Release #04.HAL6
July 16, 2004

HAL Pilot Union Praises Court’s Decision to Pay $11 Million Owed to Pilots

HONOLULU, HAWAI‘I -- Captain Jim Giddings, Chairman of the Hawaiian Airlines unit of the Air Line Pilots Association, today praised the federal bankruptcy court’s decision to grant ALPA and the airline’s motion to allow payment of what amounts to approximately $11 million in unpaid salaries and pension payments to Hawaiian Airlines pilots.

"This is a significant step toward the resolution of our issues and of Hawaiian’s overall restructuring. Clearing the decks of the past-due amounts lets everyone focus on the going forward issues – getting Hawaiian out of bankruptcy and resolving our open contract and concerns about our pension plan." said Giddings.

The motion -- which was filed jointly by the union and HAL bankruptcy trustee Joshua Gotbaum -- includes both the 10 percent deferred compensation as mandated in the pilots’ 2000 employment contract and the past-due amounts for the pension plan. The total amounts approximate $3.5 million in deferred compensation and $7.5 million for the retirement plan, respectively.

In another decision at the same hearing, the judge approved a motion proposed by bankruptcy trustee, Joshua Gotbaum, to provide a management bonus program. The union had had earlier expressed its concerns about the management program. Giddings said: "Hawaiian’s management, like all our employees, has worked hard to help turn around Hawaiian Airlines. We are not fundamentally opposed to the company providing bonuses to any employee who works hard and does a good job. However, the specific plan proposed by Mr. Gotbaum was problematic. And even if those problems were fixed, no bonuses should be handed out while the trustee is demanding concessions from the pilots or any other labor group."

"Basically, the management bonuses are out of step with the rest of the airline. It is true that line employees recently received a profit sharing bonus of about six to seven percent. This profit sharing plan was negotiated last year when the pilots gave up concessions equal to about 20% of our payroll. Although we took the biggest hit, other line employee groups also agreed to make concessions at the same time. The profit sharing plan was intended to be a small offset to concessions if the Company were to make a lot of money. Management employees didn’t give up anything, and therefore they didn’t get the profit sharing plan. Now, Mr. Gotbaum wants to give them bonuses ranging from 15% to 168% of their base pay." Giddings said.

"Additionally, we believed the structure of the proposed bonus plan is flawed because a significant portion of the money is not contingent on either continued employment or a successful reorganization. While we understand the need to attract – and retain – the best managers at the airline, the plan proposed by Mr. Gotbaum does not include proper incentives for good managers to stay over the long term," he explained.

Headquartered in Honolulu, Hawaiian Airlines is the nation’s 12th-largest carrier, with 135 daily flights flown by 300 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 64,000 pilots at 42 airlines in the U.S. and Canada. Visit the ALPA Web site at

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ALPA CONTACT: Capt. Jim Giddings, (808) 836-2572

Darcie Scharfenstein, Joan Bennet and Associates, Inc. (808) 531–6087, ext. 2