HONOLULU,
March 20 /PRNewswire/ -- Aloha Airgroup, Inc., a Hawaii
corporation whose principal operating subsidiary is Aloha Airlines, Inc.,
announced today that it filed a voluntary petition for protection under
Chapter 11 of the U.S. Bankruptcy Code. Aloha will seek the Court's approval
to allow the Hawaii-based company to continue operating.
Aloha is also seeking Court approval of a cash collateral financing
arrangement with its principal working capital lender, General Motors
Acceptance Corporation, to provide financing for operations pending a further
hearing in accordance with bankruptcy rules. In doing so, Aloha seeks to
protect 3,500 jobs, honor thousands of passenger travel reservations, keep the
U.S. Mail and air cargo moving between the islands, and continue to provide
essential ground-handling services for domestic and international airlines
serving Hawaii.
In its filing, Aloha cited its inability to generate sufficient revenues
from its inter-island passenger business due to predatory pricing by Mesa Air
Group's go! airline. In the highly competitive inter-island market, Aloha was
forced to match go!'s below-cost fares at a time when the airline industry was
facing unprecedented increases in the cost of jet fuel. Late last week, crude
oil rose to an all-time record high of $111 a barrel. For Aloha that means an
annual increase of $71 million in fuel expenses.
"It is a travesty and a tragedy that the illegal actions of a competitor
and other factors completely beyond our control have forced us to take this
action," said David A. Banmiller, Aloha's president and chief executive
officer. "Through this filing, we hope to achieve a successful outcome that
will protect the jobs of 3,500 dedicated employees who have made extraordinary
sacrifices for Aloha, and to continue to earn the support of our loyal
customers, business partners, vendors and financial backers.
"We are reaching out to all our friends here in Hawaii and around the
world to continue to support Aloha Airlines as we work round-the-clock making
every effort to continue our 61-year tradition of serving our island home in
the spirit of Aloha."
Contact: Stu Glauberman
Director - Corporate Communications
Phone: (808) 539-5947; (808) 722-7318
E-mail: sglauberman@AlohaAirlines.com
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