Hawaiian Airlines
underestimates results,
union says

Hawaiian Airlines has a history of understating its financial projections and is economically viable, an investment adviser for the carrier's pilots union said in a marathon bankruptcy hearing yesterday that went past 7 p.m.

Eugene Weil of Washington, D.C.-based Milestone Advisors testified in the third day of a labor contract hearing that Hawaiian has underprojected its financial performance for the last couple years. The airline shouldn't be entitled to the financial relief it is seeking by requesting court approval to impose a contract on the pilots, he said.

Weil revealed that the airline in November projected it would have an operating loss of $192,000 in the first quarter and that he was forecasting the airline instead will realize an operating profit of $7.1 million.

Although Hawaiian won't disclose its March results until Wednesday, Weil said he made the projection using the company's monthly results for January and February and internal preliminary estimates for March.

He also said his analysis of the company's financial viability looks strong relative to its competitors.

Sidney Levinson, attorney for Hawaiian Airlines trustee Joshua Gotbaum, argued that the airline is projecting an operating margin of only 4 percent in each of the next three years and can't be portrayed as having long-term economic viability.

The contract hearing will conclude today with the rebuttal of evidence and closing arguments. It then will be up to Bankruptcy Judge Robert Faris to make a ruling or take the matter under advisement.

Weil said the company projected in late February that its operating income for 2005 would be $31 million and that Hawaiian was saving $26 million this year on aircraft leases it restructured. Airline officials later confirmed both figures, but noted that the operating income projection was based on fuel prices that have since risen. Hawaiian had an operating profit of $71 million in 2004.

Earlier in the day, longtime pilot Reno Morella and union official Jim Giddings testified how the union already has "stepped to the plate" in the past and that it was told by the company in early 2003 that if union members gave $8 million in concessions, the union wouldn't be asked for more later.