Tiny Aloha Airlines last month emerged from bankruptcy protection, the latest in a long line of U.S. carriers to reorganize.
Saddled with tough competition and high fuel prices, the carrier filed for Chapter 11 on Dec. 30, 2004.
A month before filing, the company hired David Banmiller, a 30-year industry veteran, as its CEO to oversee the reorganization. Banmiller had been COO of Air Jamaica. Earlier in his career, Banmiller had overseen bankruptcies at Pan Am and Sun Country Airlines.
During its bankruptcy stint, Aloha shed pension programs by handing them over to the government insurer, cut employee pay and reduced flying capacity by 20%. It also eliminated $65 million of debt and $75 million in annual operating expenses. It kept nearly all of its jobs.
Privately held Aloha told the bankruptcy court that it made a slim profit — before interest, depreciation and taxes — in 2005 and expects to be slightly more profitable this year.
Yucaipa, a private equity fund controlled by billionaire Ron Burkle, provided most of the money for Aloha's exit from bankruptcy. It now owns 67% of its shares. Banmiller recently spoke with USA TODAY's Roger Yu about bankruptcy in the airline business and the experience of his own carrier. Comments have been edited for length and clarity.
USAToday
Saddled with tough competition and high fuel prices, the carrier filed for Chapter 11 on Dec. 30, 2004.
A month before filing, the company hired David Banmiller, a 30-year industry veteran, as its CEO to oversee the reorganization. Banmiller had been COO of Air Jamaica. Earlier in his career, Banmiller had overseen bankruptcies at Pan Am and Sun Country Airlines.
During its bankruptcy stint, Aloha shed pension programs by handing them over to the government insurer, cut employee pay and reduced flying capacity by 20%. It also eliminated $65 million of debt and $75 million in annual operating expenses. It kept nearly all of its jobs.
Privately held Aloha told the bankruptcy court that it made a slim profit — before interest, depreciation and taxes — in 2005 and expects to be slightly more profitable this year.
Yucaipa, a private equity fund controlled by billionaire Ron Burkle, provided most of the money for Aloha's exit from bankruptcy. It now owns 67% of its shares. Banmiller recently spoke with USA TODAY's Roger Yu about bankruptcy in the airline business and the experience of his own carrier. Comments have been edited for length and clarity.
USAToday
