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The Honolulu Advertiser

Posted on: Tuesday, January 4, 2005

Aloha permitted to continue operations

By Lynda Arakawa
Advertiser Staff Writer

Aloha Airlines, in its first court proceeding since filing for Chapter 11 bankruptcy protection last week, yesterday was granted the authority to continue honoring its agreements and payments to employees, customer programs and other obligations.

Much of yesterday's federal bankruptcy court proceedings were fairly standard to allow Aloha to continue its operations while it reorganizes costs.

"Optimistically I felt good about this morning," said Aloha president and CEO David Banmiller.

"I would say that personally (the goal) is to continue to operate and operate successfully as we go forward in the process of restructuring, simultaneously making sure that our consumers and passengers realize that it is in fact business as usual, as well as our employees."

Aloha filed for Chapter 11 bankruptcy protection Thursday, joining competitor Hawaiian Airlines, which is in its second bankruptcy since 1993.

Also discussed at the hearing was a $3 million loan Aloha received from its shareholders, primarily families of the late Hung Wo Ching and businessman Sheridan Ing.

"It served two purposes," Banmiller said of the loan, which was made after the bankruptcy filing. "The first is to show in fact investor interest and potentially not just (from) this group but other potential ... investors. And second allow us some flexibility and liquidity that shows people that we have the cash to continue to operate."

Reach Lynda Arakawa at larakawa@honoluluadvertiser.com or at 535-2470.