First Hawaiian Bank yesterday also agreed to release $1 million from Aloha's collateral account to give Aloha additional funds.

Aloha has not paid aircraft leases totalling $4.5 million per month since filing for Chapter 11 bankruptcy protection on Dec. 30. Yesterday, Aloha also won court approval for more favorable lease agreements.

"We did need this $5 million financing, there's no question about it," said David Banmiller, Aloha's president and chief executive officer.

MatlinPatterson was launched in 2002 by David Matlin, who later recruited former New York Mayor Rudolph Giuliani to gain control of MCI Inc., the Wall Street Journal reported last week.

Representatives for Giuliani Capital Advisors, a financial investment arm of Giuliani Partners, appeared in U.S. Bankruptcy Court yesterday and said afterward that they had been retained by Aloha as financial advisors.

Banmiller said yesterday that Aloha will need the rest of MatlinPatterson's $90 million by the end of March. The funding does not give MatlinPatterson any stake in Aloha, Banmiller said.

At the same time, Banmiller said, Aloha is close to reaching the company's goal of $60 million in cost savings that he said is necessary to reorganize and exit bankruptcy.

Unions representing the majority of Aloha's workforce have already approved new contracts calling for 10 percent wage cuts. But members of the International Association of Machinists and Aerospace Workers' District Lodge 142 on Thursday voted down a new contract and then were upset yesterday when they discovered that their paychecks had been reduced anyway.

Aloha yesterday also announced route changes mean the company can return two Boeing 737-700 planes.

The company already canceled service to Burbank, Calif., and Vancouver, British Columbia, Canada, and said yesterday that it will discontinue nonstop flights to Las Vegas that had become unprofitable because of discounted fares.

Beginning April 3, Aloha instead will fly to Las Vegas through Oakland. It will also increase nonstop service from Orange County to Hawaii to five flights a day and offer twice-daily service from San Diego.

In July, Aloha will add a fourth daily flight from Oakland that will be one of two nonstop flight to Maui.