Hawaiian pilots reject
labor contract

The airline will seek to force
a contract on the pilots at a
bankruptcy hearing Tuesday

Pilots at Hawaiian Airlines rejected a tentative agreement for a new two-year contract, prompting the company to seek authority from the bankruptcy court to impose a new contract.

Members of the Air Line Pilots Association International voted down the proposal 144 to 122 because of concerns over retirement and disability benefits and increased medical premium payments.

Kirk McBride, chairman of ALPA's master executive committee, said that members were also "outraged by management bonuses that were paid out." Last year, U.S. Bankruptcy Judge Robert Faris approved up to $7 million in performance bonuses for the company's top managers.

"In general, there was a perception that interaction with management at Hawaiian does not provide for constructive problem solving and smooth employee relations," McBride said.

Hawaiian, which filed for Chapter 11 bankruptcy reorganization two years ago, has said that it needs new labor contracts with all six of its unions to emerge from bankruptcy protection and that none of the contracts can take effect until all are ratified.

The carrier had hoped to exit bankruptcy by April 1.

Hawaiian Trustee Joshua Gotbaum said he was disappointed that union members rejected the contract, which he said was better than any proposal made by the airline to its pilots in the past two years.

Gotbaum said the contract would have made Hawaiian's pilots among the best paid in the industry and would have kept the pilots' pension plan intact for the next seven years.

"It's disappointing but unfortunately not quite enough pilots voted for the contract their union negotiated," Gotbaum said. "We may be forced to go to court to get an agreement so that Hawaiian can exit Chapter 11."

Faris has scheduled a hearing for Tuesday on the airline's motion to impose a contract. The airline filed a motion in Bankruptcy Court in January seeking authority to impose a new contract but hearings on the matter were delayed as both sides continued to negotiate.

The vote comes after the executive committee of the pilots' union reached a tentative agreement for a new contract with management on Feb. 23 following sometimes bitter negotiations. The proposed deal was subject to ratification by ALPA's union members.

McBride said that the union is open to further discussions with the company but said no talks have been scheduled. He said the union is prepared to go to court Tuesday and present its arguments in support of its position.

The pilots association is the last union that has not ratified a new contract. The International Association of Machinists, the Transport Workers Union, the Network Engineering Group and the Association of Flight Attendants already have reached labor accords with the airline.