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The Honolulu Advertiser
Posted on: Friday, November 9, 2007

KEY FIGURE IN HAWAI'I AIRLINE SUIT
Suspended exec at Mesa's China launch

By Rick Daysog
Advertiser Staff Writer

Mesa Air Group executive Peter Murnane, whose destruction of evidence resulted in an $80 million judgment against Mesa and who has since been fired, took part in the launch of the company's new China airline, even though he was supposed to be on administrative leave for alleged misconduct.

Murnane, Mesa's longtime chief financial officer, attended an Oct. 27 ceremony in China marking the launch of Kunpeng Airlines, a joint venture between Mesa and China-based Shenzhen Airlines.

But according to a Sept. 21 filing with the Securities and Exchange Commission, Murnane was on administrative leave pending the outcome of an internal investigation into his destruction of key evidence.

Jonathan Ornstein, Mesa's chief executive officer, said Murnane, a member of Kunpeng's original board, attended the event at the request of Mesa's partners in China.

Murnane, who was fired Monday by Mesa, has resigned from Kunpeng's board or is in the process of doing so, Ornstein said.

"It was in deference with our Chinese partners and it was their recommendation that he attend," Ornstein said.

Murnane declined comment.

He was fired after U.S. Bankruptcy Judge Robert Faris ordered Mesa to pay $80 million to Hawaiian Airlines, which alleged that Mesa used confidential information to launch interisland carrier go! last year.

Ornstein has said the ruling "went too far" and that Mesa will appeal.

Murnane's participation in the Kunpeng Airlines' launch could become an issue in court proceedings relating to Mesa's planned appeal.

As part of its appeal, Mesa must post a bond for the full $80 million, unless Faris were to grant Mesa a stay pending the outcome of such an appeal.

A hearing on the matter is scheduled Tuesday.

Scott Hamilton, a Washington state-based aviation industry consultant, said it isn't unusual that Mesa's partners sought Murnane's presence at last month's launch.

"Knowing the Chinese culture and having done business there myself, the Chinese are very big on ceremony and protocol," he said.

"If they had requested that Peter be there, then it would be natural for him to be there."

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.