Posted on: Wednesday, March 30, 2005
Hawaiian still awaits pilots' OK of contract
By Dan Nakaso
Advertiser Staff Writer
Hawaiian Airlines' hopes for emerging from federal bankruptcy protection were pushed back again yesterday as company and pilot negotiators agreed to try to reach agreement on another tentative contract.
Both sides argued all day yesterday before U.S. Bankruptcy Court Judge Robert Faris on whether Hawaiian pilots should have a contract imposed on them against their will after they voted down a tentative agreement last week.
Approval of the proposed contract — the last for Hawaiian's six unions — would have cleared the way for Hawaiian to emerge from federal bankruptcy protection on Friday under new ownership.
Instead, a courtroom packed with pilots, attorneys and representatives from Hawaiian's other unions heard testimony yesterday from an airline consultant hired by Hawaiian, Hawaiian's court-appointed bankruptcy trustee and its president and chief operating officer.
Much of the arguments and testimony focused on Hawaiian's economic position in the airline industry, the effects of rising fuel costs and outside competition, the marketability of Hawaiian pilots and managers and whether it was economically necessary for Hawaiian pilots to make concessions to their health and retirement plans.
At one point in response to a question, Josh Gotbaum, Hawaiian's bankruptcy trustee, revealed an interesting fact about Hawaiian's 2-year-old bankruptcy: The company had budgeted $1 million per month in legal and consulting fees for the bankruptcy process and another $10 million for so-called "success fees" after Hawaiian emerges from bankruptcy.
Gotbaum and others have the right to seek a success fee, the size of which would be determined by the court.
At the end of the first day of testimony yesterday Mark Dunkerley, Hawaiian's president and chief operating officer, was still on the stand when Faris adjourned the hearing until April 13 and urged both sides to continue talking.
"I wish everyone the best in resolving this matter consensually," Faris said. "It would be better for everybody than if I have to do it. If not, I'll see you all" on April 13.
After the hearing, Gotbaum said, "If what happened today helps us get a negotiated agreement and get out of bankruptcy, that's terrific. ... Everyone involved in this recognizes that what's best for Hawaiian is to get a negotiated and ratified agreement before April 13. ... I'm optimistic we can do it again."
Hawaiian pilots on Friday voted down an agreement that would have increased salaries
1 percent, but required them to pay a share of their medical coverage and put the security of their retirement benefits in doubt.
Pilots and union officials said the plan was defeated by a vote of 120 to 144 because pilots were particularly angry over reports that Hawaiian's 80 managers recently received part of $7 million in bonuses that had been approved by the bankruptcy court, as well as concerns "that management does not have a genuine interest in constructive problem-solving and smooth employee relations," according to the union.
Capt. Jim Giddings, head of the pilots' negotiating committee, acknowledged yesterday that some of the emotional issues linger.
But Giddings plans to encourage pilots to continue pushing for a negotiated contract, rather than having one imposed by the bankruptcy court.
Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or at 525-8085.
