Hawaiian Airlines Unions to Vote on 5-Year Contracts
The Newport Beach investor group bidding for ailing Hawaiian Airlines said Wednesday that it has reached tentative agreement with all of the carrier’s unions on new five-year contracts that call for wage freezes in the first 36 months.
Approval of the contracts by the carrier’s pilots, flight attendants, machinists and other union workers would clear the way for completing the acquisition of HAL Inc., the airline’s holding company, by a group headed by attorney J. Thomas Talbot and former baseball commissioner Peter V. Ueberroth.
The buyout, which calls for the payment of $22 per share for at least a majority of the airline holding company’s stock, or at least $22 million, is contingent on the unions’ agreeing to concessions on wages and working conditions.
As of Wednesday, Talbot said, outside shareholders had tendered 233,000 shares and the HAL board had agreed to sell 1.1 million shares to his group, HAL Acquisition Inc., giving it control of 68% of the holding company’s 1,953,000 shares.
Japanese Group Holds 20%
A subsidiary of Japan Air Lines holds a 20% stake in HAL through the purchase last year of a large block of preferred stock. The Talbot group has not said whether it will also try to acquire those shares. Acquisition of all the outstanding shares would cost $43 million.
The acquisition also is contingent on the Talbot group securing financing and on the approval of HAL shareholders. A special meeting of stockholders is scheduled for Oct. 23. Talbot declined to discuss the financing arrangements but said they are expected to be in place Friday after the unions vote.
To accommodate the union ratification votes on the new contracts, HAL Acquisition has extended the deadline for its tender offer until midnight Tuesday, and Talbot said the deadline will probably be extended through Oct. 23 if the unions accept the agreements.
Officials of Hawaiian Airlines’ five unions could not be reached for comment Wednesday, but in a statement issued early in the day, the Assn. of Flight Attendants said its negotiating team, as well as negotiators for the Air Line Pilots Assn. and the International Assn. of Machinists, had reached tentative agreement with the Talbot group.
Talbot said leaders of two smaller unions representing dispatchers and other communications workers have also agreed to the pact.
The five unions represent 83% of Hawaiian Airlines’ 3,000 employees, and all have scheduled ratification votes this week on the proposed contracts, Talbot said.
Jack Magoon Jr., HAL chairman and majority shareholder, said the contracts call for the unions to accept a three-year pay freeze and major changes in working conditions--changes designed to increase worker productivity--in return for job security and wage increases in the fourth and fifth years of the pacts.
According to documents it has filed with the Securities and Exchange Commission, HAL Acquisition believes that the new contract, if approved by the union members, will save about $6 million over its lifetime. HAL has lost more than $30 million in the past 2 1/2 years.
Under the acquisition agreement proposed by the Talbot group, Magoon would remain as co-chairman of the holding company, sharing the title with Ueberroth. Talbot would become chief executive.
