In the continuing saga between Mesa Air Group and Mokulele, Mesa said Mokulele Airlines owes it $400,000 in fuel expenses, and filed filed suit in U.S. District Court in Arizona against its code-share partner Mokulele Airlines in the wake of its new agreement with Republic Airways Holdings. Related Story
MAG charged that Mokulele, which operated its Cessna 208B Caravans as go!Express, failed to pay its June and July fuel costs at $171,819.94 and $219,520.16, respectively, according to the Honolulu Star Bulletin.
"We had what I thought was a pretty good partnership with them, but it became clear to us it wasn't quite as good as we thought," Mesa Chief Executive Jonathan Ornstein told the Star Bulletin. "When we do a little digging, we find out that he hasn't paid us for fuel for two months, and we just need to be paid. As everybody knows, at Mesa, we have our own issues. We are not in the position to be another airline's bank. Something like this happens and you really feel like you are getting taken advantage of."
Mokulele President Bill Boyer, during the Republic announcement in which he was asked about unpaid fuel bills told the press, “Jonathan should look at his own operation before talking to other people about their past-due bills." However, he did not comment for yesterday’s story but said he is working with his legal team on the lawsuit.
Fuel payments have been an issue for some time and Mesa, according to court papers, said that it recently switched from a deal affording Mokulele the ability to pay monthly after being invoiced by Mesa for fuel already used. It switched to a pay-at-the-pump plan. Mesa, on the other hand, was paying for fuel seven days before use. During the dispute, Mesa said it would no longer supply fuel but could arrange a short-term agreement if the Hawaiian carrier made good its bills.
In an October 14 letter, Mesa demanded payment by October 15, the day of the Republic announcement, for the June/July invoices but said it never received a response to either the October 14 or a letter sent October 16, according to Ornstein.
The Mesa/Mokulele contract contains a six-month notification clause to terminate the relationship but Mokulele said it expected to continue as a go!Express during the Republic announcement. Mesa has options for replacing the Mokulele service since it still has 10 Beech 1900s which it recently grounded along with Air Midwest subsidiary.