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The Honolulu Advertiser
Updated at 7:04 p.m., Sunday, March 30, 2008

ALOHA CLOSING
Last Aloha passenger flights tomorrow after six decades

Photo gallery: Aloha ending passenger service

Advertiser Staff

Hawaii news photo - The Honolulu Advertiser

Aloha says it will cease passenger operations tomorrow.

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Calling it an "incredibly dark day" for the state, Aloha Airlines announced it will end its 61-year history of passenger flights at the end of the day tomorrow because it had run out of time to find a buyer or get additional financing..

Aloha said the closing of its interisland and Mainland flights will affect about 1,900 full- and part-time employees out of its total workforce of about 3,550. The airline advised passengers with future bookings to seek a refund through their travel agent or credit card companies.

The airline said it will continue to operate its air cargo and aviation services units while the U.S. Bankruptcy Court seets bids from potential buyers for those operations.

The abrupt announcement came as a surprise to many people who thought Aloha had bought time through the filing of a Chapter 11 bankruptcy on March 20. At that time the company said it was trying to keep operating while looking for a buyer or buyers for its businesses. The company operates about 700 interisland flights and about 120 to the Mainland on a weekly basis.

Since that time the company has scrambled to find buyers and last week said it will auction off its profitable interisland air cargo business. It said it had found at least one bidder willing to pay $13 million or more.

"Despite the groundswell of support from the community and our elected officials, we simply ran out of time to find a qualified buyer or secure continued financing for our passenger business," said David Banmiller, Aloha's president and chief executive officer, in a press statement.

"We had no choice but to take this action."

Aloha said it had stopped taking reservations for all travel beyond tomorrow. Aloha will operate its schedule with the exception of flights from Hawaii to the West Coast and flights from Orange County to Reno and Sacramento and Oakland to Las Vegas.

Aloha said has about 3,550 employees. Aside from those in passenger service, others worked in the company's administrative, cargo and aviation service operations, a unit that performs ticketing, cleaning, baggage for other airlines.

Aloha said other airlines are stepping forward to assist and accommodate passengers who have been inconvenienced.

Banmiller, in announcing the shutdown, bemoaned the closing of a passenger operation that had flown for 61 years.

He also repeated Aloha's contention that the entry of go! airlines with its discount fares was a factor in the shut down. Surging fuel prices also have played a role in the airline's financial woes. Interisland carrier go! entered the market in June 2006 to challenge Hawaiian and Aloha airlines, the No. 1 and 2 biggest local air carriers.

"Unfortunately, unfair competition has succeeded in driving us out of business, bringing to an end a 61-year-old company with a proud legacy of serving millions of travelers in the true spirit of Aloha," Banmiller said.