GMAC to pay Aloha Airlines' workers April back pay

HONOLULU—Aloha Airlines' lender says the carrier's cargo employees will be paid for work done since the middle of April, but they'll have to wait a few more days to receive the back pay.

Even though it is not legally obligated, GMAC Commercial Finance LLC says it has agreed to pay pilots and other cargo employees who worked without pay for the last two weeks in April.

The two weeks represents the last pay period before Aloha converted its bankruptcy from a Chapter 11 reorganization to a Chapter 7 liquidation.

The back pay will arrive after the Saltchuk Resources Inc. closes its deal Wednesday to acquire Aloha's cargo division, which handles 85 percent of Hawaii's interisland air cargo.

GMAC attorney Douglas Lipke said the funds will come from proceeds of the sale.

John Dean, an attorney for the Air Line Pilots Association, said it's not clear whether GMAC will pay medical premiums and other benefits owed to pilots since April 16.

"Everything is somewhat unsettled at the moment," Dean said.

The union was in contract negotiations with Saltchuk, which is planning to hire 35 to 40 of Aloha's pilots.

Squeezed by soaring fuel prices and increased competition from Mesa Air Group Inc.'s Go! airlines, Aloha filed for bankruptcy and then abruptly closed down its passenger service in March.

The carrier's contract services division was sold to Pacific Air Cargo for $2 million.