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The Honolulu Advertiser
Posted on: Wednesday, August 28, 2002

Aloha posts $6.8 million loss

By Andrew Gomes
Advertiser Staff Writer

Aloha Airlines posted a $6.8 million loss in the second quarter as it continues to feel the effects of sluggishness in air travel.

Aloha Airlines said startup costs for two more Mainland flights near the end of its second quarter contributed in small part to operating expenses relating to its net loss. The airline plans to leave its flight schedule unchanged.

Advertiser library photo • October 2000

The loss for the quarter ended June 30 compares with a $162,412 loss in the same quarter a year ago.

The airline attributed much of the loss to weakness in the interisland market, where Aloha continues to feel "lingering effects" from the Sept. 11 terrorist attacks.

Despite the second-quarter loss, the report — the first look at the airline's finances this year since the breakup of its planned merger with Hawaiian Airlines earlier this year — shows that Hawai'i's second-largest airline has continued to improve its bottom line over the past nine months.

The loss was lower than the carrier's $12 million loss in last year's fourth quarter and slightly better than its $7.1 million net loss during the first three months of this year.

Airline spokesman Stu Glauberman declined yesterday to characterize the company's outlook for the rest of the year.

For the second quarter, the airline had a $9.9 million loss from operations, on $78.8 million in revenues. Total operating expenses came to $88.8 million, according to the financial report released yesterday by the federal Bureau of Transportation Statistics.

Glauberman said a small part of the operating expenses that contributed to Aloha's loss was from startup costs for two daily flights to the Mainland begun in June. There were no costs related to the failed merger, or significant changes in fuel expenses.

Aloha announced new daily nonstop service between Honolulu and Burbank, Calif., and between Honolulu and Vancouver, British Columbia, in April. The new routes started in June using new aircraft.

The airline has said it plans to leave its flight schedule unchanged for the fall.

It is unclear how Aloha's schedule of about 850 weekly interisland flights would change under a plan by the airline to coordinate schedules and share passenger revenue, for a limited time, with competitor Hawaiian Airlines under a requested antitrust exemption. The request is pending before the federal Department of Transportation.

Aloha and Hawaiian have said they lost money on interisland service for several years. Earlier this year, both airlines told the Securities and Exchange Commission that they were losing as much as $270,000 a day after the Sept. 11 attacks.

In its report released yesterday, Aloha reported having $18 million in cash on hand, down from $30 million at the end of last year. The airline has asked the federal government for a loan of $45 million over five years — $40.5 million of which would be guaranteed. That request is pending.