Hawaii airline accuses rival's consultant
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By Rick Daysog
Advertiser Staff Writer
By Rick Daysog
Aloha Airlines said in court documents that a Mainland airline industry consultant played a pivotal role in an alleged effort by Mesa Air Group to drive Aloha out of business.
Morris Garfinkle, president of Arlington, Va.-based GCW Consulting, served as Mesa's consultant when it launched interisland airline go! in June 2006.
In an Aug. 22 legal filing, attorneys for Aloha said that Garfinkle relied on "stolen" business records to devise go!'s low fares, which were allegedly designed to drive the state's No. 2 airline out of business.
"During the discovery process, Aloha located documents prepared by or sent to Mr. Garfinkle that establish Mr. Garfinkle as a central figure and a guiding force in Mesa's scheme to drive Aloha out of the interisland markets," wrote Nathan Vitan, a Washington, D.C.-based attorney working for Aloha.
"Mr. Garfinkle engineered the predatory pricing scheme and used the stolen confidential information to do so. He committed both of these wrongdoings."
Aloha's allegations are contained in a legal filing in U.S. District Court in Maryland seeking Garfinkle's testimony. Aloha — which filed an antitrust lawsuit against Mesa in January — said Garfinkle failed to show up for an Aug. 15 deposition and has resisted efforts to question him.
Garfinkle could not be reached for comment but Lissa Andrews, attorney for GCW, denied that Garfinkle and go! had set up a predatory fare structure to drive Aloha Airlines out of business.
Andrews also cited a court declaration by Garfinkle, in which the consultant said he missed the Aug. 15 deposition and had to postpone a trip to China because he had to have surgery done on his hand. Garfinkle's deposition is now set for today, Andrews said.
Mesa Chief Executive Officer Jonathan Ornstein could not be reached yesterday.
But in the past, Ornstein has denied that Mesa misappropriated confidential information about Aloha. Ornstein previously has said that go!'s fare structure is predicated on having three major airlines serving the interisland market.
Garfinkle is a longtime airline industry consultant who has played roles in several major airline deals since the 1970s. He served as special counsel to Pan American when the bankrupt company sold its international routes and he worked on many of the leverage buyouts of airlines during the 1980s.
In Hawai'i, he helped former Hawaiian Airlines Chief Executive Officer John Adams in his failed bid to win back the local airline after it filed for bankruptcy protection in 2003.
Garfinkle has done consulting work on the local market for Mesa at least since 2004.
According to Aloha's January 2007 lawsuit, Garfinkle concluded that Mesa's entry into the interisland market made no sense if Aloha was operating.
Mesa Chief Financial Officer Peter Murnane responded to Garfinkle in a 2005 e-mail, in which he discussed giving Aloha Airlines a final push to drive it out of business when it was still under bankruptcy protection.
Since go! started in June 2006, local airfares have dropped by as much as half, increasing the number of interisland passengers. But the low-fare environment has pummeled the bottom lines of Hawai'i's carriers. Hawaiian and Aloha airlines lost a combined $82.1 million last year.
Reach Rick Daysog at email@example.com.