fails to make full
Aloha Airlines failed to make $1.4 million in scheduled payments to employee pension plans before it filed for bankruptcy protection last week.
In a notice to employees Dec. 22, the company said payments that were due Oct. 15 were not made.
"In calendar year 2004, the company had a combined contribution requirement of $11.3 million. Of this total required payment of $11.3 million for all six plans, all but $1.4 million was paid," Aloha spokesman Stu Glauberman said yesterday.
Glauberman declined to say why the payments were missed and whether Aloha would make up the payments. "All of the financial stuff is up to the court now," he said.
A representative of Aloha's pilots union said the pilots have been given no word on the status of the payments.
"I think it's pretty self-explanatory. There's a major cash crunch right now," said Capt. Steve Brenessel.
Hit by fuel costs and the lower margins plaguing the entire industry, Aloha filed for Chapter 11 bankruptcy protection last week to allow it reorganize, as rival Hawaiian Airlines has been doing for the past two years.
Aloha Airlines has six pension plans for its 3,700 employees. The company needs to come up with $60 million in annual cost savings to keep operating and is asking some of its unions for major concessions.
Glauberman noted the company has continued to make payroll.