HONOLULU, Oct. 13 LAWFUEL – Legal News Network – In a suit filed today by Aloha Airlines, Inc., and Aloha Airgroup, Inc., in state Circuit Court, Aloha
said Mesa Air Group, Inc., received confidential information as a potential investor in Aloha and used it improperly to enter Hawaii’s inter-island
market with intent to drive Aloha out of business.
Aloha alleges in its suit that Mesa used Aloha’s proprietary
information to unethically compete in the Hawaii market by offering air
fares that failed to cover Mesa’s costs. Mesa’s Chief Executive Officer
Jonathan Ornstein has stated more than once that Mesa’s Go! can “fly empty” for five years with the profits from Mesa’s Mainland operations.
This indicates that Mesa is not covering its costs and is ultimately motivated
to offer unrealistic fares with intent to drive out competition from the
Aloha’s filing also points out that according to other legal documents,
Mesa’s Chief Financial Officer George Murnane III sent an e-mail message,
stating that Mesa’s entry would make “no sense” if Aloha remained in the
inter-island market: “We definitely don’t want to wait for them to die;
rather we should be the ones to give them the last push.”
As a result of the substantial and continuing economic harm brought on
by Mesa’s actions, Aloha is seeking damages and injunctive relief to stop
Mesa from competing unfairly, and threatening the jobs of 3,500 Aloha
Airlines employees in Hawaii.
“Mesa came to Hawaii under false pretenses, making false promises,”
said David A. Banmiller, Aloha’s president and chief executive officer.
“Aloha is not opposed to competition, we’re opposed to unfair competition, and a competitor whose objective appears to be the demise of Aloha Airlines, ultimately to the detriment of Hawaii’s consumers.”
The Aloha suit stated that Mesa signed two confidentiality agreements
in 2005 and January 2006 stipulating that Mesa would only use the
confidential information for the purpose of pursuing an investment. If
there was no investment, the agreements called for Mesa to promptly destroy
Aloha’s confidential information, including financial records, business
plans, internal forecasts, customer lists, and other highly sensitive data regarding projections for the inter-island market.
The filing alleges that Mesa improperly used the information to compete
directly against Aloha, with the ultimate goal of driving Aloha out of
An aviation services company registered in Nevada and based in Arizona, Mesa began inter-island service with its Go! subsidiary on June 9, 2006.
In its filing, Aloha noted that Mesa’s Ornstein admitted to
shareholders that Mesa’s decision to begin inter-island passenger service
in 2006 was based on confidential information obtained from Aloha and
Hawaiian Airlines during their bankruptcies.
Ornstein was quoted as telling shareholders: ” … we do have the
benefit of looking at both Aloha and Hawaiian when they were in bankruptcy … ”
Founded in 1946, Aloha Airlines is a Hawaii-based transportation
services company that provides inter-island passenger and cargo services,
transpacific service linking Hawaii with California and Nevada, and
contract aviation services throughout Hawaii.
Contact: Stu Glauberman
Phone: (808) 539-5947; (808) 722-7318
E-mail: [email protected]