|
The Plane Truth
As Hawaiian Airlines prepares
to fly out of bankruptcy, it is
in talks to replace the four
aircraft it rejected earlier
Got planes?
Nearing its two-year anniversary in bankruptcy, Hawaiian Airlines can see the light at the end of the runway now.
And if the company emerges from reorganization as it hopes on March 31, it plans to pursue a growth strategy to make up for some of the opportunities it lost when it was trying to get its affairs in order.
To that extent, Hawaiian is actively engaged in discussions now for Boeing 767s and 717s to replace the four aircraft it shed less than two years ago when it was trying to lower its expenses.
So was it a mistake to get rid of the planes since Hawaiian had to pay damage claims for the lease rejections?
"We had to do what we had to do at the time," said Mark Dunkerley, president and chief operating officer of Hawaiian. "The company's condition was perilous and we can play endless what ifs. We're very pleased that the decision we made of going into bankruptcy helped contribute to the fact that we're coming out of bankruptcy in the good shape we are."
Although Dunkerley acknowledges the company is searching for new aircraft, he's unwilling to tip his hand on any of the details. But this much he admits: He's looking for more than one 767, the aircraft that Hawaiian uses on trans-Pacific routes, and seeking more than one 717, the type of plane used for interisland flights.
"(Acquiring additional aircraft is) obviously a very important decision for the management to decide and, ultimately, the board of directors to decide because we're talking about a very significant investment in the future," he said.
Hawaiian has 25 aircraft in its fleet now after rejecting the delivery of two 767s -- one from Boeing Capital Corp. and one from Ansett Worldwide -- and returning two 717s that it already was leasing from Boeing Capital.
Fourteen of Hawaiian's remaining planes are 767s while the other 11 are 717s. Hawaiian leases 14, or more than half of its planes, from Boeing Capital.
Boeing Capital officials didn't return several phone calls.
Hawaiian Airlines' Boeing 717s line the runway outside the company's interisland terminal. The Honolulu-based carrier also is seeking to expand its 767 fleet.
"And, it's critically important that we emerge from bankruptcy as soon as possible so that we can pursue opportunities as they arise," added Hershfield, who also is the managing member of majority investor RC Aviation LLC.
Dunkerley said that Hawaiian is looking at new markets on the West Coast as well as cities currently served by Hawaiian that have been infiltrated by other carriers.
"We'd like to be able to grow," he said. "It's very clear that over the last couple of years we've seen some of our competitors move into markets which were previously our own. We are very keen to be able to compete vigorously on those routes and to recapture some of those markets that we've seen diluted away from us."
Dunkerley cited as examples current Hawaiian destinations of Phoenix, Ariz.; San Diego; Sacramento, Calif; and Portland, Ore.
"We are looking to be able to grow back into these routes and take it to the competition," he said. "We continue to be on the lookout for new routes. We do believe that there's some additional growth to markets that Hawaiian doesn't serve on the West Coast."
Dunkerley also said Hawaiian has a very active plan to expand into Asia and reiterated the airline's recent disappointment about being passed over by the U.S. Department of Transportation for a direct route to Shanghai, China.
"Our enthusiasm for Asian expansion remains undimmed," he said.
Although Dunkerley won't talk about other possible mainland routes, the person who hired him in December 2002, former Hawaiian CEO John Adams, said last year that future Hawaiian destinations could include Atlanta, Boston, Chicago, Detroit, New York's John F. Kennedy International Airport, Philadelphia, St. Louis, Dulles (Washington) International Airport, Baltimore-Washington International Airport and Toronto, Canada.
Adams also said at the time that his management team, which included Dunkerley, studied such Asian destinations as Auckland, New Zealand; Hong Kong; Manila; Seoul; Shanghai; and Tokyo. Indeed, Hawaiian did apply for a Shanghai route at the end of last year.
Another city that had been on Adams' list, Sydney, Australia, was launched as a new nonstop route by Hawaiian last May.
Still, Giddings said any growth would be a positive sign.
"There's a good element to growth when it comes to flight crews because that's one way we can move up pilots," he said. "People can upgrade and we can bring people back from furlough. It's a great thing from our perspective.
"But, at the same time, we have this saying that it's not true until V1. That's the decision speed at takeoff that if anything goes wrong with the airplane and you've reached that speed, you can safely take off, deal with the problem in the air and come back and land, If you haven't reached that speed, you stop."
The only things standing between Hawaiian and confirmation of its reorganization plan now are successful ratification votes by the company's pilots and flight attendants, and approval from Bankruptcy Judge Robert Faris.
Hershfield, who has teamed up with Hawaiian Airlines trustee Joshua Gotbaum and the airline's unsecured creditors committee to propose a reorganization plan, said the parties will ask Faris at the March 10-11 confirmation hearing to confirm the plan but delay entry of the order for a few days until all ratifications are completed.
Despite objections by some other parties to the airline's reorganization plan, Dunkerley is hopeful that everything will soon fall into place.
"There's still a number of hurdles to overcome," he said. "The sooner we can knock down some of those hurdles, the sooner we can look at the prospect of inaugurating new routes. We do believe that there's some existing opportunities today that we'd be happy to pursue tomorrow if all these conditions were already past us."
The Plane Truth
As Hawaiian Airlines prepares to fly out of bankruptcy, the company is gearing up to land aircraft to replace the four it rejected
By Dave Segal
dsegal@starbulletin.com
Got planes?
Nearing its two-year anniversary in bankruptcy, Hawaiian Airlines can see the light at the end of the runway now.
And if the company emerges from reorganization as it hopes on March 31, it plans to pursue a growth strategy to make up for some of the opportunities it lost when it was trying to get its affairs in order.
To that extent, Hawaiian is actively engaged in discussions now for Boeing 767s and 717s to replace the four aircraft it shed less than two years ago when it was trying to lower its expenses.
So was it a mistake to get rid of the planes since Hawaiian had to pay damage claims for the lease rejections?
"We had to do what we had to do at the time," said Mark Dunkerley, president and chief operating officer of Hawaiian. "The company's condition was perilous and we can play endless what ifs. We're very pleased that the decision we made of going into bankruptcy helped contribute to the fact that we're coming out of bankruptcy in the good shape we are."
Although Dunkerley acknowledges the company is searching for new aircraft, he's unwilling to tip his hand on any of the details. But this much he admits: He's looking for more than one 767, the aircraft that Hawaiian uses on trans-Pacific routes, and seeking more than one 717, the type of plane used for interisland flights.
"(Acquiring additional aircraft is) obviously a very important decision for the management to decide and, ultimately, the board of directors to decide because we're talking about a very significant investment in the future," he said.
Hawaiian has 25 aircraft in its fleet now after rejecting the delivery of two 767s -- one from Boeing Capital Corp. and one from Ansett Worldwide -- and returning two 717s that it already was leasing from Boeing Capital.
Fourteen of Hawaiian's remaining planes are 767s while the other 11 are 717s. Hawaiian leases 14, or more than half of its planes, from Boeing Capital.
Boeing Capital officials didn't return several phone calls.
Lawrence Hershfield, chief executive officer of Hawaiian Airlines parent Hawaiian Holdings Inc., said that the company is "very interested" in acquiring additional aircraft if it can be done at attractive rates.
"And, it's critically important that we emerge from bankruptcy as soon as possible so that we can pursue opportunities as they arise," added Hershfield, who also is the managing member of majority investor RC Aviation LLC.
Dunkerley said that Hawaiian is looking at new markets on the West Coast as well as cities currently served by Hawaiian that have been infiltrated by other carriers.
"We'd like to be able to grow," he said. "It's very clear that over the last couple of years we've seen some of our competitors move into markets which were previously our own. We are very keen to be able to compete vigorously on those routes and to recapture some of those markets that we've seen diluted away from us."
Dunkerley cited as examples current Hawaiian destinations of Phoenix, Ariz.; San Diego; Sacramento, Calif; and Portland, Ore.
"We are looking to be able to grow back into these routes and take it to the competition," he said. "We continue to be on the lookout for new routes. We do believe that there's some additional growth to markets that Hawaiian doesn't serve on the West Coast."
Dunkerley also said Hawaiian has a very active plan to expand into Asia and reiterated the airline's recent disappointment about being passed over by the U.S. Department of Transportation for a direct route to Shanghai, China.
"Our enthusiasm for Asian expansion remains undimmed," he said.
Although Dunkerley won't talk about other possible mainland routes, the person who hired him in December 2002, former Hawaiian CEO John Adams, said last year that future Hawaiian destinations could include Atlanta, Boston, Chicago, Detroit, New York's John F. Kennedy International Airport, Philadelphia, St. Louis, Dulles (Washington) International Airport, Baltimore-Washington International Airport and Toronto, Canada.
Adams also said at the time that his management team, which included Dunkerley, studied such Asian destinations as Auckland, New Zealand; Hong Kong; Manila; Seoul; Shanghai; and Tokyo. Indeed, Hawaiian did apply for a Shanghai route at the end of last year.
Another city that had been on Adams' list, Sydney, Australia, was launched as a new nonstop route by Hawaiian last May.
Jim Giddings, the negotiating committee chairman for the Hawaiian Airlines unit of the Air Line Pilots Association, said he's more focused now on the company's pilots ratifying a new contract than possible new routes that the airline may be targeting. After all, he said, "you always hear rumors."
Still, Giddings said any growth would be a positive sign.
"There's a good element to growth when it comes to flight crews because that's one way we can move up pilots," he said. "People can upgrade and we can bring people back from furlough. It's a great thing from our perspective.
"But, at the same time, we have this saying that it's not true until V1. That's the decision speed at takeoff that if anything goes wrong with the airplane and you've reached that speed, you can safely take off, deal with the problem in the air and come back and land, If you haven't reached that speed, you stop."
The only things standing between Hawaiian and confirmation of its reorganization plan now are successful ratification votes by the company's pilots and flight attendants, and approval from Bankruptcy Judge Robert Faris.
Hershfield, who has teamed up with Hawaiian Airlines trustee Joshua Gotbaum and the airline's unsecured creditors committee to propose a reorganization plan, said the parties will ask Faris at the March 10-11 confirmation hearing to confirm the plan but delay entry of the order for a few days until all ratifications are completed.
Despite objections by some other parties to the airline's reorganization plan, Dunkerley is hopeful that everything will soon fall into place.
"There's still a number of hurdles to overcome," he said. "The sooner we can knock down some of those hurdles, the sooner we can look at the prospect of inaugurating new routes. We do believe that there's some existing opportunities today that we'd be happy to pursue tomorrow if all these conditions were already past us."
www.hawaiianair.com
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