| March 31, 2008
Aloha Airlines Ceases Passenger Operations
Dear Sisters and Brothers:
Printable Version
After a proud history spanning more than 60 years, Aloha Airlines has
made the painful decision to cease its passenger operations effective
April 1, 2008. International and District staffs have been dispatched to
work closely with your Local Lodge representatives and assist the
membership in any way possible.
Employees courageously fought for the airline’s survival, making extreme
sacrifices during the company’s first trip through bankruptcy court. The
restructuring IAM members made possible could not prevent the shock
being experienced today, but it should have. Forces beyond the control
of management and employees controlled Aloha’s destiny: predatory
pricing, exorbitantly high fuel prices and a distressing lack of
government regulation conspired against Aloha’s success. While employees
tried valiantly to save their airline, others fought to see it
disappear. Aloha is a victim of corporate homicide.
A potential buyer for Aloha’s cargo unit and contract services has been
found and is seeking bankruptcy court approval to take over these
operations. How this will affect these employees is not yet certain, but
these units will continue operating for the time being.
The IAM will continue fighting to protect as many jobs as possible, and
assist those that lose their jobs as a result of Aloha’s demise. The
Machinists Union has a Department of Employment Services with the
resources and programs to assist members affected by Aloha’s shutdown.
The Machinists Union will not abandon our Aloha members. You will be
receiving information on how to deal with the sudden unexpected loss of
employment and how to apply for state unemployment benefits, as well as
other advice. The IAM will also try to find work for our displaced Aloha
membership. You will be advised when meetings with the Employment
Services Department are scheduled, and we strongly encourage you to
attend.
Grand Lodge Representative Samson Poomaihealani has been assigned to
represent the Grand Lodge in this matter. He will be working with the
Local and District Lodges to provide support for our Aloha members.
We thank the Aloha membership for decades of strong solidarity and
support. You will always be part of the Machinists Union family.
Mahalo,
S.R. (Randy) Canale
President and Directing General Chairman
IAMAW District 141
March 28, 2008
Aloha Airlines at Critical Juncture
Dear Sisters and Brothers:
Printable Version
An Aloha Airlines bankruptcy court hearing is scheduled for Monday,
March 31, 2008. Aloha complained in a previous court appearance that go!
Airline’s predatory conduct contributed to the need for the bankruptcy
and confirmed that Aloha Airlines is for sale. At that hearing, Judge
King approved the interim use of cash collateral to continue operating
the airline and pay wages and other employee related expenses. The
airline is expected to update the court on its progress in finding a
buyer or significant investor at the March 31 hearing.
Media reports suggest that Aloha Airlines may cease operations if a
buyer is not found. High fuel prices and unrealistically low
inter-island fares have caused Aloha’s precarious condition, not its
employees. The fact that Aloha has not asked for any concessions from
employees is telling for two reasons: Aloha acknowledges the substantial
contributions its employees have already made to the airline, and the
carrier recognizes that its condition is so dire that any additional
employee sacrifice will not improve Aloha’s current situation.
Seattle-based Saltchuk Resources, Inc. has made an offer to buy Aloha’s
cargo operations, but not the passenger operation. Approval of the
Saltchuk offer is subject to possible higher and better offers from
other parties. There have been no offers at this time for the entire
business.
Aloha employees have a long and proud history, and your union will fight
to keep the airline alive and our members employed.
You will be updated as events occur.
Fraternally,
S.R. (Randy) Canale
President and Directing General Chairman
IAMAW District 141
March 21, 2008
Aloha Returns to Bankruptcy Court
To: All IAM Members Employed by Aloha Airlines
Printable Version
Dear Sisters and Brothers:
Aloha Airlines has landed in bankruptcy court for the second time in
three years. Unfortunately, Aloha members are seasoned veterans of
bankruptcy wars. The Machinists Union has not been contacted about what
plans Aloha may have, if any, regarding IAM members. What is known,
however, is the tremendous sacrifice IAM members made during the
carrier’s previous trip through bankruptcy court.
IAM members survived Aloha’s last bankruptcy scarred, but not defeated.
Aloha management has not indicated what plans they may have regarding
our membership, but IAM members have already made all the sacrifice they
can. The Machinist Union’s proven bankruptcy team will aggressively
protect the interests of our Aloha Airlines membership.
Rumors abound at times like these. The IAM has prepared a bankruptcy Q&A
to address some of the most immediate concerns and we urge you to
contact your local or district IAM representative with any questions you
may have. The Q&A is available on the District 141 website,
www.iam141.org.
As we go forward and navigate the treacherous waters of bankruptcy,
shareholders, banks, airline executives, and countless others will have
diverging agendas. The Machinists Union’s only concern is the well-being
of our members. We will utilize all our resources to ensure you have a
strong, effective voice throughout the proceedings,
You will be kept updated as soon as more information becomes available.
Thank you for your solidarity and support.
Fraternally,
S.R. (Randy) Canale
President & Directing
General Chairman
March 21, 2008
Bankruptcy Q&A
Printable Version
for IAM-Represented Employees at Aloha Airlines
The IAM, in conjunction with our bankruptcy attorneys, has prepared this
document to explain how bankruptcy laws apply to Aloha Airlines
employees.
This document is not intended to try to answer every individual question
the membership has about bankruptcy, but we will try to answer as many
as we can. Please contact your local union representatives with any
additional questions so they can forward them to the appropriate
district representative for an answer. We will add to this document as
necessary.
Q: What is the goal of a “Chapter 11” bankruptcy?
A: The main purpose of a “Chapter 11” bankruptcy is to relieve a debtor
(in this case, Aloha Airlines) of debts, thereby providing an
opportunity for a fresh start. This is different from a “Chapter 7”
bankruptcy, which involves the company shutting down its operations and
the company’s assets being sold off. In each of the following questions,
when the term “bankruptcy” is used, we are referring to a Chapter 11
bankruptcy. A Chapter 11 bankruptcy could include selling off some or
all the Company’s assets as part of reorganization.
Q: Do we continue to get paid when the airline is in bankruptcy?
A: Yes. Things like wages, salaries, and sick leave are considered as
normal administrative expenses while in bankruptcy. The bankruptcy laws
assure that employees will continue to be paid for their services during
the reorganization. In addition, certain “pre-petition claims,” for
items like unpaid medical expenses and other benefits are given priority
status in bankruptcy, meaning that they are paid before any other
general unsecured claims.
Q: Do we still have collective bargaining agreements in effect in
bankruptcy?
A: Yes, the IAM continues to represent you for collective bargaining
purposes and our contract remains in effect. However, the company may
determine to ask the court for permission to reject our collective
bargaining agreements.
Section 1113 of the bankruptcy code lays out the rules an employer must
follow if it determines to seek to reject labor contracts. It ensures
that negotiations between a Chapter 11 employer and a union occur before
the company asks the court to allow it to reject a collective bargaining
agreement. It lays out the stringent standard by which a bankruptcy
court must evaluate an application to reject an agreement, and it
establishes a time frame in which the court may make its determination.
A collective bargaining agreement remains in effect, and the collective
bargaining process continues, after the filing of a bankruptcy petition
“unless and until” the company complies with the provisions of Section
1113. Accordingly, before the court may authorize the rejection of a
collective bargaining agreement the company must prove to the court that
the following nine (9) requirements have been met:
1. The company must have made a proposal to the union.
2. The proposal must be based upon the most complete and reliable
information available at the time of the proposal.
3. The modifications must be necessary to permit reorganization.
4. The modifications must provide that all affected parties are treated
fairly and equitably.
5. The company must provide the union with such relevant information as
is necessary to evaluate the proposal.
6. The company must have met with the collective bargaining
representative at reasonable times subsequent to making the proposal.
7. The debtor must have negotiated with the union concerning the
proposal in good faith.
8. The union must have refused to accept the proposal without good
cause.
9. The balance of the equities must clearly favor rejection of the
agreement.
If the court agrees that the company has met these conditions, it may
authorize the rejection of the collective bargaining agreement.
Q: What happens to our IAM National Pension Plan benefits in
bankruptcy?
A: The IAM National Pension Plan is a multi-employer defined benefit
pension plan, unlike the previously terminated Aloha-sponsored plans.
Vested benefits will not be affected by the bankruptcy filing. As long
as your current contractual provisions remain in effect, Aloha must
continue making pension contributions on your behalf.
Q: Are our Defined Contribution Pension Plans (e.g 401-k plans)
affected by bankruptcy?
A: The filing of a bankruptcy petition typically does not have an
immediate effect on a defined contribution pension plan. Assets in the
defined contribution plans are separate from Aloha Airlines, and would
not be “up for grabs” in bankruptcy proceedings. What is in your account
today will remain. The company is prohibited by law from taking funds
out of the defined contribution pension plans to meet other obligations
or to pay its debts. Furthermore, employer contributions to the plans
are treated as normal administrative expenses after a bankruptcy filing.
Such contributions to the plan would not be affected by the filing, but
could be affected if changes are made to the collective bargaining
agreements.
As part of a restructuring under bankruptcy, the company could elect to
terminate the defined contribution pension plans. If this were to occur,
prior contributions made by the employee would be protected. Prior,
vested contributions made by the employer would also be protected.
Q: Would retiree benefits such as medical and life insurance be
affected?
A: Just as with pension benefits, a bankruptcy filing does not have an
immediate or automatic impact on medical and life insurance benefits for
retirees. Unfortunately, because retiree medical and life insurance
benefits are not vested benefits in the same sense as pension benefits,
they are more vulnerable during a bankruptcy. However, Section 1114 of
the bankruptcy code says that a company may not modify retiree benefits
unless the retirees’ representative (the IAM) agrees to such
modification or unless the court specifically authorizes modification.
Like the requirements that must be met to modify collective bargaining
agreements, Section 1114 sets certain procedures to obtain permanent
modifications to retirement benefits. |
