The fare war that killed Hawaii's Aloha Airlines

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Its history went back to before Hawaii was a state.

Passengers check in at the Aloha Airlines counter at the Honolulu International Airport, Sunday, March 30, 2008, in Honolulu, one day before it halted all passenger service, signaling the end of an airline that had served Hawaii for more than 60 years.After 61 years of service, Aloha Airlines flew its last flight on March 31, 2008 — an interisland hopper from Maui that landed in Honolulu at 10:34 p.m.

Aloha and Hawaiian Airlines, both founded when Hawaii was just a territory, had dominated Hawaii’s air travel for decades. Other airlines tried to compete, but they didn’t last long. However, when Go! and its Phoenix-based parent Mesa Air Group entered the market in 2006, it proved to be a ruthless competitor.

“We have a very strong balance sheet with $300 million in cash,” Mesa’s CEO, Jonathan Ornstein, said in a 2006 Associated Press article. “So we can stay here and continue to make this work for a long time.” Citing unfair competition, employees of Hawaiian Airlines, Aloha Airlines and Island Air created an independent group called H.E.R.O. .

Both Aloha Airlines and Hawaiian Airlines sued Mesa Air Group for misuse of confidential information. They accused Go! of using trade secrets, such as routes, pricing and profitability, that it had gathered as a potential investor during their bankruptcy to drive out the competition.

Founded as Trans-Pacific Airlines in 1946 by Hawaii businessman Ruddy F. Tongg Sr., Aloha Airlines was created in post-war Hawaii when prejudice to minorities was high.

 

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