HONOLULU (AP) -- The parent company of Aloha Airlines Inc. on Friday announced it has repaid a $45 million federal guaranteed loan it received from the Air Transportation Stabilization Board, a key step in the carrier's attempt to emerge from bankruptcy protection.
Aloha Airgroup Inc. said it paid off the $21 million balance early after finalizing $65 million in debtor-in-possession financing with Ableco Finance LLC and Goldman Sachs Credit Partners LP. The financing allows Aloha to continue functioning while going through the Chapter 11 bankruptcy process.
The federal loan, backed by a guarantee issued under the Air Transportation Safety and System Stabilization Act, was issued Dec. 23, 2002.
''The loan guarantee program served its purpose to support Aloha over the past two years when credit was not otherwise reasonably available and the board is pleased that the company has secured private financing and is now proceeding toward a successful reorganization and exit from bankruptcy,'' board Executive Director Mark Dayton said.
Aloha filed for Chapter 11 bankruptcy protection on Dec. 30, citing higher operating costs and the need to renegotiate aircraft leases. Rival Hawaiian Airlines Inc. is in the final stages of emerging from Chapter 11. Hawaiian filed for bankruptcy in March 2003.
''This financing commitment from our new lenders is a significant step in our goal to quickly exit bankruptcy and represents a vote of confidence in our restructuring business plan,'' said David A. Banmiller, Aloha's president and chief executive officer.
The Air Transportation Stabilization Board was established by Congress to oversee a $10 billion loan program, part of the airline industry bailout after the Sept. 11, 2001, terror attacks.
Prior to obtaining the court-approved DIP financing, Aloha had already paid back $24 million to the board, resulting from employee wage concessions and productivity improvements.
Banmiller said the employees should be commended for ''assisting the company in its efforts to rebound from the industrywide problems that have plagued all carriers over the past four years.''
Aloha has 3,558 employees and operates a fleet of 26 Boeing 737 aircraft.