The owner of Young Brothers/Hawaiian Tug & Barge has revived its efforts to acquire Aloha Airlines' cargo division.

Seattle-based Saltchuk Resources Inc. is offering to pay more than $10 million for the cargo unit, according to people familiar with the deal who asked not to be identified because the sale has not been finalized.

Aloha's abrupt shutdown of its cargo unit Monday night threw more than 300 people out of work and forced businesses to find new ways to ship products between the islands.

Aloha told cargo employees to show up for work yesterday, several people familiar with the situation said. Aloha also has contacted state officials to reissue airport security badges and is in the process of reinstating its contracts with Federal Express and other mail services, one person familiar with the deal said.

Aloha and Saltchuk had planned to issue a news release last night announcing the sale, but the deal ran into a last-minute snag due to questions from Aloha's court-appointed trustee Dane Field, several people familiar with the process said. As bankruptcy trustee, Field oversees the sale of Aloha's assets. Field did not return a call seeking comment.

Saltchuk's latest offer is less than the $13 million it bid last month for the cargo business, which handled as much as 85 percent of all goods flown between the islands. The new lower price represents the loss of value that Aloha Cargo has suffered after its closure on Monday.

During the past few days, major customers have turned to smaller airlines and freight companies to ship their products to the Neighbor Islands.

Love's Bakery, Aloha's largest freight customer, said it has tapped local carrier Pacific Wings for some of its overnight freight and is in the process of turning over the bulk of the 36,000 pounds of bread products its ships daily to Young Brothers.

Aloha, the state's second-largest carrier, filed for bankruptcy protection on March 20 after losing more than $120 million during the past two years. The company shut down its passenger service 11 days later and terminated 1,900 workers in the largest mass layoffs the state has ever seen.

During a speech at a Hawai'i Publishers Association meeting yesterday, Aloha's chief executive David Banmiller said discussions are under way to turn over the company's cargo unit to a new owner.

He declined to identify the buyers but said he expected the deal to be announced shortly.

"I can't say much other than that there's great sensitivity about the current market situation and (finding) any way of salvaging the operations," Banmiller said.

'RELIEVES THE PRESSURE'

The proposed deal comes as representatives for another bidder, Jupiter Holdings Group, attempted to revive their offer.

Jupiter had bid $13.65 million for the cargo unit but Aloha's lender, GMAC Commercial Finance LLC, nixed the deal after calling for a minimum bid of $15 million.

Customers said they would welcome a return of Aloha Cargo.

While many of the small local carriers have ramped up their cargo service to meet the immediate crisis, it's not enough to fill the void created by the loss of Aloha's freight business, which included six Boeing 737-200 jets flying 216 flights per week.

"This relieves the pressure," said Kevin Shigemura, vice president of Armstrong Produce Ltd., the state's largest produce wholesaler.

The turmoil in the interisland cargo business prompted U.S. Congressman Neil Abercrombie to ask Gov. Linda Lingle yesterday to consider declaring a state emergency or disaster, saying "we absolutely cannot stand by and wait for medical equipment, pharmaceuticals or our food supplies to dwindle or run out."

Abercrombie said such a declaration will allow the state National Guard to carry cargo among the islands if necessary.

But Lingle said she had no plans to make an emergency declaration and called Abercrombie's efforts to alert the secretaries of Defense, the Army, and Air Force and other federal officials an "overreaction."

"I am confident that in the near- to medium-term, the market will stabilize and correct itself, and both carriers and shippers will make the necessary adjustments to ensure cargo capacity meets the demand for service," Lingle said in a news release.

Banmiller said yesterday that he's been warning state officials for two years about the potential problems that would arise in the local community should Aloha go under. So the problems that have arisen in wake of Aloha's failure should be no surprise to them, he said.

"Regardless of what you read about, I had private meetings with senior officials at the state level before we filed for bankruptcy, not after. People stand up and say, 'I didn't know about this.' Well, you did," Banmiller said.

"As a practical matter, I'm standing here representing the results of, perhaps, inattention to the issues we talked about for two years. We are now living that."