DENNIS ODA / DODA@STARBULLETIN.COM Hawaiian Airlines' outgoing trustee Joshua Gotbaum, far right, and incoming CEO Mark Dunkerley, in blue, talked to employees and the press yesterday. During a blessing ceremony, Dunkerley and Gotbaum received a group hug from employees.

Airline’s rebirth
hits final snag

Hawaiian Air celebrates getting
out of bankruptcy, but the fanfare
turns out to be a little premature

Hawaiian Airlines, which prides itself as the No. 1 on-time carrier in the nation, missed its self-imposed target date yesterday for emerging from bankruptcy.

But the coming-out party went on as planned, with company officials and more than a hundred employees marking the occasion with music, food and a Hawaiian blessing in a crowded conference room at Honolulu Airport.

It seemed fitting that there should be a last-minute snag in a 26-month Chapter 11 case that included an ousted chief executive, two trustees and federal indictments for bankruptcy fraud, conspiracy and bribery.

The airline had even taken out full-page newspaper advertisements in Oahu's two daily newspapers in anticipation of its expected emergence yesterday from reorganization.

Additional time needed for financing documentation caused the delay, the airline said, and it expects to be officially out of bankruptcy by today or tomorrow.

Fred Proute, a financial analyst in the airline's finance department, said he finally appears to have brought good luck to an airline after previously working for now-defunct TWA and United Airlines, which filed for bankruptcy in December 2002 -- three months before Hawaiian Airlines.

"It's been two rough years for myself and the company, but I think it's very positive and it's exciting to be out," he said. "I think with Mark Dunkerley at the head (as the new CEO) and (investor) Ranch Capital as the financial back-up, I think it's going to be very successful."

Proute said he went to United Airlines after TWA -- later absorbed by American Airlines -- filed for bankruptcy and then came to Hawaiian three days before United filed for Chapter 11. Three months after arriving in the islands, Hawaiian also filed for bankruptcy.

"This is my third bankruptcy, basically, and I've been a professional in the industry five, six years," he said. "But I guess I haven't brought all bad luck to the airlines because we came out a stronger carrier and a stronger competitor. I brought luck to this one."

Arnold Domingo, who has been with Hawaiian for 18 years and works in reservations, said this is his second time through bankruptcy with the company. The first time was when the airline filed in September 1993 and emerged a year later.

"It's always a nice feeling that the company is back on stable ground, so I'm very elated," he said. "I knew we would get out of it. There's always doubt, but our management team has always indicated to us to try to be as focused as possible and we could get over any type of hurdle, which we've accomplished."

Hawaiian Airlines trustee Joshua Gotbaum, in rallying and praising the employees, told them that they've earned the right to broaden the way they measure themselves.

"The days when Hawaiian would be good just by being better than Aloha (Airlines) are long gone," he said. "You are way better than Aloha. The fact of the matter is, you're better than most airlines anywhere in the world, and that's an important change. ... You have to stay the best and compete with the best by continuing to improve."

Gotbaum also said that Hawaiian's greatest challenges lie ahead in the form of increased competition.

"Our competition in the future is not Aloha," he said.

"Our competition is United and American and low-cost carriers like ATA and Southwest that are coming into our markets. Competition here is going to get tougher and it will continue. It's not just about fare prices. It's about the fact that other airlines can come in and compete with Hawaiian Airlines just by filing a paper. They've already got the planes."

Dunkerley, the airline's president who will assume the added duties of CEO when the company officially emerges from bankruptcy, said Hawaiian can't rest on its laurels of having the best on-time performance record, best baggage-handling record and overall best customer satisfaction ratings in the industry.

"This is a tough and totally uncompromising business that is fraught with uncertainty," he said. "The competition out there is fierce, the fuel costs are high and we have to contend with this each and every day whether we're in bankruptcy or out. What matters most is going to be how we perform going forward. We can and we simply must keep improving Hawaiian Airlines."