Here's the official release:
FOR IMMEDIATE RELEASE
> Wednesday, December 19, 2001
> Stu Glauberman, Aloha Airgroup, (808) 539-5947
> Keoni Wagner, Hawaiian Airlines, (808) 833-6778
> Owen Blicksilver, TurnWorks, (516) 742-5950
> Alison Russell, Communications-Pacific, (808) 543-3542
> ALOHA, HAWAIIAN TO MERGE
> Airline Industry Leader Greg Brenneman to Head Combined Company
> HONOLULU - In a move designed to ensure the continued viability of
> Hawaii's interisland air service in a changing marketplace, Aloha
> Airgroup, Inc. and Hawaiian Airlines, Inc. (AMEX/PCX "HA") today agreed to
> merge Hawaii's two air carriers under a new holding company, Aloha
> Holdings, Inc.
> The new company will be headed by Greg Brenneman, the former president and
> chief operating officer of Continental Airlines, who for six years helped
> lead that carrier's spectacular turnaround. Brenneman will serve as
> chairman and chief executive officer of Aloha Holdings, Inc., which will
> be a public company traded as Hawaiian Airlines under the ticker symbol HA
> on the American Stock Exchange (AMEX) and the Pacific Stock Exchange
> The combined carrier is committing to hold unrestricted interisland fares
> for two years, and for an additional three years to link increases in
> those fares to inflation and other adjustments that affect all airlines,
> such as increased insurance and security rates due to September 11.
> Beyond this, the carrier will work with the State Attorney General to
> ensure fair prices for all consumers, including those who currently can
> arrange their travel at lower fares.
> Both Aloha and Hawaiian have been adversely impacted by the global
> economic slowdown and the dramatic reduction in Hawaii visitors since the
> tragic events of September 11. These and other financial factors, such as
> the continuing trend toward more direct flights from the mainland U.S. to
> Hawaii's Neighbor Islands, have made it uneconomical to maintain dual
> interisland operations.
> "This merger is the best thing these two great airlines could do for the
> people and economy of Hawaii," said Brenneman. "This state is dependent,
> like no other place in our country, on frequent, affordable, reliable
> local air service. The merger will create a flagship carrier for Hawaii
> that will not only allow the continuation of interisland service that
> Hawaii depends on, but will also provide the financial muscle and staying
> power needed to allow us to bring more visitors to Hawaii by growing in
> new markets, on the Mainland and in the Pacific.
> Since leaving Continental in May 2001, Brenneman has served as chairman
> and CEO of TurnWorks, Inc., a Texas-based company he founded in 1994,
> shortly before moving to Continental. TurnWorks invests in and works with
> firms needing executive turnaround leadership, management expertise and
> financial re-engineering. During Brenneman's six years as Continental's
> president and chief operating officer, he worked with management and
> employees as they developed and implemented a plan which resulted in a
> dramatic turnaround. Continental moved to the top of the industry in most
> major airline performance indicators, resulting in a dramatic improvement
> in shareholder value, reversing 16 years of losses. The company was
> recognized for outstanding service, including winning the J.D. Power,
> Frequent Flyer Magazine Award five out of six years for the best customer
> service of any U.S. air carrier. Continental climbed as high as Number 18
> in Fortune (magazine's) "100 Best Places to Work in America" before
> Brenneman's departure.
> "I look forward to working closely with all the employees of the new
> airline as we focus on the basics of providing a great product delivered
> by people who like coming to work," said Brenneman.
> The merger is expected to strengthen the company by generating savings of
> approximately $90 million from the consolidation of operations,
> elimination of excess aircraft and the coordination of flight schedules,
> ticket distribution and other functions. The company hopes to minimize
> the number of employees displaced as a result of the merger and, once
> profitability is reached, quickly grow so that everyone can come back to
> work. Brenneman plans to closely involve the unions and employees in
> making the integration of the two companies a success.
> The new airline is expected to have annual revenues of approximately $1
> billion, ranking it 10th largest among U.S. carriers, with solid prospects
> for growth.
> The combined company will continue to operate the interisland, Mainland,
> and Pacific routes currently served by Aloha and Hawaiian, including the
> operations of Aloha's sister carrier, Island Air, linking Hawaii's primary
> and secondary airports. The new company also will continue to provide
> dedicated interisland freight/cargo service.
> Aloha and Hawaiian's airline alliance partners will be able to keep their
> current contracts until they expire. Brenneman said the aim is to work
> with these partners to develop new agreements as well as to work closely
> with any airline that wishes to connect its passengers between the
> Under terms of the merger agreement, current Hawaiian Airlines'
> shareholders will receive approximately 52 percent of the combined company
> and a six-year, 8-percent note with a face value of $2 per share. Of the
> 52 percent, Airline Investors Partnership (AIP), Hawaiian's current
> majority owner, will receive approximately 28 percent and Hawaiian's
> public shareholders will receive approximately 24 percent. Aloha Airgroup
> shareholders will receive approximately 28 percent of the combined
> company, and TurnWorks will receive approximately 20 percent. Additional
> details regarding the transaction are described in the Annex attached
> An 11-member board of directors will govern Aloha Holdings, Inc. Three
> members will represent major employee labor units. In addition to
> Chairman and CEO Brenneman, Han "Sonny" Ching will serve as vice chairman.
> Ching has been chairman of the board of Aloha Airgroup since 1993.
> Ching said, "We see this new venture as the evolution of what Aloha began
> more than 55 years ago-an airline especially dedicated to the people of
> Hawaii. We are fortunate to have a highly respected airline executive
> like Greg Brenneman to help us carry on this tradition."
> John Adams, chairman of the board of Hawaiian Airlines, said, "Combining
> these two companies is something that makes sense now. The events of
> September 11, the distressed economic climate, and the interest expressed
> by TurnWorks were the catalysts for taking this step. The merger will
> create both immediate and long-term benefits for the flying public, Hawaii
> residents, and the Hawaii economy, as well as for our shareholders."
> The closing is subject to certain federal and state antitrust and other
> regulatory approvals, which are expected to be obtained in the first half
> of 2002. Aloha Airgroup's President and CEO Glenn Zander and Hawaiian
> Airlines' Vice Chairman and CEO Paul Casey plan to retire from their
> companies when the transaction closes.
> Zander said: "The completion of this merger will fulfill my mission at
> Aloha, which is to provide a financially stable air carrier that serves
> the needs of Hawaii and has the strength to expand into new markets.
> Stability, strength and growth will enable Hawaii's airline to bring
> increased economic benefits to the state for many years to come."
> Aloha Airlines was founded in 1946 as Trans-Pacific Airlines and is today
> the largest provider of interisland air transportation services in Hawaii,
> including passenger, air cargo and contract services. In addition, Aloha
> offers daily trans-Pacific scheduled air service between Hawaii and
> Oakland and Orange County in California, as well as Las Vegas, Nevada.
> Aloha's sister carrier, Island Air, operates scheduled air service to
> Hawaii's smaller airports.
> Founded in 1929 as Inter-Island Airways, Hawaiian Airlines is the first
> and largest Hawaii-based airline. From Honolulu, Hawaiian provides
> scheduled and charter air transportation of passengers, cargo and mail
> among the islands of Hawaii and between Hawaii and seven Western U.S.
> gateway cities and two destinations in the South Pacific. The nation's
> 12th-largest carrier, it is also the second-largest provider of
> trans-Pacific air service between the U.S. mainland and Hawaii.
> TurnWorks, Inc., a Texas-based private equity investment firm founded in
> 1994, focuses on corporate turnarounds and provides services such as
> management expertise, financial re-engineering, executive search and
> growth capital.
> Mercer Management Consulting provided strategic consulting services in
> support of the merger.
> Additional information on Aloha Airgroup and Hawaiian Airlines is
> available at www.alohaairlines.com http://www.alohaairlines.com
> www.hawaiianair.com http://www.hawaiianair.com
. In addition, an
> investors' presentation is available at www.hawaiianair.com
. Updated information on the merger will be
> posted on both sites as it becomes available.