Hawaiian Airlines seeks buyer or investor

By Jeff St.Onge
Bloomberg News

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Hawaiian Airlines has already received competing reorganization offers from Boeing, which is the Honolulu-based airline's largest creditor, and from corporate parent Hawaiian Holdings. Hawaiian Airlines filed for bankruptcy protection last year after failing to negotiate a $20 million reduction in aircraft leases with Boeing.

A court-supervised auction of the airline would allow competing investment offers and may result in improved recoveries for Boeing and other creditors. Hawaiian is a longtime Boeing customer and operates 135 daily flights using 11 717s and 13 767s. The airline, founded in 1929, has 3,276 employees, according to its Web site.

"Hawaiian Airlines is not only one of the nation's best airlines, it's also one of the most profitable" said Joshua Gotbaum, a court-appointed bankruptcy trustee running the company. "We've received plenty of calls from interested investors, and the way to get the best deal for Hawaiian is to let them compete for it."

U.S. Bankruptcy Judge Robert . Faris named Gotbaum to lead the airline after Boeing in May asked for the ouster of then Chief Executive Officer John Adams. Hawaiian Holdings, which isn't in bankruptcy proceedings, is controlled by Adams and his partner, Randall Smith.

The Hawaiian Airlines creditors' committee joined in the airline's request for an auction. A hearing on the motion is set for April 1. Court approval of the auction process would preserve the airline's right to reorganize independently if it doesn't receive acceptable bids, the airline said in a court filing.

" Russell Young, a Boeing spokesman, said the company would proceed with its reorganization plan for Hawaiian Airlines. "We'll go to court and argue the merits of our motion," Young said. "We've got a plan that offers the best return for creditors and the brightest future for the airline."

The six-member Hawaiian Airlines creditors' committee includes United Technologies' Pratt & Whitney unit and three labor unions representing Hawaiian's pilots, mechanics and flight attendants.

A spokesman for the panel couldn't immediately be reached to comment.

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