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The Honolulu Advertiser
Posted on: Monday, May 5, 2008

Union, Aloha Air Cargo buyer agree

Advertiser Staff and News Services

The machinists union has tentatively agreed with the buyer of Aloha Air Cargo on a four-year contract including wage protections for former Aloha employees and salary guidelines.

The International Association of Machinists and Aerospace Workers and Aeko Kula, a newly formed subsidiary of Seattle-based Saltchuk Resources Inc., reached the agreement Saturday night.

Specific terms of the contract have not been released.

Aeko Kula arranged to buy Aloha Air Cargo last week after the business shut down and went into liquidation at bankruptcy court because its chief lender cut off funding. The sale is expected to be completed on May 14.

The airlines had ceased passenger operations on March 31 and laid off 1,900 workers. It had said it would be able to sell the cargo business.

Nearly all of the 300 cargo employees were rehired Friday, and former senior vice president of Aloha's airline operations Mike Coffman was named president and chief executive officer of the newly named company called Aloha Air Cargo.

Aloha Airlines' new court-appointed trustee has asked a federal bankruptcy court to reject all six of the company's union labor contracts as the carrier liquidates and halts its business operations.

The pilots union, which represents 300 Aloha pilots, criticized the trustee's move. Between 30 and 40 of Aloha's pilots are needed to fly its cargo operations.

The Air Line Pilots Association has been demanding that Aloha abide by the union's collective bargaining agreement and use seniority to determine which pilots fly the cargo planes.

The union wanted the carrier to include those pilots who had been flying Aloha's passenger flights to be included in the seniority calculations. But Aloha wanted to use existing cargo pilots, many of whom were more junior to the passenger pilots.

The cargo division was the only division of Aloha's that returned a significant profit. The passenger business was deep in the red and the contract services division made a marginal profit.

Before the airline shut down the cargo division, it handled 85 percent of the state's air cargo, including all the mail to and from Maui and the Big Island.

Saltchuk's purchase is the company's latest investment in Hawai'i.

It acquired Young Brothers/Hawaiian Tug & Barge, the state's largest interisland cargo service, in 2001.

Five years later, Saltchuk purchased Hawaii Fuel Network, Maui Petroleum and Minit Stop Stores.

Saltchuk also owns Northern Air Cargo, the largest cargo carrier in Alaska, which uses the same type of aircraft as Aloha.

Aloha has sold its contract services division, which handles ticketing and other ground services for airlines not based in Hawai'i, to Pacific Air Cargo for $2 million.