Fewer than two days before the official announcement that Aloha Airlines leaders filed Chapter 11 bankruptcy papers, employees at the Lihu‘e Airport operations said they were for the second straight pay period shorted money on their paychecks. But an Aloha
Fewer than two days before the official announcement that Aloha Airlines leaders filed Chapter 11 bankruptcy papers, employees at the Lihu‘e Airport operations said they were for the second straight pay period shorted money on their paychecks.
But an Aloha Airlines spokesman said the problem was a combination of the Christmas holiday, accounting quirks and woes with timecards, and that if the Lihu‘e employees haven’t been paid already, they will be soon.
Stu Glauberman, Aloha’s director of corporate communications, said there were problems with some timecards of workers at Lihu‘e and Kona, but they have been cleared up. The glitches have nothing to do with the “bigger financial problems” associated with the bankruptcy, he said.
Earlier in the week, the Lihu‘e employees were upset. According to one employee, who asked not to be identified, managers told workers that timecards got lost or were sent back because they were coded incorrectly, and that special checks would be cut to cover the shortages. As of earlier this week, they had not been cut.
“We’ve been lied to over here. We worked for that money already,” and people have mortgages and rents to pay, and bought Christmas presents for family members and friends banking on the fact that they would get the full amounts of pay they were entitled to on their checks, the disgruntled worker said.
Several Kaua‘i employees of Aloha Airlines didn’t receive paychecks at all on Tuesday, even after they were promised special checks would be issued to cover earlier shortages, the employee said.
“We’re been treated very unfairly here,” he said.
In a press release issued yesterday afternoon, airline officials said it would be “business as usual” even though they had filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
“It will be business as usual as we move forward to complete the restructuring of our company,” said David A. Banmiller, Aloha’s president and chief executive officer.
Banmiller said Aloha hopes to emerge from Chapter 11 as expeditiously as possible. “Meanwhile, it is important for the traveling public to know that reservations for future travel will continue to be taken, tickets will be honored, and flights will continue to operate as scheduled.
“Despite actions already taken to cut unprofitable routes and reduce senior management by 36 percent, Aloha must continue to pursue cost-reduction initiatives necessary to offset higher fuel and operating expenses in what has become a fiercely competitive market environment,” he said.
The worker at Lihu‘e said employees have already taken 10-percent pay cuts, and have been asked to take another 10-percent pay cut.
“If Aloha is to effectively compete, we must align our aircraft lease rates to market levels and match our expenses to those of competitors who have already benefited from bankruptcy protection,” Banmiller said.
“The decision to file Chapter 11 was not easy for Aloha — a company with a proud history etched by a conscientious desire to be a good corporate citizen and deeply rooted in the communities we serve.
“With our valued customers and loyal employees in mind, Aloha is focused on successfully emerging to become a bigger, stronger and more competitive player in the industry, so that we can continue to optimize our route network and provide our high-quality service at affordable fares to travelers in the cities we serve in Hawai‘i and North America.”
Chapter 11 of the U.S. Bankruptcy Code enables companies to reorganize under court supervision while they continue to operate and meet customers’ needs. Aloha’s restructuring efforts will be led by Banmiller, a veteran airline executive with an accomplished background specializing in airline financings and turnaround ventures for “financially-challenged” companies.
Glauberman said the bankruptcy filing is actually good news for leaders at the carrier, who hope to emerge from the filing a stronger entity, possibly even with the ability to offer lower fares.
Paul C. Curtis, associate editor, may be reached at 245-3681 (ext. 224) or mailto:pcurtis@pulitzer.net.
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