Aloha Airlines was an American airline
headquartered in Honolulu CDP, City and County
of Honolulu, Hawaii, operating from a hub at
Honolulu International Airport. Operations began
on July 26, 1946, and ceased on March 31, 2008.
The airline was founded as charter carrier
Trans-Pacific Airlines by publisher Ruddy Tongg
as a competitor to Hawaiian Airlines, commencing
operations on July 26, 1946, with a single World
War II-surplus Douglas C-47 (DC-3) on a flight
from Honolulu to Maui and Hilo.
The name reflected Tongg's vision of a
trans-oceanic airline connecting California,
Hawaii, and China. It soon earned the nickname
"The Aloha Airline" and was flying four aircraft
by the end of the year.
Approval to operate as a scheduled airline came
when President Harry S. Truman signed the
certificate on February 21, 1949, with the first
scheduled flight on June 6, 1949, following
ceremonies held the previous day.
In 1952, the airline reported its first annual
profit: $36,410.12. The airline's market share
rose to 30% that year, up from 10% in 1950, the
year the airline adopted the name TPA-The Aloha
Airline. However, the introduction of the
Convair 340 at Hawaiian Airlines halted further
growth of TPA's market share for over five
years.
In 1958, real estate developer Hung Wo Ching,
whose family held a sizable stake in the airline
and following overtures by Tongg, was elected
president of the airline. In November of that
year, the company changed its name again,
becoming Aloha Airlines. On April 15, 1959,
Aloha took delivery of its first Fairchild F-27
turboprop aircraft. These aircraft were unique
to Aloha, built with a stronger keel beam and
thicker belly skin to satisfy concerns about
ditching the high-wing aircraft. That summer,
Aloha's market share jumped to 42%.
Rising costs and an economic retraction in Japan
put Aloha into a defensive position in the early
2000s, soon exacerbated by the September 11,
2001 terrorist attacks, the SARS panic of 2003,
and soaring fuel prices. On December 30, 2004,
Aloha Airlines filed for Chapter 11 bankruptcy
protection in an attempt to cut costs and remain
competitive with other airlines serving Hawaii.
Following approval of new labor contracts and
securing additional investment from new
investors, the airline emerged from bankruptcy
protection on February 17, 2006. On August 30,
2006, Gordon Bethune was named Chairman of the
Board.
Citing losses from a protracted fare war incited by
inter-island competitor go! (operated by parent company
Mesa Airlines) and high fuel prices, Aloha filed for
Chapter 11 bankruptcy protection again on March 20,
2008. Ten days later, on March 30, 2008, Aloha Airlines
announced the suspension of all scheduled passenger
flights, with the final day of operation to be March 31,
2008. The shutdown resulted in the layoffs of about
1,900 of the company's roughly 3,500 employees. Hawaii
Governor Linda Lingle asked the bankruptcy court
involved to delay the shutdown of Aloha Airlines
passenger services, and forcibly restore passenger
service; however, federal Bankruptcy Judge Lloyd King
declined, saying the court should not interfere with
business decisions.
After the shutdown of passenger operations, Aloha and
its creditors sought to auction off its profitable cargo
and contract services division. Pacific Air Cargo
emerged as the highest bidder for the contract services
division; the sale of the division to Pacific Air Cargo
is currently in progress. Pacific Air Cargo will operate
the division under the name Aloha Contract Services.
Several companies expressed interest in purchasing
Aloha's cargo division, including Seattle-based Saltchuk
Resources, California-based Castle & Cooke Aviation, and
Hawaii-based Kahala Capital (which included Richard Ing,
a minority investor in the Aloha Air Group and member of
Aloha's board of directors).
However, a disagreement between cargo division
bidders and Aloha's primary lender, GMAC
Commercial Finance, ended with the bidders
dropping out of the auction. Almost immediately
afterwards, GMAC halted all funding to Aloha's
cargo division, forcing all cargo operations to
cease; at the same time, Aloha's board of
directors decided to convert its Chapter 11
bankruptcy reorganization filing into a Chapter
7 bankruptcy liquidation.
Saltchuk Resources decided to renew its bid to
purchase the cargo division at the urging of
U.S. Senator Daniel Inouye, and a deal between
Aloha and Saltchuk was struck and approved by
the federal bankruptcy court, where Saltchuk
would purchase the cargo division for $10.5
million. The sale was approved by federal
Bankruptcy Judge Lloyd King on May 12, 2008,
with the sale expected to close two days later.
Prior to its bid for Aloha, Saltchuk Resources
was already present in Hawaii through its
subsidiaries Young Brothers/Hawaiian Tug &
Barge, Hawaii Fuel Network, Maui Petroleum and
Minit Stop Stores. The company also owns
Northern Air Cargo, Alaska's largest cargo
airline. A new subsidiary, Aeko Kula Inc., was
set up by Saltchuk to operate Aloha Air Cargo.
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