Midnight Mike
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- Dec 10, 2002
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Hawaiian Airlines has wrestled a lease agreement from Boeing Capital Corp., after nearly two years of negotiations, adding a vital link in the chain of events as it attempts to get out of bankruptcy by the end of this year.
http://dc.bizjournals.com/event.ng/...bizjournals.com/specials/election/story1.html
According to the new agreement finalized this week, Boeing would transfer its claim in Hawaiian's Chapter 11 bankruptcy to the airline's new investor, Ranch Capital Corp.
Ranch's RC Aviation LLC, the airline's majority shareholder, would in turn vote in favor of the plan filed jointly by airline Trustee Joshua Gotbaum and parent company Hawaiian Holdings, ensuring that it garners maximum support. The plan already has the support of the unsecured creditors and lessors. Union approvals are the last link in the chain.
To emerge from bankruptcy, the airline needs final approval from U.S. bankruptcy court. It will seek an expedited court decision by Sept. 30.
"This agreement is good for both Hawaiian Airlines and Boeing," Gotbaum said. "It means we have the aircraft we need at lease rates we can afford. It's another important step toward Hawaiian's successful exit from bankruptcy."
Earlier this week, Boeing withdrew its support for another reorganization plan filed by Capital Recovery Group with former Hawaiian CEO Bruce Nobles.
Under the latest agreement, Hawaiian will get to keep the 11 Boeing 717-200s and three Boeing 767s it leases from Boeing Capital. More details on the terms of the deal were not disclosed as of PBN's press time Wednesday. Gotbaum expects to amend the plan to reflect the agreement terms before a court hearing on Oct. 5.
Expanding revenue, routes
According to the airline's proposed reorganization plan, it expects revenue from its passenger service to increase 9 percent between 2004 and 2007 due to route expansions.
Hawaiian's total revenue in 2007 is expected to be $838 million, compared to an estimated $761 million this year, according to management projections included in Gotbaum's reorganization plan filed last week.
The document outlined the airline's projected operating and financial performance from 2004 to 2007.
Based on projections, the company expects a net profit of $30.3 million this year. Increases in wages and fuel costs were offset by more money from passengers.
http://dc.bizjournals.com/event.ng/...bizjournals.com/specials/election/story1.html
Much of company's projected increase in the future is from the addition of new long-haul routes: the Australia route launched this year, a proposed China route and the possible addition of other Asian cities.
The interisland business, on the other hand, is expected to get tougher as more airlines fly direct to neighbor islands from the mainland. Interisland fares, which have escalated in the last couple of years, are expected to decline at the rate of 0.5 percent annually, the filing said.
On the expense side, Hawaiian expects to freeze contributions to its pilots' pension plan at the end of the year and replace them with a defined contribution plan.
Gotbaum has frequently mentioned that he intends to achieve the pension change by negotiating it with the pilots' union, whose current contract is up for renewal this year.
The company expects to contribute $32 million to the plan in 2004, but lower its contributions to about $20 million annually after that. Hawaiian will resume pension contributions to salaried employees and machinists, frozen in 1993, with a $10 million contribution over the next five years.
The company also said it estimated having to pay $135.6 million as the cost of its bankruptcy reorganization.
http://dc.bizjournals.com/event.ng/...bizjournals.com/specials/election/story1.html
Ranch's RC Aviation LLC, the airline's majority shareholder, would in turn vote in favor of the plan filed jointly by airline Trustee Joshua Gotbaum and parent company Hawaiian Holdings, ensuring that it garners maximum support. The plan already has the support of the unsecured creditors and lessors. Union approvals are the last link in the chain.
To emerge from bankruptcy, the airline needs final approval from U.S. bankruptcy court. It will seek an expedited court decision by Sept. 30.
"This agreement is good for both Hawaiian Airlines and Boeing," Gotbaum said. "It means we have the aircraft we need at lease rates we can afford. It's another important step toward Hawaiian's successful exit from bankruptcy."
Earlier this week, Boeing withdrew its support for another reorganization plan filed by Capital Recovery Group with former Hawaiian CEO Bruce Nobles.
Under the latest agreement, Hawaiian will get to keep the 11 Boeing 717-200s and three Boeing 767s it leases from Boeing Capital. More details on the terms of the deal were not disclosed as of PBN's press time Wednesday. Gotbaum expects to amend the plan to reflect the agreement terms before a court hearing on Oct. 5.
Expanding revenue, routes
According to the airline's proposed reorganization plan, it expects revenue from its passenger service to increase 9 percent between 2004 and 2007 due to route expansions.
Hawaiian's total revenue in 2007 is expected to be $838 million, compared to an estimated $761 million this year, according to management projections included in Gotbaum's reorganization plan filed last week.
The document outlined the airline's projected operating and financial performance from 2004 to 2007.
Based on projections, the company expects a net profit of $30.3 million this year. Increases in wages and fuel costs were offset by more money from passengers.
http://dc.bizjournals.com/event.ng/...bizjournals.com/specials/election/story1.html
The interisland business, on the other hand, is expected to get tougher as more airlines fly direct to neighbor islands from the mainland. Interisland fares, which have escalated in the last couple of years, are expected to decline at the rate of 0.5 percent annually, the filing said.
On the expense side, Hawaiian expects to freeze contributions to its pilots' pension plan at the end of the year and replace them with a defined contribution plan.
Gotbaum has frequently mentioned that he intends to achieve the pension change by negotiating it with the pilots' union, whose current contract is up for renewal this year.
The company expects to contribute $32 million to the plan in 2004, but lower its contributions to about $20 million annually after that. Hawaiian will resume pension contributions to salaried employees and machinists, frozen in 1993, with a $10 million contribution over the next five years.
The company also said it estimated having to pay $135.6 million as the cost of its bankruptcy reorganization.
