Mahalo still lacks
cash to resume flying

The airline says it may ask
the state for a loan

By Russ Lynch
Star-Bulletin

Mahalo Air, grounded by financial problems, today was still looking for financing to get back in the air again and said it may seek a state loan.

President Mike Yocum said there are two investors, one of which is a foreign corporation, interested in investing in the interisland airline but they have not yet provided any money.

Yocum said he couldn't say when that might happen. He said he regretted saying earlier this week that he might have the airline flying by today since it looks bad now that it hasn't happened.

Yocum added that it takes time for interested parties to study the airline before committing themselves to an investment, but he hopes that the money will come.

Mahalo, which shut down Tuesday night after missing an insurance payment, has said it needs $1.5 million to get flying again.

Meanwhile, Mahalo's 240 employees, who are still owed their final paychecks, were given unemployment forms to fill out.

There is a plan to restart the airline when it does get some money, using three of its ATR-42 turboprop aircraft on a reduced schedule, Yocum said. Before shutting down, it was flying five planes on about 70 flights a day.

Yocum said Mahalo also is looking into the possibility of applying for a $1 million loan from business-support agencies in the state Department of Business, Economic Development & Tourism.

Yocum said Mahalo had a string of engine problems, for which he blames the manufacturer for not making good on maintenance promises. In all, 12 engines had to be changed, often causing one or two planes to be out of service.

The resulting loss of revenue put Mahalo into a financial hole, and when it heard the planes' French owner was moving to repossess them, the airline last month opted for Chapter 11 bankruptcy court protection.