Sale of Hawaiian Airlines Gains as Unions Freeze Pay

The Newport Beach investment group bidding for control of Hawaiian Airlines moved closer to its goal Friday as four of the air carrier’s unions approved new contracts that freeze wages for 36 months.

The fifth union, the 650-member Assn. of Flight Attendants, was still counting votes late Friday but was expected to ratify the new contract. Officials of the unions had strongly recommended acceptance of the pact.

J. Thomas Talbot, the Newport Beach attorney and longtime airline executive who has teamed with former baseball commissioner Peter V. Ueberroth to lead the $22-per-share acquisition bid for Hawaiian Airlines, said Friday that he was pleased with the action by the pilots, machinists and two smaller airline unions.

Approval a Must

Talbot said he expected the flight attendants to also approve the five-year contract, which his group has said must be in place for its deal to be completed.

Financing for the acquisition is contingent on the unions approving the contract, which is designed to save about $6 million in payroll costs over the five-year span.

The unions represent 84% of Hawaiian Airlines’ 3,000 employees. The new contract imposes a three-year wage freeze and a new set of work rules designed to increase employee productivity. Pilots and flight attendants, for example, would agree to work more hours each month for the same salary. In return, the workers would get increased job security and wage increases in each of the last two years of the contract.

The acquisition will cost at least $22 million for a majority of the outstanding common shares of HAL Inc., the airline holding company. If all the shares are tendered, the acquisition price would be $43 million.

Proxy Statement

Talbot declined Friday to discuss the financing arrangements but said they would be spelled out in a proxy statement HAL Inc. is expected to file with the Securities and Exchange Commission next week.

The proxy seeks the approval of current HAL shareholders of the sale of a majority interest in the company to HAL Acquisition. A shareholders’ meeting to vote on the sale has been scheduled in Honolulu on Oct. 23, Talbot said.