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Posted at 1:40 p.m., Friday, December 15, 2006

Hawaiian Air moves ahead with job outsourcing plan

Advertiser Staff

Hawaiian Airlines, which in July reached an outsourcing agreement with its biggest union, said it may move some of its reservations call center, accounting and information technology positions to the Philippines and India.

The company has yet to sign contracts or decide how many positions will be affected, but has toured facilities of several overseas outsourcing companies and is in talks about potential work, airline spokesman Keoni Wagner said. The airline employes 249 people in its reservations, accounting and information technology departments.

The affected workers would be transferred to other jobs within Hawaiian Airlines at the same or higher pay scales, said Randy Kauhane, union assistant general chairman for the International Association of Machinists and Aerospace Workers District 141. The air carrier employs about 3,330 workers in all.

The Honolulu-based air carrier and the union reached an agreement in July on the outsourcing after reviewing how other airlines were laying off people, cutting benefits or terminating pensions and retirement plans. Wagner said. Those moves have produced a situation where Hawaiian Airlines is competing against some airlines that have a cost advantage over it because they have lower labor expenses, he said.

Labor costs have traditionally been the biggest expense for airlines, though in recent quarters fuel costs have spiked above those for worker salaries and benefits. In the three months ended Sept. 30 Hawaiian Airlines spent $52.2 million on labor.

Wagner said the airline won't know how much it will save until it decides on how much work it will ship overseas. No timetable has been set.

"There are lots of sensitivities to outsourcing, not just from the employees' standpoint, but from the customers' standpoint," he said. "We don't want to degrade our product."

Kauhane said other carriers such as United Airlines and U.S. Airways have begun oursourcing to reduce costs. The union agreed to Hawaiian Airlines' proposal because jobs for its people were preserved.

"Our main goal was to make sure people didn't lose their jobs," Kauhane said.