Aloha Airlines President Glenn R. Zander announced yesterday new flights to Burbank, Calif., and Vancouver, Canada, starting in June.

Aloha to fly
to Burbank and

Both local air carriers are
increasing their North
American traffic

By Russ Lynch

Aloha Airlines, setting aside its ill-fated attempt to merge with Hawaiian Airlines, is pushing ahead with its own plans to launch flights to Burbank, Calif., and Vancouver, Canada.

Glenn R. Zander, president and chief executive officer, said the message he wants to convey is that "Aloha Airlines is alive and well." Zander told a news conference that Aloha still feels the merger would have allowed a combined airline to grow faster and better than either can do individually, but the merger deal is over, and it is time to move forward.

Aloha Air Aloha has two new Boeing 737-700 aircraft at Honolulu Airport that it has not used because they were on a lease deal that said the airline did not have to pay rent if it was not using them. They will be activated under a new lease to start the Burbank service June 1 and Vancouver, British Columbia, June 15, he said.

North America "has been profitable for us," Zander said. It was clear before Sept. 11 that the interisland business did not have much, if any, room for growth, and Aloha had already begun looking seriously at additional mainland destinations.

He said there was a decline in interisland business after Sept. 11, making it even more important to build mainland routes.

Zander said the daily Honolulu-Burbank and Honolulu-Vancouver flights may be followed later by other destinations in North America and the Pacific. Aloha now has seven new Boeing 737-700s, and they have a range of 3,500 miles, a thousand miles farther than the West Coast.

Each aircraft carries 124 passengers, with 112 in coach and 12 in first class.

He said Burbank has easy access to Hollywood, downtown Los Angeles, famous movie studios, Dodger Stadium and other attractions without the need to go through the traffic and complexities of Los Angeles' international airport.

Competitor Hawaiian Airlines took the same approach with its post-merger-talks announcement that it will begin flights between Honolulu and Ontario, Calif., as well as Honolulu-Sacramento, on June 7. Hawaiian has been operating service to the mainland since the early 1980s.

Zander said convenience is the key, and flying to alternative airports close to major cities can be comfortable for travelers. For nearly a year, Aloha has been flying to John Wayne Airport in Orange County, giving travelers close access to Disneyland. It has been running Oakland services, close to San Francisco, since early 2000.

"That convenience, we have found, grows the market to Hawaii," Zander said. He said employees are enthusiastic about the new flights, and once they are fully operating, all employees furloughed in the travel drop-off from Sept. 11 will be back at work.

"Yes, Aloha is OK, Aloha is growing," he said.

And Aloha's financial situation has changed since disclosures in the complex merger documents, said Zander. They showed it in potential default on some $20 million in loans handled by First Hawaiian Bank as the main lender but shared among other local banks.

"We had a successful negotiation with the bank, and we are in full compliance" with all of the loan conditions, he said.

Zander also said that Aloha is considering a lawsuit against Hawaiian over a breakup fee from the failed merger. He said the possible suit involves a $4 million breakup fee, which called for $3 million going to Aloha and $1 million for Turnworks Inc., the Texas-based company working to merge the two carriers.

Zander said he believes the breakup fee agreement was not fulfilled.

"Not surprisingly, Hawaiian takes an opposite point of view," he said. "So we do have attorneys looking at it, we are considering initiating litigation."

The Associated Press contributed to this report.

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