Agreement to help carrier emerge from bankruptcy
| • | Pair betting on struggling Aloha Air |
| • | $100M bid made for Aloha Airlines |
By Lynda Arakawa
Advertiser Staff Writer
Q. What will happen to tickets and reservations for future Aloha Airlines flights?
A. All tickets and reservations will be honored, and customers should not notice any changes to Aloha's flight operations or programs. Aloha said it will continue business as usual.
Q. Will the AlohaPass frequent-flier program be affected?
A. No. All products and services, including the Ali'i Loyalty Program and the Ali'i Club airport lounges, will continue.
Q. Why is Aloha Airlines being bought?
A. Aloha, which filed for Chapter 11 bankruptcy protection last December, needs the investment so it can pay off its debts. The investors, The Yucaipa Companies LLC and Aloha Aviation Investment Group LLC, have agreed to purchase $50 million of Aloha's stock and provide another $50 million in debt financing.
The agreement will allow Aloha to continue its current operations, pay off more than $65 million it owes to lenders, and emerge from bankruptcy protection.
Q. When will this happen?
A. The deal with Yucaipa and AAIG still requires U.S. Bankruptcy Court approval. Assuming the agreement is approved, Aloha says it's optimistic it will emerge from bankruptcy protection before the end of the year.
Q. Will there be any changes to Aloha's routes and flights?
A. There are no anticipated changes for interisland or transpacific operations, as well as Aloha's contract services and its air freight cargo service. As far as any potential expanded services, Aloha said its first step is stabilizing the company and that it will look at opportunities as they develop once it exits bankruptcy.
Q. Will employees be affected?
A. Aloha hopes to maintain its workforce of 3,600 employees. David Banmiller, who will continue as CEO of Aloha Airlines, said there are still some discussions ongoing with employees regarding "some final expense related issues to make sure that our costs are in line with competitive factors." He declined to elaborate.
Q. What happens to Aloha Airlines' local owners?
A. The families of local investors Hung Wo Ching and Sheridan Ing — longtime owners of the airline — will retain a minority interest in the airline and sit on the airline's board. AAIG will also be a minority shareholder and Yucaipa will be the majority shareholder.
Reach Lynda Arakawa at larakawa@honoluluadvertiser.com.
