October 16, 2005
Aloha Airline Pilots Condemn Management’s Request to Terminate Labor Contracts in Bankruptcy Court
Management Flip-Flops; Files 1113 Motion After Assuring Pilots They Wouldn’t
HONOLULU – The Aloha Airlines unit of the Air Line Pilots Association, International (ALPA) today denounced Saturday’s 1113 motion filing by Aloha Airlines, calling it disappointing, unnecessary and inappropriate. The filing, which attempts to void labor contracts as part of the bankruptcy process, comes at a time when management gave assurances to the pilot group that they would avoid filing the motion and would work with the pilots to reach a consensual agreement.
The company’s 1113 motion also follows months of negotiations and numerous concessions given by the pilot group putting Aloha’s pilots in a significantly poorer financial position than those at Aloha’s competitors. These concessions have succeeded in making Aloha very profitable over the past months, and have created a stable labor environment for the potential new investor groups: Yucaipa Cos. and Aloha Aviation Investment Group LLC.
“We have made every attempt to negotiate in good faith with this management team for a labor contract that benefits both the pilots and the company, and would create a seamless transition for the new investors,” said David Bird, chairman of the master executive council for the Aloha pilot group. “Why they now would go back on their word, ask the Court to reject our contract, and risk having the new investors walk away from the table is beyond reason.”
Bird continued: “The Aloha Airlines management has failed to demonstrate the need for us to take these drastic concessions at this time. While we are aware of the cash crunch our company faces, management should be negotiating with us rather than trying to use the courts to raid its own workers who have worked so hard to make Aloha successful."
“Our goal was, and remains, to reach a consensual agreement with Aloha management to allow the airline to successfully emerge from bankruptcy court protection. We met with management as recently as Friday afternoon, and we continue to believe a satisfactory agreement can be reached. The company’s attempt to seek bankruptcy court intervention is both inappropriate and completely unnecessary.”
Under Section 1113, employers can seek to reject labor contracts as part of the bankruptcy process, in effect modifying the terms of any provision in those agreements, including pay, benefits, work rules, and scope. Any proposal must be limited to necessary modifications and any request must treat all parties fairly and equitably.
As part of the most recent round of concessions this past spring, Aloha pilots agreed to a twenty-percent pay cut, productivity enhancements and a two-year “freeze” on their pension plan. In return for nearly $12.5 million in pilot concessions, Aloha Airlines management on May 13, 2005 signed a Letter of Agreement expressly agreeing not to seek rejection of the pilot collective bargaining agreement in bankruptcy court. Merely five months later, the company not only is seeking complete termination of the pilots’ pension plan, but rejection of the entire contract.
The Air Line Pilots Association, International, is the world’s largest pilots union, representing 64,000 pilots at 41 airline carriers in the United States and Canada. Visit the ALPA website at http://www.alpa.org.
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ALPA CONTACT: Capt. David Bird, 808-838-0022; Ron Lovas, 703-481-4468