Aloha Airlines

Aloha Airlines was an American airline headquartered in Honolulu, Hawaii, operating from a hub at Honolulu International Airport (now Daniel K. Inouye International Airport). Operations began on July 26, 1946, and ceased operations on March 31, 2008.

History

Propeller era

The airline was founded as charter carrier Trans-Pacific Airlines by publisher Ruddy F. Tongg Sr. as a competitor to Hawaiian Airlines, commencing operations on July 26, 1946, with a war-surplus Douglas C-47 ( DC-3) on a flight from Honolulu to Maui and Hilo. Tongg and partners founded the airline after being bumped from flights on the only interisland carrier, Hawaiian Airlines. The company employed local Island residents and its first slogan was "The People's Airline. It soon earned the nickname "The Aloha Airline". 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, approximately $36,000. In 1950, the airline adopted the name TPA-The Aloha Airline. To compete, Hawaiian Airlines began using the Convair 340. In 1958, real estate developer Hung Wo Ching, became CEO of the airline and changed the name to Aloha Airlines. In 1959, Aloha began using Fairchild F-27 turboprops. Also in 1959, the company became a public company via an initial public offering.

Jet engine era

Aloha retired its last DC-3 on January 3, 1961, becoming the second airline in the United States to operate an all-turbine fleet. In 1963, the airline took delivery of two Vickers Viscounts from Austrian Airlines and soon acquired a third from Northeast Airlines. The October 1, 1964, cover of the airline's system timetable proclaimed "''Hawaii's Only All Jet Power'' ''Service'' ''Between The Islands''" as Aloha was operating all of its inter-island flights at this time with the Fairchild F-27 and Vickers Viscount turboprops. Soon, the airline made the move to pure jets, with its first new British Aircraft Corporation BAC One-Eleven twin jet arriving in Honolulu on April 16, 1966. The last F-27 was retired from service in June 1967. As Hawaiian Airlines took delivery of larger Douglas DC-9-30 jets, Aloha realized its smaller BAC One-Eleven series 200 aircraft, which also suffered from performance penalties at Kona International Airport, put it at a disadvantage. Aloha placed an order for two Boeing 737-200 jetliners in 1968. Named "Funbirds," the Boeing jets entered service in March 1969. The massive capacity increase hurt both airlines, and in 1970, the first of three unsuccessful merger attempts between the two rivals (the others coming in 1988 and 2001) was made. In October 1971, the airline sold its remaining Viscount 745 turboprop aircraft and became an all-jet airline.

In 1983, Aloha introduced its AlohaPass frequent flyer program. In 1984, the airline leased a McDonnell Douglas DC-10-30, and on May 28, inaugurated service with the aircraft between Honolulu, Guam, and Taipei under the name Aloha Pacific. The operation, however, was unable to compete with Continental Airlines, and was discontinued on January 12, 1985. In October 1985, Aloha acquired Quick-Change 737 aircraft that could be quickly converted from a passenger configuration to all-cargo freighter for nighttime cargo flights. In February 1986, Aloha began weekly flights between Honolulu and Kiritimati (Christmas Island), becoming the first airline to operate ETOPS approved B737s.

In late 1986, Ching and vice-chairman Sheridan Ing announced plans to take the company private, and it remained in the hands of the Ing and Ching families until its emergence from bankruptcy in 2006, when additional investors including Yucaipa Companies, Aloha Aviation Investment Group, and Aloha Hawaii Investors LLC took stakes in the airline. In 1987, the airline acquired Princeville Airways, renaming Aloha IslandAir, which became known as Island Air in 1995. In 2003, Island Air was sold to Gavarnie Holding and became an independent airline.

On February 14, 2000, the airline began mainland service, flying newly delivered ETOPS certified Boeing 737-700 jetliners from Honolulu, Kahului, and Kona, Hawaii, to Oakland. The carrier soon started regularly scheduled flights to and from Orange County, San Diego, Sacramento, Reno, and Las Vegas. Aloha also offered flights from Honolulu to Vancouver. In addition, the airline served the Burbank-Glendale-Pasadena Airport (BUR, now known as Bob Hope Airport) in the Los Angeles area with nonstop Boeing 737-700 service to and from Honolulu.

Aloha Airline's longest inter-island route was , while the shortest route was a mere . The average travel distance per inter-island flight was . Aloha also marketed some inter-island routes served by partner Island Air, and passengers earned miles in either its own frequent flyer program, AlohaPass, or in United Airlines' Mileage Plus program.Codeshare partners

Economic challenges

Rising costs and economic stagnation in Japan put Aloha into a defensive position in the early 2000s, exacerbated by the September 11 attacks, the SARS panic of 2003, and soaring fuel prices. On December 30, 2004, Aloha Airlines filed for Chapter 11 bankruptcy protection. Led by Marc Bilbao and six other Giuliani advisors in December 2004, Giuliani Partners through Giuliani Capital sold Aloha to Ronald Burkle's group of investors and also obtained a $65 million loan for the carrier. In November 2005, Giuliani renegotiated with Aloha Chief David Banmiller for Giuliani's total compensation to be increased to $2.9 million. 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 chairperson.

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. Governor of Hawaii 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 its profitable cargo and contract services division. Pacific Air Cargo acquired the division in 2008 for $2.2 million and operates it 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 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.

Name and intellectual property

In January 2011, Los Angeles-based Yucaipa Companies, the former majority shareholder of Aloha, won federal Bankruptcy Court approval to buy the Aloha name and other intellectual property for $1.5 million with a stipulation that it not resell the name to Mesa Air Group, the parent of go! Mokulele. In 2009, Mesa sought to re-brand its go! planes as Aloha. But federal Bankruptcy Judge Lloyd King stopped the name change, following impassioned pleas from former Aloha Airlines employees who largely blamed Mesa for Aloha's demise.

Destinations

Prior to the shutdown of its passenger services on March 31, 2008, Aloha Airlines provided passenger service to/from the following destinations:

* Pago Pago ( Pago Pago International Airport) twice weekly flight

* Vancouver (Vancouver International Airport)

* Rarotonga ( Rarotonga International Airport)

* Kiritimati ( Cassidy International Airport) one weekly flight, usually on Sunday mornings to connect Hawaii with Christmas Island

* Kwajalein (Bucholz Army Airfield) twice weekly flight, alternate stop via Majuro
* Majuro (Marshall Islands International Airport) twice weekly flight, alternate stop via Kwajalein

Midway Atoll
* Midway ( Henderson Field) scheduled chartered flights, usually on Wednesdays

* Burbank (Bob Hope Airport)
* Hilo ( Hilo International Airport)
* Honolulu (Honolulu International Airport