TEL AVIV (Dow Jones) -- Aloha Airlines, a carrier focused on flights within Hawaii and across the Pacific, said it's closing its passenger operations on March 31 after 61 years in business, affecting 1,900 jobs.

Parent Aloha Airgroup earlier this month filed for protection from its creditors under U.S. bankruptcy law for the second time in two years, citing high fuel prices and fierce competition in its inter-island operations. It cited "predatory pricing" from Mesa Air Group's (MESA) Go Airlines.

In a statement late on Sunday, Aloha said 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."

On March 27, Saltchuk Resources Inc., a Seattle company with air-cargo, petroleum-distribution, real-estate and marine-transport businesses, proposed to buy Aloha's air-cargo business.

"[We] simply ran out of time to find a qualified buyer or secure continued financing for our passenger business," Aloha's president and chief executive officer, David A. Banmiller, said in Aloha's statement.

He added: "Unfortunately, unfair competition has succeeded in driving us out of business."

Aloha Air said that on March 31, it'll fly its schedule, except for flights from Hawaii to the West Coast and flights from Orange County, Calif., to Reno, Nevada, and Sacramento, Calif., and Oakland, Calif., to Las Vegas.

Aloha's code-share partner, United Airlines, (UAUA) Hawaiian Air (HA) and Mesa Air's Go said they'll accommodate Aloha's passengers.

  (END) Dow Jones Newswires
  03-31-08 0530ET
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