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The Honolulu Advertiser
Posted on: Tuesday, April 29, 2008

Aloha Airlines Q and A

Photo gallery: Aloha cargo service ends

Q: Why did Aloha shut down its cargo division?

A: The short answer is it ran out of money. Aloha filed for bankruptcy protection on March 20 because it was losing money. Aloha shut its passenger service on March 31, and said it would sell the cargo service.

Aloha's chief lender, GMAC Commercial Finance LLC, was hoping to get at least $15 million for the cargo unit. The highest bid was $13.65 million. GMAC said yesterday it was unwilling to provide further financing, and that forced the cargo division to shut down.

Q: When was the last cargo flight?

A: Aloha ceased cargo operations yesterday afternoon. All cargo flights scheduled to go last night were canceled.

Q: How many workers are affected?

A: The company is in the process of laying off its 300 cargo workers as of late yesterday. That follows the layoffs of about 1,900 passenger service workers on March 31.

Q: What about the companies that relied on Aloha to ship cargo interisland?

A: Aloha had 85 percent of the interisland air cargo market, so it won't be easy for customers to find alternative air cargo services. Some customers are using Hawaiian Airlines or other airlines, barges or the Hawaii Superferry.

Q: What is left of Aloha now?

A: The only division of Aloha still operating is the contract services division, which handles baggage duties, ramp duties and other ground services for carriers that serve Hawai'i. It employs about 1,100 workers. Los Angeles-based Pacific Air Cargo agreed last week to buy the contract services division.

Q: Did the action of Aloha pilots kill the cargo unit?

A: The Aloha pilots union wanted its members, who had been fired from the passenger services division, to have the option to fly cargo jets. The union threatened to strike over the issue. Aloha's lender GMAC was not pleased with the union's actions, and the actions may have made the cargo division less attractive to a potential buyer.