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Aloha move signals end of airline

An Aloha Airlines passenger plane departs the Honolulu International Airport in Hawaii, on Sunday. PHOTO: AP

Aloha Airlines said it would halt all passenger service today, signaling the end of an airline that has served Hawaii for more than 60 years.

Aloha, which filed for bankruptcy protection on March 20, was a casualty of fierce competition and rising fuel prices.

"We simply ran out of time to find a qualified buyer or secure continued financing for our passenger business," Aloha president David Banmiller said on Sunday in a statement. "We had no choice but to take this action."

Aloha has suffered since Phoenix-based Mesa Air Group Inc launched a new inter-island carrier called go! airlines in 2006, triggering a local airfare war.

In January, go! reported a US$20 million operating loss in its first 16 months of operations. Meanwhile, Aloha and Hawaiian Airlines -- the other major inter-island carrier -- reported combined losses of nearly US$65 million since go! began operating.

Aloha's bankruptcy filing said the airline was unable to generate sufficient revenue owing to what it called "predatory pricing" by go!

Banmiller did not mention go! by name in his statement, but did blame the company's demise on rival companies.

"Unfortunately, unfair competition has succeeded in driving us out of business," he said.

Rising fuel prices, which have forced other airlines to raise fares and look for ways to cut expenses, also made it difficult for Aloha to operate. Aloha, the second-largest Hawaii carrier, has operated a fleet of 26 Boeing 737s to serve five airports statewide and six mainland US destinations.

Hawaii Governor Linda Lingle said the state would ask federal bankruptcy court stop Aloha from shutting down its passenger flight business until it has shown it has exhausted alternatives for continuing its operations.
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