zubart

Aloha Airlines is back in bankruptsy. It's very sad around here.


From Honolulu Star-Bulletin, March 21, 2008.

Aloha air bankrupt
The airline reports losses of $81 million in 2007 and $11 million in January
Aloha Airlines Inc., faced with staggering losses since emerging from bankruptcy in February 2006, filed for Chapter 11 reorganization yesterday for the second time in 39 months.
The 61-year-old airline blamed predatory pricing by Mesa Air Group's interisland carrier go!, which began service in June 2006, and record-high fuel prices.
Aloha said its losses swelled to $81 million in 2007 after losing $46 million in 2006 and $41.2 million in 2005. The airline said it lost an additional $11 million in January of this year.
The company reported $215.9 million in assets and $284.9 million in liabilities.
Also filing for bankruptcy were the airline's parent company, Aloha Airgroup Inc., and the California-based company that was formed to bring Aloha out of its 2004 bankruptcy, Airgroup Acquisition Corp.
Aloha said it will seek federal Bankruptcy Court approval of a cash collateral financing arrangement with its main working capital lender, General Motors Acceptance Corp., to let it keep flying.
The airline said it is trying to protect the jobs of its 3,500 employees, honor thousands of passenger travel reservations, keep U.S. Mail and air cargo moving between the islands, and provide ground-handling services for domestic and international airlines serving Hawaii.


By Dave Segal

Aloha Airlines Inc., unable to survive a cutthroat interisland fare war and record-high fuel prices, filed for Chapter 11 bankruptcy yesterday for the second time in just more than three years.
The state's second-oldest airline, which disclosed it lost $81 million in 2007 and an additional $11 million in the first month of this year, blamed its bankruptcy filing on predatory pricing by Mesa Air Group's interisland carrier go!, which began service in June 2006, and record-high fuel prices that hit $111 a barrel for crude oil last week.
David Banmiller, hired as Aloha's president and chief executive six weeks before the airline filed for bankruptcy on Dec. 30, 2004, lashed out at Mesa, which Aloha is suing for allegedly engaging in predatory pricing intended to drive Aloha out of business. Aloha's lawsuit, scheduled to be heard in federal District Court on Oct. 8, also accuses Mesa of using confidential information obtained as a potential investor during Aloha's first bankruptcy to gain a competitive advantage in the Hawaii market.
"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," Banmiller said. "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."
Jonathan Ornstein, chairman and CEO of Mesa, declined to comment immediately on Aloha's filing but said Mesa planned to issue a prepared statement, possibly today. In the past, Ornstein has cited overcapacity in the market from Hawaiian Airlines for some of the problems facing the three carriers.
Last October, Hawaiian won an $80 million judgment against Mesa for using confidential information obtained as an investor during Hawaiian's 26-month bankruptcy that ended in June 2005. Mesa has appealed that decision.
Hawaiian President and CEO Mark Dunkerley said the action taken by Aloha "reflects the difficult operating environment in Hawaii's airline industry. It is extremely challenging and marked by high operating costs, record-high fuel prices and a very competitive pricing structure."
Aloha said it will seek federal Bankruptcy Court approval of a cash collateral financing arrangement with its principal working capital lender, General Motors Acceptance Corp., to enable the airline to continue operating.
The company reported $215.9 million in assets and $284.9 million in liabilities.
Also filing for bankruptcy were the airline's parent company, Aloha Airgroup Inc., and the California-based group that was formed to bring Aloha out of its 2004 bankruptcy, Airgroup Acquisition Corp.
Aloha's bankruptcy filing renewed fears that the Hawaii market might not be able to support three major carriers.
"This is like the shot over the bow regarding the overcapacity in the interisland business, and one way or another, this is going to get resolved," said analyst Nick Capuano, who covers Hawaiian Airlines for Los Angeles-based Imperial Capital LLC. "It's still early in the process, but when all is said and done, I think there's only going to be two airlines left."
Capuano suggested there are a lot of potential outcomes from Aloha's bankruptcy, including a successful restructuring or Aloha working out a deal with another airline.
Gov. Linda Lingle expressed her concern for the 3,500 employees and the sacrifices they have made.
"The continued, uninterrupted service of the airline is in the best interest of the employees, Hawaii residents and visitors, and our state's economy," she said.
Aloha, which said it has in excess of 4,000 creditors, listed the Transportation Security Administration as having the largest unsecured claim at $7.5 million, followed by United Airlines at $5.5 million, Hawaii Medical Services Association at $2.1 million, the state Department of Transportation Airports Division at $1.3 million and law firm Latham & Watkins at $1.2 million.
In its filing, Aloha also reported its revenue slipped in 2007 to $407 million from $416 million in 2006 when it had a net loss of $46 million.
In 2005, Aloha lost $41.2 million on revenue of about $455 million.

Dork

People have chosen $1.00, $19.00, $39.00 airfares over keeping 3,500 decent jobs in the state. The amazing thing is that most people actually believed they could have both. And no, Mesa does not count as decent jobs.

knma'91

Wish the best of luck to Aloha airlines.

__________________
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zubart

Thanks guys.

It can be a very brutal business...........