Aloha Airlines last month emerged from bankruptcy protection, the latest in a long line of U.S. carriers to reorganize.

Saddled with tough competition and high fuel prices, the carrier filed for Chapter 11 on Dec. 30, 2004.

A month before filing, the company hired David Banmiller, a 30-year industry veteran, as its CEO to oversee the reorganization. Banmiller had been chief operating officer of Air Jamaica. Earlier in his career, Banmiller had overseen bankruptcies at Pan American World Airways and Sun Country Airlines.

During its bankruptcy stint, Aloha shed pension programs by handing them over to the government insurer, cut employee pay and reduced flying capacity by 20 percent. It also eliminated $65 million of debt and $75 million in annual operating expenses. It kept nearly all of its jobs.

Privately held Aloha told the Bankruptcy Court that it made a slim profit — before interest, depreciation and taxes — in 2005 and expects to be slightly more profitable this year.

Yucaipa, a private equity fund controlled by billionaire Ron Burkle, provided most of the money for Aloha's exit from bankruptcy. It now owns 67 percent of its shares.

Banmiller recently spoke with USA Today's Roger Yu about bankruptcy in the airline business and the experience of his own carrier. Comments have been edited for length and clarity.

Q. Critics of bankruptcy such as American Airlines CEO Gerard Arpey and Alaska Airlines CEO William Ayer say weak carriers get an unfair advantage from Chapter 11.

A. I know there's controversy about the relative merits and fairness of bankruptcy, but it's designed for a reason. We saved 3,500 jobs. We drive the economy in Hawai'i. We carry the mail and about 85 percent of the (air) cargo between the Islands. We tried to hurt as few people as possible, but people are going to be affected in bankruptcy.

Q. How bad did things get?

A. When we filed, we only had $2 million in the bank, and we had to do a lot of stuff fast. Shareholders put in $3 million to meet payroll. We also needed a change in the entire management. There were 23 vice presidents. I cut it to 10.

Q. Did you ever think the company might have to liquidate?

A. You're talking to an eternal optimist. On the first day of filing, I actually visualized standing in front of the judge and thanking him (for approving our bankruptcy exit plan). And I never forgot that visualization.

Q. Did coming to Aloha from the outside help you?

A. When you come in as a change agent, it's always easier. I asked the board to just tell me if there were special deals. They said, "No, you're absolutely in charge." And they were true to their word.

Q. How was this case different from your bankruptcy cases at Pan Am and Sun Country?

A. With (high) fuel prices and so many carriers in bankruptcy, it was harder to get (exit) financing. Second, the implication of failing for the Hawaiian economy was pretty dramatic. And with the time-zone difference, I slept with (my BlackBerry) seven days a week because the lawyers are in New York and Florida.

Q. How did you go about looking for investors?

A. We hired (former New York Mayor Rudy) Giuliani's firm and knocked on doors. In September, I was getting a lot of pressure from lenders, and we had a meeting in Los Angeles. You never know who's going to be in the room when you do about 50 of these. And we ran into Yucaipa's people and Willie Gault. (Gault, a former NFL wide receiver and principal at IBS Capital Holdings, helped deliver a minority investment in the reorganized Aloha.)

Q. Your pilots didn't agree until late 2005 to your proposal of terminating their pension. How close were they to walking out?

A. In November, we walked into court at 10 a.m., and the judge says he already has a ruling. He says, "I don't think either one of you will like the ruling." So I told (the pilots' attorneys) that we've got to solve the issue, because something tells me he's got big plans here.

I'm not sure pilots can strike, but who wants to try to find out if you can get around it? So we walked across the street (to a lawyer's office), pulled an all-nighter and (had a deal) by next morning. I had to give a speech to the judge the next day, and I said, "If I slur my words, it's because I haven't slept."

Q. Do you want to run a larger airline?

A. If I do, I'm not going to say it publicly. Do I have a couple of dreams? Maybe.