Gotbaum, who has been on the job three months, yesterday reiterated his confidence that Hawaiian will not be liquidated and instead will successfully emerge from bankruptcy protection.

The airline essentially consists of rented airplanes, rented buildings, rented hangars and "a group of people producing a really nice product. ... There is nothing to liquidate," Gotbaum said. "Airlines that are not half as good as Hawaiian have gotten out of bankruptcy."

But it will take at least until next summer before Gotbaum even proposes a reorganization plan to the U.S. Bankruptcy Court. Until then, Gotbaum said, "expect to see a series of mixed messages from all kinds of folks."

Gotbaum made his comments yesterday to The Advertiser's editorial board, along with Mark Dunkerley, Hawaiian's president and chief operating officer. Together, they highlighted the operational changes going on at Hawaiian that directly benefit customers. They are also helping the company right itself.

"The Hawaiian Airlines of today is not the Hawaiian Airlines of a year ago," Gotbaum said. "And it is not the Hawaiian Airlines of three years ago."

Returning to profitability

The company just had four consecutive months of profits after being profitable in only one of the previous 10 years. The airline increased fares while reducing some flights to point Hawaiian back to profitability.

But more, unforeseen changes, still need to occur, said Gotbaum, who has been running the airline since July.

Gotbaum can feel cynicism and skepticism about his ideas because in the past "nobody had delivered all of the news."

"I'm delivering all of the news I know thus far," Gotbaum said. "... What I don't know is, where do we go from here? That will take many months."

Some of the news so far hasn't pleased Hawaiian's 300 pilots.

Gotbaum won an arbitrator's ruling to close pilot bases in Los Angeles and San Francisco, which will disrupt pilots' home lives and result in furloughs for 12 to 15 pilots.

He also delayed paying $4.25 million into the pilots' pension fund. A hearing on the issue is scheduled for Oct. 24.

Gotbaum's ideas aren't restricted to pilots. Hawaiian's 3,000 employees make up half of the operating costs and Gotbaum said he will consider further layoffs and furloughs.

But Gotbaum reiterated that he is "months away" from a detailed restructuring plan.

The changes will occur amid a shifting airline industry and fluid island market, in which Hawaiian and Aloha Airlines emerged from an antitrust exemption this month that had let them collaborate on some routes.

Positive changes made, too

As the industry recovered from the start of the war in Iraq and the scare of SARS, Mainland airlines also increased direct flights to the Neighbor Islands, further cutting into both airlines' money-losing, interisland market.

And last month Hawaiian's parent company — Hawaiian Holdings Inc. — disclosed that it is under investigation by the Securities and Exchange Commission for a stock buyback program that benefitted the company's CEO, John Adams, while the airline was pointed toward bankruptcy.

The plan earned Adams and his other companies $17 million.

"It was wrong as a business judgment," Gotbaum said of the buyback.

SEC investigators were already looking into the buyback program when they talked to Gotbaum for the first time three weeks after he settled into Hawaiian's headquarters on Koapaka Street.

The airline industry, Gotbaum said, "lives and dies by cash and capital. ... You don't give away cash unless you're very sure you don't need it."

The serious issues surrounding Hawaiian over the past year have overshadowed much of the positive structural changes that have taken place at Hawaiian, Dunkerley said.

Over the past two years, Hawaiian officials have upgraded their entire fleet and retrained crews. They installed computerized check-in procedures that cut the waiting time in crowded terminals by three-fourths. And in March they improved the company's Web site to make it easier to buy lower-priced tickets.

"Our Web site used to be like a billboard in Las Vegas," Dunkerley said. "You could do practically anything on it except buy a ticket."

The use of e-tickets has since jumped from 20 percent earlier in the year to 60 percent now, Dunkerley said, helping to further cut down ticket counter lines.

Perhaps more fundamentally, Gotbaum said, Hawaiian's business philosophy has changed.

The old attitude was that Hawaiian essentially flew two operations: an interisland "bus service" that lost money; and charter flights to the West Coast that lost less money.

Now Hawaiian has reduced flights and increased passengers by sometimes charging higher rates in exchange for better service and more convenience.

"Our operating philosophy was we would sell it cheap and stack them high," Dunkerley said.

Hawaiian also eliminated discounted package fares that benefitted tourist and corporate groups that could afford to pay. But that had left higher-priced seats for elderly passengers and others least able to afford them, Dunkerley said.

"A great deal of distance has been covered over the last 12 months," Dunkerley said.