Families seek to loan
more money to Aloha Air

The $1.6 million is on top
of $3 million put up
by Aloha's owners

Aloha Airlines' majority owners have offered to loan the company as much as an additional $1.6 million to raise the total they are providing to $4.6 million as they try to help the carrier navigate through bankruptcy reorganization.

The $1.6 million loan from the Ching and Ing families would allow them to give the airline $320,000 a week for five consecutive weeks unless certain conditions occur that change the airline's situation.

The proposal by the families was disclosed in federal Bankruptcy Court yesterday on a day in which Aloha said it reached agreements with First Hawaiian Bank and American Express to extend their credit-card processing agreements until Feb. 11 while the parties continue to negotiate.

Aloha's agreement with First Hawaiian, which processes Aloha's Visa and MasterCard transactions, allows the airline to temporarily access $2 million of its money that the bank previously was holding back.

The extensions are essential for Aloha to survive. The airline has said that Visa and MasterCard transactions processed through First Hawaiian constitute approximately 57 percent of Aloha's monthly sales.

As the processor of Aloha's credit card transactions, First Hawaiian faces a risk exposure of having to refund customers' money if Aloha were to cancel flights, or if customers were to request refunds for unused flights. The percent of Aloha's money that First Hawaiian holds back for possible refunds has been an issue as the airline proceeds through bankruptcy.