Hawaii-based airline Aloha has gained court permission for a restructuring plan which will see it exit bankruptcy.
Aloha operates inter-island routes
Established in 1946, the private airline operates about 800 flights a week across the Hawaii archipelago and to other US states.
It filed for Chapter 11 bankruptcy protection 11 months ago, citing rising fuel costs, increased aircraft leasing rates, and increased competition.
The new move comes after a proposed contract agreement with pilots.
"This is a significant moment in the 60-year history of Aloha Airlines," said David A Banmiller, president and chief executive of the carrier.
The airline said it was set to emerge from bankruptcy as early as 15 December, should the pilots vote to accept the new contract proposals.
Supermarket chain owner Ron Burkle and former American football star Willie Gault, as well as the Ching and Ing families which own the airline are set to recapitalise the firm.
That will be done through a combination of $50m in equity and up to $50m in debt financing.
"The members of the (union's) master executive council have unanimously endorsed the negotiating committee's agreement with the company, and encourages the membership to vote in favour of it," said Daniel Katz, a lawyer representing the Air Line Pilots Association.
Aloha is one of a number of US airlines which have operated under Chapter 11 provisions over the past two years, allowing them to continue trading while they restructured their finances.
Meanwhile, the state of Hawaii has waived $1m owed to it in taxes by the airline, but it still must pay the $5.5m it owes the US Department of Transportation in landing fees.
As well as inter-island routes, Aloha operates services to five cities in California, Nevada and to Vancouver, Canada.