Carty could become Hawaiian Airlines chairman

By Debbie Sokei
Advertiser Staff Writer

Don Carty, who resigned as CEO of American Airlines last year, could become chairman of Hawaiian Airlines if the bankruptcy court approves a reorganization plan pushed by Hawaiian Holdings Inc.

Hawaiian Holdings, the parent company of Hawaiian Airlines, is one of three groups so far to file proposals to take Hawaiian Airlines out of bankruptcy. The bankruptcy court has not set a date for selecting the winning proposal.

Carty resigned from American almost a year ago after he failed to disclose details about giving top executives bonuses while union employees were being asked for $1.8 billion in concessions. Carty was president, chairman and CEO of American from 1998 to 2003.

Jim Giddings, chairman of Hawaiian's unit of the Air Line Pilots Association, said he looks forward to hearing Carty's ideas and suggestions on how to turn Hawaiian around, but he is also skeptical.

"He doesn't have a good history when it comes to labor relations. It's a concern," Giddings said.

John Adams, chairman of Hawaiian Holdings, said Carty's knowledge of the airline industry will be a great addition to the company's management team.

"Don Carty is a giant in the airline industry. We are delighted that someone with his vast experience and his strong vision has agreed to join the Hawaiian Air team," Adams said.

Carty will help finalize Hawaiian Holdings' reorganization proposal and also be an investor in the new company if they are the winning bidder.

Since his retirement, Carty has been teaching and consulting and has been looking for airline investment opportunities.

"I really do think Hawaiian is very much on track," Carty said. "If we can get it out of bankruptcy, I think it has some incremental growth opportunities."

Adams, the former CEO of Hawaiian Airlines, put the airlines into bankruptcy March 2003 after he could not reach an agreement with Boeing to reduce the leases on Hawaiian's fleet.

Adams has proposed to bring the airline out of Chapter 11 with a $30 million capital infusion. The $30 million investment will come from Hawaiian Holdings and Airline Investors Partnerships in return for 50 percent of the company. Adams controls AIP.

On April 1, the bankruptcy court will hold a hearing to set the procedures to evaluate and select the best proposal to take the airlines out of bankruptcy.

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