Hawaiian Airlines seeks $11M in givebacks

By Debbie Sokei
Advertiser Staff Writer

Hawaiian Airlines wants employees to work more for the same pay, take a pay cut or accept reduced benefits to bring the airline out of bankruptcy this year.

Josh Gotbaum, Hawaiian's trustee, presented details of his business plan yesterday to more than 70 employees in a closed-door meeting.

Gotbaum said $11 million in employee concessions will be necessary for the company to compete with other carriers and to emerge from bankruptcy by October, according to a written summary of the presentation.

"Labor costs must be reduced enough for total costs to be competitive," the summary said, under the heading, "What's necessary?"

Hawaiian filed for Chapter 11 bankruptcy protection in March.

The pilot's pension plan, to which Hawaiian is already overdue in making $4.5 million in payments, must be terminated, frozen with earned benefits protected or converted to a defined contribution plan, according to the summary.

Gotbaum's meeting with employees was scheduled to last an hour but went on for two as Gotbaum answered questions, mostly from pilots upset over freezing their pension plan.

Jeff Lilley, a pilot for Hawaiian who did not attend the meeting, said in past negotiations the pilots have always given up pay to keep their pension.

"Right now we are not going to bend on the issue," Lilley said. "We sign on to an airline for the retirement."

Gotbaum's business plan presentation said that the airline's route structure leads to higher-than-average labor cost. To be competitive with American Airlines and United Airlines, Hawaiian has to reduce its operating cost by 7.5 percent, the summary said.

The business plan calls for reductions to bring each union — pilots, flight attendants and machinists — to its industry level. No union should pay for another group's concessions and each union will negotiate its own combination of reduced wages or increased productivity, according to the plan. To achieve benefit consolidation and cost savings, a single set of benefit programs will be developed for all employees.

The employees will get the $11 million in concessions back in profit sharing if the company profits remain strong. Hawaiian's projected revenue for 2004 is $681 million with a net income of $16 million, the summary said. In December, Hawaiian reported revenues of $68.9 million.

Hawaiian wants its nearly 3,000 employees to decide on the givebacks by March 15.

Gotbaum would not comment yesterday.

Keoni Wagner, spokesman for Hawaiian, said it is company policy not to discuss details of employee meetings or negotiations with the media until information has been shared with all employees.

Employees who attended the meeting said Gotbaum spoke in general terms and they left the meeting not knowing what they're giving up.

"He didn't specifically say anything. He said concessions will be more or less from individual unions," said an employee who spoke on the condition of anonymity since the business plan has not been released publicly.

"We got to start somewhere. I'm trying to keep an open mind," said another employee who also did not want to be identified for the same reason.

Reach Debbie Sokei at 525-8064 or dsokei@honoluluadvertiser.com.