Bankrupt Aloha Airlines to End All Flights and Operations

HONOLULU – Aloha Airlines said Sunday it will halt all passenger service after Monday, signaling the end of an airline that has served Hawaii for more than 60 years.

Aloha, which filed for bankruptcy for Chapter 11 bankruptcy protection on March 20, was a casualty of fierce competition and rising fuel prices. The airline said it will stop taking reservations for flights after Monday.

"We simply ran out of time to find a qualified buyer or secure continued financing for our passenger business," said Aloha President David Banmiller in a statement. "We had no choice but to take this action."

Aloha has suffered since Phoenix-based Mesa Air Group Inc. launched a new interisland carrier called go! airlines in 2006, triggering a local airfare war.

In January, go! reported a $20 million operating loss in its first 16 months of operations. Meanwhile, Aloha and Hawaiian Airlines — the other major interisland carrier — reported combined losses of nearly $65 million since go! began operating.

Aloha's bankruptcy filing said the airline was unable to generate sufficient revenue due to what it called "predatory pricing" by go! Banmiller didn't mention go! by name in his statement, but did blame the company's demise on rival companies.

"Unfortunately, unfair competition has succeeded in driving us out of business," he said.
The company's Web site, www.alohaairlines.com, also announced the end of service.

Rising fuel prices, which have forced other airlines to raise fares and look for ways to cut expenses, also made it difficult for Aloha to operate. Aloha, the second-largest Hawaii carrier, has operated a fleet of 26 Boeing 737s to serve five airports statewide and six mainland U.S. destinations.

Aloha Airgroup Inc. was forced to file for Chapter 11 protection just over two years after it emerged from a previous trip through bankruptcy court.

Aloha said tickets for flights after Monday will not be honored. It said it is working to have UAL Inc.'s United Airlines accommodate passengers with tickets for Aloha's mainland to Hawaii flights. It hopes to seat those with interisland tickets on Hawaiian Airlines Inc.

Aloha has canceled Monday flights from Hawaii to the West Coast and between several cities in California and Nevada. Its last day for interisland travel will be Monday.

Aloha advised passengers who don't want to fly another airline and who want a refund to contact their travel agents or credit card companies. Those who paid by cash or check may file a claim in bankruptcy court.

Hawaiian Airlines said it would add capacity and take all the Aloha passengers it can on standby free, but only for four days, through April 3

"Customers will be accommodated on a first come, first served basis based on available seats 15 minutes prior to each scheduled departure," the airline said.

The shutdown will affect about 1,900 employees. The company said air cargo services are to continue.

A Seattle company on Thursday offered to buy Aloha's cargo operations for an undisclosed amount. But Saltchuk Resources Inc. said it wasn't interested in taking over Aloha's passenger business.

According to Aloha's Web site, the airline was founded in 1946 by Chinese-American publisher Ruddy Tongg and his friends at a time when the best jobs and opportunities in Hawaii went to the white establishment. Some of Tongg's friends even had trouble getting airline seats.

"They figured, why not start our own airline," Aloha's official history says.

Banks wouldn't lend money to Asians then so Tongg turned to a hui, or investment group, that included Hung Wo Ching, a Chinese-American who later became the airline's president.
On Sunday, Aloha's web site signed off with the words, "Mahalo Nui Loa — Aloha Oe" which means "Thank you — Farewell" in Hawaiian.