Aloha Airlines ceased flying people yesterday, but its other vital service — daily interisland cargo delivery — will continue to supply businesses and consumers with time-sensitive goods from fresh bread to mail.

The loss of Aloha's passenger service was a terrible blow to thousands of travelers and the 1,900 company employees left jobless in the local airline's abrupt shutdown. But many companies and consumers breathed a sigh of relief that Aloha's fleet of six cargo aircraft are still flying.

"Aloha is our link to the outer islands," said Norma Acob, managing director of Commodity Forwarders Inc., a company that coordinates shipments of seafood, vegetables, flowers and other items to customers including retailers and restaurants.

Aloha said that excluding mail, it carries 85 percent of interisland cargo that travels by air, which is typically time-sensitive consumer goods like produce, meat, medicine, newspapers, auto parts and construction materials.

The airline also runs cargo interisland for global package delivery companies FedEx, UPS and DHL, and is one of two local contract carriers of the U.S. mail.

Aloha's biggest cargo customer is Love's Bakery, which initially was extremely nervous about Aloha's ability to keep running cargo flights, but has been assured the critical service will continue.

"We can't afford to have Aloha Airlines give us a 48-hour notice," said Mike Walters, Love's president.

O'ahu-based Love's fills six Aloha planes a day with bread, doughnuts and other baked goods headed to Neighbor Island customers including convenience stores, supermarket chains and big-box discounters.

According to the latest available state statistics, in 2006 there was 47,000 tons of non-mail air cargo transported from Honolulu to the Neighbor Islands, and 22,000 tons from the Neighbor Islands to Honolulu.

Mail added another 16,500 tons to the Neighbor Islands and 2,200 tons to Honolulu.

Tropical Hawaiian Products, a Big Island-based papaya processor and exporter that sends about a million pounds of fresh papaya to O'ahu and Kaua'i each year, relies on Aloha to send much of that fruit.

"They've been very helpful to us," said Loren Mochida, company general manager. "Hopefully, we'll get the same service."

Aloha's cargo operation employs nearly 400 people and has been one financial bright spot for the troubled airline, producing more than $6 million in profit before interest, taxes, depreciation and amortization in recent years.

Aloha, which filed for bankruptcy on March 20, has proposed selling its cargo division for $13 million to Saltchuk Resources Inc., the Seattle-based owner of Young Brothers Ltd. and Hawaiian Tug & Barge.

The sale plan, however, is subject to potential competing bids by other parties willing to top the Saltchuk offer by at least $650,000. Bankruptcy court approval is another condition.

A sale auction is tentatively set for April 14.

Some observers in the freight business wonder whether Saltchuk acquiring control of what essentially would be the state's largest interisland cargo airline would give it unfair pricing power over local ocean or air transportation.

But others see no problem with one company operating two modes of interisland cargo transportation that don't directly compete with each other because the differences between time and price are far apart for ocean and air transport service.

Tim Engle, Saltchuk president, has said that little overlap apparently exists between the customer base of interisland barge operations and Aloha's air cargo business.

Attorneys for the United States Department of Justice yesterday filed an objection to the proposed sale auction over concerns that a buyer would need to obtain its own operating permit from the Federal Aviation Administration as well as federal approvals to transfer its U.S. mail contract and a U.S. Department of Transportation permit.

It's expected that Saltchuk or a higher qualified bidder will apply for such approvals as part of a sale. Saltchuk is already an experienced air cargo operator as owner of Alaska's largest all-cargo airline, Northern Air Cargo.

"We believe our knowledge of Hawai'i, coupled with our extensive air cargo operations experience, positions us well to help take Aloha Air Cargo to the next level," Engle said in a statement. "We want to employ as many of the current employees as possible, and to ensure the continuity of excellent service that Aloha Air Cargo's customers have enjoyed for over 20 years."