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Mesa Air Group will have to pay Hawaiian Airlines $80 million in a breach of confidentiality suit.


Go! lawsuit won’t calm Hawaii airline industry

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Nov 06, 2007

THE prospect of higher interisland air fares has constantly hovered on the horizon even as Mesa Air Group's go! jumped into the Hawaii market last summer with an aggressive pricing line that forced the state's established carriers to cut their ticket prices.
A federal judge's ruling in a dispute between Mesa and Hawaiian Airlines could accelerate price increases should go! leave the islands, which doesn't seem likely at the moment. But sooner or later, the pressure on airlines' bottom lines will become untenable, and unless one or the other finds a way to reduce operating expenses further, Hawaii might lose an airline, and travelers will pay more as competition decreases.

With government unable to interfere, consumers can do little but enjoy cheaper fares while they last. Such is the nature of free enterprise.

Mesa has been ordered to pay Hawaiian $80 million in damages for having breached a confidentiality agreement made when it was considering investing in Hawaiian. The court agreed with Hawaiian's claim that Mesa improperly used material to gain a competitive edge when the Arizona company later decided to start flying in the islands.

Mesa's cut-rate tickets were roundly hailed by passengers who felt pricing by Hawaiian and its chief competitor, Aloha Airlines, was too much to bear for short hops between islands. Be that as it may, both had been struggling financially for years, filing for bankruptcy after the 9/11 economic downturn and an attempt at a merger.

Aloha also has filed suit with similar claims against Mesa and until that case concludes and appeals by Mesa run their course, Hawaii's airline industry will remain volatile.

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Go! lawsuit won’t calm Hawaii airline industry
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