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December 9, 2003
HAL Pilots Express Outrage Over Executive Bonus Plans and Perks
HONOLULU --- Hawaiian Airlines pilots are demanding that the airline pay what it owes its underfunded pilot pension plan before it hands out millions of dollars in bonus payments to senior management and close to a million dollars a year in pay and perks to its court-appointed bankruptcy trustee.
On the day after Thanksgiving, Hawaiian’s bankruptcy trustee, Joshua Gotbaum, filed a wide-ranging motion seeking court approval for millions of dollars in severance and retention bonuses for senior management and a compensation package for himself of $70,000 per month plus unspecified housing and other expenses. Gotbaum advised the court that he might also seek a further bonus for himself at the conclusion of the case.
Capt. Jim Giddings, chairman of the Hawaiian Airlines unit of the Air Line Pilots Association, said Monday that pilots are upset and dismayed that the airline may hand over millions in executive compensation when it still has not made a $4.25 million pension payment scheduled for Sept. 15, which the company claimed it needed emergency relief to avoid.
"Why is this company looking to pay bonuses when it swears it doesn’t have enough money to pay its pension obligations?" Giddings asked. "It’s good that the company has now become so profitable that they can pay profit sharing to employees. But he should now be making good on Hawaiian’s retirement promise to the pilots. Gotbaum’s refusal to meet the Company’s pension obligations to the pilot group is a clear double standard."
Under the plan proposed by the Trustee, 11 senior officers of the Company could continue to receive their salaries for up to one year following a change in control if they either resign or are terminated within certain dates. Trustee Gotbaum would have the discretion to allocate up to an additional $1 million in severance payments to this select group and other management personnel in the case of separation during the reorganization period. The Trustee noted in the court filing that he was considering proposing a further bonus plan for senior management on top of the severance and retention payments.
In an announcement after Thanksgiving, the Trustee reported that Hawaiian had so exceeded its projected financial results that it would make profit sharing payments of approximately $3 million.
"Excessive compensation and perks take money away from the airline that could and should be used to bolster the company’s finances and pay our retirement plan," Giddings said. "Other than making Gotbaum look more and more like an overpaid airline CEO, how does this help Hawaiian pay its bills and emerge from bankruptcy?"
Headquartered in Honolulu, Hawaiian Airlines is the nation’s 12th-largest carrier, with 135 daily flights flown by 437 pilots who operate a fleet of B-717 and B-767 aircraft.
Founded in 1931, ALPA is the world’s oldest and largest pilots’ union, representing 66,000 pilots at 42 airlines in the U.S. and Canada. Visit the ALPA Web site at http://www.alpa.org.
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ALPA CONTACT: Capt. Jim Giddings, 808-836-2572