While listening to the news the other morning I heard something that caught my attention.
But first a little background.
After flying between the Hawaiian Islands for more than 60 years Aloha Airlines filed bankruptcy for the second time in last few years. It flew its last passenger flight Monday. They shut down with over 400,000 outstanding tickets. They did not have a count of how many passengers were stranded, but they acknowledged about 700 were at the airport trying to get home.
1900 of there 3500 employees saw their last day on Monday. The word came down on the weekend and it happened that fast.
Now here is the part that caught my attention. The news reporter listed fierce competition and rising fuel costs as primary reasons for their financial problems. He further suggested that the lending industry crisis as the cause for their closing.
The story behind the story was that when Aloha Airlines got into financial problems a couple of years ago, there were many interested buyers for their company. They successfully went through reorganization and avoided the need to sell. In this round they had to sell to save themselves. The roadblock they faced was the potential buyers now are facing difficulty getting the needed financing to make the purchase. The mortgage industry problems were cited as the reason for Aloha not being able to secure a qualified buyer.
In a related story, the purchase of the Hyatt Regency Hotel in Waikiki is in jeopardy citing the same reason.
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It's the old liquidity. Hey, perhaps the Fed will open a "window" for distressed airlines like they did for financial houses on Wall Street.