Aloha files for $45M loan
Advertiser Staff and News Services
Aloha Airlines is one of only 13 air carriers to seek federal loans under a program created to help the industry recover from the Sept. 11 attacks.
Aloha said yesterday that it has asked the Air Transportation Stabilization Board for a five-year, $45 million loan — $40.5 million of which would be guaranteed.
The airline filed its application late Thursday, according to Betsy Holahan, a spokeswoman for the stabilization board, the federal entity charged with reviewing and deciding on the applications. The application deadline was yesterday.
Aloha and the board did not disclose further details about the airline's application.
Of the country's 11 largest passenger airlines, only four — America West, American Trans Air, United Airlines and US Airways — asked the board to lend them money to keep flying.
The $10 billion loan program required airlines to provide detailed information and let the government buy stock in their companies, a provision modeled after the Chrysler bailout.
Air Transport Association spokesman Michael Wascom said the provision requiring airlines to let the government buy stock may have discouraged airlines from seeking government help.
"There are some carriers who decided that was not a consideration they wanted to entertain," said Wascom, whose trade group represents the major airlines.
Aloha was among nine smaller air carriers that applied for help under the program, according to the Air Transportation Stabilization Board.
Four submitted applications shortly before yesterday's deadline: Aloha, Frontier, Great Plains and World. The others are Evergreen International, National and Spirit, whose applications are pending, and Frontier Flying Service and Vanguard, both rejected.
Besides the loan program, Congress also provided $5 billion in grants for the airline industry, Most of that money has been distributed, including to Aloha and Hawaiian airlines.
Immediately after the attacks — in which terrorists hijacked two jetliners from United Airlines and two from American Airlines and crashed them into the World Trade Center, the Pentagon and a field in Pennsylvania — the nation's air fleet was grounded. Traffic has yet to return to pre-Sept. 11 levels.
The Air Transport Association reported that airlines carried 45.3 million passengers in May, down 10.3 percent from the same month a year ago. Airlines also carried 11.6 percent fewer passengers during the first five months of 2002 as they did during the same period in 2001. The Federal Aviation Administration has predicted air travel won't return to pre-Sept. 11 levels until 2003.
So far, the board has approved one application, that of America West, which received $380 million in government-backed loans, in exchange for warrants to buy 5.3 percent of the airline's stock.
Those still waiting to hear about their applications include United Airlines, which is seeking $1.8 billion in loan guarantees; US Airways, which asked for $900 million in backing; and American Trans Air, which requested $165 million.
Although US Airways didn't lose any planes Sept. 11, its business was hurt when Reagan National Airport was shut down for three weeks and then allowed to reopen with only a limited schedule.
The board may take weeks to decide on the latest applications.
Advertiser staff writer Susan Hooper contributed to this story.
