April 01, 2008

Aloha, Aloha

Aloha Airlines went out of business yesterday after 61 years of mainly inter-island flying.

It was driven out in part by high fuel costs but mostly by an unsustainable price war brought on by the entrance of go! Airline, a deep-pocketed subsidiary of Mesa Air.

Prices got ridiculous. At one point last year go! was offering one-way tickets for as little as $9. The usual price had been around $89 round-trip until the company entered the market; currently a one-way ticket runs $49.

Aloha and Hawaiian (the other carrier) have pending lawsuits against go!, but Aloha couldn't hold out. Hawaiian won eighty million bucks in an earlier suit claiming go! and its corporate owners misused confidential information it had received when Hawaiian was looking for investors.

The bankruptcy comes as Aloha is suing go! for misusing confidential information to try to drive it out of business. Aloha has alleged that Mesa used proprietary records to launch go!

A similar lawsuit by Hawaiian Airlines resulted in an $80 million judgment against Mesa.

In that lawsuit, Hawaiian's lawyers disclosed e-mails in which Mesa's chief financial officer at the time, Peter Murnane, stated: "We definitely don't want to wait for (Aloha) to die, rather we should be the ones who give them the last push."

Ornstein previously denied that Mesa attempted to drive Aloha out of business. Ornstein testified that his company attempted to invest $20 million in Aloha.

Aloha's suit will go to trial in October.

Nearly 2,000 people are now out of work, thanks basically to greed on the part of a Mainland airline.

If you're planning to fly between islands out here, your choices just got smaller and your costs probably just got higher.

Posted by Linkmeister at April 1, 2008 08:45 PM | TrackBack

It saddens me to see things like this happen. And so many people out of work!

I was laid off last November, but am doing just fine and enjoying being home. Not too many people are that lucky.

I hope this unemployment problem and the losing of good businesses improve soon.

Posted by: cassie-b at April 2, 2008 07:21 AM