Aloha Airlines Files For Bankruptcy

Nicole Fong
Nicole Fong
Kamuela Melemai
Kamuela Melemai

HONOLULU (KHNL) -- It's a turbulent time for Aloha Airlines. It's scrambling to stay in business and keep its employees.

Company executives say they're also fighting to make sure passengers don't lose their travel reservations.

To accomplish all of that, the airline filed for Chapter 11 bankruptcy protection on Thursday.

Aloha's president and CEO David A. Banmiller blames its competitor Mesa Air Group's go! Airlines for the bankruptcy, saying the inter-island price war caused their business to nose-dive.

As the announcement was made, employees hadn't had a chance to soak it in.

"They haven't said anything to us. I'm sure the management knew but they haven't gotten to us. I just overheard but I've been helping with the line so I haven't really heard," said Nicole Fong, a ticket agent.

Aloha says go!'s low-cost fares forced the company to compete and offer below-cost tickets. As a result, Aloha says it couldn't generate enough revenue from its inter-island business.

"I don't think it was so much of go! like a while back we had Mid Pacific Air and everybody was saying that that was their competition too but then look what happened, Aloha and Hawaiian came out," said Kamuela Melmai, an Aloha airlines passenger.

Company execs also blame its financial problems on record-breaking crude oil prices.

"Yeah, it's been a real big thing like the cost of fuel, the flights have been going up and down but that's about it as far as the prices go because gas is expensive," said Fong.

To make sure the bankrupty does not disrupt travel, Aloha will ask the court to approve cash financing with its principal lender so it can pay for operating costs.

A court approval will allow Aloha to protect 3500 jobs, and honor its thousands of travel reservations.

go!'s CEO Jonathon Ornstein said he hasn't had a chance to review Aloha's filing, and because of pending litigation, he cannot comment at this time.