SoCal firm wins auction for Aloha Airlines contract services

SoCal firm wins auction for Aloha Airlines contract services A Southern California firm Tuesday became the winning bidder for a portion of Honolulu-based Aloha Airlines.
   Los Angeles-based Pacific Air Cargo, already a major player in the Hawaii air freight trade, has offered to pay $2.2 million for Aloha's contract services division, which provides ground support such as baggage, customer, ramp and ticket services in Honolulu for domestic and international carriers such as Japan Airlines and United Airlines.
   If approved by the U.S. Bankruptcy Court on Thursday, the deal would preserve many of the 1,100 jobs in the Aloha contract services division, Aloha said.
   The 8-year-old Pacific Air operates five B747F cargo flights a week between Honolulu and Los Angeles, in addition to Hawaiian inter-island hauling and services to Guam, Pago Pago and American Samoa. Last year, Pacific Air opened a 65,000-square-foot facility at Honolulu International Airport.
   Unlike the contract services bid awarded Monday, Aloha postponed awarding of its profitable air cargo division was postponed until at least today. That portion was delayed amid criticism of the auction by creditors and a strike threat from union pilots. Aloha's air cargo division, with 400 employees, carries 85 percent of the island state's air freight in addition to all U.S. mail to Maui and the island of Hawaii.
   Seattle-based Saltchuk Resources Inc., parent of Young Brothers/Hawaiian Tug & Barge, had offered a starting bid of $13 million for the air cargo division and another $5 million for accounts receivable.
   However, Aloha's principle creditor, GMAC Commercial Financing LLC, demanded that the bidding start at no less than $20 million. GMAC loaned Aloha at least $44 million. A committee representing Aloha's unsecured creditors also filed objections to both the service contracts and air cargo auctions, saying that Aloha and GMAC are rushing to sell, not marketing the assets properly, and making it difficult for potential purchasers to bid.
   In addition, the Aloha pilots' union is threatening to go on strike if Aloha does not assign high-seniority pilots from the shuttered passenger division to fly the air cargo flights. Aloha terminated the passenger division pilots on March 31, but continues to operate the air cargo division with the same lower-seniority pilots it did before the carrier entered bankruptcy.