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The Honolulu Advertiser

Posted on: Saturday, May 21, 2005

Two airlines owe state $4 million

By Rick Daysog
Advertiser Staff Writer

Hawai'i's two largest airlines, which both are operating under federal bankruptcy protection, owe the state more than $4 million in landing fees, back rent and other charges.

What's owed?

Landing fees and rents owed to state

Aloha Airlines $2.3 million

Hawaiian Airlines $346,000


Back taxes, interest owed

Aloha Airlines $1.3 million

Aloha Airlines, which filed for bankruptcy protection in December, owes more than $2.3 million in past-due landing fees and rents at Hawai'i's airports, the state Department of Transportation said yesterday.

Aloha also owes $1.3 million in back taxes and interest, according to a recent Bankruptcy Court filing by the state Department of Taxation.

Hawaiian Airlines, which will emerge from Chapter 11 reorganization on June 1, owes about $346,000 in delinquent landing fees, rents and other charges, the Transportation Department said. Tax figures for Hawaiian were not available.

Landing fees help pay for operations at Hawai'i's airports.

The delay in payments from the two airlines comes amid pressing maintenance problems at the Honolulu International Airport, which serves more than 20 million travelers a year.

The state has budgeted about $8 million this year for terminal modernization projects, some as basic as fixing leaking roofs.

Hawaiian Airlines — which owes a total of $246 million to about 1,100 creditors — said it will pay off the entire outstanding balance of all debts, including the landing fees and rents for its facilities at the state's airports, once it emerges from bankruptcy protection next month.

Aloha Airlines hasn't announced its plans for repaying creditors, including the state.

When asked about the unpaid landing fees, Stephanie Ackerman, Aloha's senior vice president for public relations and government affairs, said, "That's why it's so important for us to work our way out of the bankruptcy."

Hawaiian Airlines said it had been current on its rents and landing fees several months before it filed for Chapter 11 in March 2003 but fell behind just before the filing.

The company said it has paid all landing fees and rents since it filed for reorganization.

According to the Transportation Department, Aloha Airlines' delinquent landing fees were accumulated before the company filed for bankruptcy protection.

The state tax department said in a filing this week that Aloha owed more than $1.3 million in taxes and interest for 1996 and 1997.

The tax department said that the figure included more than $831,000 for past-due corporate taxes and $497,000 in interest during the two-year period.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com or 525-8064.