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Last Updated: Friday, 31 December, 2004, 07:45 GMT
Hawaii airline seeks Chapter 11
Plane landing
Analysts say airlines are facing a 'fiscal timebomb'
Aloha Airlines, the Hawaii based airline, has become the latest US carrier to seek bankruptcy protection.

Parent group Aloha Airgroup said escalating fuel costs, above average plane leasing rates and tough competition forced it into the move.

Established in 1946, the private airline operates about 800 flights a week across the Hawaii archipelago and to other US states.

Aloha becomes the fifth US airline to operate under Chapter 11 provisions.

Fuel costs

These allow companies to continue trading while they restructure their finances.

Aloha said its fuel costs in November were almost double what they were a year before.

The airline industry in general is in life support
David Banmiller, Aloha Airlines

The airline has tried to reduce its cost base this year by closing unprofitable routes and laying off a dozen senior executives.

"We will re-evaluate our staffing levels and I cannot guarantee that there will be no layoffs," said chief executive officer David Banmiller.

"Unfortunately, this is an airline and the airline industry in general is in life support."

Fellow problems

Hawaiian Airlines, Aloha's principal rival, has been in bankruptcy protection since March 2003.

The two airlines sought to merge in 2002 but a deal fell apart.

Aloha employs 3,600 staff and operates 27 aircraft.

As well as inter-island routes, it operates services to five cities in California, Nevada and to Vancouver, Canada.

Other airlines currently fighting for survival under Chapter 11 protection include United Airlines and US Airways.


SEE ALSO:
Airline staff 'to work for free'
29 Dec 04 |  Business
US Airways agrees cash lifeline
26 Nov 04 |  Business
'Fiscal timebomb' for US airlines
15 Oct 04 |  Business
US airlines fly towards extinction
27 Mar 03 |  Business


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