Posted on: Wednesday, December 10, 2003
Pilots demand back payment
By David Butts
Advertiser Staff Writer
Hawaiian Airlines pilots demanded yesterday the bankrupt carrier fully fund their pension before paying bonuses to senior management and compensation to the court-appointed trustee, Josh Gotbaum.
Gotbaum, who was appointed trustee in July, has proposed that he be paid as much as $70,000 a month plus "the reasonable cost" of renting a single-family home and automobile. He also asked for severance and retention bonuses for senior managers.
The Air Line Pilots Association said in a statement the company should make a $4.25 million pension payment it skipped in September before "handing over millions in executive compensation."
The association said 11 senior officers at Hawaiian could receive as much as $1 million in severance packages and continue to be paid their salary for one year after they leave if they stay until the airline is handed over to a new owner.
"Why is this company looking to pay bonuses when it swears it doesn't have enough money to pay its pension obligations?" said Capt. Jim Giddings, chairman of the Hawaiian Airlines unit of the pilots union, in the statement.
"Other than making Gotbaum look more and more like an overpaid airline CEO, how does this help Hawaiian pay its bills and emerge from bankruptcy."
Attorney Bruce Bennett, who represented Gotbaum in court last week, defended the need for executive bonuses.
In an improving economy, he said, top managers needed for the airline's reorganization will be tempted by offers from companies not in bankruptcy. The payments will help keep them at Hawaiian.
Bennett also said the pension issue is a $60 million problem being negotiated between pilots and the company. The $4.25 million payment is just part of a larger issue that needs to be resolved, he said.
The court has given them until February to find a solution, and they are in the middle of negotiations, Bennett said.
Reach David Butts at 535-2453 or dbutts@honoluluadvertiser.com.
