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Aloha: The Undead Airline?

November 28th, 2008 by Ryan Ozawa · 9 Comments · Business, Hawaii

If you can’t beat ‘em… kill ‘em, then reanimate their corpse as a corporate zombie. That appears to sum up the bizarre chain of events that will allow the much-maligned, Mesa-backed upstart go! Airlines to rebrand itself as Aloha Airlines.

Yes, the “intellectual property” of Aloha Airlines, a beloved interisland carrier that abruptly went out of business in March, will soon belong to Mesa Air, the Arizona-based company blamed for killing it.  It’s part of what’s emerging from the twisted labyrinth of wrangling by lawyers and creditors behind the late Aloha Airlines… the ghost of which still had a stake in a pending lawsuit against Mesa.

A brief recap: Both of Hawaii’s two legacy carriers, Aloha Airlines and Hawaiian Airlines, were struggling with bankruptcy and financial woes. Mesa came calling, claiming to be interested in buying or taking a stake in the companies. Instead, Mesa launched its own low-cost interisland service: go! Airlines.  The resulting fare wars brought $19 tickets, even $1 tickets, protests, and an avalanche of criticism from residents who were loyal to the home team.

The battles were even fiercer in board rooms courtrooms, as both Hawaiian and Aloha alleged that Mesa illegally used the information it got as a potential investor to help go! Airlines get a foothold in the Hawaii market.

Hawaiian won its suit against Mesa, and it looked like the Aloha lawsuit was heading the same way.  Internal e-mails revealed that Mesa’s plan all along was to drive Aloha out of business. Unfortunately, Aloha folded before the lawsuit was settled. But Aloha’s creditors decided to keep the lawsuit alive, even when the airline wasn’t.

Well, according to the Star-Bulletin, Mesa is now settling the lawsuit by giving top Aloha creditor Yucaipa Co. $2 million, 10 percent of its stock, travel benefits to former Aloha employees, and buying the Aloha Airlines name at auction next week.

For people who still feel deep resentment against go! for killing Aloha, this development only adds more insult to injury. If the deal goes through, we’ll soon see “Aloha Airlines” in the sky. But it won’t be Aloha Airlines.

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