it has reached with its clerical workers and flight attendants.

Aloha said in its motion filed yesterday that it will realize monthly cash savings of $357,000 in concessions from the two labor agreements. Aloha said productivity changes from the two unions will save the airline thousands of dollars more on a monthly basis.

The company said it wants to implement the agreed-to savings for the pay period of Feb. 1-15. Aloha said if a decision is delayed until the next pay period the airline would not achieve an additional cost savings of $178,000 from those two contracts.

"These additional savings are vital to (Aloha's) continued efforts to restructure (its) operating cost structure, a process that should not be delayed even for one pay period," the motion said.

The Association of Flight Attendants' Aloha unit, which represents 444 members, ratified a contract yesterday that reduces the staffing level on trans-Pacific flights on its Boeing 737-700s from four to the required minimum of three.

The new contract is retroactive to Feb. 1 and runs through Jan. 1, 2007.

"We recognize that our participation is necessary to secure a future for the airline," said Peggy Gordon, president of the Aloha Airlines master executive council of the AFA.

Last week, the International Association of Machinists' clerical workers ratified their contract. Both unions took 10 percent pay cuts.

Aloha announced yesterday that it has reached a tentative agreement on a new five-year agreement with its mechanics that is subject to a ratification vote. The final contract language with Aloha's pilots also is being worked out.

In the Hawaiian Airlines bankruptcy, none of the agreements ratified by Hawaiian Airlines' unions go into effect until all unions have reached agreements. Three of six union groups for Hawaiian have ratified.

Ted Pettit, the local counsel for Aloha's unsecured creditors' committee, said Aloha was making a smart decision by seeking to have the cost cuts implemented right away.

"Every airline in bankruptcy should take immediate steps to reduce its costs," said Pettit, an attorney with Case Bigelow & Lombardi. "I see it as a very positive development to have a significant agreement with the labor unions so early in the case."

Hawaiian didn't receive a ratified agreement with any of its labor groups until more than a year and a half after it filed for bankruptcy.

Aloha sought Chapter 11 reorganization on Dec. 30, 2004.