Hawaiian Airlines Reaches New Tentative Agreement With Pilots

HONOLULU (AP) -- Hawaiian Airlines and its pilots union have reached a new tentative labor agreement, a month after the union rejected a previous deal, citing changes to retirement benefits and rising medical costs, officials said Thursday.

Terms of the tentative agreement between Hawaiian and the Air Line Pilots Association were not immediately disclosed. But Capt. Jim Giddings, the Hawaiian pilots' lead negotiator, said the tentative three-year agreement contains pay raises of 1 percent each year for three years. The contract covers the period from June 30 last year, when the previous contract expired, to June 30, 2007, he said.

The union will vote on the proposal, starting early next week, through May 10.

The pilots are the last of Hawaiian's six labor unions to ratify a new contract. The airline's parent, Hawaiian Holdings Inc., needs the new pilots contract to complete its emergence from Chapter 11 bankruptcy.

The carrier's court-appointed trustee, Joshua Gotbaum, said Hawaiian could emerge from bankruptcy by the end of May if the pilots ratify the agreement.

The pilots last month rejected a previous agreement because of changes to the retirement and disability plans, ''excessive'' increases to health insurance premiums and management bonuses some pilots considered too generous.

Gotbaum said the new contract addresses some of those issues.

On March 10, U.S. Bankruptcy Judge Robert Faris selected the reorganization plan submitted by Gotbaum, an unsecured creditor's committee and investment group Ranch Capital LLC, the controlling shareholder of the carrier's parent company Hawaiian Holdings Inc.

The Honolulu-based airline filed for Chapter 11 on March 21, 2003. Since then, Hawaiian has restructured its aircraft leases and negotiated new labor contracts with all but the pilots union.

When the new plan becomes effective, airline President and Chief Operating Officer Mark Dunkerley will become chief executive, the company said. Lawrence Hershfield, Ranch Capital's managing director and Hawaiian Holdings' CEO, will become chairman of the new board.