go! No More?

If you're one of the many airline passengers and aviation enthusiasts who lamented this year's shutdown of Aloha Airlines, you may want to swallow an aspirin before reading this next story. On second thought... make that two aspirin, washed down with an adult beverage.

Mesa Air Group announced Friday it agreed to a settlement with the former controlling shareholder of Aloha, concerning a lawsuit stemming from Mesa's alleged wrongdoing over pricing. Most of the settlement terms are boilerplate, though one stipulation may cause severe agita among former Aloha employees and fans.

As ANN reported, in November 2007 a US Bankruptcy Court judge ordered Mesa to cough up $80 million in damages to Aloha's former interisland rival, Hawaiian Airlines, determining Mesa used information it obtained while bankrupt Hawaiian courted Mesa as a possible investor. That information included profitability figures for local and Hawaii-US mainland routes, and passenger profiles... which Mesa later used to launch its own airline, go!

Advertising fares as low as $29, the summer 2006 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 the March 2008 shutdown of the former. Aloha subsequently sued Mesa, claiming that outcome was due to Mesa's "illegal" practices.

Under terms of the settlement announced Friday, Mesa admits no wrongdoing in bringing about Aloha's demise... but it will make a cash payment of $2 million to Aloha's biggest shareholder. Mesa will also issue shares of its common stock equal to 10% of its currently outstanding shares, and will provide some inter-island travel benefits to former Aloha employees.

That's the boilerplate stuff. This isn't: "In the event the shareholder is able to purchase the "Aloha" name in the upcoming bankruptcy court auction, it will license the "Aloha" name to Mesa."

Translation -- the upstart airline many blame for bringing about the collapse of a storied, well-regarded 61-year-old carrier, may soon carry the name of that very airline. It's not a done deal just yet... but Mesa CEO Jonathan Ornstein apparently expects that to happen soon.

"We are extremely pleased to resolve all claims put forward in this litigation and look forward to re-branding service under the Aloha name in the near future," said Ornstein. "This settlement resolves all claims by Aloha Airlines related to Mesa's entry into the Hawaiian inter-island market and permits us to focus solely on our core competency of providing the best service, convenient schedules and low fare pricing to our customers.

"We intend to carry on Aloha's proud tradition, maintain Mesa's status as Hawaii's low cost air carrier and look forward to future growth opportunities made possible by this settlement," he added.

It's worth noting go! has been a consistent money-loser for Mesa since its inception, contributing over $34 million in red ink from June 2006 through July of this year. Such is the price of assimilation...

FMI: www.mesa-air.com