Court OK's Trustee's Joint Plan of Reorganization

HONOLULU –- After almost two tumultuous years in bankruptcy, Hawaiian Airlines received court approval today for its plan of reorganization. After its two remaining labor contracts are ratified and a formal order is entered by the court, Hawaiian should emerge from Chapter 11 in early April.

Hawaiian Trustee Joshua Gotbaum said "This is a great day for a great airline and everyone who is part of Hawaiian: Our shareholders keep their shares, which have increased in value. Our creditors get repaid in full. And Hawaiian employees will, for the first time, get wages and benefits as good or better than our competitors. For an airline that two years ago was losing money and had less than $20 million in the bank, I think it's a real success.

“We all look forward to Hawaiian's emerging from Chapter 11 and showing the world that what is already one of America's best airlines will get even better," he said.

Gotbaum developed and proposed the Joint Plan with Hawaiian's creditors committee and investor group Ranch Capital LLC. He noted that, unlike most bankruptcies, under the plan at Hawaiian:

- Creditors will receive 100% of the value of their claims, most of them in cash.

- Existing stockholders keep their shares, whose value has risen during the bankruptcy, and

- Employees have new negotiated contracts which, for the first time, have pay and benefits comparable to or better than those at Hawaiian's competitors.

Furthermore, thanks to financing provided and arranged by Ranch Capital, a co-proponent of the plan and now the controlling shareholder of Hawaiian's parent company, Hawaiian Airlines will have substantial new capital for growth.

The Hawaiian bankruptcy has involved many twists and turns over the past two years. After the airline filed in March 2003, creditors successfully petitioned the bankruptcy court to replace the airline's CEO and controlling shareholder with a trustee. Under a trustee, multiple reorganization plans can be filed, and several plans were, including one by Boeing, a major creditor, and another by one of Hawaiian's own pilots. The former plan was withdrawn last fall and the latter plan was withdrawn today after its financing source was arrested by the FBI for fraud and bribery.

Gotbaum, working with Hawaiian's creditors committee, established a competitive process to solicit investors for their own plan. In August, they selected and jointly proposed a plan with investors led by Ranch Capital LLC, who had purchased a controlling interest in Hawaiian's parent company, Hawaiian Holdings, Inc. (AMEX: HA).

In the two years since Hawaiian entered Chapter 11, the airline has restructured its fleet, aircraft leases and other contracts and made changes to its routes, fares and marketing. It negotiated new three-year labor contracts with its six union groups that will provide most employees with wage increases while implementing productivity improvements to keep overall costs from rising. All but two of the contracts, those covering Hawaiian's flight attendants and its pilots, have been ratified. Once the remaining contracts are ratified, the bankruptcy judge can sign the order confirming the Plan.

When the Plan becomes effective, Hawaiian Airlines President and Chief Operating Officer Mark Dunkerley will become Chief Executive Officer. Lawrence Hershfield, Ranch Capital's managing director, who became CEO of Hawaiian Holdings and chair of its board, will also chair the new board of Hawaiian Airlines, Inc.

An Amazing Turnaround Since entering bankruptcy on March 21, 2003, Hawaiian's turnaround operationally and financially has been remarkable. According to the U.S. Department of Transportation (DOT), Hawaiian has led the industry in on-time performance for the past 15 consecutive months. In 2004, Hawaiian was the top-ranked airline by DOT finishing #1 for on-time service, #2 for baggage handling and for oversales and in the top five for consumer complaints.

Two nationally recognized travel magazines, Condé Nast Traveler and Travel + Leisure rate Hawaiian as the best airline serving Hawaii and among the best in the nation.

The past two years have also been Hawaiian's most profitable. In 2003, Hawaiian made a $133 million reversal of fortune, generating an operating profit of $77.5 million on revenue of $706.1 million after recording an operating loss of $55.2 million on revenue of $632 million in 2002. And despite skyrocketing fuel costs, Hawaiian followed up in 2004 with an estimated unaudited operating profit of $70 million on revenue of $764 million. Hawaiian's (unaudited) operating profit margin in 2004, 9.4%, was the highest of all major airlines.

About Hawaiian Airlines

Hawaiian Airlines, the nation's number one on-time carrier, is recognized as one of the best airlines in America. Readers of two prominent national travel magazines, Condé Nast Traveler and Travel + Leisure, have both rated Hawaiian as the top domestic airline serving Hawaii in their most recent rankings, and the fifth best domestic airline overall.

Celebrating its 76th year of continuous service, Hawaiian is Hawaii's biggest and longest-serving airline, and the second largest provider of passenger air service between Hawaii and the U.S. mainland. Hawaiian offers nonstop service to Hawaii from more U.S. gateway cities than any other airline. Hawaiian also provides approximately 100 daily jet flights among the Hawaiian Islands, as well as service to Australia, American Samoa and Tahiti.

Hawaiian Airlines, Inc. is a subsidiary of Hawaiian Holdings, Inc. (AMEX and PCX: HA). Since the appointment of a bankruptcy trustee in May 2003, Hawaiian Holdings has had no responsibility for the management of Hawaiian Airlines and has had limited access to information concerning the airline. Additional information is available at www.HawaiianAir.com.