A U.S. Bankruptcy Court approved a reorganization plan Tuesday to bring Aloha Airlines out of bankruptcy, hours after the company reached a tentative contract agreement with its pilots.
"This is a significant moment in the 60-year history of Aloha Airlines," said David A. Banmiller, president and chief executive of the carrier that filed for Chapter 11 bankruptcy protection Dec. 30.
With a contract ratification vote expected later this week, the airline is now positioned to emerge from bankruptcy as early as Dec. 15, the carrier said.
Once the pilots' contract is ratified, the reorganization plan will enable supermarket chain owner Ron Burkle and former pro football star Willie Gault and the owners of the airline, the Ching and Ing families, to recapitalize the company with a combination of $50 million in equity and up to $50 million in debt financing, the airline said.
The plan by Burkle's Yucaipa Cos. LLC and Gault's Aloha Aviation Investment Group LLC depended on the pilots ratifying the agreement reached at 3 a.m. Tuesday.
Details of the agreement weren't disclosed.
"The members of the (union's) master executive council have unanimously endorsed the negotiating committee's agreement with the company, and encourages the membership to vote in favor of it," said Daniel Katz, an attorney representing the Air Line Pilots Association.
Meanwhile, the airline's flight attendants voted 179-51 to approve their new labor contract.
The vote by the flight attendants and the tentative agreement with the pilots completes negotiations with all five Aloha's collective bargaining units.
On Monday, an agreement was disclosed forgiving more than $1 million in state taxes owed by Aloha. Gov. Linda Lingle said the action was taken because the state was an unsecured creditor and could not have expected to collect the funds.
Under the agreement with the state, Aloha still will repay $5.5 million over several years that it owes to the Department of Transportation in landing fees.
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