Aloha may seek $4 million from Hawaiian

By Susan Hooper
Advertiser Staff Writer

Aloha Airlines believes it is entitled to a $4 million break-up fee from Hawaiian Airlines in the wake of the failed merger, the company's president and chief executive said.

In an interview late last week, Glenn Zander said the fee is required under the terms of the merger agreement and that company attorneys are reviewing the issue to determine whether the airline will pursue it.

The merger fell apart last weekend, with each side giving different reasons for the deal's demise. Hawaiian cited increasing costs and risks associated with the completion of the merger. Aloha said Hawaiian tried to change the deal's terms.

The original merger agreement includes penalties for withdrawal by any of the parties under certain circumstances. Hawaiian spokesman Keoni Wagner said Hawaiian feels that no penalties will be accrued by any of the parties.

Both airlines are making changes not only to survive but also to prosper during one of the most difficult times for their industry.

Hawaiian has announced that it will expand trans-Pacific operations with flights between Honolulu and two new California cities in June. Hawaiian also said it will bring back workers furloughed after the Sept. 11 attacks to staff the flights.

Aloha plans to expand its operations, including its trans-Pacific routes, and it will revamp and retain its interisland coupon system, Zander said. Aloha also expects to apply for federal loan guarantees available to airlines hit hard by the downturn in travel after Sept. 11.