Aloha Airlines yesterday asked a federal airline recovery agency to back a loan worth $45 million. Aloha said $40.5 million of that amount has been approved by private-sector lenders the airline declined to name. Aloha asks feds to back loan
By Russ Lynch
rlynch@starbulletin.com
The loans depend on a federal government guarantee under the Air Transportation Safety and System Stabilization Act, signed into law by President Bush after the Sept. 11 attacks.
Meeting yesterday's deadline for a loan application, Aloha said its financial results have been hurt by fallout from Sept. 11 and the drop in the number of Japanese visitors.
"Based on our review of the federal loan guarantee program, we believe that Aloha meets all the criteria for approval," Glenn R. Zander, Aloha president and CEO, said in a statement issued yesterday.
In the federal law, the new airline stabilization board can issue up to $10 billion in credit backing for airlines whose post-Sept. 11 hardship qualifies them for support.
The board has to rule that credit "is not reasonably available" to the airline, that the debt will be "prudently incurred" and that the federal financial support "is a necessary part of maintaining a safe, efficient and viable commercial aviation system in the United States."
Aloha said that its review of all the criteria shows it meets the requirements for approval.
Competitor Hawaiian Airlines did not apply for federal loan assistance.
Both airlines have already received assistance under a federal program that provided direct compensation for post-Sept. 11 losses. Aloha received $7.7 million and Hawaiian received $24.9 million.