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The Honolulu Advertiser
Posted on: Friday, October 5, 2007

Hawaii rival airlines wrapping up trial

By Rick Daysog
Advertiser Staff Writer

The legal battle over Hawai'i's airways came to a rest yesterday with each sides accusing the other of attempting to reduce competition to raise fares.

In closing arguments in Hawaiian Airlines U.S. Bankruptcy Court lawsuit against Mesa Air Group and interisland carrier go!, Hawaiian argued the two-week trial demonstrated that Mesa executives misappropriated confidential Hawaiian documents to jump start go!

Sid Levinson, attorney for Hawaiian, said Mesa's business plan for go! also showed that Mesa "wanted to displace Aloha Airlines and raise fares to 105 percent of where they were."

"We had an agreement with Mesa, we provided them with our confidential information, they misused it, they hid that, they lied about that fact, they destroyed key evidence and they entered the Hawai'i market," said Hawaiian's Chief Executive Officer Mark Dunkerley.

"They clearly have an agenda to run an interisland carrier out of business and (their) Robin Hood charade is just a fantasy."

Hawaiian is suing Mesa for $173 million in damages, alleging Mesa used confidential financial data from Hawaiian to set up go! If Hawaiian wins its case, Mesa could be forced to shut down go!, according to airline analysts.

Max Blecher, Mesa's attorney, called Hawaiian's suit "a lot of bunk because Hawaiian wants to kick us out of the market."

Blecher said none of the documents provided to Hawaiian was confidential and that the information could be retrieved from public sources. If any damages should be assessed by the judge, the amount should be no higher than $13 million, Blecher said.

Blecher denied that Mesa attempted to drive Aloha out of business, saying Mesa once proposed a $20 million joint venture with Aloha when the state's No. 2 airline was in bankruptcy. Aloha emerged from bankruptcy in February 2006.

"Their own documents showed that they feared us because we're a strong competitor who can charge low prices because we have low costs," Blecher said. "This lawsuit is an opportunistic way to get us out of the market so they could go back to their cozy little arrangement to charge high prices and provide poor service for the people of Hawai'i."

Yesterday's closing arguments culminated two weeks of trial, in which thousands of pages of documents were introduced and testimony from more than a dozen witnesses were heard.

U.S. Bankruptcy Judge Robert Faris did not say when he will rule on the case but said he would issue a written ruling.

Judge Faris previously ruled that Mesa based its decision to start go! on confidential information obtained from Hawaiian while the local carrier was in bankruptcy, seeking a buyer.

The trial has largely focused on how much confidential material was used and amount of damages, if any, Mesa must pay.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.