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.
29 comments on “go! shuts! down!”
What is the appetite for one of the big 3 (UA/DL/AA) to have an inter-island operation? United has a pretty big operation in HNL – and they have a whack of E70s on the way. Could there be a niche there? Or are the big guys not looking for niches and concentrating on the Mainland?
James – I know United did sniff around Aloha back in bankruptcy, but I don’t know that they have an appetite for it now. They have better uses for those big regionals than sending them to Hawai’i. It’ll be an uphill battle to take on Hawaiian. But I do think if anyone might be interested, it could be Alaska. Bring some Q400s down there.
Ill advised airline from the start, same with their little escapade in China. Real shame that they killed off a great (albeit weak) airline in Aloha. I hope some quality competition arises in Hawaii, having just one dominant carrier is not good. Especially on the now monopoly route into ITO.
So odd to me that a judge has the purview to say what private entities can and cannot due with their intellectual property based on the perceived misbehavior of one of the entities. When did that become something a federal judge should even consider looking into?
A bankruptcy judge has almost total discretion as to the sale and transfer of assets. Here in Hawaii, we take a dim view of Haole companies coming in, destroying what is part of our heritage (Aloha) and then absconding with their good name. “Stealing Heritage” may not have much legal basis, but, thankfully, a Hawaiian judge thought it did, and unless the parties were willing to pay for an appeal to the Federal courts, that’s where the decision lay.
‘go’ was always a dumb name anyway and did not give people an island feel. There does need to be another bigger player in the market, so either some one new will start up or maybe United or Delta will start a regional of their own to feed their flights and move millions of locals and tourists around the islands. Since both fly to the mainland and to international points, it seems to make sense for them.
due = do
As much as I hated Go and their encroachment into the islands and their destruction of Aloha, at least for the past couple years they were keeping Hawaiian honest. Inter-island Fares have skyrocketed over the past several months, coming close (and I’m not kidding) to the point where instead of say, KOA-HNL, you could do KOA-LAX-HNL for the same dollars. Further, Hawaiian has completely lost their Aloha. The line employees are rude, surly and totally unreasonable.
My hope is that Larry Ellison is just tweaked enough at Hawaiian right now that he will pu;ll ot some of his famous F.U. money and make Island Air a contender.
I would not be shocked to See Island Air buy CRJ-700,900,or even 1000s maybe even 736s and try to compete on HNL-OGG and HNL-KOA HNL-LIH and use the ATRs on flights to East Maui and Hana or the other smaller sized airports sorta like they are doing now
Jeremy – Well, one thing I’ll say. You could probably get those 737-600s for nothing!
Sure, the 736 might be cheap, but the CFM56 is so poorly suited to interisland operations that they’ll spend a fortune on the engines. Ask those who remember about their experience with the 737-300 and -400 on interisland flights, and the occasional -700 interisland flight. The CFM56 needs more time at cruise and/or on the ground to cool off than the ultra short flights with quick turns schedule that interisland demands.
Ant That true
Is there any example among our 50 States where the structure of commercial airline service within the State, pure intrastate service, should look like? Something comprehensive, well-run, reasonably-priced, and capable of making a profit?
No? Seems like someone could figure this all out, or is this a case where the free enterprise, capitalist system just won’t, and never will be able to work effectively and in the best interests of its State citizens. Maybe, 50 open, honest, State Departments of Commercial Aviation regulatory bodies, of the People, by the People, and for the People…and I believe in the tooth fairy, too!
Where else is intra-state relevant, and not kept in check by the automobile? As far as I am aware, the list consists of Alaska (for “else”).
There is a reasonable level of intra state flying in Texas, but there you have the hubs of United and American, along with Southwest, providing general competition and availability. That’s more or less the same story for California, I think (big airlines, big hubs, big cities). The relative degree of demand is much less in Florida (and hence the market is under developed, and basically not relevant…).
Original story was about jet service. What does jet service matter for inter island (intra state) flying, perception of Jet > Prop aside? I think the one time I went to Hawaii for personal reasons (been there a few times on business, but that was just to Honolulu) we were on props between HNL and OGG. Props is what you get in and around Alaska (I go there on business as well…).
The Jet > Prop perception is a pretty big one in Hawaii. The winds between the islands can be pretty turbulent and the ride definitely seems smoother in a jet. I don’t know if it’s because the 717/737/DC-9 smooth out the bumps better than a Dash 8 (I haven’t flown Island Air since they got the ATRs) or if the jets can get to cruise altitude (such as it is) a bit quicker.
Luggage capacity is an issue too. Sometimes people are going on shopping trips to HNL or traveling with a surf board. The big jets (the distinction here being that the CRJ-200 is no better than a prop in this regard) have more cabin space for carry ons and bin space for checked bags, surf boards, etc.
Also, some of the locals are, shall we say, big. I don’t know how they fit comfortably jammed into a CRJ.
“Where else is intra-state relevant, and not kept in check by the automobile? As far as I am aware, the list consists of Alaska (for “else”).”
Interesting question, DAB. Florida and California come to mind after thinking about it for some time.
Just checked fares and travel time on Tallahassee to Miami. You can drive it in 7 hours, 23 minutes, or buy a round trip ticket on US (nonstop) for $348.
Yikes!
JM
WN could do this if they ever figure out how to put life vests for all seats.
JayB – Well, Alaska is the only other place that has a geographical reason for requiring air service. The other states all only have established air service because of the distances between major cities. Texas and California are the only ones that ever developed a real intrastate air service market. California was the first with PSA and then AirCal. It was PSA that inspired Southwest in Texas.
Flew go! a couple weeks ago. Definitely looked liked they were about to shut down. Flight was rescheduled a couple weeks before and there was no communication. Went to check my bags at HNL and there were two couples ahead of me. It took 45 minutes. The one agent was completely overwhelmed and was telling people to use the kiosks, but none of the kiosks worked. Wouldn’t print anything out or take your credit card payment.
There needs to be some competition, but go! definitely needed to go!
what goes around comes around….Mesa’s devilish practices….has driven them out of hawaii. they found out you cannot make money flying 50 seat jets even if you pay your pilots peanuts. the most cost effective planes for inter island flying are large turboprops….too bad there is not a Shorts-360-300NEO(presurrized version).
Not! Surprised!
It will be interesting to see if any meaningful competition arises in the interisland market. In any event, it will have to be well capitalized.
This pretty much confirms the rumors that Mesa has been unable to hire enough to pilots to staff the airplanes they’re getting. I bet their E175 deployment ends up being much slower than planned.
Hawaiian is a great airline for non-elite passengers. They answer their phone reasonably promptly and the people who answer know their stuff. Seat pitch in economy is 32 inches, a standard that now seems luxurious compared to many majors. Their transpac jets are 2+4+2 seating instead of something more cramped. Its employees deserve to work for an airline that is not going to go bankrupt and go back on its promises to them. Passengers should be willing to pay a bit more for a more comfortable airline.
Seems to me this could be a perfect opportunity for Alaska/Horizon (of which I’m a shareholder, btw) to slip into the inter-island game. Alaska has already quietly become the largest-lift airline from the West Coast to the Hawaiian Islands, with routes from unexpected spots like Bellingham (my fave) and San Diego. But once Alaska’s fliers are land on an island, they are stuck there with only really Hawaiian to get them to any other island. Seems to me it could be a great opening for Alaska.
So, I have tickets on Go ten days from now. Do I just make reservations on Hawaiian and hope that my credit card will make good on this? Any advice appreciated.
john – go! is recommodating people when there’s room. See everything you need to know here;
http://www.iflygo.com/
Maybe it is the pilots they want to redeploy, not the 50 seat aircraft
How does an RJ deploy outside its range? Can they reach the West Coast?
They remove all the seats and install portable fuel tanks in the cabin to use.