A federal judge confirmed the $10.5 million sale of Aloha Airlines' cargo division to the owner of Young Brothers/Hawaiian Tug & Barge.

U.S. Bankruptcy Judge Lloyd King also approved the airline's request to terminate collective bargaining agreements with Aloha's pilots, machinists and flight attendant unions.

"It's a great day for Hawai'i: We saved the jobs and the cargo business," said Dane Field, Aloha's court-appointed trustee.

Tomorrow, Seattle-based Saltchuk Resources Inc. will finalize its purchase of Aloha Cargo, which handles about 85 percent of all air freight between O'ahu and the Neighbor Islands.

Although the sale does not include Aloha's union contracts, Mark Tabbutt, Saltchuk's chief executive officer, said his company plans to keep all of the cargo division's 300 employees, including 25 pilots.

King said the sale to Saltchuk was the only possible deal.

"Saltchuk stayed along for the ride — up and down. Given Saltchuk's continued interest in purchasing the cargo division and the fact that no one else appeared to be interested, I am satisfied that Saltchuk is a good-faith purchaser," King said

Aloha shut down its passenger operations and put its cargo division up for sale last month.

The move — which resulted in the loss of 1,900 jobs — came after the carrier filed for bankruptcy protection on March 20.

James Linsey, attorney for the Air Line Pilots Association, said the company acted in bad faith in rejecting the collective bargaining agreements. Pilots have said Aloha's management violated its collective bargaining agreement when it terminated the pilots March 31 and allowed lower seniority pilots to continue flying for the cargo division.

"The company has repudiated every aspect of the collective bargain agreement from stem to stern," Linsey said.

But Field said the cargo deal wouldn't have gone forward if the airline didn't reject the union contracts. If Aloha didn't move to terminate its collective bargaining agreements, the contracts would have terminated on their own in 60 days under federal bankruptcy law, attorneys for Field argued.