5.01.2008

Seattle-based company to buy Aloha Airlines' cargo operation

HONOLULU — The parent company of Hawaii's biggest interisland ocean shipper announced Thursday it had worked out a deal to buy Aloha Airlines' cargo operation, which shut down Monday.

Seattle-based Saltchuk Resources Inc. said it had obtained the consent of Aloha's main lender, GMAC Commercial Finance. The purchase price wasn't disclosed.

The purchase of the service that carried 85 percent of Hawaii's interisland air cargo needs to be approved by U.S. Bankruptcy Court, which was considering the arrangement Thursday.The agreement called for operations to resume by midnight Thursday, with Aloha's cargo employees to be hired to return to run the operation.

Last week, Saltchuk pulled out of an auction for the cargo service after its $13 million offer was outbid by another company. The auction ended with no winner.

Saltchuk President Tim Engle said his company's interest was revived by the efforts of Sen. Daniel Inouye, D-Hawaii, and his staff.

"We re-engaged in our efforts to acquire Aloha's air cargo operation after Sen. Inouye personally called us shortly after the shutdown of operations earlier this week," Engle said in a news release.

"He was greatly concerned about the 300 jobs and the vital service that Aloha Air Cargo has provided for the people of Hawaii and asked we try once again to see if we could make something happen," he said.

There was no mention in the announcement of which pilots would be used to fly the planes. Before the cargo operation was shut down, the Air Line Pilots Association had voted overwhelmingly to authorize a strike of Aloha cargo operations in a dispute over which pilots would fly the planes.

The union wants the airline to use seniority to determine which pilots to use for the cargo flights, and to include those who had been piloting passenger flights.

Saltchuk's announcement said the rehired Aloha cargo employees would work for the newly formed Saltchuk subsidiary Aeko Kula Inc.

In 2000, Saltchuk acquired Young Brothers/Hawaiian Tug & Barge, the state's largest interisland cargo service. In 2006, the company purchased Hawaii Fuel Network, Maui Petroleum and Minit Stop Stores. Saltchuk also owns Northern Air Cargo, the largest cargo carrier in Alaska, which uses the same type of aircraft as Aloha.

Aloha filed for bankruptcy and then closed down its passenger service in March. It has sold its contract services division to Pacific Air Cargo.

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