Hawaiian Reorganization

[RJP]

Hawaiian Air to file reorganization plan

By Jennifer Inez Ward, CBS MarketWatch.com
Last Update: 11:21 PM ET Aug. 26, 2004**CENSORED****CENSORED**

SAN FRANCISCO (CBS.MW) - Hawaiian Holdings and the trustee for its Hawaiian Airlines unit said late Thursday they have agreed on a reorganization plan to take the airline out of bankruptcy.

Ranch Capital, the managing member of Hawaiian Holdings' controlling shareholder, RC Aviation, has agreed to invest more than $160 million to purchase claims and reorganize the airline.

Under the proposed plan, Hawaiian Airlines' largest creditors, its aircraft lessors, would receive 100 percent of their approved claims, in a combination of 50 percent cash and 50 percent stock or a long-term note.

Other creditors would also be offered full payment of claims, either in cash or in a combination of 50 percent cash and 50 percent stock.

Mark Dunkerley, Hawaiian Airlines' president and chief operating office, would become chief executive officer.

The plan also calls for the board of Hawaiian Holdings, including former American Airlines CEO Donald Carty, to become the board of Hawaiian Airlines.

Hawaiian Holdings (HA: news, chart, profile) said the plan will be filed in U.S. Bankruptcy Court on Monday. The court and the airline's creditors must approve the plan.

On Thursday, shares of Hawaiian Holdings closed up 15 cents, or 2.3 percent to $6.56.

 

[HAL]

It's a good start, however down deep in the longer articles (WSJ, etc) came mention from Ranch Capitol of the "concession" word regarding employee groups.

They've already given up a lot, and since the company is currently making money, it seems a little hard to believe that the employees would give up much of anything without a very hardfought battle.

Yes they want to expand the airline, but at what cost? How much debt will the newly restructured airline be saddled with at a time where every penny of cash is precious? I hope it works, but there's a long way to go.

HAL

 

[Dan Roman]

Here's the WSJ article, were do you see the word concession?

http://online.wsj.com/article_email/0,,SB109356090945302457-IZjf4NklaJ3mp2pa36IbKyJm4,00.html

The word from all the unions and even the trustee has been adament that there would be no asking for employee concessions.
The rumor mill generally is agreeing that the retirement fund will be funded and than continue with both an A and B fund. New contracts will be signed that satisfies the unions (raise not concessions). Don Carty has been working with Boeing in advance for more aircraft and over 160 million will be invested initially for satisfing the creditors and expansion. Supposedly Ranch Capital likes the 7E7's but are looking at 777's as an interim aircraft. Believe it when you see it, but they will be buying the airline to expand. Ranch has the money to do it. They made the statement that they are excited that this is progressing quickly as their plans for the airline will be a major boost to the state's economy. Hawaiian made 18 million in July alone, and they were the third most profitable airline in 2003, they are doing even better in 2004, they don't need concessions.

 

[Dan Roman]

Here's a little longer one for you. No hint of concessions.

http://biz.yahoo.com/prnews/040826/lath085_1.html

 

[igneousy2]

Here's a little longer one for you. No hint of concessions.

http://biz.yahoo.com/prnews/040826/lath085_1.html

"Our next immediate task is to attempt to reach a consensual agreement with each of Hawaiian's labor groups, and to that end, we hope to continue our meetings with each in the coming weeks. Hawaiian's employees have been a large part of the reason for Hawaiian's success at a time when much of the rest of the industry is suffering, and they are an essential part of Hawaiian's future."

Sounds like they'll be looking for consessions to me.

Later

 

[HAL]

The quote came from Friday's Honolulu Advertiser:


http://the.honoluluadvertiser.com/article/2004/Aug/27/bz/bz01a.html

The specific quote is about 2/3 through the article and says:

[font=Times New Roman,Times,serif]Hawaiian's union employees would be asked to negotiate a new contract, Gotbaum said.[/font]

[font=Times New Roman,Times,serif]Hawaiian cannot exit bankruptcy until satisfactory new contracts have been negotiated.[/font]

Using the word "new" twice in two sentences seems pretty clear to me that they'll be coming after the unions for more concessions, even after Gotbaum clearly said there was no need.

HAL