Aloha Airlines plans to continue as an independent carrier after Hawaiian Airlines refused to extend the 18 April deadline for completion of their proposed merger. Hawaiian is expected to proceed with plans to expand its international services and all-Boeing fleet.

The extension was requested by TurnWorks, the Houston, Texas-based private equity firm headed by former Continental Airlines executive Greg Brenneman that was the driving force behind the merger. According to Aloha president and chief executive Glenn Zander, Hawaiian refused to extend the deadline unless TurnWorks was eliminated and Hawaiian chairman and controlling shareholder John Adams, rather than Brenneman, was named president and chief executive officer.

Under the original deal, Hawaiian majority owner Airline Investors Partnership (AIP) was to hold 28% of the merged carrier, Aloha Airgroup shareholders 28%, Hawaiian's public shareholders 24% and TurnWorks 20%. Aloha was to have three board members, AIP three, the unions three and TurnWorks two. According to Aloha, Hawaiian's revised proposal gave AIP five board positions, Aloha three and the unions three.

Both airlines have been barely profitable for the past five years and have failed to break even on competing inter-island services. Turnworks promised to consolidate fleets and renegotiate aircraft financing. The merger had faced opposition from employees worried about layoffs and politicians concerned about fare increases.

Source: Flight International