Aloha Runs out of Time

The 61-year history of Aloha Airlines ended last week when its final inter-island and trans-pacific passenger flights land in Hawaii. Code Share partner, United is stepping in, along with other airlines, including Mesa’s go! operation, to assist stranded passengers. On March 31, Aloha operated its...

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The 61-year history of Aloha Airlines ended last week when its final inter-island and trans-pacific passenger flights land in Hawaii. Code Share partner, United is stepping in, along with other airlines, including Mesa’s go! operation, to assist stranded passengers. On March 31, Aloha operated its schedule with the exception of flights from Hawaii to the West Coast and flights from Orange County to Reno and Sacramento, and Oakland to Las Vegas. Aloha Airlines was founded in 1946 to give Hawaii’s people a choice in inter-island air transportation. Meanwhile, Wall Street analysts are expecting further bankruptcies by other airlines who, they say, will have a tough time getting through the economic crisis including American and Alaska.
Aloha filed for Chapter 11 on March 20. Related Story
The shutdown of Aloha’s passenger operations affects about 1,900 employees. Aloha also announced that its air cargo and aviation services units will continue to operate as usual while the U.S. Bankruptcy Court seeks bids from potential buyers. On March 27, 2008, Saltchuk Resources, Inc, announced its intention to buy Aloha’s air cargo business.
This is an incredibly dark day for Hawaii, said David A. Banmiller, president and chief executive officer, adding the action was taken despite the groundswell of support from the community and our elected officials. The airline, he said, simply ran out of time to find a qualified buyer or secure continued financing for our passenger business.
“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,” said the airline in its announcement alluding to Mesa’s go! operation. “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.”
The bankruptcy judge said he would not decide whether or not to close the airline as requested by Hawaii Governor Linda Lingle, saying it was not his place, but a business decision between the airline and its creditors. Aloha needed $1.5 million a day to continue passenger operations. An attorney for Aloha said Banmiller approached five other airlines unsuccessfully about acquiring Aloha before its March 20 bankruptcy filing.
Aloha’s pilots announced they will continue to fight for the airline as the Master Executive Council explores every avenue to assist the company continue operations by engaging in continuous negotiating efforts with management and with prospective suitors. Contrary to inaccurate news reports, local pilot leadership has urged pilots to continue to report to duty for cargo flight assignments, said the airline’s Air Line Pilot’s Association MEC. Aloha pilots joined the union as pilots of Trans Pacific Airways in 1949 (the airline changed its name to Aloha in 1959). More than 300 pilots are employed by Aloha.
Aloha filed first for bankruptcy in 2004, and pilots made concessions to help improve the airline's financial position and attract new investors. The Aloha pilots agreed to a 20 percent pay cut, productivity enhancements, and a two-year "freeze" on their pension plan. ALO pilots gave more than $12 million worth of concessions to the airline to support its previous restructuring efforts to ensure Aloha became profitable and a stable airline.
Meanwhile, go! added aircraft and flights to meet the increased demand. During a recent suit by Hawaiian emails showed the regional was gunning for either Hawaiian or Aloha saying there was not enough room in the market for three carriers. Related Story Mesa increased the number of flights it operates from an average of 54 flights per day to 94 flights beginning April 1 offering all seats at $49 through Monday April 7. With this new service, go! provides between 11 and 13 round trips per day from Honolulu, to each of the destinations currently served - Maui, Lihue, Hilo and Kona. In addition, go! offered no charge, standby, space available, day of original travel to passengers holding Aloha Airlines paper and electronic tickets through April 3.
"In response to demand, we have significantly increased the number of flights in all markets providing high frequency service throughout the business day,” said Jonathan Ornstein, Mesa Air Group chair and CEO. “We will continue to adjust our schedule to satisfy demand and work hard to provide the highest quality, lowest cost service to the people of Hawai'i."
Almost 1.5 million people have flown on go! and more than 65,000 have joined our go!Miles frequent flyer program since it was launched in June 2006, said Frank Among, go!'s vice president e-Commerce.
Hawaiian and Aloha execs met early Sunday, according to the Pacific Business News which reported they could not work out a deal, which the news organization said was seen as a last resort by Aloha. The deal would have kept Aloha as an inter-island operation with some mainland service. While Hawaiian was willing to put up $5 million in cash, Aloha was losing that much each week and the offer would do little to stave off the inevitable. The two airlines first approached merger in the post-9/11 period, opposed by the public since it would form a monopoly in the market. United also pulled out of a deal.