As the pilots of Hawaiian Airlines look forward to 2016, they see clear skies ahead—especially if they can complete a new contract this year.
The airline continues to impress observers with its service and on-time performance as it successfully resists ongoing competition from new and traditional rivals, posting record profits while building cash reserves and raising its stock price to all-time highs. And next year, the airline will begin taking delivery of new midsize aircraft that could be game changers.
All in all, Hawaiian is in an enviable position—except when it comes to contract talks with its pilots, which have slowed down after getting off to a fast start last fall.
“The goal is to have a contract that reflects industry wages, retirement, and work rules,” said Capt. Hoon Lee, the Hawaiian pilots’ Master Executive Council (MEC) chairman. “The pilots have spoken: We will accept no contract that is worth less than that of our peers who are flying the same types of aircraft and who have the same level of professional responsibility.”
The pilots spent a year preparing to open Section 6 talks in 2015. With Hawaiian posting record profits and its share price rising by almost 500 percent over the past few years, the pilots were hoping that bargaining would be limited to a few key issues and that an agreement would be reached quickly.
But despite this record profitability, management has asked pilots to “buy back” any pay increases by trading for other items, which is a nonstarter for the pilot group. As a result, in October 2015 the pilots and the company jointly filed for federal mediation after making only negligible progress in direct negotiations. The first sessions with the mediator will begin in January.
“All we’re requesting is to fairly participate in the incredible success the airline has benefited from. A large part of the success is due to the pilots’ many years of living with a concessionary contract,” Lee explained. “Both the company and the public should know that there’s no reason why Hawaiian pilots should earn 35–45 percent less than our fellow airline pilots.”
In addition to increased pay, the pilots are seeking to complete improvements to their retirement system, a task begun in the 2010 contract. Another key issue the pilots want to define is scope, as Hawaiian continues to expand internationally and grow its interisland subsidiary created in 2012.
Ohana by Hawaiian uses nonunion pilots to operate turboprops that fly into airports too small for the carrier’s B-717s. In 2015, Hawaiian announced it would expand its existing fleet of three passenger ATR 42s by adding three ATR 72Fs and launching a new interisland freight operation.
According to Lee, the pilots are keeping a close eye on the feeder carrier operation. “Our pilot working agreement places very specific restrictions on the Ohana operation. We’ll continue to monitor the situation and ensure that Hawaiian Airlines and Hawaiian Holdings comply with our current agreement,” he said.
After several years of expanding into new international markets, Hawaiian spent 2015 upgrading its existing fleet, standardizing seating for all of its interisland B-717s, and adding new lie-flat seating and other long-haul business travel amenities to its A330s. The carrier has aggressively competed with much larger rivals for coveted landing slots at Tokyo, Japan’s Haneda Airport.
The airline is also looking forward to major changes in its transpacific service, preparing for new A321neos that will begin arriving in July 2017. The midsize narrowbodies will replace B-767s by 2020, opening new opportunities and routes between the islands and the U.S. mainland that currently don’t make economic sense for the airline because of its larger aircraft.
“To attract the most skilled and qualified pilots to fly these new aircraft, we need an agreement that’s in line with what our peers are making,” Lee asserted.