Posted on: Friday, January 21, 2005

Hawaiian asks judge to modify contract

By Lynda Arakawa
Advertiser Staff Writer

Hawaiian Airlines has asked a federal bankruptcy judge to extend and modify a labor contract with its pilots' union as both sides continue to try to reach a negotiated agreement.

Hawaiian has reached tentative agreements on new contracts with every union representing its workers except for the pilots. The company said it cannot exit Chapter 11 bankruptcy until new contracts are in place for all unions.

Hawaiian trustee Joshua Gotbaum said the company asked the court to extend the pilot's contract as "a deadline-forcing device." The company's motion is scheduled for a hearing Feb. 14 and 15.

Jim Giddings, negotiating committee chairman for the Hawaiian unit of the Air Line Pilots Association, said the company's motion "will tend to make it more difficult to reach a consensual agreement" but that the union will continue to work toward a negotiated agreement.

Giddings said the union will fight the motion if an agreement can't be reached.

Gotbaum said the company's goal is to have fair labor contracts that recognize the contributions of employees while keeping the company competitive. The airline has said it wants to maintain labor costs at existing levels.

"We would much rather negotiate an agreement — as we've done with every other union — than have the court impose one," he said. "We have proposed a contract that would preserve the 40-plus percent wage increases the pilots have enjoyed over the past four years, plus additional wage increases, plus a pension plan as generous as any in the industry, plus profit-sharing."

But Giddings said there are problems in the proposal.

"They've made some (proposals) that on the surface looked like improvements in some areas, (but) they've really taken backward steps in other areas," Giddings said.

The pilots last week objected to the company's plan to emerge from bankruptcy, saying it would raise pilot costs for retirement, disability and healthcare.

Giddings said the company and the union planned to meet Tuesday in Los Angeles. The union represents 304 active Hawaiian Airlines pilots.

Also yesterday, Hawaiian Airlines reported that the company generated a $6.2 million operating profit last month, a 54 percent drop from the $13.4 million generated the previous December.

Last month's revenue of $66.5 million was down from $68.6 million a year ago.

The company said operating expenses grew 9.2 percent, from $55.2 million in December 2003 to $60.3 million last month, largely because of rising fuel costs.

"Hawaiian is usually profitable in December because of the holidays, but (last month) the combination of higher costs and more intense fare competition has taken its toll," Gotbaum said.

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com or 535-2470.