HONOLULU -- It could have easily been a time of widespread panic, but when word came that Aloha Airlines had filed for bankruptcy and then abruptly announced that it was out of business, Aloha Airlines Federal Credit Union took an aggressive, proactive approach to reassure its members.

Aloha Airgroup, the parent company of Aloha Airlines Inc, closed shop on March 31, less than two weeks after filing for bankruptcy for the second time in three years. The shutdown of Aloha's passenger operations will affect about 1,900 of its 3,500 employees. Aloha also announced that its air cargo and aviation services units will continue to operate as usual while the U.S. Bankruptcy Court seeks bids from potential buyers, according to a statement on the carrier's Web site (www.alohaairlines.com). On March 27, Saltchuk Resources Inc. announced its intention to buy Aloha's air cargo business. The carrier said United Airlines, its code-share partner, and other airlines were prepared to assist and accommodate Aloha's passengers who had been inconvenienced.

"Unfortunately, unfair competition has succeeded in driving us out of business, bringing to an end a 61-year-old company with a proud legacy of serving millions of travelers in the true spirit of Aloha," said David A. Banmiller, Aloha's president/CEO. "We realize that this comes as a devastating disappointment to our frequent flyers and our loyal business partners who have supported this company for many, many years."

Nearly 1,000 members of $30 million Aloha Airlines FCU's 4,595-member base were laid off as a result of Aloha Airlines' demise, said Doug Mashino, a credit union spokesperson. Founded in 1952, the single occupational common bond AAFCU had a 56-year history with Aloha Airlines. The credit union will continue to serve Honolulu-based Island Air, once a subsidiary of Aloha Airlines.

The trigger for AAFCU to spring into action came when the carrier filed for Chapter 11 bankruptcy protection on March 20. Nearly a week later, Mashino said it took roughly one day to clear the credit union's Web site (www.alohafcu.com) of all promotions and revamp it with a question and answer section, what services were available to members during the transition and many reassurances.

"The key thing was we knew members were thinking the credit union would cease," Mashino said. "The biggest concerns were will we go away and do we have liquidity or cash problems. Our biggest challenge is getting members to understand that once they're a member, they're always a member."

Indeed, front and center on the AAFCU's home page in eye-catching red letters is the assurance that the credit union "is not affected by the shutdown of Aloha Airlines. Your funds are federally insured and are not frozen. Your credit union will continue to operate."

The credit union quickly instituted its member assistance program, offering several relief measures including emergency loans up to $2,000 for 24 months and loan payment deferrals and extensions. AAFCU has also lifted withdrawal penalties from March 30 to June 30 on certificate share accounts and Christmas club savings accounts. The board of directors approved an additional $100,000 for pressing financial needs.

Members impacted by Aloha Airlines' collapse are still getting their bearings. With the layoff, benefits and vacation pay were terminated. Many were longtime employees of the airline, Mashino said. Members are starting to ask for emergency cash loans and loan payment deferrals. If there is a bright light to all of this, some had braced for the carrier's shutdown.

"We were pleasantly surprised that some of our members were prepared," Mashino said. "Those in shock were able to ask for help. The response has been very positive."

Still, for some, the mood has been somber.

"We're talking to some people who don't have any source of income," Mashino pointed out.

The total shutdown of a Hawaii-based airline has never happened, Mashino pointed out. There have been mergers and company helm changes but this unprecedented and sudden dissolve left the credit union not knowing what to expect.

Regarding a name and image change, AAFCU said it will take into account any changes that occur in the next few days and weeks with regard to the remaining portions of Aloha Airlines. Mashino said they are contracted to use the Aloha Airline name until the end of April.

"We've had discussions but we just don't know what the outcome is," Mashino said. "As soon as the company dissolves, we will no longer have a contract to use the name."

Guy Usui, president/CEO of AAFCU, and Mashino took their hats off to the credit union's employees who have been pivotal in helping members during this troubling phase. On the credit union's Web site, a sign of things to come clearly shows AAFCU is prepping to move forward: "...in the end, not only are credit unions able to survive after drastic changes take place at their sponsor companies, credit unions are designed and required to stand alone."

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