Business as usual with court's OK
| • | Aloha Airlines files for bankruptcy, blames go! |
Advertiser Staff
Q: Will tickets, coupons and reservations for future Aloha flights be honored during the bankruptcy process?
A: Yes. As long as the bankruptcy court accepts Aloha's financial plan, it should be business as usual. The airline plans to honor existing reservations and accept new reservations.
Q: Does the Chapter 11 filing affect the AlohaPass frequent-flier program?
A: No. Again, with the court's approval, there should be no change to the AlohaPass program.
Q: What is Chapter 11 bankruptcy?
A: When a company struggles under heavy debt but still wants to stay in business, it can file for reorganization under Chapter 11 of the U.S. Bankruptcy Code. This type of bankruptcy gives the company breathing room to recover, putting creditors temporarily at bay. Management continues to run daily operations but major corporate decisions must be approved by a bankruptcy court.
Secured creditors or lenders — most often banks — are paid first, followed by unsecured creditors such as bondholders and suppliers. Shareholders have the last claim on assets and may not get anything if the others are not fully repaid. To emerge from bankruptcy and return to profitability, the company crafts a reorganization plan to be approved by the bankruptcy court. After Chapter 11, part or all of a company's debt may be canceled and creditors get ownership of the newly organized firm.
Q: Why is Aloha filing for Chapter 11?
A: Aloha said it was due to its inability to generate sufficient revenues from its interisland passenger business "due to predatory pricing by Mesa Air Group's go! airline." The airline also cited increases in the cost of jet fuel. With crude oil at $111 a barrel, Aloha's annual jet fuel costs increased by $71 million, the company said.
Q: Will this mean a reduction in flights? How about safety?
A: Aloha will not be cutting back on flights — including its air freight cargo service — and the bankruptcy filing will not affect safety measures.
Q: Can customers request a refund for unused and unrestricted refundable tickets?
A: Yes. There is no change to Aloha's refund and ticketing policies.
