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Wednesday, March 31, 2004 2:43:21 PM
Re bankruptcy:
Former American Airlines CEO to join Hawaiian Airlines' parent
Associated Press
Published on: 03/24/04
HONOLULU -- Former American Airlines chairman and chief executive Donald Carty will become chairman and an investor of Hawaiian Airlines once it emerges from bankruptcy under a reorganization plan by the carrier's parent company.
John Adams, chairman of Hawaiian Holdings, announced Carty's involvement in a statement Wednesday.
"Don Carty is a giant in the airline industry," Adams said. "We are delighted that someone with his vast experience and his strong vision has agreed to join the Hawaiian Air team. He's also an excellent addition to our investor group, with his understanding and appreciation of Hawaiian Air's unique market."
Carty served as American Airlines' chairman and CEO from 1998 until he resigned in April 2003. He resigned after an uproar that threatened the concessions deal over his failure to tell workers about bonuses and bankruptcy-proof pensions granted to executives while the rank-and-file were being asked to accept the huge pay cuts.
"I am not just going to be Hawaiian's chairman," Carty said in a statement. "I am going to be an investor and the managing partner of the investment partnership that will, pursuant to Hawaiian Holdings' reorganization plan, invest new money in the company. I believe strongly in Hawaiian Airlines and its future."
His proposed financial commitment was not disclosed.
Carty said he will not be involved in day-to-day management and that his role will be more strategic to help guide the airline through its next phase.
"I have studied Hawaiian Air for some time and I am very impressed," he said. "Its transformation since 1996, its young fleet, its vastly improved customer service and customer image, its on-time leadership record and its financial performance have been nothing short of phenomenal in these tumultuous times."
Hawaiian Airlines filed for Chapter 11 bankruptcy protection in March 2003.
Hawaiian Holdings has proposed a reorganization plan. Corporate Recovery Group LLC and Boeing Capital, the airline's primary aircraft lessor, have also filed a plan.
Several other entities also are expected to file reorganization plans, including one from Joshua Gotbaum, the court-appointed trustee in the case.
http://www.ajc.com/business/content/business/delta/0304/24carty.html
Boeing likes Carty, but says no to concessions
Prabha Natarajan
Pacific Business News
Boeing Capital Corp., Hawaiian Airlines' largest creditor, says it won't make any concessions despite the hiring of deal master Don Carty by John Adams, who is competing with Boeing for control of the airline.
This week, Adams, the airline's majority stockholder, parachuted Carty, American Airlines' former CEO, into the bankruptcy game to leverage his relationship with Boeing and capitalize on his reputation in the industry. But Boeing says it is not swayed.
"Despite our respect for Carty and assurances being made, we still see John Adams ... behind the plan," said Russ Young, a Boeing spokesman.
At issue is who will run Hawaiian Airlines after it emerges from Chapter 11 bankruptcy. Both Boeing Capital and Adams have presented reorganization plans to the bankruptcy court.
Hawaiian Airlines pays $500 million annually to lease 11 Boeing 717 and three Boeing 767 aircraft. The terms of the lease remain a major area of contention. Boeing refuses to renegotiate the lease agreements even though it has done so with several mainland carriers. Under Adams' leadership, the airline went into Chapter 11 bankruptcy a year ago when he couldn't get Boeing to lower its lease rates.
During the bankruptcy proceedings Boeing has actively opposed Adams. It succeeded in removing him as the airline's CEO and replaced his management with a court-appointed trustee. The trustee, Joshua Gotbaum, sued Adams claiming the $25 million stock buyback he engineered served his interest even as he sought lower leases from Boeing a month after. The U.S. Securities and Exchange Commission is investigating the buyback deal.
Boeing also proposed a separate reorganization plan to get the airline out of bankruptcy, which will be heard in bankruptcy court April 1. The plan would bring in new investors to replace Adams' interests. Chapter 11 bankruptcy proceedings will allow trustee Gotbaum and the creditors' committee to look at all reorganization plans and make a recommendation to the bankruptcy judge, who makes the final call.
The reorganization plan needs to find favor with creditors and, as the airline's major creditor, Boeing will have its say.
Getting back Boeing's favor is vital for Adams if he wants to retain his interest in the airline. That's why Carty was brought on board, said airline consultant Mo Garfinkle, an Adams' adviser.
"Carty should give Boeing a lot of comfort that the airline is in good hands," Garfinkle said.
Carty says he's ready to fulfill that role and already has met with Boeing.
"Hawaiian has an all-Boeing fleet so it is important that we establish a partnership that works for both parties," Carty said. "We need to rebuild the relationship."
Carty's role will be as an investor in a new partnership with Adams that will seek bankruptcy court approval to acquire a reorganized Hawaiian Airlines, effectively replacing the current parent company, Hawaiian Holdings Inc. Carty will be its managing partner and replace Adams as the organization's executive face. The size and price tag of Carty's investment hasn't been settled yet, they said.
Carty's name is much respected in the industry for saving American Airlines from the brink of bankruptcy. But it cost him his job. Carty resigned as CEO of American Airlines when its unions, on the verge of voting for massive wage concessions, discovered that the airline's top executives were being given retention bonuses. Carty had forgotten to tell them about it. The resulting furor maligned his name and he brings that baggage to Hawaiian's bankruptcy proceedings. Hawaiian Airlines' parent hopes his name and reputation will carry weight and win them back the airline. The unions say they still have reservations about Carty.
http://pacific.bizjournals.com/pacific/stories/2004/03/29/story2.html
Former American Airlines CEO to join Hawaiian Airlines' parent
Associated Press
Published on: 03/24/04
HONOLULU -- Former American Airlines chairman and chief executive Donald Carty will become chairman and an investor of Hawaiian Airlines once it emerges from bankruptcy under a reorganization plan by the carrier's parent company.
John Adams, chairman of Hawaiian Holdings, announced Carty's involvement in a statement Wednesday.
"Don Carty is a giant in the airline industry," Adams said. "We are delighted that someone with his vast experience and his strong vision has agreed to join the Hawaiian Air team. He's also an excellent addition to our investor group, with his understanding and appreciation of Hawaiian Air's unique market."
Carty served as American Airlines' chairman and CEO from 1998 until he resigned in April 2003. He resigned after an uproar that threatened the concessions deal over his failure to tell workers about bonuses and bankruptcy-proof pensions granted to executives while the rank-and-file were being asked to accept the huge pay cuts.
"I am not just going to be Hawaiian's chairman," Carty said in a statement. "I am going to be an investor and the managing partner of the investment partnership that will, pursuant to Hawaiian Holdings' reorganization plan, invest new money in the company. I believe strongly in Hawaiian Airlines and its future."
His proposed financial commitment was not disclosed.
Carty said he will not be involved in day-to-day management and that his role will be more strategic to help guide the airline through its next phase.
"I have studied Hawaiian Air for some time and I am very impressed," he said. "Its transformation since 1996, its young fleet, its vastly improved customer service and customer image, its on-time leadership record and its financial performance have been nothing short of phenomenal in these tumultuous times."
Hawaiian Airlines filed for Chapter 11 bankruptcy protection in March 2003.
Hawaiian Holdings has proposed a reorganization plan. Corporate Recovery Group LLC and Boeing Capital, the airline's primary aircraft lessor, have also filed a plan.
Several other entities also are expected to file reorganization plans, including one from Joshua Gotbaum, the court-appointed trustee in the case.
http://www.ajc.com/business/content/business/delta/0304/24carty.html
Boeing likes Carty, but says no to concessions
Prabha Natarajan
Pacific Business News
Boeing Capital Corp., Hawaiian Airlines' largest creditor, says it won't make any concessions despite the hiring of deal master Don Carty by John Adams, who is competing with Boeing for control of the airline.
This week, Adams, the airline's majority stockholder, parachuted Carty, American Airlines' former CEO, into the bankruptcy game to leverage his relationship with Boeing and capitalize on his reputation in the industry. But Boeing says it is not swayed.
"Despite our respect for Carty and assurances being made, we still see John Adams ... behind the plan," said Russ Young, a Boeing spokesman.
At issue is who will run Hawaiian Airlines after it emerges from Chapter 11 bankruptcy. Both Boeing Capital and Adams have presented reorganization plans to the bankruptcy court.
Hawaiian Airlines pays $500 million annually to lease 11 Boeing 717 and three Boeing 767 aircraft. The terms of the lease remain a major area of contention. Boeing refuses to renegotiate the lease agreements even though it has done so with several mainland carriers. Under Adams' leadership, the airline went into Chapter 11 bankruptcy a year ago when he couldn't get Boeing to lower its lease rates.
During the bankruptcy proceedings Boeing has actively opposed Adams. It succeeded in removing him as the airline's CEO and replaced his management with a court-appointed trustee. The trustee, Joshua Gotbaum, sued Adams claiming the $25 million stock buyback he engineered served his interest even as he sought lower leases from Boeing a month after. The U.S. Securities and Exchange Commission is investigating the buyback deal.
Boeing also proposed a separate reorganization plan to get the airline out of bankruptcy, which will be heard in bankruptcy court April 1. The plan would bring in new investors to replace Adams' interests. Chapter 11 bankruptcy proceedings will allow trustee Gotbaum and the creditors' committee to look at all reorganization plans and make a recommendation to the bankruptcy judge, who makes the final call.
The reorganization plan needs to find favor with creditors and, as the airline's major creditor, Boeing will have its say.
Getting back Boeing's favor is vital for Adams if he wants to retain his interest in the airline. That's why Carty was brought on board, said airline consultant Mo Garfinkle, an Adams' adviser.
"Carty should give Boeing a lot of comfort that the airline is in good hands," Garfinkle said.
Carty says he's ready to fulfill that role and already has met with Boeing.
"Hawaiian has an all-Boeing fleet so it is important that we establish a partnership that works for both parties," Carty said. "We need to rebuild the relationship."
Carty's role will be as an investor in a new partnership with Adams that will seek bankruptcy court approval to acquire a reorganized Hawaiian Airlines, effectively replacing the current parent company, Hawaiian Holdings Inc. Carty will be its managing partner and replace Adams as the organization's executive face. The size and price tag of Carty's investment hasn't been settled yet, they said.
Carty's name is much respected in the industry for saving American Airlines from the brink of bankruptcy. But it cost him his job. Carty resigned as CEO of American Airlines when its unions, on the verge of voting for massive wage concessions, discovered that the airline's top executives were being given retention bonuses. Carty had forgotten to tell them about it. The resulting furor maligned his name and he brings that baggage to Hawaiian's bankruptcy proceedings. Hawaiian Airlines' parent hopes his name and reputation will carry weight and win them back the airline. The unions say they still have reservations about Carty.
http://pacific.bizjournals.com/pacific/stories/2004/03/29/story2.html
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