Hawaiians Say Aloha to Aloha

By Anastacia Mott Austin

"This is an incredibly dark day for Hawaii," said Aloha Airline’s CEO David Banmiller, the day the airline closed its doors for good on passenger service to and from Hawaii, as well as all interisland flights.

The move came 11 days after the airline declared bankruptcy for the second time. The first bankruptcy occurred in 2004.

Though some said they hadn’t seen it coming, Aloha had been operating in the red for years, reporting losses of $41 million in 2005, $46 million in 2006, and $81 million in 2007. The airline lost $11 million in just January of 2008.

The airline’s more profitable cargo service will continue to operate, after being bought by the Saltchuk corporation.

Aloha claimed that unfair competition from the Mesa company’s go! air service forced the closure. Banmiller told the press, "Unfortunately, unfair competition has succeeded in driving us out of business." The competing airline go! had arrived in 2006 and offered cheaper fares for interisland travel.

Some disgruntled customers of Aloha Airlines said that it’d gotten what it deserved after creating artificial price wars with its main competitor, Hawaiian Airlines, for way too many years. Others reacted with sadness that such a long-standing company, a part of Hawaii’s history, was folding.

It didn’t go down easily. Hawaii’s governor Linda Lingle tried to step in at the last minute, asking a bankruptcy judge to temporarily halt Aloha’s closure, saying she wanted to know whether the airline had truly exhausted all of its options in trying to avoid going out of business. Judge Lloyd King denied Lingle, saying that Aloha’s closing was "a business decision."

While Lingle says she was surprised by the closure, CEO Banmiller told reporters that the governor had been informed for over two years of the situation with Aloha and had not tried to help until the last minute, when it was too late. Snapped Banmiller, when told of Lingle’s criticism, "If the governor or the administration has a plan, I hope it includes money, not rhetoric."

Added Banmiller to reporters, responding to Lingle’s claim that Aloha had given up too easily: "For any suggestion that we prematurely shut down…I am the last guy here that wants this to happen." Said Banmiller, "I also happen to be the one guy who's legally responsible to make the right decision, even if it's a tough one. If I operated for another week and wasn't able to make payroll, I would be enormously criticized for flying airplanes that way."

Aloha’s chief competitor before go! had been Hawaiian airlines, and the two airlines had vied for customers for many years. They had tried to work out a last-minute buyout to keep Aloha in the air, but were unable to come to a successful agreement.

In fact, says Banmiller, Aloha tried every way it could think of to stay afloat, but other airlines simply weren’t interested in taking on another company, especially in today’s high oil price atmosphere. "I have talked to probably every airline CEO. Every single one took a pass," said Banmiller to the press. "We've covered the waterfront. We covered everyone in New York, and all the hedge funds and the airlines ... It's a tough world to sell an airline today."

Rising oil and jet fuel prices were also blamed for the downfall of Aloha.
More than 1900 jobs will be lost by the closure, although competitors Hawaiian and go! have said that they will add new hires as they step up their service capacity to help absorb Aloha’s ticket holders who are now left holding the bag.

Thirty-year veteran Aloha flight attendant Sharlene Painter spoke to local reporters at The Honolulu Advertiser. "It's very sad," said Painter. "It was beyond our control and we were totally blindsided."

For an airline that has operated since before Alaska became a state, it is indeed sad, agrees Banmiller. "This is a terrible day for this company," he said. "A lot of people are hurting and justifiably so. This is adversely affecting human beings, their lives and their families."