While under court protection, Aloha plans to seek savings in a variety of ways, including renegotiating labor contracts, wage rates, work rules and aircraft leases. The company's 3,668 employees and its suppliers will be called on to sacrifice the most.

"You don't file bankruptcy lightly," said Mike Boyd, president of Boyd Group, a Colorado-based airline consulting firm. "Bankruptcy is ugly. Everybody gets hurt."

Chapter 11 bankruptcy gives a company protection from creditors while the company attempts to put its business on sounder footing.

Looking to cut costs

If the recent bankruptcy reorganization of competitor Hawaiian Airlines is any indication, Aloha could emerge intact and in a stronger financial position. Hawaiian has posted a profit in all but three months since filing for bankruptcy protection in March 2003.

Today, Hawaiian employs about 3,300 people and operates nearly the same number of aircraft as it did before entering bankruptcy reorganization.

Getting on sound financial footing cost Hawaiian employees $15.3 million in concessions and the loss of a couple hundred jobs. The company's aircraft lessors were forced to cut rates.

Aloha will be looking for similar savings, in part to counter the rising cost of jet fuel, Boyd said.

"If Aloha's cost of fuel hadn't gone up 40 to 50 percent, we'd be talking about how successful they are," he said.

Aloha and Hawaiian are far more affected by fuel increases than any other airline because of their short, inefficient interisland routes, he said.

"They've got to wring other costs out of the system."

Aloha lost $6 million in the third quarter — the fourth quarterly loss in a row. Aloha's fuel costs in the third quarter were $22.7 million, compared with $13.8 million a year ago.

While under bankruptcy protection, Aloha hopes to cut operating expenses by 15 percent, or $60 million, in 2005 by renegotiating aircraft leases, labor contracts, and reassessing operations, including Mainland routes, the company said.

Aloha pilots indicated yesterday that they may be willing to accept some concessions. Aloha management won points with union workers earlier this month when it cut 12 top management positions, showing the pain would be shared at all levels.

"When they come to the employees and say that we need to tighten up, we have a feeling that that's not unreasonable," said Capt. Steve Brenessel, an Aloha pilot and spokesman for Council 80 of the Air Line Pilots Association, which represents about 320 Aloha Airlines pilots.

Three weeks ago, the carrier met with its pilots to propose possible concessions to their contract, including wage and benefit cuts, Brenessel said.

Level playing field

Brenessel said most pilots are upbeat about the bankruptcy, saying that this now levels the playing field as Aloha's competitors — Hawaiian, United and ATA — have all been operating under the protection of Chapter 11.

"We know we're not going to shut down, but we'll emerge from this a lot stronger," Brenessel said. "And now that we have the same competitive advantage the other airlines have, we feel actually a lot of relief. We think it's going to be a positive thing. Yes, it will be painful to give up some wages and benefits, but we'll come out of this all right."

While some Aloha employees expressed a willingness to make some concessions yesterday, others said there is a limit to their generosity.

"The employees see that the flights are full, so they can't be losing that much money," said an Aloha mechanic who asked not to be identified because of sensitivities surrounding the bankruptcy. "If they ask for too much, I think everybody will vote no."

Talk of merger

With Aloha's bankruptcy filing, both of Hawai'i's locally based airlines are under court protection, and the idea of merging the two to make one strong local airline has been raised again.

The two companies discussed merging in 1972 and again in 2001. The latest attempt was called off by Hawaiian. Aloha's president at the time, Glenn Zander, said Hawaiian chairman John Adams wanted to run the new airline himself instead of letting an independent executive take over.

Aloha's new president, Banmiller, said he would not rule out a merger.

"That's a question probably for the future," Banmiller said at a news conference announcing the bankruptcy. "I think there's an environment here that supports two airlines.

"I know there's been discussions for many years about that," he added. "As an individual, I'll never say never."