Aloha Airgroup, Inc., filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code, cited “predatory pricing” by Mesa Air Group's go! for its failure. Aloha is suing Mesa for using confidential information to launch go!. Mesa recently lost a similar suit by Hawaiian Airlines and was forced to post a $90 million bond, pending resolution of appeals. Related Story
“In the highly competitive inter-island market, Aloha was forced to match go!'s below-cost fares at a time when the airline industry was facing unprecedented increases in the cost of jet fuel,” said the airline in its filing. “Late last week, crude oil rose to an all-time record high of $111 a barrel. For Aloha that means an annual increase of $71 million in fuel expenses.”
Aloha sought the court's approval to allow the Hawaii-based company to continue operating. It is also seeking approval of a cash collateral financing arrangement with its principal working capital lender, General Motors Acceptance Corporation, to provide financing for operations pending a further hearing in accordance with bankruptcy rules. In doing so, Aloha said it seeks to protect 3,500 jobs, honor thousands of passenger travel reservations, keep the U.S. Mail and air cargo moving between the islands, and continue to provide essential ground-handling services for domestic and international airlines serving Hawaii.
"It is a travesty and a tragedy that the illegal actions of a competitor and other factors completely beyond our control have forced us to take this action," said David A. Banmiller, Aloha's president and chief executive officer. "Through this filing, we hope to achieve a successful outcome that will protect the jobs of 3,500 dedicated employees who have made extraordinary sacrifices for Aloha, and to continue to earn the support of our loyal customers, business partners, vendors and financial backers.”