The only jet competitor to Hawaiian Airlines flying between the islands, go!, shuts down next week. This cements Hawaiian’s near-monopoly in the interisland market for now, yet you don’t hear a lot of people complaining. go! takes a lot of bad-will with it as it flees back to the mainland.
When it began flying in mid-2006, go! became best known for ignoring all punctuation and grammar rules. It also became known as the Aloha-killer (on many levels). Make no mistake, both of the interisland carriers in Hawai’i were on the ropes before go! started. Hawaiian and Aloha were both bankrupt with Hawaiian exiting in 2005 and Aloha following in 2006, but go! helped push Aloha out of business in what became quite the soap opera.
During that time, Mesa Air Group decided to come sniffing around the books of both airlines. Mesa originally acted as if it was an interested party in bringing the airlines out of bankruptcy. Mesa was feeling creative in those days, and this could have been an opportunity to place airplanes in Hawai’i with a partner.
What happened next was the exact opposite of partnering. Mesa took the information it gleaned from the books and used it to create a business plan and find investors for its own airline. That airline was go!, and when it launched in June 2006, there was a swell of anger directed at the airline. What’s more, as fuel prices crept up, go! continued to sell tickets for extremely low fares. (Yes, the airline was doing this while flying expensive 50-seat CRJ aircraft.)
The response from the islands was fierce. Airline employees formed the H.E.R.O. (Hawaii’s airline Employees Repelling [Mesa CEO Jonathan] Ornstein) group to fight go! tooth and nail. It got so vicious that Mesa even sued some of the participants in the group.
During this time, Mesa was sharpening its focus with go!. Mesa’s Chief Financial Officer at the time sent an email saying “We definitely don’t want to wait for them (Aloha) to die; rather we should be the ones to give them the last push.”
The result was what you probably expected. While Hawaiian Airlines survived, the flood of capacity and low fares was too much for Aloha. After more than 60 years of flying in the islands, Aloha shut down on March 31, 2008. Would Aloha have survived had go! never existed? It’s hard to know. But it’s probably safe to say that at the very least it would have lasted longer than it did if it didn’t have to fight ultra low fares that left everyone unprofitable.
The immediate aftermath was not good to Mesa. One lawsuit over Mesa’s misuse of information resulted in Hawaiian being awarded more than $80 million in court. (Eventually, Mesa agreed to drop its appeal in exchange for a $52.5 million payment to Hawaiian.)
A similar lawsuit from Aloha ended up being settled without Mesa admitting any wrongdoing. The settlement, however, was substantial. The majority shareholder of Aloha got $2 million and 10 percent of Mesa’s outstanding shares. Former Aloha employees got interisland travel benefits on go!. And the dagger… the majority shareholder agreed that it would try to acquire the Aloha name in bankruptcy court. If it did, it would license it to Mesa to replace the go! name with Aloha. That was probably the most disrespectful thing that could have been done, and the outrage was deafening.
Even US Bankruptcy Judge Lloyd King got into the act. After considering the sale of the Aloha name, he rejected Mesa’s effort to use it. He did not mince words, saying that “Mesa entered the Hawai’i interisland air market with the intention of forcing Aloha out of business.” He added, “It is difficult to imagine a court overlooking what Mesa has done and putting its stamp of approval on Mesa’s subsidiary, go!, becoming Aloha.”
With the issue of the name behind it and the chances of Aloha coming back slim to none, go! turned to trying to make a profit. It didn’t succeed. It did raise fares from the historically low levels with which it started. At one point, little Mokulele decided to partner with Republic to try its own hand at interisland service. Mokulele and go! ended up agreeing to work together before it all fell apart, once again leaving go! on its own.
There were rumors that Island Air, recently bought by Larry Ellison, was interested in buying go! to grow its operation. That never came to fruition. go! continued to flounder in its shrunken state. (It only had a couple airplanes in the end.)
Finally, on Monday, Mesa announced it was pulling the plug. Just two weeks after announcing its death, go! would stop flying and disappear completely from the islands. Mesa says it is going to focus its efforts on its growing mainland business flying for other airlines. That business looked dead just a couple years ago, but now it has signed new agreements to add airplanes with both United and US Airways. I have no doubt Mesa needs those pilots on the mainland.
The only puzzling piece of the closure announcement is that the airline says it is “re-deploying the go! aircraft to support our existing mainland operations.” That’s odd since Mesa doesn’t operate any other 50 seat jets. You wouldn’t think there would be a place for them, but maybe they’ll be transition airplanes or something.
While there will be some job loss in Hawai’i, there are many more people celebrating the demise of this operation. Former Aloha CEO David Banmiller said “Go was a parasite and destroyed so many people’s lives.” While go!’s demise won’t bring Aloha back, it is cathartic for many in the islands, and it does close an ugly and turbulent chapter in the history of Hawaiian aviation.
There is one unfortunate side effect of go!’s disappearance. Now, Hawaiian Airlines will completely dominate on major routes with just a couple of smaller players on the periphery. That may mean higher fares unless an existing airline steps up its game or another airline comes in. Could that happen? Maybe. Wouldn’t that be interesting.