Go! lost $19.8M in its first 16 months
The carrier's parent reported a loss of $81.6 million for the 2007 fiscal year
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Mesa Air Group's go!, which heralded its arrival in the state in June 2006 as Hawaii's low-cost carrier, lost $19.8 million during its first 16 months of existence.
The Phoenix-based company, whose presence triggered an airfare war and lawsuits by incumbent carriers Hawaiian Airlines and Aloha Airlines, had an operating loss of $13.9 million in fiscal 2007 and an operating loss of $5.8 million in the four months it was in service in fiscal 2006, according to a filing with the Securities and Exchange Commission.
Go! had revenue of $34.8 million during the first 16 months, including $25.7 million in fiscal 2007 and $9.2 million in its only four months of operation in fiscal 2006.
On Monday, Mesa reported a companywide loss of $81.6 million in its fiscal year ended Sept. 30.
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Mesa Air Group's go!, the new interisland carrier that triggered a fare war with one-way prices as low as $1, lost $19.8 million during its first 16 months of existence.
The Phoenix-based parent company, which on Monday reported a loss of $81.6 million in its fiscal year ended Sept. 30, said in a Securities and Exchange Commission filing Tuesday that go! had an operating loss of $13.9 million in fiscal 2007 and an operating loss of $5.8 million in the four months it operated in fiscal 2006 after starting service in June of that year.
Go!, which currently operates four 50-seat CRJ-200s with an additional plane as a spare, had revenue of $34.8 million during the first 16 months, including $25.7 million in fiscal 2007 when its operating expenses were $39.6 million.
Go!'s revenue during its four months of operation in fiscal 2006 was $9.2 million -- with expenses of $15 million.
Mesa Chairman and Chief Executive Jonathan Ornstein, who on Monday called the company's overall earnings results "very disappointing," said he still believes in Mesa's strategy in Hawaii and the company's ability to achieve its long-term goals in the islands.
But Mesa faces some costly legal hurdles to remain in Hawaii.
In November, it put up a $90 million bond in the wake of a federal Bankruptcy Court judge's decision that Mesa misused confidential information obtained as a potential investor during Hawaiian Airlines' bankruptcy to gain a competitive advantage in entering the Hawaii market.
Judge Robert Faris also ruled that Mesa Chief Financial Officer Peter Murnane, since fired by the company, willfully destroyed computer evidence related to the Hawaiian case. Faris ordered Mesa to pay Hawaiian $80 million in damages, plus interest and attorney fees. Mesa is appealing the decision to federal District Court.
Aloha Airlines also has sued Mesa for allegedly misusing confidential information obtained as a potential investor during the Aloha bankruptcy and for implementing artificially low costs designed to drive Aloha out of business. That trial is scheduled for Oct. 28 in federal District Court.
Go!, whose presence has financially hurt its chief rivals, had made its basic one-way fare $39 until recently raising its lowest price -- along with Hawaiian and Aloha -- to $49 due to rising fuel costs.
In the 15-month period of July 1, 2006 through Sept. 30, 2007 -- the time frame with publicly available information that most coincides with go!'s entry into the Hawaii market -- Aloha lost $74.5 million and Hawaiian had net income of $1.9 million.