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From the Honolulu Advertiser: Aloha’s air cargo unit is flying a full schedule today. All six of the company’s Boeing 737-200 cargo jets will fly today, after GMAC and Saltchuk Resources came to terms. It’s hard to believe that these 6 planes handled 85% of Hawaii’s air cargo, but it’s true.

Saltchuk, the owners of interisland barge company Young Brothers, will pay US$10.2 million, which is $3M less than the company’s offer of late last week.

Dane Field finally accepted his appointment as bankruptcy trustee, which helped break the impasse he helped create. He had refused to confirm his appointment on Monday, which led to the air cargo unit’s closure and a subsequent layoff.

Aloha cargo employees and pilots have reported back for work, but Saltchuk can hire or fire whoever the company pleases after the deal is finalized on 14 May 2008. Salaries and wages may be changes, which is a major blow for the Air Line Pilots Association (ALPA). The union wanted Aloha to use more expensive senior passenger-rated pilots.

Hawaii’s senior senator, Daniel Inouye (D), was credited with bringing the parties back to the negotiating table:

Douglas Lipke, GMAC’s attorney, said Inouye called GMAC’s president on Monday to urge the lender to reconsider its decision to cut off Aloha.

Inouye also called Saltchuk executives to stress the importance of a service that transported 85 percent of all goods flown between O’ahu and the Neighbor Islands, Saltchuk president Tim Engle said.

“He (Inouye) was the architect of bringing this back together,” Banmiller said.

According to this article in the Honolulu Star-Bulletin, 1300 jobs were saved. Two planes flew last night from Honolulu to Kona and Kauai, according to another Star-Bulletin article.

Contract services group sold

In a related story, Aloha’s contract services group was sold yesterday to Pacific Air Cargo of Los Angeles. US Bankruptcy Court Judge Lloyd King order the sale to close immediately, instead of Monay, 5 May 2008. PAC paid US$2.05 million for the 1100 employee unit. According to the Advertiser, “[t]he contract services division handles ticketing, baggage services, ramp duties and other ground services for United Airlines, Japan Air Lines and other carriers that serve Hawaii.”

I hope we have no more surprises coming at the airport. It’s been a weird week for tourists, hotels, groceries, restaurants and other businesses who were affected by Monday’s air cargo shutdown.

Related posts on billso.com

• 30 April 2008: Will Aloha Airlines’ contract services unit shut down?
• 29 April 2008: Aloha Airlines shuts down its air cargo unit
• 2 April 2008: Aloha cargo sale and neighbor island mail service in jeopardy
• 8 April 2008: Aloha cargo flights disrupted - is Hawaii’s economy next?
• 30 March 2008: Aloha Airlines shuts down

As I mentioned on 2 April 2008, Aloha Airlines is still flying cargo flights in the state of Hawaii. It hasn’t been easy. Aloha flies 85% of the state’s air cargo, including postal mail, bread and other time-sensitive items. If Aloha stops flying, Hawaii’s economy will feel the effects within two days.

A report posted this evening on the newspaper’s web site says that GMAC has agreed to provide US$3 million in bridge financing while the Air Line Pilots Association and Aloha management are still negotiating.

UPDATE: here’s the full article from the Star-Bulletin’s 9 April 2008 print edition.

The main issue is which pilots will be retained when the cargo business is sold at auction on 24 April. Aloha management wants junior pilots, while ALPA favors the current collective bargaining agreement and senior pilots.

Cancellations and allegations

Meanwhile, Aloha canceled 7 of its 16 cargo flights today after pilots staged a sick-out. Mail and other time-sensitive cargo was shipped, but the situation will only get worse if the sick-outs continue.

An earlier report in the Tuesday print edition has more details. In the article, ALPA representatives claim that Aloha is blocking pilots from flying to Oahu for job fairs by confiscating their ID cards and turning off some information systems.

Senator Daniel Inouye (D-Hawaii) will hold a hearing of the US Senate Commerce, Science and Transportation Committee on Thursday, according to this Star-Bulletin report. Inouye chairs the committee, and he will examine the current state of the airline industry in Hawaii.

Aloha Airlines president David Banmiller and the state’s three other Congressional representatives have been invited to testify. Banmiller has become more vocal in recent days, as he provides more information about how state officials refused to assist Aloha Airlines during the last two years. This Pacific Business Story has more details.

No backup plan?

Meanwhile, USPS spokesman Duke Gonzales stated that there is no contingency plan for interisland mail service if Aloha stops flying. Aloha flies in all of the mail for the islands of Hawaii and Maui.

Hawaii residents have enough problems already, as Kilauea producing an increasing amount of vog. The Honolulu Advertiser reported this afternoon that Volcano National Park has been closed as air quality deteriorates.

Yesterday, the Hawaii Superferry started sailing between Honolulu and Kahului, Maui after a two-month repair cycle. See this Star-Bulletin story for more details. The Superferry can handle large delivery trucks and their cargo, but the company has been unable to maintain a reliable daily schedule since the service was launched in August 2007. The departure of ATA and Aloha Airlines gives the Superferry a fighting chance to hit breakeven, which is possible with about 400 passengers and 110 cars per voyage.

UPDATE: The Star-Bulletin ran a long article on the Superferry in the 9 April 2008 print edition, with a timeline and plenty of details.