Aloha-Hawaiian | End of a 55-year rivalry
Q&A on the airline merger
Q. Why the merger?
A. Airline travel has dropped dramatically since the Sept. 11 terrorist attacks, and most airlines are posting losses, cutting flights and eliminating jobs. Both airlines say that even after they cut flights, passenger levels on interisland flights are below the break-even point. Hawaiian and Aloha were struggling to stay profitable even before the attacks, in the face of rising fuel and labor costs, falling passenger traffic and competition from major carriers flying more direct Mainland flights to the Neighbor Islands. Hawaiian emerged from bankruptcy in 1993 after restructuring its business.
Q. What will the new company look like?
A. The airlines will be run by a new company called Aloha Holdings Inc., a public company traded on the American Stock Exchange as Hawaiian Airlines, with the symbol HA. The company, with headquarters in Honolulu, is expected to have $930 million in annual revenue, making it the 10th-largest U.S. carrier. It plans to grow at 7 to 10 percent per year.
Q. What will the airline be called?
A. Hawaiian and Aloha will continue to operate as separate companies under their own names until the merger is completed sometime next year. A new name will then be determined.
Q. Will jobs be cut?
A. The company offered no specifics, but it said jobs cuts are likely. Any reductions are expected to be less than the 680 the airlines had announced earlier this year. The company said job cuts related to the merger "would be largely limited to the elimination of duplicate management positions."
Q. Will employees' pay be cut?
A. The company said: "This is a very difficult time in the airline industry, with employee pay concessions being discussed at many of the major carriers. This issue, along with many others that have affected labor since September 11, will be discussed with union representatives."
Q. Who will run the new company?
A. Greg Brenneman, chairman and chief executive officer of Texas-based investment firm TurnWorks Inc., will be chairman. TurnWorks will own 20 percent of Aloha Holdings. Brenneman worked six years as president and chief executive of Continental Airlines. Both Glenn R. Zander, chief executive of Aloha, and Paul J. Casey, chief executive of Hawaiian, will step down.
Q. What about fares?
A. The new company committed to keeping unrestricted interisland fares at current levels, about $62 per coupon, for two years. For three more years, the airline said it would link fare increases to inflation and other direct increases, such as the cost of insurance and increased security.
Q. What about other fares?
A. The airline said it would work with the state attorney general on pricing.
Q. What about frequent-flier miles?
A. The airlines will continue to honor frequent-flier awards and keep existing alliances with major carriers in place.
Q. When will the deal happen?
A. Aloha Holdings is seeking approval from state and federal authorities and expects to close the deal in the first half of the year.