Mesa Air calls Hawaiian Air afraid of competition

Hawaiian sues to block Mesa from initiating interisland flights in April

Mesa Air Group Inc., the Phoenix-based company that plans to start an interisland airline in Hawaii, blasted Hawaiian Airlines yesterday for a lawsuit that seeks a minimum two-year injunction to keep Mesa out of the market as well as monetary damages.

Jonathan Ornstein, chairman and chief executive of Mesa, said a suit filed by Hawaiian on Monday in federal Bankruptcy Court shows that Hawaiian is afraid of competition.

"I think in a progressive state like Hawaii, very few people will tolerate it," Ornstein said. "The lawsuit is totally without merit. They clearly enjoy a position where they can overcharge, and saw our new fares were half of what they were charging and decided to pull out all the stops to prevent us from entering the market. Given Hawaiian's confidence, I'm surprised they would do that because I thought they would welcome competition."

Mark Dunkerley, president and CEO of Hawaiian, said the airline is not afraid of competition but Mesa unfairly will be able to use information gathered under a confidentiality agreement when Mesa was a potential investor during Hawaiian's bankruptcy.

"We're certainly not afraid of competition," Dunkerley said. "Hawaiian, by almost any measure, is one of the best airlines in the United States and we look forward to the opportunity to compete freely with all comers.

"But there has to be a basic sense of fairness. Mesa agreed contractually that they wanted to have a look at our play book, we gave them our play book and they agreed not to use the play book. Now they want to compete against us with the benefit of having in their back pocket our play book. That's what we object to, not the competition."

In the court complaint, Hawaiian said the confidential information included "Hawaiian's proprietary knowledge of the markets and routes that it serves -- the 'crown jewels' of the company."

The complaint said the information included operating statistics from the beginning of 2004 through the end of 2007.

"In short, Mesa was provided, on a confidential basis, with much or even all of the analysis and information that a competitor would need to build a business plan to compete with Hawaiian in the interisland market," the complaint said.

Hawaiian said Mesa downloaded more than 60 documents containing more than 2,000 pages of information about Hawaiian's business.

Ornstein said yesterday that Mesa destroyed all the information 18 months ago when Mesa was told it was no longer one of the bidders being considered to buy Hawaiian. He said the agreement that prohibits Mesa from using the information expires about the time Mesa would start flying in the state.

But Mesa also had said in early 2004 that it had begun a study to enter the Hawaii market, Hawaiian said in its lawsuit.

Mesa has said it intends to start a new interisland carrier around the beginning of April with one-way fares as low as $43. The airline has long sought to establish a presence in Hawaii and even was one of the potential investors in Aloha Airlines.

Dunkerley scoffed at Ornstein's arguments that the information is dated.

"They clearly thought there was value looking for confidential information," Dunkerley said. "That's why they signed the agreement. They wouldn't have done so if they could have gotten it from public sources."

"The confidential information was used inappropriately as recently as a few weeks ago," Dunkerley added.

Ornstein said Mesa won't be deterred by the suit.

"It won't slow us down," he said. "It certainly isn't going to stop us from coming to Hawaii."

David Banmiller, president and CEO of Aloha, said the carrier does not want to get involved in the lawsuit.