Hawaiian Airlines files for bankruptcy

[chperplt]

Hawaiian Airlines files for bankruptcy protection


BY JAYMES SONG, Associated Press Writer

HONOLULU - Hawaiian Airlines filed for Chapter 11 bankruptcy protection Friday, a step executives said was necessary to complete a restructuring begun several months ago.



The carrier, a subsidiary of Hawaiian Holdings Inc., said flight and services will continue without interruption. The parent company was not included in the filing.


"It will be business as usual for the airline as we complete our restructuring," said John Adams, chairman and chief executive officer of the Honolulu-based carrier.


He said tickets will continue to be honored and the airline's frequent flyer program will continue.


The company hopes to complete the restructuring and emerge from Chapter 11 in the fall, he said.


Adams said the company has made significant progress since it launched its restructuring efforts several months ago in response the travel slowdown since the Sept. 11, 2001, terrorist attacks.


"Despite our best efforts and extensive negotiations, however, we have been unable to reach agreement with certain of our aircraft lessors on reducing our lease rates to market levels," Adams said. "As a result, we felt we had no choice but to seek the protection of the bankruptcy court while negotiations with the lessors continue."


The larger of Hawaii's two major airlines, Hawaiian was founded in 1929 and is the nation's 12th-largest airline, carrying more than 6 million passengers a year. It serves 14 domestic and international destinations in the Pacific region, and specializes in interisland travel among the Hawaiian Islands.


Hawaiian provides daily service between Hawaii and Los Angeles, San Francisco, Seattle, Las Vegas and Portland, Ore.


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http://story.news.yahoo.com/news?tm...n_ge/na_fin_us_hawaiian_airlines_bankruptcy_2

 

[Freight Dog]

Jim? HAL?

 

[Singlecoil]

I wish you guys and gals all the best of luck. The only unknown in Ch. 11 is that you relinquish some control of your company to outside influences. I would view that as a calculated gamble by management that they could get what they want from the judge. I would guess that the judge is in Honolulu, and the creditors are from outside. Sounds like a winner.

 

[inseattlewa]

agreed, best of luck

hey jim-
truthfully, best of luck to you guys. personal opinion is that the best hope you have is that the bankruptcy court looks back into your past to see how much you, as an employee group, has given. it is a mistake to think that adams wont ask for pay cuts for you guys, yet again. look at HIS wording in your agreement. it is far from a legal agreement. scratch that, the wording is a legal way of saying, we wont, unless we find a way to...

this guy has set you up again and again. his specialty is doing exactly what he's doing. he sucked 20+ million out of you guys a few years back. that is where the courts may come in and save your bacon. investors know your retirement is almost $50 M underfunded. so do the courts. even in this great republican era, i find it hard to believe that anyone is going to FULLY support adams' plans. many believe he had this exactly planned for over a year. look at what he's done!

all that being said, you guys as an mec have to fight tooth and nail and do what it takes to keep your jobs. pay cuts, work rules, everything is on the table now. it sucks, but its true. you guys need to do what they ask to get yourselves a paycheck every month. its just SO not right. how far would that $25M stock buyback at $4 have gone for you right now? i sincerely wish the best to your whole employee group. when HAL gets back on its feet, and it will, get rid of that sack you have in charge, he is nothing but poison.

aloha,
IS

 

[HAL]

Yeah, it was a shock. I was just getting off the plane in HNL after the flight from SEA Friday, and one of the flight attendant reps was standing there with xerox copies of the news release. Not the way I like to be welcomed to Hawaii.

That said, I agree with Jim. Adams is a sharpie NY lawyer type, but since he bought the company, we've doubled in size and put in the most profitable years HA has ever seen. Personally I don't think he's out to screw the pilot group, or any other labor group. He wants to make a profit for the company and himself.

I've heard a lot of pilots here talk about how Adams has screwed us, but honestly I don't think he's done anything he didn't tell us about up front. The $25M stock buyback was pretty stupid, but nobody's perfect. And I don't think he could have seen the ugliness of the past six months back then. He told us this bankruptcy was a possibility, and here it is. I believe it really is about the lease rates, and if completed, we'll be out of Ch. 11 by late summer or fall, with new routes about to start.

The furloughs hurt too, but they said all along they were coming. I'm hanging on by my fingernails, but without some growth, I'm gone too. So for mine, Jim's, and all our sakes, lets hope the war is short, the bankruptcy brief, and growth in our future.

HAL

 

[inseattlewa]

yeah, nobody is perfect....

I hope you're right. And if these are the most profitable years you guys have ever had and you're still filing bankruptcy, well, there is a problem somewhere.

You guys do know what Smith and Adams do for a living right? Even the Hawaiian papers have given some pretty dead on reports on these guys. Truth be known, I want you guys to continue to flounder along like you have been. If we get someone else in the interisland market that knows what they are doing, we are in big trouble. And I don't mean that to be derogatory. Look at what your management does to you guys...seriously.

Do you truly believe for one second that Adams didn't know bankruptcy was coming? Come on, the guy was spawned from that circle! He knew. He doesn't care about Hawaiian Airlines. He cares about the bottom dollar...his bottom dollar. That's his only redeeming quality, he always makes money. Its too bad its at labor's expense. Don't let this guy fool you.

I hope you guys make it out of CH 11 by fall. I hope you all keep your jobs, your pay that you've earned, your retirements that you've paid into for so long, and all that you have coming to you. Problem is, the employees are gonna be the ones who get crushed in this deal. Think USAir and their pension plan as a worst case scenario. How is your plan funded right now? Are there any large payments due anytime soon? The funds in these accounts may not be accessible by creditors, but are they open for a certain kind of 'restructuring' so maybe they don't need to be funded the way they were initially agreed upon? Say off by $25M or in another year $50M?

I'm not trying to be a pain, I just hate to see this stuff go on at an ALPA carrier. These wages and working condition rules have been hard fought and to see $20+ million sucked out to payback a greedy guy like Adams (and the like) really irks me. Especially when it comes out of your hard work. You people fly 767's for criminy's sake, how is your pay and hour/month compared to anyone who flies that kinda equipment.

Ok, enough, I'm done. Kick this guys tail, get back what is yours. Best wishes to you guys. Really.

 

[HAL]

inseattlewa, I understand your opinion, but would like to respectfully disagree.

Yes, Adams and the Smith group are business men, and that is what it takes to run a business! Of course they knew a bankruptcy was possible, they said so time and again to us, but most people don't like listening to bad news and tuned much of it out in favor of being optimistic. That's fine for the employees, but I'm glad our management didn't turn a blind eye to our financial position. Of course it hurt to see them do the stock buyback, but not all of the $25M was his. In fact less than $10M went to the Smith group investors. The rest went to people like me who owned HA stock and took them up on the buyback offer. Remember - keep your eyes open. There are always more sides to the story than it first appears.

You said: He doesn't care about Hawaiian Airlines. He cares about the bottom dollar...his bottom dollar.

I've heard quite a few of the louder voices in the union saying things like that, but in reality, Hawaiian IS his bottom dollar. All of his money in the deal is tied up in the airline. If he doesn't manage the airline well and the airline sinks - there goes his $$. Adams & co. are not like the hired gun management at United, AA, Enron and the rest who'll get a golden parachute no matter what happens to the company. If Hawaiian goes under, so does all their money.

And - we finally have a president who actually comes from an airline background. Mr. Dunkerly has done nothing but impress the labor groups with his knowlege and ability. I feel confident that once the bankruptcy problems are behind us we'll be much stronger, leaner, and able to take on anybody, including AQ interisland. He has even said out loud that we should have our interisland operations profitable by late summer. Our international ops are already making money, so that will give us the leverage and opportunity to expand and become dominant in the Pacific.

You said: You people fly 767's for criminy's sake, how is your pay and hour/month compared to anyone who flies that kinda equipment. In a little over a year, we'll finish out this contract, which includes a little over 40% raise since it was signed in December 2000. Considering that we haven't taken any pay cuts, and the big guys like UA and AA have, we're actually quite close to industry standard. Yes, we'd like to have more, but in this economic environment, I think it would be pretty difficult to do. It's up to our negotiating committee to do their best in the coming year.

And finally, as far as the underfunded pension plan goes; I believe everyone's is in poor shape because of the current market woes on Wall Street. Yes, we have a number of our union people keeping tabs on it, so I doubt management will go after it. If I'm wrong, feel free to remind me about it in the future.

Like you said, I don't want to start a flame war between AQ and HA. You guys took government loan guarantees, we didn't. We chose bankruptcy, you didn't. There are more ways to do this than I can count. Let's hope we both get profitable, viable, and growing as soon as possible.


HAL

 

[AQ PILOT]

I really should stay out of this

I'm a friend of IS's and I agree with him on many of his points. I too would like to see both companies flourish. I hope you are right in your views, and I hope that HAL emerges ok from bankruptcy.

My 2 cents worth is this, from the SEC filing that I remember seeing last year, Adams and Co. walked away with over 80% of the 25 Million stock buy back. That is significantly more than 10M.

Look into Dunkerly's background.

Your 767 rates will not be close to industry standards, but then again, neither are our 737's.

Pension plans are your future. Remember that.

The thing I find most disturbing is the buyback timing and the 'suprise' bankruptcy. But, if its true as you put it, "hawaiian is adams future," he will have no problem putting the money back into the company to help out his company and his employees survive!

Good luck to you guys over there. There is no flaming war or animosity here!

Hey IS, be nice....

 

[inseattlewa]

Apologies!

sorry for the poor choice of posts. was actually trying to be supportive of the HAL pilots. everyone i know is for HAL employees! part of an advertiser story-


Tuesday, March 25, 2003

Stock buyback criticized

By Andrew Gomes
Advertiser Staff Writer

The largest secured creditor of Hawaiian Airlines has hinted it may fight the airline's attempt to reduce airplane lease payments through bankruptcy, citing the airline's use of $25 million in cash to pay Hawaiian owners a premium for their stock less than a year ago.

Boeing Capital Corp. attorney Steve Hedberg at a hearing on Friday called the buyback a potential fraudulent stock transfer, resurrecting criticism of Hawaiian rewarding investors last year while the airline industry was struggling to pull out of a financial crisis.

But proving it was Hawaiian's intent to repurchase stock so as to reduce assets that might be available to creditors in bankruptcy is a complicated task, according to bankruptcy attorneys not affiliated with the case.

A spokesman at Boeing Capital said the company would not elaborate on the issue. Hedberg did not return a call for further comment.

Keoni Wagner, a spokesman for Hawaiian, said the buyback was validated by an independent advisor as a good investment to enhance shareholder value at the time and is unrelated to the bankruptcy case.

The airline started repurchasing stock after the cancellation of a planned merger with Aloha Airlines last March, spending $3.1 million to buy nearly 1 million shares at varying market prices that averaged $3.17 between April 19 and May 7.

On May 31, Hawaiian said it would repurchase another 5.9 million shares for $4.25 each, a $1 premium per share at the time, and completed the $25 million deal July 8.

The buybacks reduced Hawaiian's cash by $28 million to $53.7 million at the end of September.

Wagner declined to disclose how much cash the company has on hand now, but said in hindsight that the buyback's only influence was to perhaps move up the need to file for bankruptcy a couple of months.

"The buyback has an impact on the company's cash position, but it really has no bearing on the company's business plan or viability," Wagner said.

Hawaiian said in its bankruptcy filings that it lost $58 million last year, at the end of which it had $256 million in assets and $399 million in debts.

Still, the perception among some observers is that Hawaiian management irresponsibly spent cash on the buybacks after receiving $30.1 million in federal air transportation stabilization benefits between late 2001 and August 2002.