KHON 2 TV News
Apr 21, 2008 at 9:39 PM HDT
By Gina Mangieri
Aloha's departure from passenger business has created opportunity for Hawaiian Airlines and Go. Hawaiian is taking off while Go's parent company is trying to avoid a hard landing financially.
First Aloha stopped flying passengers, then ATA abruptly shut down. Is it the end, or just a start?
"I'm really concerned that we may have another airline going out, and it may be disastrous for us," said Sen. Kalani English, chairman of the Senate transportation committee. "What we're thinking might happen is Go will declare bankruptcy as well."
Go's parent company Mesa acknowledges they're considering bankruptcy but are doing everything to avoid it. Its stock price tanked 92 percent since last year, making it harder to raise a $40 million bond payment due this summer. It's also reeling from an $80 million court judgment in Hawaiian Airlines' favor. Plus, a giant contract Delta yanked on the mainland could leave 36 small jets idle.
"Unfortunately in this business you never know what the worst case scenario is because we've seen things we never would have imagined we'd see," said Jonathan Ornstein, CEO of Mesa.
With the tide of bankrupt airlines rising, we asked Mesa is it inevitable for them?
"Nothing is inevitable. Clearly it's going to be a little tricky," Ornstein said. "With fuel prices at these levels the economic damage that's being done throughout the industry is so significant, and that's everybody."
It a factor Hawaiian is managing to beat for now. Analysts project its stock price will top its 52-week high.
"The most important issue for us isn't which airline is in business or not at any given time," said Gov. Linda Lingle, "but the number of seats that we have operating between the islands, and between the mainland and Hawaii."
Hawaiian added flights and picked up Aloha's Oakland route. But it's not been an altogether smooth flight.
"They're having some growing pains," English said. "I was stuck at the Maui airport yesterday. My bag didn't come in from Oahu to Maui and I had to wait for 4 hours. I had to sit in that airport and watch bags backed up, people backed up, there was not enough staffing there."
Hawaiian says it's hiring.
After years of a money-losing fare war, Ornstein said Go's fare structure is now in the $49-$89 range.
"Clearly with fuel prices doubling and being the largest expense we have to have to be cognizant of that," he said.
Go nearly doubled its fleet when Aloha left, so with profit margins returning, Go could actually help Mesa recover by expanding here -- something it could do even under Chapter 11 bankruptcy protection.
"We're going to carefully monitor our demand level and we will react to whatever the market requires," Ornstein said, adding that they're keeping a close eye on summertime market demand.
Mesa is negotiating with aircraft companies to see if they can get better lease terms without having to resort to bankruptcy protection. ©2007 KHON-TV. All Rights Reserved.
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