Losses pile up at Aloha Airlines

The airline has now been in the red 15 consecutive quarters

Aloha Airlines already has lost more money this year than it did for all of 2006.

The privately held carrier lost $18.8 million in the three-month period ended June 30, and saw its losses through the first six months balloon to $43 million, according to preliminary data released yesterday by the federal Bureau of Transportation Statistics. In full-year 2006, Aloha lost $41.5 million.

Aloha, which now has had 15 straight losing quarters, lost $2.8 million in the second quarter of 2006 and lost $23.1 through the first six months of last year.

Last quarter's revenue was $96.3 million, down 6.1 percent from $102.6 million a year ago.

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In another sign that the interisland fare war is inflicting a heavy toll on the two longtime local carriers, Aloha Airlines already has lost more money this year than it did for all of 2006.

The privately held airline, which has now been in the red for 15 consecutive quarters, saw its second-quarter net loss widen more than sixfold to $18.8 million from a year ago, according to preliminary data released yesterday by the federal Bureau of Transportation Statistics. That ballooned Aloha's loss through the first six months to $43 million -- greater than the $41.5 million that Aloha lost in all of 2006.

"It was a tough quarter," said David Banmiller, president and chief executive of Aloha. "Fuel was up and fares were down."

In 2006, Aloha had a net loss of $2.8 million in the second quarter and a net loss of $23.1 million through the first six months.

Declining revenue and higher fuel expenses pressured Aloha as it continued its uphill battle since emerging from bank-ruptcy in February 2006. Despite extensive cost cutting,

Aloha's situation worsened when Mesa Air Group's go! entered the interisland market in June 2006 and promptly initiated a fare war that in recent months has seen tickets priced as low as $1 one way. Aloha -- as well as longtime rival Hawaiian Airlines -- have slashed fares in order to remain competitive but have seen earnings suffer as a result.

The fare war contributed to Aloha's revenue falling 6.1 percent in the second quarter to $96.3 million from $102.6 million from a year ago. Through the first six months, Aloha's revenue was off 8.2 percent to $184.4 million from $200.8 million.

Aloha's cash slipped to $32.1 million as of June 30 from $33.8 million at the end of the second quarter but up from $28.1 million at the start of 2007.

Publicly traded Hawaiian, which reported its second-quarter earnings in July, had a net loss of $3.9 million in its second quarter, which included benefits from a recent company restructuring and the outsourcing of some services to India and the Philippines. Mesa didn't break out go!'s numbers in the parent company's most recent earnings report but said go! "continues to move toward profitability."

Aloha and Hawaiian both have sued Mesa separately with claims that Mesa used proprietary information gathered as a potential investor during the bankruptcies of both of those airlines. A trial on Hawaiian's lawsuit is scheduled to start next Tuesday with Aloha's trial slated for next year.

Operating expenses for Aloha rose 5.9 percent to $112.3 million from $106 million last quarter with fuel costs increasing 3.1 percent to $26.2 million from $25.4 million. For the first six months, operating expenses were $222.1 million, up 6.4 percent from $208.7 million a year ago. During the same period, fuel costs increased 3.6 percent to $49.2 million from $47.5 million.

Aloha's operating loss last quarter widened to $15.9 million from a loss of $3.5 million a year ago, and through the first six months increased to a loss of $37.7 million from a loss of $7.9 million.