Sunday, March 30, 2008

Aloha ʻoe - Aloha Airlines Shuts Down Passenger Operations

Aloha Airlines logoToday is a sad day in Hawaii. Aloha Airlines, which has been in business in the islands since 1946, announced that it is suspending all passenger operations as of March 31, 2008. The airline, which recently filed for bankruptcy, announced that all inter-island and trans-Pacific passenger services are slated to be shut down, a move that will affect about 1,900 employees.

On Friday, March 28, employees of Aloha Airlines staged a rally at the Hawaii State Capitol in Honolulu [photos] urging lawmakers to do what they could to save the airline -- and their jobs. Indeed, legislation that would have provided loan guarantees and certain tax exemptions was introduced late last week, and was to be heard during the coming week. A Pacific Business News (PBN) article about the legislation said:
House Bill 509 is modeled on 1993 legislation that was intended to help Hawaiian Airlines, which was struggling with financial difficulties at the time.

The bill's first hearing is before the Senate Committee on Ways and Means.

A Senate spokesman told PBN that, if passed by both chambers, HB 509 could be submitted for Gov. Linda Lingle's signature as early as April 9. The guarantee would take effect immediately.
PBN reported that language in the bill's draft says issuance of a loan guarantee is "in the public interest and for the public health, safety and general welfare of the state."

While well-intentioned, help from the Hawaii State Legislature apparently came too late. The airline said "Aloha ʻoe" [farewell] earlier today.

In an Aloha Airlines news release about the suspension of its passenger service, David Banmiller, the carrier's president and chief executive officer, said:
Despite the groundswell of support from the community and our elected officials, we simply ran out of time to find a qualified buyer or secure continued financing for our passenger business. We had no choice but to take this action.

“We deeply regret the impact this will have on our dedicated employees who have made Aloha one of the best operating airlines in the country. “Aloha Airlines was founded in 1946 to give Hawaii’s people a choice in inter-island air transportation.

Unfortunately, unfair competition has succeeded in driving us out of business, bringing to an end a 61-year-old company with a proud legacy of serving millions of travelers in the true spirit of Aloha. ”We realize that this comes as a devastating disappointment to our frequent flyers and our loyal business partners who have supported this company for many, many years.”
Aloha's recent filing for Chapter 11 Bankruptcy protection cited financial difficulties due to fierce competition, and record-high fuel prices. This was the second time that Aloha Airlines filed for reorganization under Chapter 11 in the past three years.

Aloha's air cargo and aviation services units will continue to operate while the U.S. Bankruptcy Court seeks bids from potential buyers. So far, one such bid has been announced. On March 27, 2008, Saltchuk Resources, Inc., announced its intention to buy Aloha’'s air cargo business. Saltchuk is the parent company of Young Brothers Ltd., an inter-island ocean freight shipping company in Hawaii.