Aloha returns to bankruptcy just two years after emergence. Aloha Airlines, which emerged from bankruptcy in February 2006, filed Chapter 11 again last week and cited actions by Mesa Air Group's go! as the main impetus behind the latest filing.

"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," CEO David Banmiller said. Company officials said they will ask the bankruptcy court for permission to continue operating while going through Chapter 11 restructuring.

Aloha and Hawaiian Airlines have been engaged in a fierce battle against go! since it began low-fare inter-island service with 50-seat CRJs in June 2006. Both took legal action against the startup, charging that Mesa had misused confidential information obtained when it was considering an acquisition of the island carriers. Hawaiian was awarded $80 million in October 2007 by a bankruptcy court. Aloha's case is still pending.

The inter-island fare wars and the continued escalation of fuel costs have chipped away at profits for all of the carriers. "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," Aloha said in a statement.

"The action taken by Aloha Airlines reflects the difficult operating environment in Hawaii's airline industry," Hawaiian President and CEO Mark Dunkerley said. "It is extremely challenging and marked by high operating costs, record high fuel prices and a very competitive pricing structure."

Aloha is privately held and does not release financial information, but in December it confirmed to ATWOnline that it had endured a $15.1 million loss in the 2007 third quarter, widened from a $9.9 million deficit in the year-ago period. The Honolulu Star-Bulletin reported that Aloha has posted 16 straight quarterly losses. (Source: Air Transport World)

United will protect it's codeshare passengers.
Sunday, March 30, 2008 - 3:16 PM PDT
Aloha Airlines halting passenger operationsSacramento Business Journal - by Adam Weintraub Staff writer
Aloha Airlines will halt all passenger service to Sacramento and all flights from Hawaii to the western United States as of Sunday, and will cease all passenger operations Monday, the carrier said.

In a news release Sunday, airline president and chief executive officer David Banmiller said the company did everything it could to find a buyer or financing, but ran out of time. "This is an incredibly dark day for Hawaii," he said.

The move will affect about 1,900 employees, most of them in Hawaii. Honolulu-based Aloha will continue cargo operations and aviation services while the U.S. Bankruptcy Court seeks buyers.

United Airlines, which has a code-share arrangement with Aloha, will work to accommodate passengers with tickets on Aloha who will be left in the lurch by the shutdown.

In Sunday's news release, Aloha said Monday would be its last day for any passenger service and that it would immediately stop selling tickets for service after that day. Monday's flight schedule will not include flights from Hawaii to the West Coast; flights from Orange County to Reno and Sacramento; and from Oakland to Las Vegas.

At the time it filed for Chapter 11 bankruptcy protection March 20, Aloha blamed what it termed unfair competition from go! airlines, a subsidiary of Arizona-based Mesa Air Group Inc. Banmiller stood by that on Sunday.

"Aloha Airlines was founded in 1946 to give Hawaii's people a choice in inter-island air transportation," he said. "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."

Banmiller thanked employees, but said the airline had to face reality. "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."

Passengers stranded by the move were advised to contact United at united.com or 1-800-UNITED1. Those who prefer a refund were instructed to contact their travel agent or credit card company. Those who paid by cash or check were advised to file a claim through the bankruptcy court.

Does Mesa fly 737's on the mainland?

I fear they will attempt to buy Aloha's fleet and offer the crew jobs at 1/2 their previous wage and no benefits. There is clearly no other work available in the Hawaiian Islands so they will either take the lower wages, or leave their families behind to find work abroad. We're all getting screwed again!

Really a sad day for everyone involved! I've flown Aloha many times, and always enjoyed the experience. Best of luck to all their employees.

Mesa flies RJ's in Hawaii under the Go! name. Potential buyers for Aloha's fleet of B737-200's would be pretty small. I suspect most of their NG's are leased.