Clock Ticking For Aloha Airlines
Norman Lee - [email protected]
Thirteen days. That's how much time Aloha Airlines and its pilot union has until D-Day. Today, both parties arrived for a fifth and final day of hearings in federal bankruptcy court.
Judge Robert Faris is considering a motion to throw out the collective bargaining agreement between the airline and the Air Line Pilots Association.
The carrier has been seeking concessions from its five labor unions in order to move forward with its reorganization plan and emerge from Chapter Eleven bankruptcy protection. Without those labor concessions, the airline says it would likely lose its new investor, Yucaipa, and would face liquidation.
During a break in the proceedings, Michael Feeney, who sits on the negotiating committee for the Air Line Pilots Association, was asked whether he believed that claim.
"No, I don't," he replied. When asked why, Feeney paused for several seconds and said, "I'm in confidentiality right here, I can't talk about that."
Charles Dyke, who is representing Aloha Airlines during its latest court proceedings, told the judge the carrier has no new investor lined up. He also said no investor would be willing to absorb the current pension plan.
"Unless a new investor comes forward, it's over," he said.
Dyke told the court other union groups the airlines has negotiated with understand the need to sacrifice in order for the company to survive. He said the pilots are playing with disaster.
"They want to pull the trigger and see if there's a bullet in there," Dyke said.
The pilots say they have already agreed to pay cuts in 2003 and are willing to pay a premium for medical insurance. However, they are balking at the amount of cuts in pension benefits for retirees. They also want pilots who reach the mandatory retirement age of 60 to be covered by the company's medical plan until they become eligible for Medicare. They say Aloha's proposal would cut off those retirees from the company plan.
Daniel Katz, who is representing ALPA during the proceedings, told the court the pilots have also offered to freeze its pension plan. He argued Aloha has dismissed all of the union's proposals and is not bargaining in good faith.
He also noted the airline's agreements with the other unions are contingent upon the company reaching a deal with ALPA.
"So really in some ways, we're negotiating on behalf of the entire employee group, not just the 300-plus Aloha pilots," said Feeney.
Feeney says if this is designed to be a pressure tactic on the pilots union, it won't work.
Katz also revealed should the judge throw out the pilots labor agreement, the union would consider taking a strike vote.
"I can't comment on that," said Feeney.
Faced with those gloomy scenarios, Judge Faris has repeatedly pleaded with both parties to reach a consensual agreement and not leave the decision in his hands.
"This is literally a no-win proposition. I don't think anybody is really the winner if I decide it," Faris said.
"Not only do I not think it's a win-win, but I think either way the judge goes, it's a lose-lose proposition," said Feeney.
However, both sides confess, they are far apart on the key issues.
By law, the judge must issue a decision by November 28. That gives both parties less than two weeks to settle their differences and agree on a compromise.
"We have been negotiating through the weekend with the company and I believe I'll be heading straight from this hearing to continue negotiations," said Feeney.
One weary-looking attorney walked into the elevator following the hearing and murmured to no one in particular, "It's a waiting game now."
The clock is ticking.
Norman Lee - [email protected]
Thirteen days. That's how much time Aloha Airlines and its pilot union has until D-Day. Today, both parties arrived for a fifth and final day of hearings in federal bankruptcy court.
Judge Robert Faris is considering a motion to throw out the collective bargaining agreement between the airline and the Air Line Pilots Association.
The carrier has been seeking concessions from its five labor unions in order to move forward with its reorganization plan and emerge from Chapter Eleven bankruptcy protection. Without those labor concessions, the airline says it would likely lose its new investor, Yucaipa, and would face liquidation.
During a break in the proceedings, Michael Feeney, who sits on the negotiating committee for the Air Line Pilots Association, was asked whether he believed that claim.
"No, I don't," he replied. When asked why, Feeney paused for several seconds and said, "I'm in confidentiality right here, I can't talk about that."
Charles Dyke, who is representing Aloha Airlines during its latest court proceedings, told the judge the carrier has no new investor lined up. He also said no investor would be willing to absorb the current pension plan.
"Unless a new investor comes forward, it's over," he said.
Dyke told the court other union groups the airlines has negotiated with understand the need to sacrifice in order for the company to survive. He said the pilots are playing with disaster.
"They want to pull the trigger and see if there's a bullet in there," Dyke said.
The pilots say they have already agreed to pay cuts in 2003 and are willing to pay a premium for medical insurance. However, they are balking at the amount of cuts in pension benefits for retirees. They also want pilots who reach the mandatory retirement age of 60 to be covered by the company's medical plan until they become eligible for Medicare. They say Aloha's proposal would cut off those retirees from the company plan.
Daniel Katz, who is representing ALPA during the proceedings, told the court the pilots have also offered to freeze its pension plan. He argued Aloha has dismissed all of the union's proposals and is not bargaining in good faith.
He also noted the airline's agreements with the other unions are contingent upon the company reaching a deal with ALPA.
"So really in some ways, we're negotiating on behalf of the entire employee group, not just the 300-plus Aloha pilots," said Feeney.
Feeney says if this is designed to be a pressure tactic on the pilots union, it won't work.
Katz also revealed should the judge throw out the pilots labor agreement, the union would consider taking a strike vote.
"I can't comment on that," said Feeney.
Faced with those gloomy scenarios, Judge Faris has repeatedly pleaded with both parties to reach a consensual agreement and not leave the decision in his hands.
"This is literally a no-win proposition. I don't think anybody is really the winner if I decide it," Faris said.
"Not only do I not think it's a win-win, but I think either way the judge goes, it's a lose-lose proposition," said Feeney.
However, both sides confess, they are far apart on the key issues.
By law, the judge must issue a decision by November 28. That gives both parties less than two weeks to settle their differences and agree on a compromise.
"We have been negotiating through the weekend with the company and I believe I'll be heading straight from this hearing to continue negotiations," said Feeney.
One weary-looking attorney walked into the elevator following the hearing and murmured to no one in particular, "It's a waiting game now."
The clock is ticking.
