Carrier blames new entrant Go! for fiscal troubles

Is there enough room in Hawaii’s busy inter-island travel market for three airlines? Apparently not: Since Mesa Air Group launched a new inter-island competitor, called Go!, in late 2006, all three airlines in the market have been losing money – including Go! as well as Hawaiian and Aloha Airlines. Now Aloha Airlines’ parent, Aloha Airgroup, Inc., has filed for Chapter 11 bankruptcy. Aloha asked the bankruptcy court to approve a new financing agreement with General Motors Acceptance Corp. that will provide it with the funds to keep operating during reorganization. In its filing, Aloha blamed its poor financial condition squarely on “predatory pricing by Mesa Air Group’s Go! airline.” Aloha said that it was “forced to match Go!’s below-cost fares at a time when the airline industry was facing unprecedented increases in the cost of jet fuel,” and it referred to Go!’s pricing tactics as “illegal actions.” In its first 16 months of flying, Go! reported operating losses of $20 million.