The move is part of a restructuring geared toward restoring the long-term financial health of the carrier, said John Adams, Hawaiian's chairman and chief executive. He said Hawaiian will continue normal operations while in bankruptcy.

"It will be business as usual for the airline as we complete our restructuring," he said. "This is a moment in time for our company. Hawaiian will continue to fly, take reservations and honor tickets."

Hawaiian Airlines, a subsidiary of Hawaiian Holdings, filed for Chapter 11 protection in U.S. Bankruptcy Court. Shares of Hawaiian Holdings were halted on the American Stock Exchange today.

Adams said the bankruptcy filing was prompted by the airline's inability to renegotiate aircraft leases in its favor, including those with Boeing Co.

"Despite our best efforts and extensive negotiations, however, we have been unable to reach agreement with certain of our aircraft lessors on reducing our lease rates to market levels," Adams said. "As a result, we felt we had no choice but to seek the protection of bankruptcy court while negotiations with the lessors continue."

The filing does not include Hawaiian Holdings Inc.

Hawaiian employs 3,491 workers in the Islands and on the Mainland and flies 30 nonstop daily flights between nine Mainland cities and Hawai'i, along with service to Neighbor Island destinations, American Samoa and Tahiti.

The company reported $612 million in sales in 2001 and had a net loss in three of its last four quarters.

Today's filing was not surprising to one airline analyst, who said the war with Iraq and terrorism concerns continue to take a toll on passenger traffic. At the same time the industry is getting pinched by higher fuel and other costs, said John Pincavage, with Pincavage & Associates in Westport, Conn.

Among the major network carriers, United and US Airways already are in Chapter 11. Other carriers may follow suit to remain competitive and shed and restructure debt through bankruptcy reorganization, he said. Carriers teetering on the brink of bankruptcy include American Airlines and possibly Delta.

"It's not a pretty picture," Pincavage said.

Whether carriers such as Hawaiian can emerge from bankruptcy "really depends on factors out of their control ­ how long the war lasts, how soon traffic comes back, whether there's a terrorist attack involving planes."

Gov. Linda Lingle said that she felt better about the news after hearing the airline had sought to restructure and bring down costs with their employees and vendors, but could not renegotiate with the lessors of their planes.

"This is not the first time that Hawaiian has sought protection of the bankruptcy court and they came out of it stronger, and we certainly hope they do that," she said.

This is the second time that Hawaiian, the nation's 12th-largest airline, has sought the bankruptcy protection. It last filed for Chapter 11 in September 1993 and emerged about a year later.

Russ Young, a spokesman for Boeing Capital, Hawaiian's aircraft lessor, confirmed that negotiations between the two were unsuccessful.

"We're obviously concerned by their decision to file for Chapter 11 protection but they had indicated that it was a possibility," he said. "We will continue to look for a solution that works the best for the airline, Boeing Capital and all the other stakeholders."

Young said under bankruptcy laws, Boeing has the right at the end of 60 days to repossess airplanes from Hawaiian if the airline says it will not continue performing under the terms of agreements . Young said he did not know what is the likelihood of Boeing repossessing the aircraft.

Hawaiian has $476 million in lease agreements out of Boeing's total portfolio of $11.8 billion, and much of it is secured in assets that Boeing can recover, Young said.

Hawaiian at the end of last year was Boeing's fifth-largest customer.

If Hawaiian is forced to drastically cut flights or if its planes were repossessed by Boeing, "It would be extremely hard on us," said Rex Johnson, executive director of the Hawai'i Tourism Authority. "Now that's not to say that other (airlines) would not try to fill the void."

Johnson, who is a former director of the state Department of Transportation, said Hawaiian came out of its 1993-94 bankruptcy protection "a better and stronger operation." This time around, "That's what we hope would happen," Johnson said

Hawaiian's restructuring started several months ago and has included:

• Cuts in labor costs amounting to about $15 million through productivity gains and union concessions.

• Increased efficiency through aircraft conversions.