[Oblarg]

Use a step bit to get up to 1 inch or so, finish it off with the 1-1/8'' bit.

You can, of course, use the step bit for the whole thing but I've always found they don't leave the nicest finish on the hole (lots of burrs, and if you go too far you end up widening one end).

Edit: As for general drilling practice, you should always have a bottle of cutting oil handy when you're using a drill press. It almost always gives you better results. It's not always necessary on aluminum (I tend to skip it for the 1/4'' or 3/16'' holes we drill loads of to save time), but it's an absolute must for getting good results on steel and it really does help for larger holes on aluminum as well. I went a long period of time not knowing this, to my detriment.