Hawaiian Air
faces showdown
with pilots

Get ready for the remake of "Airplane II: The Sequel."

The second courtroom showdown pitting Hawaiian Airlines' pilots against the company will get under way today after two weeks of sporadic negotiations produced no real progress in the yearlong labor dispute.

Hawaiian Air Hawaiian Airlines has asked Bankruptcy Judge Robert Faris for approval to impose a contract on the unionized pilots. While Faris has the option to retain the current contract or throw it out, both sides agree he has the latitude to opt for something in between.

Faris also could approve a tentative agreement that was reached by union representatives but voted down by members, or he could accept the different proposal sought by the airline in its motion. Or he could delay a decision.

The company, which once hoped to be out of bankruptcy at the start of this month, was put in a holding pattern when Faris delayed a hearing for two weeks so that the two sides could reach a deal.

But no vote on a contract was held during the period, even though the previous tentative agreement failed by a 144-to-122 margin. Now, attorneys from both sides are gearing up for a battle that the pilots say centers around the quality of the retirement plan that Hawaiian is offering if the pilots' pension plan is frozen.

"We feel the membership has spoken," said Jim Giddings, negotiating committee chairman for the Hawaiian Airlines unit of the Air Line Pilots Association. "We really feel that way because even the votes in favor of the tentative agreement were from pilots who were conflicted and that they really were voting for the tentative agreement under the circumstances and not because it was really an affirmative, positive contract. There's a lot of uncertainty for them because of the tentative agreement."

Hawaiian Air trustee Joshua Gotbaum, who declined to comment for this story, has said that the wages, benefits and retirement plan that the company's pilots are being offered are better than those of United Airlines.

Giddings said the pilots reluctantly have offered to freeze their pension plan, but that the sticking point is the value of the replacement plan.

"Frankly, we don't want to freeze the plan," Giddings said. "But the company is hung over on a freeze and we were willing to freeze the plan, but where we were not able to reach agreement was the value of the replacement plan."

Gotbaum also has said he wants to keep the company's costs flat and has offered the pilots pay raises in exchange for the pilots absorbing more of their health and disability costs.

Giddings, though, said the airline's operating profits don't justify Gotbaum's demand for flat costs.

"What's magical about flat costs?" Giddings asked. "The trustee has been demanding flat costs for a year, and it's been in a year in which the fortunes of the company have improved. The company has made a lot more money than it expected to make in the last year. And while there's been a variety of changes in the company's finances and the overall economic situation, their demand for flat costs remains the same. That leads us to feel that's it's an arbitrary demand."

Although Hawaiian had a $71 million operating profit in 2004, the airline's year-over-year results have declined for seven consecutive months.

Separately, Gotbaum, airline parent Hawaiian Holdings Inc. and investor group RC Aviation LLC have filed a contempt motion seeking attorney's fees and costs from pilot Robert Konop, Honolulu attorney Randal Yoshida and St. Louis attorney Timothy Philipp for their participation in a competing reorganization plan for Hawaiian Airlines that ended up with two of the proposal's financial backers being indicted on conspiracy charges.

Hawaiian Airlines
Air Line Pilots Association

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