Faced with increased competition and higher fuel prices, Aloha Airlines reported an operating loss of about $3.5 million for the second quarter.

The loss reverses a $2.1 million operating profit by Aloha during second quarter of 2005.

Aloha, which filed its second- quarter financials with the U.S. Department of Transportation last week, said the loss came on revenues of $102.6 million in three months ending June 30.

Stu Glauberman, Aloha's spokesman, said yesterday that the loss was largely attributed to continued high fuel costs and increased capacity in the interisland market from Hawaiian Airlines, Island Air and go!, which began flying on June 9.

Go! touched off a price war when it opened for business in Hawai'i with $39 one-way interisland tickets.

The start-up airline, which is owned by Phoenix-based Mesa Air Group, also has offered one-way fares for a limited time at $29. Aloha and Hawaiian have matched go!'s fares each time it has announced a discount.

In its filing, Aloha said it spent $27.9 million on fuel during the second quarter, which was the airline's next highest expense category behind salaries and benefits.

Founded in 1946, Aloha, is the state's second largest airline with about 3,400 employees. The company emerged from bankruptcy protection in February under new ownership led by California billionaire Ron Burkle's Yucaipa Cos. LLC.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.