Mesa disputes $173M claim
Mesa Air Group yesterday disputed Hawaiian Airlines' claim that it is entitled to $173 million in actual and future damages as a result of Mesa's interisland carrier go! entering the market.
Mesa's attorney, Maxwell Blecher, told the U.S. Bankruptcy Court that -- even if the information Mesa got from Hawaiian is found to have been confidential -- the most Hawaiian would be entitled to is $4 million or $13 million, depending on how much interisland airfares change over the next two years, and when Hawaii returns to a two-carrier market.
Economics consultant Robert Wunderlich, hired by the Phoenix-based airline, said the local carrier would be entitled only to interest on the money it lost between the time go! was launched in June 2006 and March 2007, when Mesa could have started flying if its planning for go! had begun in April 2006, when the confidentiality agreement expired.
"The damages are based on the fact that Mesa could've entered the market in March," Blecher said, adding that the information Mesa received as a first-round bidder was "junk" and had no value to the company.
"The crown jewels (were) the route-specific information," which only the final bidders received, he said. "It's not the basis to award huge damages and drive people out of the market at the expense of Hawaiian consumers."
Hawaiian's attorney Sid Levinson said Mesa's damage estimates aren't valid because it is ridiculous to think airfare prices are going to rise after a year in a price war that has driven fares as low as $1.
"There's no serious prospect of prices increasing while there's still three players in the market if Mesa is one of those players," Levinson said.
Mark Dunkerley, Hawaiian's president and chief executive officer, said Mesa's plan all along was to drive out the weaker player, Aloha Airlines, and then raise the fares higher than they were before go! began.
"Clearly they have an agenda, which is to run an interisland company out of business," said Dunkerley. "This Robin Hood charade is just a fantasy."
Hawaiian is suing Mesa for $173 million in damages, plus $5 million in pre-judgment interest and attorney's fees, for misusing information Mesa obtained as a potential investor while Hawaiian was in bankruptcy. Hawaiian also is seeking a one-year injunction to prevent go! from selling tickets in Hawaii.
Bankruptcy Judge Robert Faris, who ruled last week that Mesa misused Hawaiian's information when it decided to enter Hawaii, has taken the case under advisement.
He didn't say when he plans to issue his ruling.