The news just came down today that Hawaiian Holdings, the parent company of Hawaiian Airlines, has purchased the certificate, ground equipment and the frequent flyer list of the now-defunct Island Air. The move, which came as a last minute motion before the bankruptcy judge, will purchase all of Island Air's assets for $750,000. This included the operations certificate, valued at $450,000, and immediately provide cash advances to pay for Chapter 7 administrative expenses. Hawaiian said it would buy other assets, such as ground-service equipment, furniture and frequent-flier lists, for $300,000.

According to the Star Advertiser article: "Hawaiian officials said they would issue a statement shortly on what Hawaiian intended to do with the operating certificate."

It was the purchase of the operations certificate that seems the most intriguing. And obviously Hawaiian already talked about what to do with the certificate when the purchase is made and is transferred. For the rest of the purchase, I am sure that buying a FF list allows Hawaiian to bulk up their list with whomever is not in their current FF program.

The article that announced this is from the Star Advertiser. And they have a paywall.
http://www.staradvertiser.com/2017/12/1 ... or-750000/

Whaaaaaaaat? What is going on here? No way they’d buy the operating certificate if they didn’t plan to use it, right? What would they do with it though? Interisland isn’t big enough to have a low cost subsidiary ... or is it? Maybe they’re worried about WN’s interisland threats and they want to introduce no-frills a la Go! Interisland service with spare 717s? No baggage allowance, no classes, no service - basically a flying TheBus?

Or maybe they were worried someone else was going to buy the certificate and they wanted to head them off at the pass to avoid a new competitor?

Omg...I’m at the edge of my seat.

The FF list seems like a waste of money. I think everyone who lives in the State has a Hawaiian FQTV so what could there be to having from WP’s list?

I would guess "Island Air" will take over the Ohana operation from Empire.

MO11 wrote:

I would guess "Island Air" will take over the Ohana operation from Empire.

Lol duh, that is actually the most logical explanation. Here I was having a party in my head with all my guessing.

The purchase of the air operations certificate may be as simple as not allowing another company to gain access to the certificate.
Beyond the general difficulty in gaining the certification, each certificate is different- and allows different operations based off what the operator has been willing to prove to the FAA over time. A certificate In Hawaii may have some exemptions that are very specific to Hawaii, and HA may not want other airlines to gain easy access to those exemptions.

Per a recent update to the Star-Advertiser story:

Hawaiian spokesman Alex Da Silva said the decision to buy the operating certificate was a way to bring in-house the company’s turboprop airline, ‘Ohana by Hawaiian, rather than outsource the contract as it is now to Idaho-based Empire Airlines.

Da Silva said the state’s largest carrier formed a new wholly-owned subsidiary, Elliott Street Holdings, to purchase the stock of Island Air and assume ownership of Island Air’s Federal Aviation Administration operating certificate as well as other assets. ‘Ohana by Hawaiian, which launched service in March 2014 and now has three 48-seat ATR-42s, flies between Honolulu and Molokai, Honolulu and Lanai, Kahului and Kona, Kahului and Molokai, Kahului and Hilo and Lanai and Molokai.

“If approved, the sale will allow ‘Ohana by Hawaiian to assume oversight of operations currently provided under contract by Empire Airlines,” Da Silva said. “Those operations would include the hiring of pilots, flights attendants, and customer service and maintenance crews (who now are all Empire employees). We believe that assuming the FAA certificate will greatly benefit our guests by improving the efficiency and reliability of ‘Ohana by Hawaiian.”

-Aloha!

Web500sjc wrote:

The purchase of the air operations certificate may be as simple as not allowing another company to gain access to the certificate.
Beyond the general difficulty in gaining the certification, each certificate is different- and allows different operations based off what the operator has been willing to prove to the FAA over time. A certificate In Hawaii may have some exemptions that are very specific to Hawaii, and HA may not want other airlines to gain easy access to those exemptions.

While this makes the most sense, HA still has a multi year contract with Empire, they won't be able to just drop them. For this meager amount of money, staving off competition seems like a logical move. But ultimately I guess it is about Ohana. HA owns those 3 ATR-42's?

obelau24 wrote:

Whaaaaaaaat? What is going on here? No way they’d buy the operating certificate if they didn’t plan to use it, right? What would they do with it though? Interisland isn’t big enough to have a low cost subsidiary ... or is it? Maybe they’re worried about WN’s interisland threats and they want to introduce no-frills a la Go! Interisland service with spare 717s? No baggage allowance, no classes, no service - basically a flying TheBus?

Or maybe they were worried someone else was going to buy the certificate and they wanted to head them off at the pass to avoid a new competitor?

Omg...I’m at the edge of my seat.

The FF list seems like a waste of money. I think everyone who lives in the State has a Hawaiian FQTV so what could there be to having from WP’s list?

If they buy the FF list a competitor does not get that information and has to start from scratch.

RWA380 wrote:

Web500sjc wrote:

The purchase of the air operations certificate may be as simple as not allowing another company to gain access to the certificate.
Beyond the general difficulty in gaining the certification, each certificate is different- and allows different operations based off what the operator has been willing to prove to the FAA over time. A certificate In Hawaii may have some exemptions that are very specific to Hawaii, and HA may not want other airlines to gain easy access to those exemptions.

While this makes the most sense, HA still has a multi year contract with Empire, they won't be able to just drop them. For this meager amount of money, staving off competition seems like a logical move. But ultimately I guess it is about Ohana. HA owns those 3 ATR-42's?

All contracts can be broken. Yes, HA owns all the ATR's, including the freighters being brought online.

azjubilee wrote:

RWA380 wrote:

Web500sjc wrote:

The purchase of the air operations certificate may be as simple as not allowing another company to gain access to the certificate.
Beyond the general difficulty in gaining the certification, each certificate is different- and allows different operations based off what the operator has been willing to prove to the FAA over time. A certificate In Hawaii may have some exemptions that are very specific to Hawaii, and HA may not want other airlines to gain easy access to those exemptions.

While this makes the most sense, HA still has a multi year contract with Empire, they won't be able to just drop them. For this meager amount of money, staving off competition seems like a logical move. But ultimately I guess it is about Ohana. HA owns those 3 ATR-42's?

All contracts can be broken. Yes, HA owns all the ATR's, including the freighters being brought online.

The last props that HA operated were the Dash-7's & SD-330's then, correct? I've flown both types on HA & can't remember any other props in HA colors, until the ATR's showed up on property a few years back. What freighters did HA obtain? I admit I'm out of the loop on those.

azjubilee wrote:

All contracts can be broken. Yes, HA owns all the ATR's, including the freighters being brought online.

It just bought a fourth ATR 42.

RWA380 wrote:

The last props that HA operated were the Dash-7's & SD-330's then, correct? I've flown both types on HA & can't remember any other props in HA colors, until the ATR's showed up on property a few years back. What freighters did HA obtain? I admit I'm out of the loop on those.

It acquired 3 ATR 72s for cargo.

The ATR 72Fs mean that HA thinks it can take thin route cargo from TransAir's Shorts, or perhaps P2P instate without a sort in HNL.

RWA380 wrote:

Web500sjc wrote:

The purchase of the air operations certificate may be as simple as not allowing another company to gain access to the certificate.
Beyond the general difficulty in gaining the certification, each certificate is different- and allows different operations based off what the operator has been willing to prove to the FAA over time. A certificate In Hawaii may have some exemptions that are very specific to Hawaii, and HA may not want other airlines to gain easy access to those exemptions.

While this makes the most sense, HA still has a multi year contract with Empire, they won't be able to just drop them. For this meager amount of money, staving off competition seems like a logical move. But ultimately I guess it is about Ohana. HA owns those 3 ATR-42's?

Note that the statement from HA specifically mentions improving reliability of Ohana. I have no idea what Empire’s operational performance is like, but there would almost certainly be contractually agreed to minimum standards for OTP and completion which might be grounds for terminating the contract.

WPvsMW wrote:

The ATR 72Fs mean that HA thinks it can take thin route cargo from TransAir's Shorts, or perhaps P2P instate without a sort in HNL.

Can TransAir's S360's take ULDs or are they bulk only? If the latter, I'd argue it's to take on TransAir and Aloha's 737s as the AT7s will be ULD capable which will assist them in being able to offer intact ULD moves to the outer islands from the mainland and international origins.

77H

obelau24 wrote:

Maybe they’re worried about WN’s interisland threats and they want to introduce no-frills a la Go! Interisland service with spare 717s? No baggage allowance, no classes, no service - basically a flying TheBus?

In order for this type of operation to thrive by providing service at rock bottom rates, the Ohana operation I would think would need to be non-union. Is Ohana, in it's current state, non-union? Does Hawaiian and it's unions have provisions in the various contracts that would allow Ohana to stay non-unionized?

If so, than I think we might have a ballgame with your prediction.

There is also another possibility with Hawaiian getting a second certificate and bringing Ohana in house.

Perhaps Hawaiian is preparing to not only expand Ohana in the interisland market. They could, theoretically, create a whole new airline that services both the interisland and mainland or international market. With Scoot and Air Asia X coming to Hawaii from Asia with rock bottom fares, and with Southwest coming to Hawaii with the possibility of them putting in rock bottom fares, a way Hawaiian could compete at that level would be to create an airline along the lines of SWA/Scoot/Air Asia X. If the entity that Hawaiian is giving the certificate to is non-union...I would say it is a good bet that Hawaiian would transfer over older models of the A330 to this new entity, take out the first class and make it all tourist. Maybe even put a sweetener by allowing a free baggage allowance but no food service outside of pretzels.

Like what obelau24 wrote, the possibilities could be quite exciting for the Hawaii airline market. IT would also, if it all did work out, make Dunkerly something close to brilliant at a time of uncertainty.

KanaHawaii wrote:

There is also another possibility with Hawaiian getting a second certificate and bringing Ohana in house.

Perhaps Hawaiian is preparing to not only expand Ohana in the interisland market. They could, theoretically, create a whole new airline that services both the interisland and mainland or international market. With Scoot and Air Asia X coming to Hawaii from Asia with rock bottom fares, and with Southwest coming to Hawaii with the possibility of them putting in rock bottom fares, a way Hawaiian could compete at that level would be to create an airline along the lines of SWA/Scoot/Air Asia X. If the entity that Hawaiian is giving the certificate to is non-union...I would say it is a good bet that Hawaiian would transfer over older models of the A330 to this new entity, take out the first class and make it all tourist. Maybe even put a sweetener by allowing a free baggage allowance but no food service outside of pretzels.

Like what obelau24 wrote, the possibilities could be quite exciting for the Hawaii airline market. IT would also, if it all did work out, make Dunkerly something close to brilliant at a time of uncertainty.

There's at least one document that shuts down your whole fantasy... the pilot contract. What you suggest won't happen and I think you and others are reading too far into this development. From the beginning of Ohana, it was always an option to bring it in house. HAL opted to contract the services out to Empire, instead of pouring the $$$ and resources into creating a new certificate and to allow for quick start-up. Now that a certificate is available, with minimal work and investment, they're seizing the opportunity. All very straightforward. Ohana will always be limited by the HAL pilot scope in what they can do, so much more expansion is not going to happen. As for starting an alter-ego carrier, it too will be constrained by the HAL pilot contract. Not to mention, a completely useless and unnecessary venture. HAL already competes very effectively on costs, there's no need to do what you suggest.

77H wrote:

WPvsMW wrote:

The ATR 72Fs mean that HA thinks it can take thin route cargo from TransAir's Shorts, or perhaps P2P instate without a sort in HNL.

Can TransAir's S360's take ULDs or are they bulk only? If the latter, I'd argue it's to take on TransAir and Aloha's 737s as the AT7s will be ULD capable which will assist them in being able to offer intact ULD moves to the outer islands from the mainland and international origins.

77H

The Shorts can accept palletized seats, but I don't know the cargo door dimensions.

azjubilee wrote:

There's one document that shuts down your whole fantasy... the pilot contract. ... Ohana will always be limited by the HAL pilot scope in what they can do, so much more expansion is not going to happen.

Not exactly. The HA pilot contract is between the pilots union (part of ALPA) and HA, not with Hawaiian Holdings, which is a completely different legal entity that happens to own HA. HwnHldgs could very well operate a second airline under the AOC it bought. Think IAG, a larger holding company that has several subsidiaries, each with one or more AOCs.

The contract between HA and Empire can be terminated early, the issue is simply whether it's for cause, or without cause. HA is no stranger to litigation. I predict an amicable settlement with Empire and a new Ohana.

WPvsMW wrote:

azjubilee wrote:

There's one document that shuts down your whole fantasy... the pilot contract. ... Ohana will always be limited by the HAL pilot scope in what they can do, so much more expansion is not going to happen.

Not exactly. The HA pilot contract is between the pilots union (part of ALPA) and HA, not with Hawaiian Holdings, which is a completely different legal entity that happens to own HA. HwnHldgs could very well operate a second airline under the AOC it bought. Think IAG, a larger holding company that has several subsidiaries, each with one or more AOCs.

The contract between HA and Empire can be terminated early, the issue is simply whether it's for cause, or without cause. HA is no stranger to litigation.

Read all of Section 1 and report back.

The agreement is between ALPA and HA.
https://newsroom.hawaiianairlines.com/r ... y-contract
Hawaiian Holdings is not a party to the agreement.

So here is another flight of thought: So if Ohana is going to become a wholly owned subsidiary of Hawaiian Holdings, than I would suspect that the corporate structure of that airline be in line with more traditional carriers - Presidents, vice presidents, etc.

So here is a crazy thought, if Ohana is structured, and Dunkerly is named president of that new entity to help it get established within the umbrella of Hawaiian Holdings and helps it expand. He could, by the virtue of his relationships, pick up second hand planes from Airbus at rock bottom prices or negotiate a new set of planes from either A or B. He might do it for a limited amount of time.

I am intrigued by the possibilities considering what the Asian and European airlines are doing with their LCC subsidiaries with planes that are similar to what Hawaiian is flying now.

WPvsMW wrote:

The agreement is between ALPA and HA.
https://newsroom.hawaiianairlines.com/r ... y-contract
Hawaiian Holdings is not a party to the agreement.

That's wonderful. But it still doesn't let you see what Section 1 actually says and how it restricts Ohana and would prevent alter ego flying.

The new operator will not be HA or Ohana. Section 1 cannot restrict a party who is not a signatory to the agreement.

WPvsMW wrote:

The new operator will not be HA or Ohana. Section 1 cannot restrict a party who is not a signatory to the agreement.

You don't get it do you? Report back when you've read section 1.

KanaHawaii wrote:

So here is a crazy thought, if Ohana is structured, and Dunkerly is named president of that new entity to help it get established within the umbrella of Hawaiian Holdings and helps it expand.

The new airline could be an LCC. CONUS and Asia Pacific and Europe, hubbed at HNL. Mark Dunkerly, a magic wand, and a march stolen on DY and WN. I mean... this a.net.

azjubilee wrote:

WPvsMW wrote:

The new operator will not be HA or Ohana. Section 1 cannot restrict a party who is not a signatory to the agreement.

You don't get it do you? Report back when you've read section 1.

Kindly post Section 1. I'll read it and report back. If not, simply post the parties that signed the agreement (I know that much).

WPvsMW wrote:

azjubilee wrote:

WPvsMW wrote:

The new operator will not be HA or Ohana. Section 1 cannot restrict a party who is not a signatory to the agreement.

You don't get it do you? Report back when you've read section 1.

Kindly post Section 1. I'll read it and report back.

Sorry, it's not a public document. So if you can't read it now, or haven't read it, you have no idea what you're talking about. I'm telling you... section 1 of the PWA restricts Ohana and alter ego flying.

My point: nothing in the ALPA/HA agreement restricts Hawaiian Holdings. The agreement restricts Hawaiian Air because Hawaiian Air is the employer of the pilots. I doubt that the new AOC will operate as Ohana.

WPvsMW wrote:

My point: nothing in the ALPA/HA agreement restricts Hawaiian Holdings. The agreement restricts Hawaiian Air because Hawaiian Air is the employer of the pilots. I doubt that the new AOC will operate as Ohana.

How is it that you profess to know so much, when you haven't actually read the contract? And what part of "bringing Ohana in house" leads you to believe it won't be operated as Ohana? Stop grasping at straws here.

Actually it will be Ohana. No alter-ego airline. And ALPA kinda has HA by the balls. there can be NO HA codeshare on routes flown by HA equipment by HA pilots, with a carve out ONLY on KOA/OGG.

HA ALPA will throw a coniption fit and throw a few lawsuits at HA if they do anything outside of that.

azjubilee wrote:

WPvsMW wrote:

azjubilee wrote:

You don't get it do you? Report back when you've read section 1.

Kindly post Section 1. I'll read it and report back.

Sorry, it's not a public document. So if you can't read it now, or haven't read it, you have no idea what you're talking about. I'm telling you... section 1 of the PWA restricts Ohana and alter ego flying.

Kindly explain how, under US law the pilots contract between H/Airlines & their union can bind H/Holding when they are not a party to the contract [or are other posters wrong and H/Holdings is somehow a party to the pilots contract].

Gemuser

Could they not simply drop Ohana and set up the turboprops under Island Air?

Gemuser wrote:

azjubilee wrote:

WPvsMW wrote:

Kindly post Section 1. I'll read it and report back.

Sorry, it's not a public document. So if you can't read it now, or haven't read it, you have no idea what you're talking about. I'm telling you... section 1 of the PWA restricts Ohana and alter ego flying.

Kindly explain how, under US law the pilots contract between H/Airlines & their union can bind H/Holding when they are not a party to the contract [or are other posters wrong and H/Holdings is somehow a party to the pilots contract].

Gemuser

It's called contract language. There are multiple pages filled with verbiage that protects HAL pilot jobs. And yes, some people discussing this issue have no clue what they're talking about.

usxguy wrote:

Actually it will be Ohana. No alter-ego airline. And ALPA kinda has HA by the balls. there can be NO HA codeshare on routes flown by HA equipment by HA pilots, with a carve out ONLY on KOA/OGG.

HA ALPA will throw a coniption fit and throw a few lawsuits at HA if they do anything outside of that.

The protections are further reaching than that actually. Anyone wonder why Ohana isn't flying the trunk routes out of HNL and are flying the ATR42? It's because of the language in Section 1 that restricts a "feeder" partner from flying planes over 69,000 pounds and from flying that would touch the major trunk routes from HNL. This is why you see them doing LNY, MKK and hops from OGG. Codeshare language, is even more extensive.

azjubilee wrote:

WPvsMW wrote:

My point: nothing in the ALPA/HA agreement restricts Hawaiian Holdings. The agreement restricts Hawaiian Air because Hawaiian Air is the employer of the pilots. I doubt that the new AOC will operate as Ohana.

How is it that you profess to know so much, when you haven't actually read the contract? And what part of "bringing Ohana in house" leads you to believe it won't be operated as Ohana? Stop grasping at straws here.

Lol. No way that contract is that easy to get around. By WPvsMW's position, an airline could just set up a new holding company and then viola, a way around.

I can’t see there are any pax on that list that matter that aren’t on the HA list already.

jbs2886 wrote:

azjubilee wrote:

WPvsMW wrote:

My point: nothing in the ALPA/HA agreement restricts Hawaiian Holdings. The agreement restricts Hawaiian Air because Hawaiian Air is the employer of the pilots. I doubt that the new AOC will operate as Ohana.

How is it that you profess to know so much, when you haven't actually read the contract? And what part of "bringing Ohana in house" leads you to believe it won't be operated as Ohana? Stop grasping at straws here.

Lol. No way that contract is that easy to get around. By WPvsMW's position, an airline could just set up a new holding company and then viola, a way around.

Yep, if it was that easy United Continental Holdings would already have all of the E175 they want.

azjubilee wrote:

RWA380 wrote:

Web500sjc wrote:

The purchase of the air operations certificate may be as simple as not allowing another company to gain access to the certificate.
Beyond the general difficulty in gaining the certification, each certificate is different- and allows different operations based off what the operator has been willing to prove to the FAA over time. A certificate In Hawaii may have some exemptions that are very specific to Hawaii, and HA may not want other airlines to gain easy access to those exemptions.

While this makes the most sense, HA still has a multi year contract with Empire, they won't be able to just drop them. For this meager amount of money, staving off competition seems like a logical move. But ultimately I guess it is about Ohana. HA owns those 3 ATR-42's?

All contracts can be broken. Yes, HA owns all the ATR's, including the freighters being brought online.

I would imagine the Empire Marketing Folks will be knocking on United, Delta, Alaska, and Southwest's door in an effort to set up an Inter-Island Operation.

ridgid727 wrote:

azjubilee wrote:

RWA380 wrote:

While this makes the most sense, HA still has a multi year contract with Empire, they won't be able to just drop them. For this meager amount of money, staving off competition seems like a logical move. But ultimately I guess it is about Ohana. HA owns those 3 ATR-42's?

All contracts can be broken. Yes, HA owns all the ATR's, including the freighters being brought online.

I would imagine the Empire Marketing Folks will be knocking on United, Delta, Alaska, and Southwest's door in an effort to set up an Inter-Island Operation.

I doubt it.

azjubilee wrote:

ridgid727 wrote:

azjubilee wrote:

All contracts can be broken. Yes, HA owns all the ATR's, including the freighters being brought online.

I would imagine the Empire Marketing Folks will be knocking on United, Delta, Alaska, and Southwest's door in an effort to set up an Inter-Island Operation.

I doubt it.

I guess you're obviously in the know.

From one standpoint, it has obviously been sad to see multiple longtime airline brands - like Aloha and now Island Air - go away in the last decade. Although, from an industry perspective, it's nice to see that Hawaii is now going to have a very strong, competitive and viable state aviation "champion" going forward. Hawaiian is a great airline with a great heritage and a great product, and it serves its home state very well. Bringing control of its turboprop operation in house should only further help improve the connectivity, efficiency and business potential of its interisland offering.

So, not knocking on asjubilee, because they obviously has some insight on the pilots contract between Hawaiian Airlines and the pilots. Would the provisions that you state the contract has, basically walling off Ohana from mainline ops and such, be enforceable when the Holding company creates a completely new wholly owned subsidiary as they did yesterday?

From the Star Advertiser:

Da Silva said the state’s largest carrier this week formed a new wholly owned subsidiary, Elliott Street Holdings, to purchase the stock of Island Air and assume ownership of Island Air’s Federal Aviation Administration operating certificate as well as other assets. Elliot Street runs along the Ewa edge of Daniel K. Inouye International Airport in Honolulu.

I would think a pilot contract would not be so clairvoyant to predict that the holding company would create a new entity to operate another airline under the holding company. Now I could be wrong and that this contract, as you make note in your posts, is so airtight that Ohana would be lucky to just have the ops they have. But I am interested to see if, indeed, a contract that we cannot see in public really has predicted this and walled off Ohana even with this structure.

ridgid727 wrote:

azjubilee wrote:

ridgid727 wrote:

I would imagine the Empire Marketing Folks will be knocking on United, Delta, Alaska, and Southwest's door in an effort to set up an Inter-Island Operation.

I doubt it.

I guess you're obviously in the know.

No, not in the know of their plans. I’m just using the knowledge and facts of the situation to draw that conclusion. I just doubt Empire has the appetite to continue its operation in Hawaii, after they eventually part ways with HA.

KanaHawaii wrote:

So, not knocking on asjubilee, because they obviously has some insight on the pilots contract between Hawaiian Airlines and the pilots. Would the provisions that you state the contract has, basically walling off Ohana from mainline ops and such, be enforceable when the Holding company creates a completely new wholly owned subsidiary as they did yesterday?



From the Star Advertiser:

Da Silva said the state’s largest carrier this week formed a new wholly owned subsidiary, Elliott Street Holdings, to purchase the stock of Island Air and assume ownership of Island Air’s Federal Aviation Administration operating certificate as well as other assets. Elliot Street runs along the Ewa edge of Daniel K. Inouye International Airport in Honolulu.

I would think a pilot contract would not be so clairvoyant to predict that the holding company would create a new entity to operate another airline under the holding company. Now I could be wrong and that this contract, as you make note in your posts, is so airtight that Ohana would be lucky to just have the ops they have. But I am interested to see if, indeed, a contract that we cannot see in public really has predicted this and walled off Ohana even with this structure.

To your first question, yes Ohana would still be restricted.

Second point... Sorry, but it’s naive to think that an airline would never use a holdings structure to pit another operation against the other. It’s called whipsaw. It’s been done in the past and will be done in the future without protections. The HAL pilots have very tight scope language protecting them. Especially when compared to their mainland peers.

So long as there are no codeshares and the new "Elliot Street" airline is not an "official feeder" to HA, HHoldings cannot, by law, be limited in its ops by an employment agreement to which HHoldings is not a party. I've read all the public disclosures about the HA/ALPA contract executed earlier this year, and the only disclosed parties are HA and ALPA. No one has posted here that HHoldings is a party to the HA/ALPA contract. This is 1L contract law. There's no privity, there's no 3P beneficiary argument, zip.

HA and Elliot St. don't need to codeshare... just to interline, which is a baggage handling agreement, but which can also designate plating carrier rights.

As to why other airline holding companies haven't done this... they have. As I cited above, IAG. The BA/union agreement is independent of the IB/union agreement, the EI/union agreement, the VY/union agreement, etc.

In a nutshell, airline holding companies can acquire and assign to subsidiaries all the AOCs they like, and a subsidiary AOC operator cannot obligate the holding company without also having the right to act as an agent of the holding company. Not the case here.

If the above seems unbelievable, call an experienced aviation lawyer, and pose a hypothetical about airline holding companies and employment agreements of subsidiaries, and "report back".

azjubilee wrote:

KanaHawaii wrote:

So, not knocking on asjubilee, because they obviously has some insight on the pilots contract between Hawaiian Airlines and the pilots. Would the provisions that you state the contract has, basically walling off Ohana from mainline ops and such, be enforceable when the Holding company creates a completely new wholly owned subsidiary as they did yesterday?



From the Star Advertiser:

Da Silva said the state’s largest carrier this week formed a new wholly owned subsidiary, Elliott Street Holdings, to purchase the stock of Island Air and assume ownership of Island Air’s Federal Aviation Administration operating certificate as well as other assets. Elliot Street runs along the Ewa edge of Daniel K. Inouye International Airport in Honolulu.

I would think a pilot contract would not be so clairvoyant to predict that the holding company would create a new entity to operate another airline under the holding company. Now I could be wrong and that this contract, as you make note in your posts, is so airtight that Ohana would be lucky to just have the ops they have. But I am interested to see if, indeed, a contract that we cannot see in public really has predicted this and walled off Ohana even with this structure.

To your first question, yes Ohana would still be restricted.

Second point... Sorry, but it’s naive to think that an airline would never use a holdings structure to pit another operation against the other. It’s called whipsaw. It’s been done in the past and will be done in the future without protections. The HAL pilots have very tight scope language protecting them. Especially when compared to their mainland peers.

As an attorney, I can firmly say contracts take into account a lot of possibilities. Its not "clairvoyance" - its called protecting your position in the likely or unlikely even of changes. As azjubilee said, this isn't some very novel idea and almost certainly the parties and attorneys discussed it in the contract.

WPvsMW wrote:

So long as there are no codeshares and the new "Elliot Street" airline is not an "official feeder" to HA, HHoldings cannot, by law, be limited in its ops by an employment agreement to which HHoldings is not a party. I've read all the public disclosures about the HA/ALPA contract executed earlier this year, and the only disclosed parties are HA and ALPA. No one has posted here that HHoldings is a party to the HA/ALPA contract. This is 1L contract law. There's no privity, there's no 3P beneficiary argument, zip.

HA and Elliot St. don't need to codeshare... just to interline, which is a baggage handling agreement, but which can also designate plating carrier rights.

As to why other airline holding companies haven't done this... they have. As I cited above, IAG. The BA/union agreement is independent of the IB/union agreement, the EI/union agreement, the VY/union agreement, etc.

In a nutshell, airline holding companies can acquire and assign to subsidiaries all the AOCs they like, and a subsidiary AOC operator cannot obligate the holding company without also having the right to act as an agent of the holding company. Not the case here.

Still haven’t read that section in the contract I see. You’re never going to understand the several hundred page contract by reading the headlines in the news. The bottom line, is you’re not equipped to have this debate. Have a good day.

WPvsMW wrote:

So long as there are no codeshares and the new "Elliot Street" airline is not an "official feeder" to HA, HHoldings cannot, by law, be limited in its ops by an employment agreement to which HHoldings is not a party. I've read all the public disclosures about the HA/ALPA contract executed earlier this year, and the only disclosed parties are HA and ALPA. No one has posted here that HHoldings is a party to the HA/ALPA contract. This is 1L contract law. There's no privity, there's no 3P beneficiary argument, zip.

HA and Elliot St. don't need to codeshare... just to interline, which is a baggage handling agreement, but which can also designate plating carrier rights.

As to why other airline holding companies haven't done this... they have. As I cited above, IAG. The BA/union agreement is independent of the IB/union agreement, the EI/union agreement, the VY/union agreement, etc.

In a nutshell, airline holding companies can acquire and assign to subsidiaries all the AOCs they like, and a subsidiary AOC operator cannot obligate the holding company without also having the right to act as an agent of the holding company. Not the case here.

Lets assume you are right (I don't think you are), but HA certainly wants more that interlining with this new carrier - FFs will want miles, HA will want to be able to seamlessly connect from their mainland/long-haul flights to interisland. Consequently, those require HA, not Holdings, to have agreements with the carrier, which would almost certainly violate contract provisions between the pilots and HA.

I understand where you are coming from, but you should understand from business corporations law classes and similar that things are not as simple as you are presenting.

jbs2886, thanks for joining the discussion. In your opinion, does any of what I posted misstate black letter law? And specifically, can a holding company be bound by agreements made by a subsidiary without there being privity or agency?