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The Honolulu Advertiser
Posted on: Sunday, November 19, 2006

go! vows to keep $39 one-way fare

 •  Airline CEO Ornstein makes many see red

By Rick Daysog
Advertiser Staff Writer

Mesa Air Group CEO Jonathan Ornstein launched go! as a Mesa subsidiary on June 9 with one-way tickets of $39, touching off a fare war with Aloha and Hawaiian. Some see the interisland competitor as a boon; others say it will increase fares once it drives out the competition.

GREGORY YAMAMOTO | The Honolulu Advertiser

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Interisland carrier go! says its cheapest one-way seats will never sell for more than $39.

Jonathan Ornstein, chief executive officer of Mesa Air Group which owns go!, said criticisms that the fledgling carrier will raise fares if one of its competitors goes out of business are groundless.

"The $39 fare will last as long as we are in Hawai'i," said Ornstein.

go! touched off a price war when it opened for business in Hawai'i in June with $39 one-way interisland tickets. The airline also has offered one-way fares for a limited time at $29 and $19.

Hawaiian Airlines and Aloha Airlines matched the discounts. Airlines typically don't say how many seats they sell at discounted prices.

How long the airlines can continue to fly with fares at $39 is open to question.

Local airline industry historian Peter Forman has his doubts that fares can remain at existing levels for too long.

Forman, a former airline pilot and author of the 2005 book "Wings of Paradise, said go!'s break-even point on its 50-passenger aircraft is about $2,000 per flight.

With its planes running about 65 percent full, go! would have to charge an average of about $61 per passenger, said Forman.

Forman added that go!'s interisland fares are much less than what it charges for flights of similar distance on the Mainland. The lowest one-way fare for flights between Albuquerque and Almogordo in New Mexico — which is similar in length to an Interisland flight — is $79, according to Mesa's Web site.

"If they do replace one of the carriers, average prices inevitably have to go up substantially from where they are today," Forman said.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.