What's In A Name? A Lot Of Sore Feelings
A federal bankruptcy judge has halted an audacious plan by Mesa
Air Group to rebrand its Hawaiian inter-island service with the
name of the carrier it helped drive into bankruptcy, and out of
The Honolulu Advertiser reports Judge Lloyd King slammed both
Mesa and Yucaipa Companies, the former controlling shareholder of
bankrupt Aloha Airlines, over an agreement reached last month that
would allow Mesa to rename its struggling go! Airlines operation as
"I don't think anyone is sensitive who's involved in this
settlement," King said Wednesday. "If this isn't approved, are
people from Yucaipa going to lose their health benefits and their
jobs? There hasn't been enough time for people to react."
King postponed a scheduled hearing on the licensing agreement
until February 19, to allow those on both sides of the issue time
to respond to the plan.
As ANN reported, Mesa announced November 28 it
had agreed to a settlement with the former controlling shareholder
of Aloha, concerning a lawsuit stemming from Mesa's alleged
wrongdoing over pricing. One year prior, a US Bankruptcy Court
judge ordered Mesa to cough up $80 million in damages to Aloha's
former inter-island rival, Hawaiian Airlines, determining Mesa used
information it obtained while bankrupt Hawaiian courted Mesa as a
That information included profitability figures for local and
Hawaii-US mainland routes, and passenger profiles... which Mesa
later used to launch its own airline in 2006. Advertising fares as
low as $29, the arrival of go! on the Hawaiian air travel scene
shook up the equilibrium that had existed for years between Aloha
and Hawaiian Airlines... and contributed to Aloha's March 2008
shutdown, after 61 years of operation. Aloha subsequently sued
Mesa, claiming that outcome was due to Mesa's "illegal"
Mesa's plan to acquire rights from Yucaipa to use the Aloha name
struck many as a guileful move, given the role go! played in
driving Aloha out of business. King drove that point home
Wednesday. "How about all the people whose lives were devastated in
this case?" the judge asked. "Doesn't that count? Is it just the
Without definitively responding in the affirmative to that
question, Yucaipa did point out it owns the rights to Aloha's
intellectual property, as part of a separate $750,000 credit bid
awarded last week.
That's a drop in the pan compared with the roughly $113 million
the company is owed from loans it either helped arrange for Aloha,
or made outright to the carrier. Yucaipa hoped the deal with Mesa
would help recoup that massive loss, in part by licensing the Aloha
brand for 10 years in exchange for a percentage of Mesa's
inter-island ticket revenue.
"Everyone knew we were in litigation with Mesa," replied Yucaipa
attorney Robert Klyman. "There was no restriction with what we
could do with the name."
For its part, Mesa is keeping quiet about the furor...but an
official with the local chapter of the International Association of
Machinists and Aerospace Workers called the agreement between Mesa
and Yucaipa "ridiculous."
"It's a scam to the public to be told that now (go!) is going to
use Aloha Airlines' name, because they had a good reputation," said
Randy Kauhane, assistant general chairman of District LOdge 141.
"It was the workers that built up the name. Let them do their own
thing without the Aloha name."