go! airline, the interisland carrier known for low fares, lost nearly $20 million during its first 16 months of operations, according to a federal filing yesterday.
go! remains committed to Hawai’i for the long term, but “clearly, we’re disappointed with our results,” said Jonathan Ornstein, CEO of go! parent Mesa Air Group.
go!’s low fares helped boost interisland passenger traffic but have exacted a heavy financial toll on the airline and Hawai’i’s dominant interisland carriers — Aloha Airlines and Hawaiian Airlines.
Since go!’s launch in June 2006, Aloha and Hawaiian have lost a combined $64.7 million.
go! began service with a standard price of $39 for a one-way interisland ticket, or about half of what its competitors were charging.
go! recently raised its basic price by $10 to $49 due to the soaring price of fuel. Hawaiian and Aloha matched the higher rate. The additional $10 will likely add $6 million to $7.2 million in revenues a year based on go!’s passenger counts, which range between 50,000 and 60,000 a month.
In a 104-page filing with the Securities and Exchange Commission, Mesa said go! had an operating loss of $13.7 million in the year ending Sept. 30, 2007. That was on top of an operating loss of $5.9 million for go! during Mesa’s 2006 fiscal year. Those results do not include a recent $80 million court judgment against Mesa for misusing confidential information.
“Hawai’i has never been friendly to a third carrier, and this is further evidence of that,” said Scott Hamilton, a Washington aviation industry expert. “I think that Mesa would be much better off to exit out of the market.”
go! generated nearly $25.7 million in operating revenue during its 2007 fiscal year and had $13.1 million in assets, according to the filing.
Randall Cummings, a seven-year Aloha pilot, said go!’s losses provide further evidence that Mesa’s pricing scheme is designed to drive Aloha and Hawaiian out of business.
“It’s definitely part of a predatory plan,” Cummings said.
Yesterday’s filing comes on the heels of Phoenix-based Mesa’s announcement on Monday that its entire Mainland and Hawai’i operations lost $81.6 million during its 2007 fiscal year. Mesa’s loss included a record fourth-quarter net loss of $68.2 million.
Mesa attributed the weak results to an October ruling by federal Bankruptcy Judge Robert Faris ordering Mesa to pay Hawaiian Airlines $80 million for misusing confidential business information.
Hawaiian had sued Mesa alleging that Mesa received hundreds of pages of confidential financial information about Hawaiian’s routes, marketing plan and financial projections while Hawaiian was in bankruptcy and improperly used the material to launch its own interisland carrier.
Mesa is appealing the decision and said it expects the judgment to be set aside.