Handful apply to run Hawaiian

By Dan Nakaso
Advertiser Staff Writer

Half a dozen people with experience in the airline industry have applied to steer Hawaiian Airlines through its bankruptcy reorganization at the same time that various creditors are looking at a handful of others.

The U.S. Office of the Trustee will narrow the list of candidates who applied to steer Hawaiian Airlines through bankruptcy reorganization and begin interviewing the top candidates. A decision is expected within two weeks. Advertiser library photo • March 16, 2001

The selection will be up to San Diego-based Steven Katzman, who took over yesterday as U.S. trustee for the Southern District of California, Hawai'i, Guam and Saipan. The selection is subject to court approval.

On Friday, a federal bankruptcy judge ousted the management of Hawai'i's biggest airline, saying "Hawaiian consistently placed the interests of its shareholders ahead of the interests of its creditors, even while the company was in severe financial distress."

Hawaiian's chief executive, John Adams, was on the East Coast yesterday.

Hawaiian spokesman Keoni Wagner said he didn't know when Adams was to return.

"We're anxious to continue our restructuring," Wagner said. "So we are anxious to find out who that person will be (to serve as trustee) and work with them as quickly as possible."

The committee of creditors and Boeing Capital Corp., which leases airlines to Hawaiian, talked yesterday and went over their list of possible trustees.

"More ideally, we're looking for somebody who may have operated with Hawaiian or operated an airline themselves," Boeing's Anil Patel said."

The opinion of the creditors could be factored into the trustee's decision, said Curtis Ching, an attorney for the trustee's office.

"The fact that they have the support of various constituencies is something we will consider," Ching said.

Taking Hawaiian through bankruptcy would be an intense, time-consuming job that also offers a high-profile, professional challenge, said Michael McQuay, one of the people contacted by creditors to serve as trustee.

McQuay, 54, was born in Kailua and was Hawaiian's executive vice president and chief operating officer from 1995 to 1997.

His daughter and one of McQuay's two sons attend Chaminade University.

Serving as trustee would "be rigorous, 24 hours a day, seven days a week until the company emerges from bankruptcy," McQuay said. "... Taking the company through the throes of bankruptcy and righting it would be a personal, significant accomplishment."

Other trustees appointed to run bankrupt airlines came in only when companies were being liquidated or the airlines had stopped running, McQuay said.

"At that particular time, it's like a vacuum," he said. "The revenues are sucked out of the business at way too rapid of a rate.

"The key is to get into the business early. (Running Hawaiian) is not only doable, but an opportunity for the business to grow and plant the seeds for success."

McQuay is president of Bombardier Business Jet Solutions in Dallas.

He would have to quit his job and return to Hawai'i for a position that would only last six months or slightly longer, he said.

But a trustee who does the job could have a future with Hawaiian after it successfully emerges from bankruptcy, McQuay said.

Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or 525-8085.