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

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

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

Nearly 1,000 members of $30 million Aloha Airlines FCU's4,595-member base were laid off as a result of Aloha Airlines'demise, said Doug Mashino, a credit union spokesperson. Founded in1952, the single occupational common bond AAFCU had a 56-yearhistory with Aloha Airlines. The credit union will continue toserve Honolulu-based Island Air, once a subsidiary of AlohaAirlines.

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

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

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

The credit union quickly instituted its member assistanceprogram, offering several relief measures including emergency loansup to $2,000 for 24 months and loan payment deferrals andextensions. AAFCU has also lifted withdrawal penalties from March30 to June 30 on certificate share accounts and Christmas clubsavings accounts. The board of directors approved an additional$100,000 for pressing financial needs.

Members impacted by Aloha Airlines' collapse are still gettingtheir bearings. With the layoff, benefits and vacation pay wereterminated. Many were longtime employees of the airline, Mashinosaid. Members are starting to ask for emergency cash loans and loanpayment deferrals. If there is a bright light to all of this, somehad braced for the carrier's shutdown.

"We were pleasantly surprised that some of our members wereprepared," 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 ofincome," Mashino pointed out.

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

Regarding a name and image change, AAFCU said it will take intoaccount any changes that occur in the next few days and weeks withregard to the remaining portions of Aloha Airlines. Mashino saidthey are contracted to use the Aloha Airline name until the end ofApril.

"We've had discussions but we just don't know what the outcomeis," Mashino said. "As soon as the company dissolves, we will nolonger have a contract to use the name."

Guy Usui, president/CEO of AAFCU, and Mashino took their hatsoff to the credit union's employees who have been pivotal inhelping members during this troubling phase. On the credit union'sWeb site, a sign of things to come clearly shows AAFCU is preppingto move forward: "...in the end, not only are credit unions able tosurvive after drastic changes take place at their sponsorcompanies, credit unions are designed and required to standalone."

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