Aloha Airlines restarted its air cargo operations last night with as many as 10 flights to and from the Neighbor Islands.

The service, which shut down on Monday, resumed with three Boeing 737-200 jets taking off from Honolulu Airport after 8 p.m.

A court-appointed trustee agreed to take over the operations of the local carrier until Aloha Cargo's sale to the Seattle-based owner of Young Brothers/Hawaiian Tug & Barge can be completed.

The move will preserve hundreds of jobs and bring much needed relief to businesses that were sent scrambling for alternative ways to ship their goods.

"It's a very good day," said Aloha's chief executive, David Banmiller. "To be able to have this happen is a good feeling in light of all the adversity we've faced."

Aloha terminated its cargo business earlier this week after its chief lender, GMAC Commercial Finance LLC, abruptly cut off funding. The move came about a month after the 62-year-old airline filed for bankruptcy, shut down its passenger service operations and laid off 1,900 workers.

During a bankruptcy court hearing yesterday, attorneys for GMAC said they had reached an agreement with Saltchuk Resources Inc., Young Brothers' parent company, to acquire Aloha Cargo for $10.5 million.

The sale price represents a discount from Saltchuk's earlier offer of $13 million.

In the deal, GMAC said that Aloha's court-appointed trustee, Dane Field, will take over the day-to-day management of the cargo business. Field will retain Aloha's current management team, including Banmiller.

GMAC said it will continue to fund the operations until May 14, when the sale to Saltchuk is completed.

INOUYE CREDITED

Saltchuk said it plans to hire existing Aloha employees but did not say if it will retain all 300 of the company's air cargo employees.

The company also said it plans to terminate the collective bargaining agreements with Aloha's pilots' and machinists' unions.

Both unions said they plan to oppose the move but that they will cooperate to keep the cargo operations running.

"We're going to do whatever we can to get the planes in the air," said pilot Mike Feeney. "We're going to argue about the other things later."

Aloha flew a shortened schedule last night but will operate a full program today. Typically, the company operates six Boeing 737-200 jets.

Banmiller said employees showed up for work anticipating the resumption of service yesterday. He said the company lined up many of its customers for last night's flights.

Banmiller, Saltchuk and attorneys for GMAC credited U.S. Sen. Daniel Inouye for brokering the agreements that led to the restarting of operations.

Douglas Lipke, GMAC's attorney, said Inouye called GMAC's president on Monday to urge the lender to reconsider its decision to cut off Aloha.

Inouye also called Saltchuk executives to stress the importance of a service that transported 85 percent of all goods flown between O'ahu and the Neighbor Islands, Saltchuk president Tim Engle said.

"He (Inouye) was the architect of bringing this back together," Banmiller said.

The cargo developments came after U.S. Bankruptcy Judge Lloyd King finalized the sale of Aloha's contract services division, allowing Los Angeles-based Pacific Air Cargo to take over management of the 1,100-employee unit immediately.

The contract services division handles ticketing, baggage services, ramp duties and other ground services for United Airlines, Japan Air Lines and other carriers that serve Hawai'i.

Pacific Air agreed last week to pay $2.05 million for the contract services division, which continued to operate despite a court order allowing Aloha to wind down its operations and sell off its assets.

"We now can get these people back to work and start running the business," said Pacific Air's president, Beti Ward.

"I want these jobs to stay in Hawai'i."