Judge Tells Mesa To go! Start Over

The attempt by Mesa Air Group to use the name of a former competitor has hit a snag.

KITV-4 in Hawaii reports a federal bankruptcy judge Tuesday agreed the sale of the Aloha Airlines name and other intellectual property to the company which drove it out of business had not been fair to competing bidders.

The Yucaipa Companies, LLC became the largest shareholder in Aloha Airlines in 2005, as part of an attempt to buy the company out. Mesa's "go!" subsidiary entered what had been a competitively-sleepy Hawaiian inter-island market in 2006, with fares low enough to cause its competitor Aloha to fold.

As ANN reported, Yucaipa retained the rights to the name, and was prepared to license its use to "go!" in a deal which would have extended some additional benefits to former Aloha employees displaced in the bankruptcy.

But Randy Kauhane of the International Association of Machinists told Judge Lloyd King the union was excluded from bidding. King also noted that Yucaipa and the trustee denied Honolulu Advertiser reporter Rick Daysog access to observe the proceedings, calling the move "outrageous."

The court has ruled there is no evidence of bid rigging or collusion, but King has also found the so-called public sale was not a public sale, and will force a do-over.

Despite those snags, US trustee James Wagner expects go! will eventually win rights to the Aloha name... unless someone else offers Yucaipa more money.

"Yucaipa stands to get $6 million or $7 million from go!" he said. "If someone else offered Yucaipa would let them have it."

FMI: www.mesa-air.com, www.yucaipaco.com