Scandal In The Hawaiian Islands
While the Hawaiian Islands are not normally associated without he under belly of aggressive competition in the airline industry, this is exactly what happened this week when two former partners went head to head in the US courts. Mesa Air Group had once been in talks with the now bankrupt Hawaiian Airlines group about putting together a joint venture, after Hawaiian Airlines hit a spot of bother.
As it transpires, this was just prior to Mesa Air Group’s launch of their own cut price airline, Go! which began operating in the Hawaiian islands. It now turns out that during the partnership talks, Mesa Air Group may have taken, and used, confidential information about the operations of Hawaiian Airlines to create budget airline Go!.
While Go! has been a great success in the area, it was the final nail in the coffin for any potential recovery in Hawaiian Airlines. Bearing in mind the situation, claims and counter-claims, a US Judge was brought in to issue a ruling on the accusations. Despite Mesa Air Group being adamant that they had done nothing wrong and they would win the case, they were shocked by an award of some $80 million in compensation to Hawaiian Airlines - far higher than estimates of between $10 million and $20 million at the very most.
As well as showing the aggressive competition which is very visible in the airline industry, it also highlights the amount of money at stake. Even though Mesa Air Group have some $200 millon in liquid funds (more than enough to cover the compensation ruling), they are taking the ruling to appeal, something which could take years to resolve, allowing Mesa Air Group to retain the $80 million for the time being.
This is no isolated story in the airline industry, with rumours and stories of double dealing and industrial espionage. However, when you consider the amount of money at stake, it is hardly surprising that some companies may decide to take drastic measures to protect their interests.