Aloha Airlines Files for Bankruptcy Protection

Written by Tina Chau - tchau@kgmb9.com

March 20, 2008 10:18 PM

Go! Airlines' rock bottom fares sound good to travellers, but Aloha Airlines says its not good for its business. Aloha said it has been forced to match go!'s outrageously low fares at a time when jet fuel costs are soaring, so the company said it had no choice but to file for Chapter 11 bankruptcy. "It is a travesty and a tragedy that the illegal actions of a competitor and other factors completely beyound our control have orced us to take this action," said David Banmiller, Aloha's president." We contacted go! Airlines parent company Mesa Air Group for a response to the statement. It said it's aware of Aloha's bankruptcy filing but declined furthur comment. Airline analyst Peter Forman said Aloha has the lowest operation costs in the islands. In October, Aloha told us their break even price was about $50 a seat, with most of the plane full. "Go! has from day one targeted Aloha," said Forman, "and this is precisely what they've been shooting for." Filing for Chapter 11 doesn't mean Aloha Airlines is going out of business. If a bankruptcy judge approves Aloha's protection request, it'll help keep the airline's thousands of creditors at bay and protect the jobs of its 3,500 employees. "What happens in the meantime is you have a smooth operating airline that is less likely to do any massive layoff or downsizing," said KGMB9 business reporter Howard Dicus, "more likely to have smooth cashflow and at the end of it there will probably be fresh investment because there's still plenty of people in the airlines industry that think Hawaii will be a profitable place to fly one day." Now what about Hawaiian Airlines? Analysts say Hawaiian is in better financial shape than Aloha partly because its non-interisland flying can support it during local fare wars.     Related Stories: Governor Statement on Aloha Airlines Bankruptcy Filing Aloha Airlines and Hotel Occupancy Report

Last Updated ( March 20, 2008 10:18 PM )