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Posted: Wednesday, February 18th, 2009 4:40 AM HST

Mokulele Airlines tries to stay in business

By Associated Press

HONOLULU (AP) — Mokulele Airlines could have its assets, including planes, seized by business partner Republic Airways as soon as the close of business today. Republic Airways Holdings Incorporated says Mokulele has defaulted on its debt, and the Indianapolis-based company would come in and operate the airline if the Hawaii carrier failed to make the payment. Republic said Mokulele's flights would operate as scheduled regardless of the outcome. Republic's chief executive officer, Bryan Bedford, says his company has "a default situation with Mokulele." Bedford said in an earnings conference call that its $8 million credit line to Mokulele has been fully drawn, and Mokulele has exceeded the amount by about $300,000. Bedford says if the default isn't resolved by close of business today, Republic will assume control of its collateral, including Mokulele's unencumbered assets. Mokulele General Manager Chris Van Den Heuvel says the airline is working with investors and outside companies to acquire additional capital to avoid shutting down. (Copyright 2009 Associated Press. All rights reserved)