Aloha Air narrows its net loss in quarter

Aloha Airlines, immersed in an interisland fare war with Hawaiian Airlines and Mesa Air Group's go!, said yesterday it narrowed its net loss to $2.8 million in the April-June period, its first full quarter out of bankruptcy.

The privately held carrier, which emerged from 13 months of reorganization in February, slashed its loss from the first quarter of 2006, when $13.4 million in reorganization expenses contributed to a $20.3 million net loss. The airline had $465,145 in reorganization expenses in the second quarter of this year, compared with $6.3 million in the same period in 2005.

Second-quarter revenue declined about 5 percent to $102.6 million this year from $107.7 million in 2005, but Aloha operated fewer planes during this year's second quarter after returning several aircraft as part of its reorganization.

Jeff Kessler, senior vice president and chief financial officer of Aloha, said yesterday he was pleased with the results, considering the challenges that Aloha faced. "The second quarter was marked by increased capacity in the interisland market by Aloha, Hawaiian, Island Air and the startup of go!," Kessler said. "In addition, Aloha continued to experience high fuel costs.

"Considering these factors, Aloha performed well, reporting a modest loss."

Fuel costs represented more than a quarter of the airline's operating expenses last quarter, according to data Aloha is required to file with the federal Bureau of Transportation Statistics.

Aloha spent $27.6 million on aircraft fuel and oil during the quarter. That was slightly above the $27.3 million it spent in the second quarter of 2005, when it was operating more aircraft but fuel prices were lower.

Operating expenses fell to $106 million from $108.2 million a year ago after Aloha shed costs during its reorganization. However, the company posted an operating loss of $3.5 million in the second quarter, versus an operating loss of $480,733 a year earlier.