Honolulu Star-Bulletin Business /2005/02/25/

[ FAST FACTS HAWAII ]

Hawaiian Airlines tax debacle is over

Bankruptcy Judge Robert Faris ruled yesterday that Hawaiian Airlines correctly calculated the amount of tax losses available to the company in 2001, closing the chapter on a $128.9 million Internal Revenue Service claim against the carrier.

Faris' decision came on the heels of a ruling last month in which he said Hawaiian had to pay $23.2 million in back taxes and interest for fuel credits the airline took in 2001, 2002 and the first half of 2003. Faris said, however, there was enough ambiguity in federal laws that Hawaiian should not have to pay a $40.5 million penalty sought by the IRS. Hawaiian had taken the credits on the advice of an airline tax consultant.

Additional amounts that Hawaiian may have to pay the IRS or be able to offset will be determined by future company earnings.

Faris also approved a $3.6 million settlement between Hawaiian and its former Chief Executive John Adams and his affiliated companies over funds diverted from the carrier under Adams' watch for consulting agreements and compensation to insiders and their interests.

Hawaiian Air's planes 85.1% full

Hawaiian Airlines again led the nation in filling seats, with a January load factor of 85.1 percent, besting JetBlue Airways with 83.7 percent.

Hawaiian's load factor improved 4.8 percentage points from a year earlier, and said its miles flown by paying passengers rose 11 percent during the same time.

Northwest, American hike fares

Northwest Airlines Corp., the fourth-largest airline, raised fares by as much as $20 on round-trip flights in the U.S. and Canada, and American Airlines put a $10 increase on flights in about one-fourth of its U.S. markets.

Northwest today raised fares $5 each way on flights of less than 1,000 miles and $10 on longer trips because of higher fuel costs and the start of the busy U.S. spring travel period, spokesman Kurt Ebenhoch said in an interview. AMR Corp.'s American, of Fort Worth, Texas, earlier yesterday increased fares by $5 each way, said spokesman Tim Wagner.

U.S. lost $129B to tax shelters

Forty percent of Fortune 500 companies and more than 10,000 individuals used tax shelters that deprived the U.S. government of about $129 billion in revenue from 1998 to 2003, according to a congressional study released yesterday.

The Government Accountability Office said 207 companies in the Fortune 500 bought tax shelters from accounting firms or obtained them from their auditor. The agency, Congress's investigative arm, concluded that 10,300 individuals also used shelters, most purchased from accounting firms. The report doesn't identify the companies or people being targeted and makes no recommendations for curbing the use of shelters.

Michigan Sen. Carl Levin, the senior Democrat on the Senate Permanent Subcommittee on Investigations who ordered the probe, said the GAO's findings ratify recommendations by the Public Company Accounting Oversight Board that new rules be enacted to limit the ability of accounting firms to promote shelters that serve no other purpose than to avoid taxes.

"Today's GAO report provides further evidence of accounting firm involvement in tax shelters and why the new rules are needed," Levin said in a statement.

[HAWAII INC.]

PROMOTIONS

» American Pacific Insurance Co., an AIG Hawaii subsidiary, has promoted Phillip Ogata and Frances Obata to assistant vice presidents. In their new positions, Ogata and Obata will serve as company officers. Ogata previously worked for HIH America Insurance Company of Hawaii Inc. Obata is a 25 year veteran of claims and workplace injury management.

» Certified Management Inc. has appointed Doug Mattos business development vice president. He will be responsible for overseeing all aspects of sales and marketing for the company. He began working for the company as a property manager.

» The Westin Maui Resort & Spa has hired Ryan Luckey as the restaurant Tropica's chef du cuisine. He will be responsible for shaping the menu and culinary direction of the restaurant. He previously served as the Sheraton Maui Resort sous chef.

» Hawaiian Host Inc. has promoted Sara Muraoka to marketing director, Jeanne Hiroshige to human resources director and Joel Corpuz to logistics manager. Muraoka will be responsible for marketing, advertising, branding and public relations for the company. Hiroshige will be responsible for all areas of personnel administration and risk management, ranging from employment, employee benefits and personnel policies to employee training. Corpuz will be responsible for coordinating all activities of the warehouse and delivery department.

» Heide & Cook Ltd., a mechanical contractor and air conditioning service company, has promoted Ken Chijimatsu to service sales manager. He will be responsible for managing sales engineers and preparing proposals for new business development. He has worked for the company for 35 years.

» Cingular Wireless has appointed Ray Vigil as the Hawaii area retail sales director. He will be responsible for wireless sales and operation in the consumer retail channel for Hawaii. He previously served as the company's indirect retail sales manager in Los Angeles.