Bankruptcy Judge Won't Halt Aloha Air's Shutdown - Hawaii News Now - KGMB and KHNL

Bankruptcy Judge Won't Halt Aloha Air's Shutdown

David Banmiller David Banmiller
Governor Linda Lingle Governor Linda Lingle

By Minna Sugimoto

HONOLULU (KHNL) -- The head of embattled Aloha Airlines spoke out after an emotional hearing at US Bankruptcy Court Monday.

The day started with Governor Lingle unveiling the state's last-ditch effort to save Aloha's passenger service. But late Monday afternoon, US Bankruptcy judge Lloyd King said he would not step in and block the shutdown, calling it a business decision.

The company's attorney told the court Aloha's current cash position is $1.7 million, but the average cost of operating the business, including the passenger division, is $1.5 million each day.

The carrier is seeking approval to sell its profitable cargo division, but says it exhausted every realistic financial option for its passenger service.

David Banmiller, Aloha's president and CEO, says the decision to shut down was a painful one.

"For any suggestion that we prematurely shut down, I would ask those with frustration, including yours truly who has loved this job for three-and-a-half years and grown to respect, enjoy and care for the employees, I am the last guy here that wants this to happen," Banmiller said. "I also happen to be the one guy who's legally responsible to make the right decision, even if it's a tough one."

The carrier blames rising jet fuel costs and unfair competition for driving it out of business.

"If I operated for another week and wasn't able to make payroll, I would be enormously criticized for flying airplanes that way."

Even the state's top official says she was caught off guard by the company's sudden announcement.

"I had no indication from Aloha that they were going to come out and say we're closing down," Linda Lingle, Governor (R), said.

In documents filed Sunday night, the state asks the US Bankruptcy Court to block the shutdown until five points are addressed.

First, the Governor wants to make sure Aloha has indeed exhausted all possibilities of finding a buyer or additional financing. Second, she wants the carrier to clearly show it lacks the resources to continue operations for at least another month.

"No one yet has seen their financials," she said. "Everyone is operating on what they say the situation is."

The Governor wants a trustee-appointed committee to be allowed to issue its recommendations first. She also says Aloha must show it's meeting a state law that requires 60 days notice be given to employees, and that it filed Chapter 11 in good faith.

The goal, she says, is to buy more time for the airlines' workers.

"People will continue to be flown between the islands," Lingle said. "I don't think there will be a major long-term dislocation there."

The state says the federal government is objecting to the carrier's attempts to sell its cargo operations.

"That creates a whole new paradigm for this case because everything Aloha has done up to now has been predicated on them selling off at least the cargo piece," Lingle said.

But the state's efforts appear to be moot at this point. Judge King told the courtroom crowd, which included Aloha employees, it's not his place to accept or reject the shutdown plan.

Job Link 8 Featured Jobs
  • Hawaii News Now headlinesNewsMore>>

  • Trump says 'hard to imagine' Kavanaugh assaulted woman

    Trump says 'hard to imagine' Kavanaugh assaulted woman

    Wednesday, September 19 2018 12:37 AM EDT2018-09-19 04:37:34 GMT
    Wednesday, September 19 2018 5:22 PM EDT2018-09-19 21:22:53 GMT
    (AP Photo/Alex Brandon). In this Sept. 6, 2018 photo, Supreme Court nominee Brett Kavanaugh reacts as he testifies after questioning before the Senate Judiciary Committee on Capitol Hill in Washington. Official Washington is scrambling Monday to assess...(AP Photo/Alex Brandon). In this Sept. 6, 2018 photo, Supreme Court nominee Brett Kavanaugh reacts as he testifies after questioning before the Senate Judiciary Committee on Capitol Hill in Washington. Official Washington is scrambling Monday to assess...

    Trump has already rejected the idea of bringing in the FBI to reopen its background check of Kavanaugh. Should he order such a review, it would likely delay a confirmation vote until after the election.

    More >>

    Trump has already rejected the idea of bringing in the FBI to reopen its background check of Kavanaugh. Should he order such a review, it would likely delay a confirmation vote until after the election.

    More >>
  • Report: Thieves in Hawaii target older Honda Civics, Accords

    Report: Thieves in Hawaii target older Honda Civics, Accords

    Wednesday, September 19 2018 5:11 PM EDT2018-09-19 21:11:23 GMT
    The Honda Accord is among the most stolen cars in Hawaii. (Image: National Insurance Crime Bureau)The Honda Accord is among the most stolen cars in Hawaii. (Image: National Insurance Crime Bureau)
    The Honda Accord is among the most stolen cars in Hawaii. (Image: National Insurance Crime Bureau)The Honda Accord is among the most stolen cars in Hawaii. (Image: National Insurance Crime Bureau)

    If you've got a 2000 Honda Civic ... sorry. Your car is the most stolen in Hawaii. 

    More >>

    If you've got a 2000 Honda Civic ... sorry. Your car is the most stolen in Hawaii. 

    More >>
  • Similar slayings draw vastly different political reaction

    Similar slayings draw vastly different political reaction

    Wednesday, September 19 2018 1:07 AM EDT2018-09-19 05:07:30 GMT
    Wednesday, September 19 2018 4:53 PM EDT2018-09-19 20:53:30 GMT
    (Luke Lu/Iowa State University via AP). In this Sept. 7, 2017, photo provided by Iowa State University in Ames, Iowa, golfer Celia Barquin Arozamena poses for a photo. The former ISU golfer was found dead Monday, Sept. 17, 2018, at a golf course in Ame...(Luke Lu/Iowa State University via AP). In this Sept. 7, 2017, photo provided by Iowa State University in Ames, Iowa, golfer Celia Barquin Arozamena poses for a photo. The former ISU golfer was found dead Monday, Sept. 17, 2018, at a golf course in Ame...

    Former inmate Collin Richards was charged with stabbing Celia Barquin to death during a random attack while she was golfing by herself in broad daylight on Monday morning.

    More >>

    Former inmate Collin Richards was charged with stabbing Celia Barquin to death during a random attack while she was golfing by herself in broad daylight on Monday morning.

    More >>
Powered by Frankly