Aloha Airlines has asked the US Federal Bankruptcy Court for approval to terminate the pensions of 3,000 employees.
The carrier, which included the action as part of its plan to end bankruptcy, also says it will pay its unsecured creditors less than 5 cents on the dollar.
Aloha received court approval earlier this month to proceed with a reorganization plan being proposed by a US based investment group.
Aloha said it owes about 60 million US dollars to more than 250 creditors.
The company filed for bankruptcy protection in 2004.