Business / In Brief • Mar. 22, 2014

United mulls outsourcing some operations

HONOLULU – United Airlines is considering outsourcing some Hawaii ground operations, potentially leading to the layoff of more than 220 employees in Lihue, Kahului and Kona.

The airline told workers at the three Hawaii airports and 12 small Mainland airports last week that it’s examining market rates for ground operations work, the Honolulu Star-Advertiser reported.

The airline said it pays the same labor rates in all markets but its major competitors pay rates in line with each local market. United spokesman Christen David said the difference puts the company at a competitive disadvantage and it must look for ways to ensure its cost structure is more in line with other airlines.

“We haven’t made any decisions, but we must continually look for new opportunities to run a more efficient and financially sustainable business,” David said.

The International Association of Machinists & Aerospace Workers Local 141, which covers the affected Hawaii employees, said in a bulletin that United contracts include language that prevents the company from unilaterally deciding to outsource work without first negotiating with the union over every airport considered.

“Negotiations will begin as soon as possible and deal with each station (airport) separately,” the union said.

United is owned by Chicago-based United Continental Holdings Inc.


Utility considers liquefied natural gas

HILO – Hawaiian Electric Co. is considering using liquefied natural gas to generate power, a switch the utility says would mean cleaner and less expensive fuel.

The utility has issued a request for proposals for the supply and delivery of as much as 800,000 tons of LNG annually, the Hawaii Tribune-Herald reported.

LNG would be used to offset the use of oil at power plants on the Big Island, Maui, Oahu, Lanai and Molokai.

According to the request for proposals, fuel costs account for 70 percent of electric rates on the islands.

“Hawaiian Electric remains fully committed to meeting and exceeding its renewable portfolio standards,” the document states. “LNG is to be utilized to displace more costly and less environmentally-friendly oil products . . . and is not intended to displace renewable energy.”

Deadlines for RFP submissions are May 16 for LNG supply and May 23 for LNG logistics services.

The utility is aiming to submit a proposed contract by August to the state Public Utilities Commission.

According to Hawaiian Electric, development, permitting and implementation of a bulk import and regasification terminal could take as much as eight years to complete. The utility anticipates such an infrastructure could begin service between 2020 and 2022.