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The Honolulu Advertiser

Posted at 1:01 p.m., Thursday, January 23, 2003

Hawaiian Air seeks union concessions

By Kelly Yamanouchi
Advertiser Staff Writer

Hawaiian Airlines is seeking major concessions from its unionized employees and companies such as Boeing Co. as it continues to look for ways to cut costs in a bid for financial survival, labor groups were told last night.

In employee meetings being held this week, Hawaiian executives said they are trying to reposition the airline financially as the carrier tries to recover from the lingering effects of Sept. 11 and Hawai'i's tourism slump.

The effort to win concessions from its employees follows 10 percent pay cuts that competitor Aloha Airlines secured from its employees in December, saving it $37 million over several years. Aloha received final approval for a $40.5 million federal loan guarantee after the pay concessions were won.

The two interisland airlines, like other carriers nationwide, have been struggling to operate in a severely depressed market. United Airlines filed for bankruptcy last month and analysts say American Airlines may be headed there as well.

Hawaiian Holdings Inc., parent company of Hawaiian Airlines, which has yet to report earnings for the fourth quarter and the full year of 2002, said in November that it expects losses in both periods.

The savings sought by Hawaiian from its workers could take the form of pay or benefit cuts.

John Adams, Hawaiian's chairman and chief executive, told employees that the concessions are urgently needed to help the company survive long-term, according to one worker who attended a company meeting last night.

According to a December memo to machinest union members employed by Hawaiian, Adams said the survival of Hawaiian Airlines, and its ability to meet the company's financial obligations and continue, depends on labor agreeing to the concessions.

Hawaiian Airlines announced in October it was cutting its work force by 4 percent by laying off 150 employees and reducing work schedules for other employees. The airline also said in October that 60 flight attendants agreed to take leaves of absence and that the company would not fill certain open positions for further savings. Hawaiian at that time had 3,538 employees.

Hawaiian spokesman Keoni Wagner said, "It is a significant challenge to reposition an airline in the current economic environment."

Wagner said there are "some big developments on the horizon," but he would not elaborate.