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Aloha Airlines Looking For Buyer

KITV Learns United Backed Out Of Purchase

POSTED: 6:44 pm HST March 21, 2008
UPDATED: 8:59 am HST March 24, 2008

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Aloha Airlines had a potential deal with United Airlines as a new buyer for the struggling airlines last week, KITV has learned.

A week later, the local airline carrier filed for bankruptcy and is seeking a buyer for some or all of its major business segments, including its passenger service.

The state's second-oldest airline filed for Chapter 11 bankruptcy protection Thursday. On Friday, a U.S. Bankruptcy Court judge granted a series of motions. They allow Aloha to continue operating in the near term, including making payments for fuel, utilities and employee wages and benefits.

Judge Lloyd King said U.S. Bankruptcy Judge Robert Faris has recused himself from the case. Faris presided over Aloha's previous bankruptcy.

Aloha's management had a proposal with United Airlines' agreement to bail out the Hawaii airlines on March 14, but United pulled out at the last minute, sources told KITV. United cited high fuel costs as the reason to kill the deal.

The two carriers have a code-sharing agreement that allows United passengers to fly on Aloha flights.

Aloha also considered buying part of Indianapolis-based ATA Airlines. Aloha Chief Executive Officer David Banmiller would not go into detail, but said that even in times of bankruptcy, opportunities present themselves.

The airline emerged from bankruptcy protection in February 2006, just 14 months after filing under Chapter 11.

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