Hawaiian Airlines Forecasts Layoffs, Fewer Flights
Hawaiian Airlines said Tuesday that it will lay off workers, reduce flights on Pacific Island routes and eliminate some Mainland bases as it continues its struggle to become profitable seven months after being acquired by an Orange County-based investor group.
J. Thomas Talbot, Hawaiian’s chairman and chief executive, said neither Hawaiian’s Honolulu-Los Angeles route nor its proposed Honolulu-Japan route would be affected by the cutbacks.
Talbot, a Newport Beach developer, teamed with former baseball commissioner Peter V. Ueberroth and other investors to acquire control of Hawaiian Airlines for $36.7 million late last year.
He said Tuesday that the air carrier’s finances continue to suffer from unexpectedly high maintenance and repair costs and from the carrier’s poor public image. Hawaiian reported a $16.2-million loss for the first quarter and expects to post a second-quarter loss as well, Talbot said.
He would not say which routes will be eliminated and said he does not know yet how many of Hawaiian’s 2,800 employees will lose their jobs. About 200 workers were let go just before the airline was acquired last year.
Although Ueberroth served as Hawaiian’s co-chairman with former majority owner John H. Magoon Jr. immediately after the takeover, both men stepped down in June as part of what Talbot called a long-planned management adjustment. The two remain on the board of directors.
Ueberroth’s brother, John Ueberroth, was named president of the airline when Talbot took over the chairmanship. John Ueberroth is a longtime travel industry executive and his connections in the travel business, airline industry sources said, are of incalculable value to a Hawaii-based carrier.
In a letter to Hawaiian’s employees, John Ueberroth said that a “significant level of sacrifice” is needed from them to help turn the carrier’s economic fortunes around.
Talbot said that while Hawaiian has dramatically improved its on-time performance and spent millions repairing and upgrading its fleet of jets and giving each employee a course in customer service, the traveling public’s perception of the carrier has not caught up with the improvements.
“I didn’t realize the reputation had deteriorated to the point it had in the local community,” he said.
Because most of Hawaiian’s delays and other performance problems have occurred on its Mainland and international flights, observers expect the carrier to concentrate on its core inter-island business.
In addition to its 17 flights from Los Angeles each week, Hawaiian’s overseas routes include scheduled daily flights to Seattle, San Francisco and La Vegas on the West Coast and weekly flights to Australia, Guam, American Samoa and Tahiti. Talbot said Hawaiian expects to be awarded a route to Japan by early 1991.
