Judge Rules Carrier Used Confidential Information

Mesa Air Group's new low-cost carrier will cost them some big bucks. A US Bankruptcy Court judge ruled Tuesday Mesa illegally used confidential information obtained from Hawaiian Airlines to launch its new go! interisland airline... and ordered Mesa to cough up $80 million.

The Associated Press reports Judge Robert J. Faris ordered the fine to compensate for damages Hawaiian Airlines has incurred since go! entered the Hawaii market.

Faris determined Mesa used information it obtained while a bankrupt Hawaiian Airlines courted Mesa as a possible investor -- including profitability figures for local and Hawaii-US mainland routes, and passenger profiles -- to turn around and launch its own airline. The judge said Mesa breached a confidentiality agreement when it failed to return the information to Hawaiian, or destroy it.

Faris rejected Hawaiian's request to ban Mesa from selling interisland tickets for one year, however, and he refused to order Mesa to compensate Hawaiian for future damages. The airline had sought such damages to compensate for what Hawaiian believes are the unnaturally low fares that have resulted since go! launched -- to an average of $40.

Still, Hawaiian president and CEO Mark Dunkerely called the ruling "a triumph for fair competition and ethics over dishonesty and illegal behavior."

Mesa has maintained it studied the Hawaiian market for years, and it launched go! because Hawaiian Airlines and Aloha Airlines were charging too much.

Faris said it's inevitable all three airlines will soon have to raise fares, due to financial losses despite an increase in passenger traffic. Hawaiian and Aloha lost a combined $82.1 million for 2006, according to the AP.

FMI: www.hawaiianair.com, www.mesa-air.com/go.asp