Freight Dog
Well-known member
- Joined
- Nov 26, 2001
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Press Release
Source: Aloha Airgroup
Aloha Airgroup to Continue Restructuring Under Chapter 11
Thursday December 30, 10:00 pm ET
HONOLULU, Dec. 30 /PRNewswire/ -- In a continuing effort to restore the company's long-term financial health, Aloha Airgroup, Inc. and its principal operating subsidiary, Aloha Airlines, Inc., announced today they have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
"It will be business as usual as we move forward to complete the restructuring of our Company," said David A. Banmiller, Aloha's president and chief executive officer. Banmiller went on to say Aloha hopes to emerge from Chapter 11 as expeditiously as possible.
"Meanwhile, it is important for the traveling public to know that reservations for future travel will continue to be taken, tickets will be honored, and flights will continue to operate as scheduled."
Banmiller said: "Despite actions already taken to cut unprofitable routes and reduce senior management by 36 percent, Aloha must continue to pursue cost-reduction initiatives necessary to offset higher fuel and operating expenses in what has become a fiercely competitive market environment. If Aloha is to effectively compete, we must align our aircraft lease rates to market levels and match our expenses to those of competitors who have already benefited from bankruptcy protection.
"The decision to file Chapter 11 was not easy for Aloha -- a company with a proud history etched by a conscientious desire to be a good corporate citizen and deeply rooted in the communities we serve."
Banmiller emphasized: "With our valued customers and loyal employees in mind, Aloha is focused on successfully emerging to become a bigger, stronger and more competitive player in the industry, so that we can continue to optimize our route network and provide our high-quality service at affordable fares to travelers in the cities we serve in Hawaii and North America."
Chapter 11 of the U.S. Bankruptcy Code enables companies to reorganize under court supervision while they continue to operate and meet their customers' needs. Aloha's restructuring efforts will be led by Banmiller, a veteran airline executive with an accomplished background specializing in airline financings and turnaround ventures for "financially-challenged" companies. Banmiller has a proven record of successfully taking other airline companies such as Sun Country Airlines and Pan Am through Chapter 11 reorganization. In addition, Banmiller has retained Giuliani Capital Advisors to assist Aloha in exploring all strategic alternatives to maximize value through the Chapter 11 process.
This is the first time in Aloha's 58-year history that the privately held Honolulu-based company has sought bankruptcy protection. Another Hawaii-based carrier, publicly held Hawaiian Airlines, came under Chapter 11 in 1993 and again in March 2003.
Since the attacks of September 11, 2001, the nation's airlines have faced what has been described as "the perfect storm" of financial hardships. A general economic slowdown and a skittish world travel market stiffened competition, which brought air fares down and reduced revenue at a time when the price of fuel, insurance and other fixed costs were skyrocketing. In Hawaii, the prolonged slump in visitor arrivals from Asia and the increase in Mainland flights going direct to the Neighbor Islands had a compounding economic impact on Aloha, the state's largest provider of inter-island air services.
In 2002, when a merger attempt was called off between Aloha and Hawaiian airlines, and private capital was unavailable, Aloha Airlines sought and received a loan guarantee from the federal Air Transportation Stabilization Board in 2002. The federally backed $45 million loan program enabled Aloha to upgrade systems and pursue expansion plans. To date, Aloha has repaid approximately half of the loan.
Rapidly mounting fuel and other operational costs sapped the company's financial strength in 2004. In spite of an 8 percent increase in enplanements in the airline's transpacific service, Aloha was unable to post a profit in the third quarter of 2004 due to higher fuel cost and lower ticket prices. Through November 2004, Aloha has paid $24 million more in fuel than over the same period in 2003 representing a 48% increase in fuel expenses year-over- year.
In announcing the airline's restructuring, Banmiller emphasized that:
* Aloha's top priority will be to provide travelers with safe and
consistently reliable and high-quality service.
* Aloha's inter-island and transpacific flights will continue to operate
according to schedule.
* All Aloha tickets and coupons will be honored. Reservations, ticketing
and refunds will continue as normal.
* AlohaPass members will still be able to earn and redeem mileage and
Aloha will continue to offer frequent flyers the option of earning
United Mileage Plus miles on Aloha flights.
* Transactions made with the Aloha AirAwards Card will continue to earn
bonus miles.
* Vendors will be paid in the ordinary course for goods and services
provided after the filing date.
* Aloha will continue to operate its air-cargo freight service.
* Aloha will continue to provide contracted services to those airlines
with signed agreements.
* Code-sharing agreements with partner airlines will not be affected by
the filing.
Founded in 1946, the privately held, Honolulu-based Aloha is a leading provider of aviation services in the State of Hawaii. Aloha offers approximately 620 interisland flights per week between Honolulu, Kahului, Kona, Hilo and Lihue. In February 2000, Aloha inaugurated transpacific service from Hawaii to Oakland, California. Today the airline operates 140 transpacific flights a week between Hawaii and Oakland, Burbank, Orange County, San Diego and Sacramento, California; 42 weekly flights between California and Nevada; and daily service between Vancouver, Canada, and Hawaii.
Aloha provides Hawaii with critical airlift for passengers flying between the five major airports throughout the Islands and carries 85 percent of the state's inter-island air freight business. Aloha is also the largest provider of contract aviation services for more than 20 domestic and international air carriers serving Hawaii.
Aloha is among Hawaii's top employers with a workforce of over 3,600 and an annual payroll of $113 million. Aloha's fleet consists of 13 Next Generation Boeing 737-700s, 10 B737-200s, three dedicated B737-200 freighters and one B737-200 QC.
Source: Aloha Airgroup
Source: Aloha Airgroup
Aloha Airgroup to Continue Restructuring Under Chapter 11
Thursday December 30, 10:00 pm ET
HONOLULU, Dec. 30 /PRNewswire/ -- In a continuing effort to restore the company's long-term financial health, Aloha Airgroup, Inc. and its principal operating subsidiary, Aloha Airlines, Inc., announced today they have filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
"It will be business as usual as we move forward to complete the restructuring of our Company," said David A. Banmiller, Aloha's president and chief executive officer. Banmiller went on to say Aloha hopes to emerge from Chapter 11 as expeditiously as possible.
"Meanwhile, it is important for the traveling public to know that reservations for future travel will continue to be taken, tickets will be honored, and flights will continue to operate as scheduled."
Banmiller said: "Despite actions already taken to cut unprofitable routes and reduce senior management by 36 percent, Aloha must continue to pursue cost-reduction initiatives necessary to offset higher fuel and operating expenses in what has become a fiercely competitive market environment. If Aloha is to effectively compete, we must align our aircraft lease rates to market levels and match our expenses to those of competitors who have already benefited from bankruptcy protection.
"The decision to file Chapter 11 was not easy for Aloha -- a company with a proud history etched by a conscientious desire to be a good corporate citizen and deeply rooted in the communities we serve."
Banmiller emphasized: "With our valued customers and loyal employees in mind, Aloha is focused on successfully emerging to become a bigger, stronger and more competitive player in the industry, so that we can continue to optimize our route network and provide our high-quality service at affordable fares to travelers in the cities we serve in Hawaii and North America."
Chapter 11 of the U.S. Bankruptcy Code enables companies to reorganize under court supervision while they continue to operate and meet their customers' needs. Aloha's restructuring efforts will be led by Banmiller, a veteran airline executive with an accomplished background specializing in airline financings and turnaround ventures for "financially-challenged" companies. Banmiller has a proven record of successfully taking other airline companies such as Sun Country Airlines and Pan Am through Chapter 11 reorganization. In addition, Banmiller has retained Giuliani Capital Advisors to assist Aloha in exploring all strategic alternatives to maximize value through the Chapter 11 process.
This is the first time in Aloha's 58-year history that the privately held Honolulu-based company has sought bankruptcy protection. Another Hawaii-based carrier, publicly held Hawaiian Airlines, came under Chapter 11 in 1993 and again in March 2003.
Since the attacks of September 11, 2001, the nation's airlines have faced what has been described as "the perfect storm" of financial hardships. A general economic slowdown and a skittish world travel market stiffened competition, which brought air fares down and reduced revenue at a time when the price of fuel, insurance and other fixed costs were skyrocketing. In Hawaii, the prolonged slump in visitor arrivals from Asia and the increase in Mainland flights going direct to the Neighbor Islands had a compounding economic impact on Aloha, the state's largest provider of inter-island air services.
In 2002, when a merger attempt was called off between Aloha and Hawaiian airlines, and private capital was unavailable, Aloha Airlines sought and received a loan guarantee from the federal Air Transportation Stabilization Board in 2002. The federally backed $45 million loan program enabled Aloha to upgrade systems and pursue expansion plans. To date, Aloha has repaid approximately half of the loan.
Rapidly mounting fuel and other operational costs sapped the company's financial strength in 2004. In spite of an 8 percent increase in enplanements in the airline's transpacific service, Aloha was unable to post a profit in the third quarter of 2004 due to higher fuel cost and lower ticket prices. Through November 2004, Aloha has paid $24 million more in fuel than over the same period in 2003 representing a 48% increase in fuel expenses year-over- year.
In announcing the airline's restructuring, Banmiller emphasized that:
* Aloha's top priority will be to provide travelers with safe and
consistently reliable and high-quality service.
* Aloha's inter-island and transpacific flights will continue to operate
according to schedule.
* All Aloha tickets and coupons will be honored. Reservations, ticketing
and refunds will continue as normal.
* AlohaPass members will still be able to earn and redeem mileage and
Aloha will continue to offer frequent flyers the option of earning
United Mileage Plus miles on Aloha flights.
* Transactions made with the Aloha AirAwards Card will continue to earn
bonus miles.
* Vendors will be paid in the ordinary course for goods and services
provided after the filing date.
* Aloha will continue to operate its air-cargo freight service.
* Aloha will continue to provide contracted services to those airlines
with signed agreements.
* Code-sharing agreements with partner airlines will not be affected by
the filing.
Founded in 1946, the privately held, Honolulu-based Aloha is a leading provider of aviation services in the State of Hawaii. Aloha offers approximately 620 interisland flights per week between Honolulu, Kahului, Kona, Hilo and Lihue. In February 2000, Aloha inaugurated transpacific service from Hawaii to Oakland, California. Today the airline operates 140 transpacific flights a week between Hawaii and Oakland, Burbank, Orange County, San Diego and Sacramento, California; 42 weekly flights between California and Nevada; and daily service between Vancouver, Canada, and Hawaii.
Aloha provides Hawaii with critical airlift for passengers flying between the five major airports throughout the Islands and carries 85 percent of the state's inter-island air freight business. Aloha is also the largest provider of contract aviation services for more than 20 domestic and international air carriers serving Hawaii.
Aloha is among Hawaii's top employers with a workforce of over 3,600 and an annual payroll of $113 million. Aloha's fleet consists of 13 Next Generation Boeing 737-700s, 10 B737-200s, three dedicated B737-200 freighters and one B737-200 QC.
Source: Aloha Airgroup
Hope things are going well, dude. Take care.TC
