Reorganization Comes Two Years After Exiting Bankruptcy
Following its announcement of intent
to file Chapter 11 bankruptcy last week, representatives with Aloha
Airlines tell ANN the carrier received US Bankruptcy Court approval
on March 21 to continue operating as usual throughout the
Aloha has been authorized to honor all existing reservations,
take new bookings, and operate all its flights, air cargo business
and ground-handling services for other airlines.
The carriers' loyalty programs, including AlohaPass, Alii
Membership and E-Plus, and the AirAwards credit card, will continue
to offer the same benefits to customers.
"We are grateful to the Bankruptcy Court for enabling us to move
ahead and continue all operations as usual while Aloha seeks
additional investors and new opportunities," said David A.
Banmiller, president and chief executive officer. "All of us at
Aloha want to thank our loyal customers, business partners, and the
entire community for their unwavering support while we get through
these challenging times."
Aloha's current financial woes are a far cry from Banmiller's February 2006 proclamation his
airline had been "reborn," after its last exit from
Chapter 11. The airline was able to exit bankruptcy that time only
after fierce cost cuts, including two rounds of employee
concessions that will help the airline save $75 million
The carrier also received
considerable help from investment group The Yucaipa Companies,
which assumed financial responsibility for Aloha in September
Aloha reentered solvency then as a much leaner entity, just as
the domestic airline industry was experiencing a resurgence
following years of economic turmoil. Since then, however, domestic
carriers are being hit once again by high fuel prices, and economic
Aloha and rival Hawaiian Airlines also have upstart go! Airlines
to contend with on interisland routes. That carrier, a subsidiary
of Mesa Air Group, offers cut-rate fares on competing routes... a
practice Aloha says is "illegal."
That scenario paints a gloomy picture for the future of the
airline... and rumor has it Aloha is positioning itself for a
buyout this time around. Stay tuned.