Aloha Airlines' financial losses widened to about $24.3 million in the first quarter of 2007 as higher fuel prices and the interisland fare war continued to take their toll on the company's bottom line.

The loss compared with a $20.3 million net loss in first quarter 2006, the U.S. Department of Transportation reported yesterday.

"The current environment produced lower interisland revenues and the cost of fuel was up," said Aloha Chief Executive Officer David Banmiller.

According to the DOT, Aloha's operating revenues dropped 10.3 percent to $88.1 million from first quarter 2006's $98.2 million.

Expenses, meanwhile, rose 7 percent to $109.9 million from the previous first quarter's $102.7 million.

Aloha said it spent about $25.1 million for jet fuel during the three months ending March 31, 2007, up 4.7 percent more than in the year-earlier period.

Aloha also paid $31.8 million in salaries and benefits during its latest quarter, up 8.8 percent from first quarter 2006.

During the same quarter, competitor Hawaiian Airlines posted an $11.9 million loss during the first quarter while Mesa Air Group, the parent of low-cost interisland carrier go!, said it lost $24 million during the same period.

go! touched off a price war when it opened for business in Hawai'i on June 9, 2006, with $39 one-way interisland tickets. The startup airline also has offered one-way fares at various times for $29, $19 and $9. Aloha and Hawaiian have matched go!'s fares each time it has announced a discount.

Aloha, meanwhile, has cited a recent study by its consultants, Texas-based Sabre Airline Solutions, which found that the three interisland carriers are each losing money when they sell interisland tickets below $50.

Aloha sued go! and its Phoenix-based parent, Mesa Air Group, in October, alleging that Mesa misused confidential information in an attempt to drive Aloha out of business. go! has denied the charge.

Founded in 1946, Aloha is the state's second-largest airline, with about 3,500 employees. The company emerged from bankruptcy protection in February 2006 under new ownership led by California billionaire Ron Burkle's Yucaipa Cos. LLC.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.