The loss was an improvement when compared with a $30.6 million net loss in the fourth quarter of 2002. For all of 2003, Aloha had a $1.18 million profit, compared with a $43.7 million loss the year before.

Glenn Zander, Aloha's president and chief executive, said he did expect Aloha to post a profit for the year, following a $11 million third-quarter profit.

"The 2003 profit was a big improvement over the previous year, and among the factors were employee payroll concessions worth about $10 million and a record third quarter, which was the best in the company's 57-year history," Zander said.

Aloha, a private company, is not required to report earnings to the U.S. Securities and Exchange Commission but does file quarterly reports with the federal Bureau of Transportation Statistics.

Sales, or operating revenue, totaled $97.2 million in the fourth quarter while the airline's operating expenses came to $99 million. That compared with $85 million in operating revenues and $89 million in operating expenses in same period of the previous year.

On Tuesday, Aloha's parent, Aloha Airgroup Inc., completed the sale of its subsidiary Island Air to San Francisco-based Gavarnie Holdings Inc. The purchase price was not disclosed.

Zander said the proceeds from the sale will be used to pay down a $45 million loan that the airline obtained in 2002. The loan was backed by a $40.5 million federal guarantee to help the carrier recover from a drop in air travel after the Sept. 11 terrorist attacks.

Last year, Aloha added daily service to Honolulu from Reno, Nev.; to Maui from Burbank and Sacramento, Calif.; and to Kona from Orange County, Calif.