Aloha Airlines, which shut down its passenger operations on Monday, said a labor dispute has threatened to scuttle its plans to sell its cargo division.

Aloha went to federal bankruptcy court yesterday morning seeking an injunction against the Air Line Pilots Association, saying the union is threatening to "disrupt or stop its cargo operations."

Federal Bankruptcy Judge Lloyd King made no ruling after the company and the union agreed to try to settle the issue over the next several days.

"ALPA threatened to disrupt or stop our cargo division," said Aloha attorney Sheldon Kline.

Aloha shut down its passenger service on Monday and laid off 1,900 workers but kept its air cargo and contract services operations running as it attempts to sell those divisions.

Richard Seltzer, ALPA's attorney, said the union planned no such work stoppage, adding that all of the company's daily cargo flights took off without interruption yesterday.

Aloha is the state's largest air cargo company in Hawai'i with about 85 percent of the market. The company flies 30 cargo flights a day and employs nearly 400 people, including 30 pilots.

The legal action was filed as a result of a disagreement between management and the pilots over who should be flying the cargo planes.

ALPA said its collective bargaining agreement calls for its most senior pilots to get first choice on its routes. Pilots who fly the cargo routes are not being laid off.

ROUTES AWARDED

The company said that pilots bid on the cargo routes more than a month ago and the routes would not be re-bid.

In its suit, Aloha said that one of its pilots told the company that he would "instruct Aloha's pilots not to fly the cargo operations unless the flights were flown on the basis of seniority."

John Riddel, pilot and member of the ALPA's executive council, denied that the union has issued such a threat and called the company's legal action "irresponsible and inappropriate."

"(Pilots) have been instructed from day one to be professional and to maintain the superior safety record that we have and to do their jobs," Riddel said.

2 NEW BIDDERS

Meanwhile, Aloha said two new bidders — Kahala Capital LLC and Castle & Cooke Aviation — have expressed interest in Aloha's cargo division.

Van Nuys, Calif.-based Castle & Cooke, headed by Dole Food Co. CEO David Murdock, provides jet fuel, aircraft hangar, office and shop space for private jets.

Kahala Capital is an investment firm, that includes investor Bradley Smith and Aloha director Richard Ing, and specializes in distressed companies.

Last week, Seattle-based Saltchuk Resources Inc., the owner of Young Brothers/ Hawaiian Tug & Barge, signed a letter of intent to acquire the cargo unit for $13 million.

Aloha said it has received inquiries from about 20 interested parties for its cargo division.

In a related matter, the state Senate Ways and Means Committee yesterday passed a bill that would provide loan guarantees for Aloha and other interisland carriers.

Senators agreed to amend the bill to require that if Hawaiian Airlines or Mesa Air Group take advantage of the loan guarantees, they give preference to hiring Aloha workers who have lost their jobs.

Three state House committees will hold an informational briefing this morning in the state Capitol auditorium on the impact of Aloha's shutdown on interisland travel and tourism and on the future options for Aloha workers.