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
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
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
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