TWAforever

Aloha Airlines files for bankruptcy

Breaking news from Honolulu Advertiser

slippahs

Wow... And they weren't shy about placing the blame squarely on go! either...

At least we all know the drill. Here's a Q&A they put up on the Advertiser website: http://www.honoluluadvertiser.com/ap...ING03/80320071

KeaauFlyer

Aloha is in a very difficult situation. They need to improve the quality of their product to be really competitive with Hawaiian, but they are not in a financial position to do so. I switched to Hawaiian because of bad experiences with luggage arriving late, shabby aircraft, and general disorganization at Aloha. For me, go!, is not an option because I don't think they are fair competitors. Ironically, I have personally benefitted from go!'s price pressure despite never having flown them. The State of Hawaii may or may not try to prop up Aloha. This will get very interesting. Aloha should get bankruptcy costs added to the judgement they will eventually get from go! and use the money to upgrade their product. Even that may be too little, too late.

DanTravels

I would imagine that Aloha's 16 flying 737-200s, with an average age of almost 25 years, are getting pretty poor "gas mileage."

Hawaiian's move from the DC-9 to the 717 looks like genius in hindsight. Aloha had reportedly been looking at the E-Jets; did anything ever come of that? And if not, is it even possible for them to change types while under chapter 11?

erickufrin

I just flew on Aloha on the 12th. I got 2 one-way tickets from OGG to LIH for $109 total!

I would be sad to see Aloha go, because they are *A and I plan on making frequent trips back to Hawaii and using them when needed. Gotta get those UA Miles!! :P

FlyinHawaiian

Aloha, and welcome to FlyerTalk. ^

Minor correction, but Aloha is not a member of the Star Alliance, they are a partner of United. The difference in this status from membership is that the miles you accrue in Mileage Plus when flying Aloha do not count towards elite status on United.

Ripper3785

It might be possible insofar as there may not be a rule/law preventing the change of aircraft. But the likelihood of a finding a lessee when you're in bankruptcy again less than two years after coming out of it......

I guess the new 'partnership' from United didn't have much of an effect on things.

Hello Bethune???

DanTravels

Really? Wow, that's a raw deal. I know at least some of the carriers that have partnerships with Hawaiian (American, Continental, Northwest) do give status miles for their inter-island flights.

bocastephen

Just curious...why do you feel that Go! is an 'unfair' competitor? What is unfair about their business?

What lawsuit was filed against Go!, and what is Aloha asking for?

I am not a fan of Go! either, and I've only flown them once (and decided never again), but I didn't notice anything 'unfair' about their operation.

Aloha should have overhauled their fleet many years ago - flying inter-island with old junk 732s complete with duct tape decorating the wings, sucking fuel down like it's 10c/gal, and operating low capacity 737s to the mainland, is not a recipe for profitability in a high cost and competitive environment.

KeaauFlyer

By consistently pricing their product below cost over a prolonged period of time, they entered the Hawaii market with the intent to push the weakest competitor, Aloha, out of business IMO. In some juridictions, such a practice is illegal and grounds for judicial action. In this case, however, the primary issue in the suit is Mesa/go!'s use of confidential bankruptcy financial data to achieve a competitive advantage rather than as a basis for potential investment in the company. HA has already won $80M on these grounds, and that judgement (which is on appeal) is much discussed on this forum. While I am not a big AQ fan, I think they have reason to pursue a judgement.

bocastephen

If that practice is illegal in Hawai'i, then Aloha has every right to persue Go! for damages. Personally, I don't think the practice should be illegal - it occurs in many different businesses, including the airline business, quite often. AA used the tactic to drive low cost competitors out of markets where it wanted to maintain its dominant share.

That being said, Aloha is in the situation it's in now because of poor strategic planning, not because of Go!, although the pricing issue certainly didn't help matters.

DanTravels

HA didn't win over fire-sale pricing, they won (well, it's being appealed) over use of confidential data. If YV had access to the same kind of data from AQ, and misused it too, AQ would have a case - but if that were the case, why would AQ have not already taken YV to court?

(One answer is that even if AQ does have a case, they may be waiting for HA to soften up YV a bit, before spending their clearly limited funds. But I'm really doubtful that they'd sit on the sidelines, given the circumstances.)

asu-ua772

It appears Aloha is in talks to sell off either the entire company or parts of it.

http://honoluluadvertiser.com/apps/p...ING03/80321040

and

http://starbulletin.com/breaking/breaking.php?id=6866

DanTravels

I think some parts of AQ's operations could find buyers easily, others, not so much.

Interisland air cargo: cash cow if you have a bunch of planes more efficient than 732s sitting around. If AQ has made any money anywhere, it's probably in this department, since they have no real competition. But the price of oil is probably killing them. As for the 732s themselves... nobody in the developed world would want them.

Mainland: Routes to destinations not served by other carriers might be of interest. 73Gs have proven they're not the greatest long-range aircraft (can't get to LAS non-stop) but they're at least new, so they'd probably sell by themselves if needed.

Interisland passenger: It's pointless to try to continue operating with the 732s. RASM and CASM are all wrong, especially when compared to HA or YV. Sell them to some developing country if you can. Getting it right is going to require a major investment in new equipment; the E-Jets do look like a sweet spot. Who'd do it? No idea. Maybe Republic (operates E-Jets for USAir and Frontier), or JetBlue, or Virgin, or somebody like that. And then the question is whether you can survive in the fare wars.

Does this mean YV has succeeded in killing off the weakest competitor interisland? And even if it has, is it a pyrrhic victory, since YV itself has been losing money hand over fist, and is appealing a big judgement against it in favor of HA? Could we end up in a situation where YV basically kills AQ and itself, leaving HA as last-man-standing?

KeaauFlyer

IIRC, AQ does have a suit pending against YV with primary emphasis on the misuse of bankruptcy financials. I think it is scheduled to go to trial later this year. I wonder what effect the possible sale, liquidation, or dismemberment of AQ might have on this suit. It might well go on since the investment group (Yucaipa Co.) that has lost over $100M on Aloha would still have an arguable case for recouping their losses.