Aloha Airlines, which is set to emerge from bankruptcy today, plans to replace its older aircraft with newer jets and expand service to the Mainland.

CEO David Banmiller said the post-bankruptcy Aloha will be a much leaner company, having shed nearly $75 million in annual costs.

The new routes will originate from Aloha's current West Coast destinations and fly farther inland, Banmiller said, although he declined to name the cities to be added.

During its 13 months under court protection, Aloha reduced its Mainland service, cut salaries and jettisoned its workers' defined-benefit pensions. Employees gave up tens of millions of dollars in concessions.

Banmiller said he wants to address the strained relations with employees by offering a new profit-sharing plan for the airline's 3,400 workers.

The airline and hundreds of its employees marked the company's emergence from bankruptcy yesterday at a ceremony at the Dole Cannery in Iwilei.

Banmiller, a veteran of several airline bankruptcies including Pan American World Airways and Sun Country Airlines, said Aloha's reorganization was the most difficult in his career in the aviation industry.

"People don't know the number of bullets we had to dodge" in the past year, Banmiller said.

Banmiller said the airline only had $2 million in cash when it filed for bankruptcy on Dec. 30, 2004. Banmiller recalled that he got a call from New York the day after the bankruptcy filing from longtime friend and airline consultant Mike Cox, who thought the filing was missing a couple of zeros.

"To be down to $2 million for a $500 million company, that's almost no money," Banmiller said.

Banmiller, who was appointed CEO in November 2004, said the airline owed about $45 million to the federal Air Transportation Stabilization Board, which was about to call in the loan.

The airline was given more time from the ATSB after it secured more than $24 million in savings in the form of workers' concessions and other cost savings. The company received $65 million in interim financing several months later from lenders Goldman Sachs Credit Group and Ableco Finance LLC.

The financing came minutes before Aloha's aircraft lessor, GE Capital Aviation Services, took back nine of its jets, Banmiller said.

"We literally got the last (bank) wire done as they were going to take planes at the airport," Banmiller said.

The Goldman Sachs and Ableco loans also proved to be problematic for Aloha.

The lenders threatened to liquidate Aloha on several occasions and ruled the airline in default on several occasions, even though the company was current on its payments. The defaults raised the interest rate on the $65 million from about 11.25 percent to about 15.5 percent.

And after fuel prices more than doubled during the past year, Goldman and Ableco tried to persuade the airline to shut down its West Coast service, which accounts for more than half of the company's revenues, Banmiller said.

The pressure from the lenders eased once Aloha found a potential buyer. A group of investors, including California billionaire Ron Burke's Yucaipa Cos. and former football star Willie Gault, agreed to buy the airline for about $100 million.

The previous owners — including the families of developers Hung Wo Ching and Sheridan Ing — continue to have a minority stake in Aloha.

They will be joined by home builder Stanford Carr, media and real estate executive Duane Kurisu, local insurer Island Holdings Inc. and local hedge fund operator Steve Yamane as minority shareholders.

Mike Feeney, an Aloha pilot for 16 years and a spokesman for the pilots union, called yesterday's end-of-bankruptcy party "bittersweet," after all the concessions given up by the employees during the past year.

"It's time to move on and it's time to do what Aloha does best and it's time to get back to the business of running the airline," he said.

"We have new owners, new capital and the same great employees we've always had."

Sue Ann Lau, a 19-year Aloha employee, was upbeat. Lau, who works in the company's reservation department — which lost dozens of employees during the bankruptcy — said she's looking forward to learning more about Aloha's expansion plans now that it has new investors and new financing.

"Today is a great day and everybody is happy the bankruptcy is over and we can move on," Lau said. "We're looking forward to bigger and better things at Aloha."

Billie Kekuewa, who has worked in Aloha's accounting department for 15 years, said she's glad the bankruptcy is finally over.

During the reorganization, her department was swamped with work as the airline was under pressure to produce financial records.

"None of us thought we'd have the types of ups and downs we had," Kekuewa said. "I thought all along that we would be OK."