Yucaipa, AAIG To The Rescue

Aloha Airgroup, says it has signed a Letter of Intent with The Yucaipa Companies, LLC (Yucaipa) and Aloha Aviation Investment Group, LLC (AAIG) for a substantial equity investment in Aloha Airlines pursuant to a Plan of Reorganization. The Agreement is subject to U.S. Bankruptcy Court approval and other conditions.

Under the terms of the Letter of Intent, the Ching and Ing families, longtime owners of Aloha, will continue to have ownership interest and have Board representation. In addition, David A. Banmiller will continue to serve as President, Chief Executive Officer and Board member of the reorganized Aloha Airlines.

"In partnership with Yucaipa and AAIG, we have a unique opportunity to carry forward Aloha's 60-year tradition of excellence," said Aloha's Banmiller. "Combining the vision and resources of our new investors with the continuing support of the Ching and Ing family shareholders ensures the future for our employees, customers and the communities we serve and will facilitate our growth."

"The Ching and Ing families are proud to have supported Aloha for more than half a century," said Han H. Ching, chairman of the board of Aloha Airgroup, Inc. "We look forward to being actively involved in the future of this company with our new partners."

Founded in 1946, the privately held, Honolulu-based Aloha Airlines is a leading provider of aviation services in the State of Hawaii. With a workforce of 3,500, Aloha offers approximately 700 inter-island flights per week between Honolulu, Kahului, Kona, Hilo and Lihue.

Aloha Airlines currently has a fleet of 22 Boeing 737s, including eight technologically advanced B737-700s. In February 2000, Aloha inaugurated transpacific service from Hawaii to Oakland, California. Today, Aloha provides 140 transpacific flights a week between Hawaii and Oakland, Orange County, San Diego and Sacramento, California; Las Vegas and Reno, Nevada.

Aloha is the state's largest provider of contract aviation services, handling 15 domestic and international air carriers. In addition, the company carries more than 85 percent of the state's non-mail inter-island air cargo business.

FMI: www.alohaairlines.com