CINDY ELLEN RUSSELL / CRUSSELL@STARBULLETIN.COM
"On one hand, our competitors are complaining that the fares are too low, and on the other hand they're adding capacity. I can't save them from themselves."
Chairman and chief executive, Mesa Air Group
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One year flying Hawaii
» Mesa CEO Jonathan Ornstein calls the interisland battle "fun" and vows not to back down.
Jonathan Ornstein won't say what lengths he'll go to attract passenger traffic to go!, but the head of parent company Mesa Air Group said the seat capacity in the interisland market will have to be reduced if Hawaii's three main carriers expect to co-exist.
"On one hand, our competitors are complaining that the fares are too low, and on the other hand they're adding capacity," said Ornstein, the chairman and chief executive of Mesa. "I can't save them from themselves."
As Mesa Air Group prepares to celebrate the one-year anniversary Saturday of its new interisland service, the $9 one-way fares that go! rolled out two weeks ago represent yet another marketing move aimed at carving out a larger slice of the Hawaii market.
Ornstein said Hawaiian Airlines and Aloha Airlines have both expanded interisland service since Mesa announced in September 2005 its intention to enter the Hawaii market, and that the increase in capacity that is driving down load factors.
However, he thinks the three carriers can co-exist if capacity is reduced.
"There's clearly enough traffic to support three carriers," Ornstein said. "The question is not the number of carriers, but the capacity that each carrier puts into the market. With only 8 percent of the capacity, I don't think that go! is the issue."
Hawaiian spokesman Keoni Wagner said the increase in capacity "has all been at Mesa's instigation."
"Hawaiian, like any competitor in a market like the interisland market, will always match the schedule offering of its competitors," Wagner said.
Aloha, likewise, said it won't let go!'s presence dictate seating capacity.
"Aloha does not need to justify its current level of service," Aloha President and CEO David Banmiller said. "Aloha has been operating flights at this level of frequency in Hawaii for many years. Our high-frequency service fits the needs of our customers. Mr. Ornstein wants to steal the market, and so he asks Aloha and Hawaiian to reduce capacity so that go! can drive us out of business and ruin the lives of 7,000 island families."
Analyst Ray Neidl, who covers Mesa for New York-based Calyon Securities, doesn't think Ornstein will buckle from the competition.
"They're in this for the long term," Neidl said. "They think it's a viable market for the product they're offering and they do offer a good service."
Neidl, though, said he recognizes the danger of overcapacity in the market.
"There's too much capacity in the interisland market and that's something that has to give," he said. "We'll see who cries uncle first."