Aloha's Cargo Service Faces Major Hurdles

HONOLULU (KHNL) -- The sale of Aloha Airlines' contract services division became a done deal Thursday morning, but the fate of Aloha's cargo service is still being ironed out in Bankruptcy Court.

Judge Lloyd King reconvened at 3:00 Thursday afternoon after a lengthy morning discussion among attorneys representing all of the interested parties.

At issue is who has control of the cargo assets and who will fly the planes?

The goal is to get air cargo up and running by midnight Thursday, but still many things to resolve before that can happen.

There is hope that Aloha's cargo service will be up and running Thursday night, but some major hurdles to overcome.

Does the court-appointed trustee accept his appointment?

Will the pilots' collective bargaining agreement be accepted?

A couple of sticking points in the Aloha Air Cargo bankruptcy saga.

A long morning session in Bankruptcy Court over the fate of Aloha Airlines' liquidated assets.

Attorneys for the interested parties hope the air cargo sale gets finalized soon.

"What's at stake first of all is hundreds of jobs and beyond that, we have a critical situation with the air cargo among the islands," said GMAC attorney Ted Pettit.

But to fly the cargo planes, they need pilots.

Former Aloha pilots say they've been kept out of the loop.

"We're absolutely willing to fly and we have been, and the company has to call us," said Mike Feeny, a former Aloha pilot.  "We haven't heard officially from the company since maybe April 7th. So I'm sure they're finding a telephone right now and we'll get on the phone and we'll do whatever it takes to get the airplanes in the air tonight."

The sticking point is the pilots' collective bargaining agreement, and whether or not Saltchuk, the company buying the cargo service, will hire based on seniority.

"We're going to have some discussions right now," said Pettit.  "I'm certain the pilots will do the right thing for the State of Hawaii."

When the bankruptcy proceedings were still in Chapter 11, GMAC rejected a $13.65 million offer, upping the minimum bid to $15 million.

When it turned into Chapter 7 liquidation Monday, GMAC accepted a $10 million offer from Saltchuk.

"Look, there were a lot of dynamics in the auction process, so I'm not going to comment on that," said Pettit.  "That's history. We're looking forward. We're not looking backwards."

And the Court-Appointed Trustee has yet to accept his appointment, complicating matters.

The only thing clear from the morning session was the approval of Pacific Air Cargo buying the Contract Service Division.

"I think we're there from what I heard. It looks like we're there," said Beti Ward, Pacific Air Cargo President.  "We can get these people back to work, and start running our business, so that's good, that's great."

Those in court Thursday hope things get resolved soon.

"I want these jobs to stay in Hawaii," said Ward,  "I don't want these airlines to bring in people from the mainland and if it's not handled here, that's what they have to do."

"We'll do whatever it takes to get the airplanes in the air and then we can argue about other things later," said Feeny.

They hope to get things ironed out so the cargo division can be up and running again by midnight Thursday.