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The Honolulu Advertiser

Posted at 11:40 a.m., Monday, October 17, 2005

Aloha Airlines seeks to void labor contracts

Lynda Arakawa

Aloha Airlines filed a motion Saturday seeking to void labor contracts with its unions, but said it hopes to reach consensual agreements with employees before the matter comes before federal bankruptcy court.

Aloha has received concessions from employees since filing for Chapter 11 bankruptcy protection in December and is currently negotiating with labor unions on more changes to collective bargaining agreements.

Among other changes, Aloha wants to terminate its defined-benefit plans for about 3,000 employees and retirees and turn them over to the Pension Benefit Guaranty Corp., the federal agency that insures basic pension benefits. The company also wants employees to pay a share of their health insurance premiums, which are currently fully funded by the company.

The motion filed this weekend drew sharp criticism today from the Air Line Pilots Association, which said it comes after management assured the union they would avoid filing the motion and work on a consensual agreement.

"We have made every attempt to negotiate in good faith with this management team for a labor contract that benefits both the pilots and the company, and would create a seamless transition for the new investors," said David Bird, chairman of the master executive council for the Aloha pilots' union. "Why they now would go back on their word, ask the court to reject our contract, and risk having the new investors walk away from the table is beyond reason.

"The Aloha Airlines management has failed to demonstrate the need for us to take these drastic concessions at this time. While we are aware of the cash crunch our company faces, management should be negotiating with us rather than trying to use the courts to raid its own workers who have worked so hard to make Aloha successful."

Aloha spokesman Stu Glauberman said the company is "hopeful that we can reach consensual agreements with our unions and that that would be before the hearing dates" on the motion which are tenatively set for later this month.

Regarding the statement from the pilots' union, Glauberman said: "Given the current condition of the industry, and particularly fuel costs, Aloha has no choice but to lower its cost structure. Fuel has gone up one dollar a gallon since we began our discussions with the union. In addition, we have found over the past several months that no investor will invest in a company that has a defined benefits program."