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New Owners Vow Not To Abuse State Freight Domination

Saltchuk Would Control Majority Of Air, Sea Freight Business

POSTED: 9:53 pm HST May 2, 2008

The soon-to-be new owner of Aloha Air Cargo is reassuring customers that the company will not abuse its near-monopoly in interisland shipping.

The Aloha buyer, Saltchuk Resources Inc. also owns Young Brothers Ltd., the state's only interisland barge service.

Things were slower than usual on Aloha Cargo's first full day back in business. Shippers temporarily found other routes. Judy Pryne of Xtreem Refrigeration was rushing a refrigerator part to the Big Island.

"My husband is doing a job in Hilo right now and he needed a part," she said.

Happy to have the service back, few people were speculating on what it will mean to have one company, Saltchuk Resources Inc. dominating both interisland air and ocean freight service. Its president though said Saltchuk will not abuse its advantage.

"Whatever the marketplace sets the price at that's what we'll try to do and try to make a living at it," Saltchuk President Tim Engle said.

He pointed out that Young Brothers rates are set by the state and that air cargo customers say they are less concerned about price than about the speed of delivery.

Aloha Cargo held 85 percent of the state's air freight business, including a lucrative U.S. Postal Service deal. The division's shutdown left companies scrambling to find alternatives.

While the Aloha Cargo contracts were killed with the shut down of operations on Monday, many companies, such as Loves Bakery, plan to return to using the business to fly their products to the neighbor islands.

Some customers were concerned about service. They say Aloha employees are very hard working, and they wonder if that attitude can survive without direct competition from Young Brothers.

Pryne said she is not worried, yet, especially if the company sticks to its promise to keep as many current employees as possible.

"Just that they'll, you know, keep these guys -- all have a job and continue the service that it's had all this time. We depend on it," she said.

Aloha Cargo employees did not want to talk about their new bosses on TV. Some said even if their compensation or union situation changes, at least having a big shipping company as owner will mean stability, which seems now more important than ever.

Aloha Airlines' main lender and the parent company of Young Brothers Ltd. reached a deal late on Thursday that saved the sale of the company's cargo division.

GMAC refused to continue funding Aloha's operation and airline officials were forced to halt business on Monday.

GMAC and Saltchuk reached an agreement on Thursday evening for the Washington state-based company to buy Aloha Cargo for about $10 million. GMAC agreed to finance Aloha Cargo operations until May 14 when Saltchuk would take over.

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