During a bankruptcy that was the most expensive ever in Hawai'i, the local airline cut costs, improved its service and added new routes.

The airline and scores of its employees celebrated the new era during a ceremony yesterday at Honolulu Airport. Hawaiian's bankruptcy trustee, Joshua Gotbaum, passed the symbolic maile lei to Dunkerley, who will assume day-to-day control of the airline.

Gotbaum said yesterday that Hawaiian was emerging a strong-er, better company than when he came to the company in July 2003.

In most bankruptcies, creditors get pennies on the dollar but Hawaiian's creditors are being paid in full while its shareholders have seen the value of their stock rise, Gotbaum said.

And while contracts for the company's unionized employees aren't as "good as people wanted," they are better than what anybody else in the industry is getting, Gotbaum said.

"Two years ago, when I got here, Hawaiian had stumbled but not fallen. They lost money for a period of years even as other airlines were profitable," he said.

"What has happened in Hawaiian Airlines and what is culminating in bankruptcy court is an enormous success."

Joann Hanson, who joined Hawaiian at its human-resources department 11 months ago, said she's relieved that the airline is finally emerging from bankruptcy protection. Hanson credited the company's leadership for pointing the carrier in "the right direction."

John Kim, a 41-year Hawaiian employee, said he had no doubts that the company would emerge from bankruptcy as a competitive airline. The mechanic, who went through Hawaiian's previous bankruptcy in 1993, added that the company's unionized employees didn't have to make concessions like those in other bankruptcies.

"All of the union members came out smelling like a rose compared to other bankruptcies," he said.