updated 5/19/2005 8:15:06 PM ET 2005-05-20T00:15:06

Hawaiian Airlines Inc. announced Thursday it will emerge from its two-year bankruptcy protection on June 1.

U.S. Bankruptcy Judge Robert Faris has issued a written order finalizing the plan which will place the carrier under the control of Ranch Capital LLC, the controlling shareholder of Hawaiian's parent company, and allow the airline to begin paying off its creditors.

"Hawaiian will exit bankruptcy on June first, a better, stronger airline," trustee Joshua Gotbaum said.

Gotbaum said Hawaiian's President and Chief Operating Officer Mark Dunkerley will become the company's new chief executive and president.

The approval of the reorganization plan came after Hawaiian's pilot union voted to ratify a new contract earlier this month. The pilot's union was the last of the company's six unions to approve a new labor deal.

The Honolulu-based airline, which filed for Chapter 11 reorganization in March 2003, will begin paying its creditors once it emerges from bankruptcy. The airline said it owes about $246 million to about 1,100 creditors.

Under the reorganization plan:

  • Creditors receive 100 percent of the value of their claims, most of them in cash.
  • Existing stockholders keep their shares.
  • Unionized employees have new negotiated contracts.

Gotbaum said the airline is looking to lease additional aircraft to fly new routes. On Tuesday, the airline announced that it will begin daily flights between San Jose, Calif. and Honolulu starting Oct. 1.

San Diego-based Ranch Capital last year spent $41.4 million to acquire 10 million of the 28.4 million outstanding shares of Hawaiian's parent company Hawaiian Holdings Inc.

Hawaiian Airlines is the nation's 12th largest carrier has 135 daily flights and is one of the largest employers in Hawaii with 3,339 employees.

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