Mesa countersues Hawaiian

Aviation International News » April 2006
September 20, 2006, 11:49 AM

In what promises to unfold as another controversial chapter in Jonathan Ornstein’s colorful tenure as CEO of Mesa Air Group, the Phoenix-based regional carrier and Hawaiian Airlines have locked legal horns over the fiery chief executive’s plan to enter the inter-island Hawaiian market this spring with 50-seat Bombardier CRJs.

Mesa has accused Hawaiian of various anti-competitive activities in a lawsuit that charges the Honolulu-based airline with, among other things, conducting a road show intended to discourage interest in Mesa by potential investors. The suit came a month after Hawaiian’s request for a court injunction that, if granted, would bar Mesa from competing in the inter-island market for at least two years.

The Hawaiian Airlines suit, filed February 13 in a federal bankruptcy court, alleges that Mesa used confidential data it collected for a proposed buy-in of then-bankrupt Hawaiian in 2004 to craft its own business plan. A confidentiality agreement signed in April 2004 prevents Mesa from using the information to gain a competitive advantage for two years. Although Mesa doesn’t expect to start revenue flights until after that two-year term expires, Hawaiian points out that Mesa admitted in a press release that it started planning for the operation, known internally as Project Hele, early in 2004.

Hawaiian claims Mesa downloaded more than 60 documents containing proprietary knowledge of the markets and routes that it serves and quarterly traffic projections through the end of next year. Mesa claims that it destroyed all the material a year-and-a-half ago and that because the “original” Hawaiian Airlines ceased to exist once it reorganized last summer, today’s entity enjoys no legal standing to ask Mesa to return the information.

For its part, Mesa claims in its suit that Hawaiian’s alleged campaign to disparage its name to potential investors violated the Sherman Antitrust Act, as did its alleged attempt to coerce freight forwarders into refusing Mesa cargo shipments to Hawaii. According to the suit, Hawaiian told the freight forwarders that it would not accept any Mesa cargo on its Boeing 767-300s–the only widebodies available for direct shipments from Phoenix to Hawaii. Mesa also filed for an injunction to bar Hawaiian from continuing activities it alleges constitute antitrust violations, and asked to have the case moved to federal district court for a jury trial.

Mesa plans to serve Hilo, Kona, Kauai and Maui from Honolulu starting before the end of June, the precise timing dictated by logistical matters such as moving airplanes and parts to Hawaii and settling leasehold details with the state Department of Transportation.

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