go! owner vows to keep flying in Hawaii
The operator of go! is criticized by its own pilots in the wake of an $80 million fine
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Mesa Air Group Chief Executive Jonathan Ornstein, still absorbing the magnitude of an $80 million fine assessed against the company for misusing confidential Hawaiian Airlines information, said yesterday he has no intention of pulling go! out of the interisland market.
Meanwhile, Ornstein drew fire from his own pilots, whose union yesterday blamed senior management for a fine they said put the carrier's employees "in jeopardy."
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One day after being hit with an $80 million fine by a federal judge for misusing confidential Hawaiian Airlines information, Mesa Air Group's chief executive insisted that he has no intention of pulling go! out of the interisland market and said that Hawaiian should be the one to pull up stakes.
"Why should we leave just because they were here first?" asked Jonathan Ornstein, chairman and CEO of Mesa. "We're going to continue to compete."
He said Mesa will appeal Tuesday's ruling to federal District Court. The company has 10 days to file, but must put up the $80 million while pursuing the appeal.
Hawaiian had sought $173 million for 39 months of current and future damages. But Ornstein said if those numbers are accurate, "they're losing 10 times more money than we are. Our losses are a fraction of the combined losses of the other interisland incumbents."
Mark Dunkerley, president and CEO of Hawaiian, called the comments by Ornstein "smoke and mirrors."
"What we see coming out of the other side is a desire to kind of obscure what is a very straightforward issue," said Dunkerley, "which is an impartial judge looked at two years' worth of evidence and the conduct of Mesa and ruled very clearly and very cleanly that, based on the facts, that Mesa breached their contract with us and damaged us to the tune of $80 million."
Mesa also was criticized by its own pilots union, which issued a statement yesterday saying it was "shocked and appalled" by the developments that led to the fine.
"The actions of (Mesa Air Group's) senior management have put the future of Mesa Air Group and the livelihoods of their hard-working employees in jeopardy," said Michael Jayson, chairman of the Mesa unit of the Airline Pilots Association. "Although the negative publicity will soon die down, the financial impact of the Hawaiian Airlines decision -- if it is not overturned on appeal -- will likely be felt for years to come."
Ornstein lashed back at the pilots union, saying that Mesa's protection of its employees "has been unsurpassed in the industry" with only one furlough -- related to 9/11 -- in its history.
Investors both cheered and jeered the ruling by federal Bankruptcy Judge Robert Faris.
The stock of Hawaiian Holdings, parent of Hawaiian Airlines, soared 17.3 percent, or 76 cents, to $5.15 yesterday while Mesa's shares tumbled 8.8 percent, or 45 cents, to $4.65.
Faris said in his ruling Tuesday that Mesa used confidential information it obtained as a potential investor during Hawaiian's bankruptcy to gain a competitive advantage in entering the Hawaii market. He also ruled that Mesa Chief Financial Officer Peter Murnane deliberately destroyed evidence that Mesa had a duty to preserve and made it more difficult and costly for Hawaiian to prove portions of its case.
"The (destruction of evidence) is what made this case," Ornstein said. "It was not what they knew, but what they didn't know. Nothing was proved. It was still based on speculation. The judge said he had to assume that the evidence that was destroyed was damaging to Mesa. As the person who made the decision to enter the market, the assumption that somehow information from Hawaiian was part of our decision was incorrect. No matter how much Peter destroyed, it had nothing to do with our decision to enter the marketplace."