The Hawaiian corporation, Aloha Airgroup, Inc. operator of Aloha Air announced today that they filed for Bankruptcy protection under Chapter 11 U.S. Bankruptcy Code. Aloha is also seeking Court approval of a financing agreement with lender General Motors Acceptance Corporation to provide the financing needed to protect 3500 jobs, honor the thousands of passenger reservations and continue as a carrier for the U.S. Mail and to provide air cargo between the Hawaiian Islands.
Aloha cited the highly competitive inter-island market and the all-time record high of $111 per barrel of crude oil as the root causes of thebankruptcy. The increase in crude oil prices, alone translate into an increase of $71 million in fuel expenditures per year. DestinationVillas.com editor, Tori Milan comments that a major contributing factor of the airlines decline was the below-cost pricing introduced by Mesa Air Groups GO! Airlines, with airfares starting at $19 one-way."It is a travesty and a tragedy that the illegal actions of a competitor and other factors completely beyond our control have forced us to take this action," said David A. Banmiller, Aloha's president and chief executive officer. "Through this filing, we hope to achieve a successful outcome that will protect the jobs of 3,500 dedicated employees who have made extraordinary sacrifices for Aloha, and to continue to earn the support of our loyal customers, business partners, vendors and financial backers.
"We are reaching out to all our friends here in Hawaii and around the world to continue to support Aloha Airlines as we work round-the-clock making every effort to continue our 61-year tradition of serving our island home in the spirit of Aloha."
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