At the same time, the airline announced that it would end service to Manila in the Philippines on July 31, 2013.
Reorganization, Bankruptcy 1, (1993 - 1994)
Due to the airline's increasingly unprofitable operations it filed for Chapter 11 bankruptcy protection in September 1993. During this time the company reduced many of its costs: reorganizing its debt, wrestling concessions from employees, cutting overcapacity and streamlining its fleet by disposing many of the planes it had added to its fleet just a few years earlier.
As part of Hawaiian's restructuring it sold Kapalua Airport to the State of Hawaii in 1993. Hawaiian soon after discontinued service to the airport as it retired its Dash 7 fleet. The retirement of the Dash 7 in 1994 also resulted in the airline operating a more streamlined all-jet fleet as it exited bankruptcy in September 1994.
Reorganization Bankruptcy 2, (2003–2005)
Hawaiian Airlines filed for Chapter 11 bankruptcy protection on March 21, 2003 with operations still continuing, and at the time was overdue for $4.5 million USD worth of payments to the pilots' pension plan. Within the company, it was suggested that the plan be terminated. As of May 2005, Hawaiian Airlines had received court approval of its reorganization plan. The company emerged from bankruptcy protection on June 2, 2005, with reduced operating costs through renegotiated contracts with its union work groups; restructured aircraft leases; and investment from RC Aviation, a unit of San Diego-based Ranch Capital, which bought a majority share in parent company Hawaiian Holdings Inc in 2004.
Hawaiian Airlines to Complete Restructuring Under Chapter 11
Flights and Services to Continue Without Interruption
HONOLULU, Mar 21, 2003 /PRNewswire-FirstCall via COMTEX/ -- Hawaiian Airlines, Inc., a subsidiary of Hawaiian Holdings, Inc. (Amex: HA; PCX), announced today that, in order to complete a restructuring process begun several months ago to restore the company's long-term financial health, it has filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Hawaiian Holdings was not included in the filing and will not be a part of the Chapter 11 process.
"It will be business as usual for the airline as we complete our restructuring," said John W. Adams, chairman and chief executive officer of Hawaiian Airlines. Adams said that the company hopes to complete the restructuring and emerge from Chapter 11 in the fall.
"In the meantime, tickets will be honored, maintenance and service will continue at the highest levels, and our HawaiianMiles program will continue to offer fliers significant award benefits. Code-share agreements with partner airlines should not be affected by the filing. Most importantly, customer safety will remain our highest priority. We take great pride in our 73-year record of safety, service and reliability, and we intend to continue to build upon that record."
"This is a moment in time for our company," Adams said. "As the travel experience on most other airlines is eroding, Hawaiian Airlines has a unique opportunity to distinguish itself with its premiere Hawaii service. While most airlines are cutting wages, cutting flight schedules and cutting services, Hawaiian Airlines is introducing new aircraft, new conveniences, new services and new routes."
Adams said that the company has made significant progress since it launched its restructuring efforts several months ago in response to the dramatically changed operating environment after 9/11. "In addition to significant improvements in operating efficiencies throughout our company, we have been successful in working with the unions that represent the majority of our employees and many of our vendors to lower operating costs and create a more viable, competitive business model for the future.
"Despite our best efforts and extensive negotiations, however, we have been unable to reach agreement with certain of our aircraft lessors on reducing our lease rates to market levels," Adams said. "As a result, we felt we had no choice but to seek the protection of the Bankruptcy Court while negotiations with the lessors continue," Adams said.
Adams pointed to substantial progress made in achieving key elements of the company's strategic plan. Since June, he said, the airline has:
Increased operating efficiency through the conversion to a new fleet of transpacific and inter-island aircraft.
Lowered labor costs by approximately $15 million annually through productivity improvements in union agreements.
Significantly reduced distribution costs while it improved efficiency and inventory management by eliminating paper tickets, inter-island coupons and conversion to an electronic processing system.
"Clearly we would have preferred to complete our restructuring outside of the Bankruptcy Court, particularly in light of our significant progress to date. A major element of our strategic plan and the key to the future financial health of the company is to mark our aircraft lease rates to market, but without the support of certain of our aircraft lessors, we felt obliged to protect the assets of the company, including the continued use of our aircraft while the restructuring is finalized," Adams said.
He noted that the company has requested Court permission to continue employee wage and benefit programs as usual. It has also requested Court permission to continue customer programs, including its HawaiianMiles frequent flyer program, pay fuel vendors, hotels and other services without interruption and to assume code-share, clearing house and interline airline contracts.
Vendors will be paid in the ordinary course for goods and services provided after the filing date.
The company filed its voluntary petition in the U.S. Bankruptcy Court for the District of Hawaii in Honolulu.
About Hawaiian Airlines
Founded in Honolulu 73 years ago, Hawaiian Airlines is Hawaii's longest- serving and largest airline. The nation's 12th largest airline, it is also the second-largest provider of passenger service between the West Coast and Hawaii.
Hawaiian Airlines currently provides up to 30 nonstop daily flights between nine cities on the U.S. mainland and Hawaii, along with weekly service between Honolulu and American Samoa and Tahiti. The airline also provides charter service between Honolulu and Anchorage, Alaska. In addition, Hawaiian Airlines is participating in the federal government's Civil Reserve Air Fleet, transporting Armed Forces personnel between the U.S. and points in the Pacific and Middle East.
Hawaiian Airlines takes great pride in its innovative onboard service programs that highlight and promote the people and culture of Hawaii. The airline has earned numerous international awards for service in recent years, including the 2001 Zagat Survey's award for Best Overall U.S. Airline in the Premier category, and the 2001 Diamond Award for In-Flight Service from Onboard Services magazine. Hawaiian Airlines was rated third highest in "Travel & Leisure" magazine's most recent ranking of the Top 10 U.S. Airlines. Additional information on Hawaiian Airlines, including previously issued company news releases, is available on the airline's Web site at www.HawaiianAirlines.com .