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The Honolulu Advertiser
Posted on: Thursday, February 24, 2005

Pilots agree on pact with Hawaiian

By Dan Nakaso
Advertiser Staff Writer

Hawaiian Airlines' efforts to emerge from federal bankruptcy protection after two years took an important step forward yesterday when the company reached a tentative agreement with the Air Line Pilots Association over a new, three-year contract.

The reorganization plan by Hawaiian's prospective new owner, Ranch Capital LLC, requires that new contracts be in place for each of Hawaiian's six unions. The pilots were the last to reach even a tentative agreement.

The two sides had been talking for more than a year and were scheduled to have their dispute decided by U.S. Bankruptcy Judge Robert Faris in a hearing that was to start yesterday morning.

Instead, Hawaiian and the Air Line Pilots Association reached a tentative agreement just before midnight Tuesday.

The tentative agreement sidesteps the contentious issue of a two-tiered pension plan for pilots that would have potentially put more financial risk on the majority of Hawaiian's pilots, said Capt. Jim Giddings, the head of Hawaiian's pilots union.

Giddings declined to go into specifics before Hawaiian's 298 pilots look at the tentative agreement.

But, Giddings said, "We've agreed that we will look for a transition from our current type of pension plan to a different type. We're just going to do it outside of the pressurized bankruptcy environment. It's a real good solution for both parties."

The agreement, Giddings said, "also gives pilots long desired improvements in compensation, per diem, deadhead and training pay."

The two sides had met nine times for negotiations when Hawaiian's bankruptcy trustee, Josh Gotbaum, asked U.S. Bankruptcy Judge Robert Faris to rule on whether the pilots should have to accept his proposals.

With the announcement of the tentative agreement, Faris yesterday instead scheduled a hearing for March 10 and 11 to consider Ranch Capital's plan to bring Hawaiian out of bankruptcy.

Four of Hawaiian's unions have approved new contracts. The Association of Flight Attendants has yet to schedule a ratification vote.

Giddings said he hopes to get the contract details before Hawaiian's pilots and schedule their own ratification vote before the March hearing.

"It's going to be tight," Giddings said. "We'll get this together as soon as possible. We understand that the company and the members want to get out of bankruptcy as soon as possible, but we want to do it right."

Union leaders will meet in a few days to decide whether to recommend that members ratify the agreement, Giddings said. "But I think we ended up with a fair agreement," he said.

In a statement yesterday, Gotbaum said: "We're pleased to have negotiated a contract that meets the needs both of Hawaiian and our pilots. It will permit Hawaiian to exit bankruptcy and show the world what a great airline it has become."

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