State alleges Aloha Air
owes $1.3M in taxes

The airline disputes
the claim for 1996-97,
which includes interest

The Hawaii Department of Taxation claims that Aloha Airlines' parent company owes more than $1.3 million in corporate income taxes and interest for the years 1996 and 1997.

The state has filed an unsecured claim against Aloha Airgroup Inc. in U.S. Bankruptcy Court. Amounts owed for 1995 and the years 1998 to 2004 are unknown, the claim said.

Stu Glauberman, spokesman for Aloha Airgroup, said the company has paid state taxes every year.

"The state is alleging that additional taxes are due and Aloha disputes that," Glauberman said.

The Department of Taxation's claim, based on an assessment made in 2000, said Aloha Airgroup owes $605,515 in taxes and $375,419 in interest for 1996 and $226,421 in taxes and $122,267 in interest for 1997. Tax claims are sometimes settled for less than the amount demanded.

State Deputy Attorney General Cynthia Johiro said she couldn't provide any details outside of what was listed in the claim.

Aloha Airgroup, along with subsidiary Aloha Airlines, filed for Chapter 11 protection from creditors late last year after the company's available cash had dwindled to about $3 million.

Separately, preliminary data released yesterday by the federal Bureau of Transportation Statistics showed that Aloha Airlines had a net loss of more than $30.4 million last year.

Earlier this year, Aloha Chief Executive David Banmiller said the airline had lost $24 million in 2004. That figure represented the carrier's operating loss. The larger net loss includes interest and other charges related to Aloha's loans, Glauberman said.

Revenue for 2004 was up 6 percent to $434 million from $410 million a year earlier.

Aloha, which is privately held, reports its financial results quarterly to the U.S. Department of Transportation, but has historically not had to release more information. However, since filing for reorganization, the airline has been required to file monthly statements with the Bankruptcy Court.

In the first quarter of 2005, Aloha reported a net loss of $6.5 million, which includes reorganization expenses, and an operating loss of $3.8 million.