StarBulletin.com

Go! carries more passengers but load factor slips


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POSTED: Monday, December 15, 2008

Mesa Air Group, embroiled in litigation to rebrand its go! aircraft with the name of the now-defunct Aloha Airlines, said today that the percentage of seats filled on go!'s planes in November dropped 6.6 percentage points from a year ago but the number of passengers carried rose 1.3 percent.

  The Phoenix-based carrier said it had a load factor of 63.86 percent last month versus 70.43 percent a year ago. Its traffic numbers rose to 55,591 from 54,895.

“;We are encouraged by the increase in passengers we experienced year over year in spite of the current economic downturn,”; Mesa Chairman and Chief Executive Jonathan Ornstein said.

“;Advance bookings remain above last year's numbers and our recent settlement of our lawsuit with Aloha has given us another reason to be optimistic. The settlement resolves all claims made by Aloha Airlines and permits us to focus on our longstanding objectives of providing the best service and the lowest fares to the people of Hawaii.”;

Go!'s available seat miles, or one seat transported one mile, rose 13.2 percent to 12.7 million from 11.3 million while revenue passenger miles, or one paying passenger transported one mile, gained 2.7 percent to 8.1 million from 7.9 million. Go!'s on-time performance rate was 81.9 percent compared with 86.6 percent a year ago.

Mesa's attempt to license the Aloha name under a lawsuit settlement with Yucaipa Cos., the former controlling shareholder of Aloha that bought the lawsuit, was temporarily blocked by federal Bankruptcy Judge Lloyd King earlier this month after King attacked the lack of sensitivity of both Yucaipa and Mesa in the wake of the 2,000 jobs that were lost by Aloha's shutdown on March 31. Aloha had sued Mesa over predatory pricing and using proprietary Aloha information.

A hearing was scheduled for Feb. 19 to give both supporters and opponents of the proposed licensing agreement more time to respond.

Despite the continuance, Mesa and Yucaipa still were able to settle their lawsuit since the licensing of the Aloha name was conditioned on the court's approval and wasn't needed for the settlement.

As part of the settlement, Mesa agreed to pay Yucaipa $2 million; issue Yucaipa 10 percent, or approximately 2.7 million shares, of Mesa's common stock; and provide interisland travel benefits to the 3,500 former Aloha employees who were with the company at the time of its March 20 bankruptcy.

The travel benefits allow the former Aloha employees to receive six space-available round-trip passes per year during the life of the licensing agreement.

“;At today's ticket prices, this benefit is worth approximately $2 million a year and $20 million over the life of the licensing agreement,”; Ornstein said.

Under the settlement, Yucaipa, which won an auction to acquire Aloha's intellectual property rights, would license the Aloha name to Mesa for 10 years in a deal in which Mesa would pay Yucaipa at least $600,000 a year, or 1 percent of Mesa's interisland passenger ticket revenue.

In addition, Mesa would pay Yucaipa 30 percent of Mesa's pretax operating profits from Mesa's Hawaii operations, excluding the revenue payments.