Judge Rules in Hawaiian Airlines/Mesa Air Group Dispute


Mesa’s Jonathan Ornstein had best get his checkbook out.

Breaking news from the Honolulu Star-Bulletin:

“Mesa Air Group, parent of interisland carrier go!, must pay Hawaiian Airlines $80 million for using confidential information obtained during Hawaiian’s bankruptcy to enter the Hawaii market, a federal judge ruled today.

Bankruptcy Judge Robert Faris, who had taken the matter under advisement on Oct. 4 following a nine-day evidentiary hearing and trial, said Mesa breached a confidentiality agreement by failing to return to Hawaiian or destroy evaluation material on a timely basis, then using that material to gain a competitive advantage when entering the Hawaii market.

Faris also ruled that Mesa must pay Hawaiian interest of 3.97 percent per annum as of the date of today’s ruling, but denied Hawaian’s request for a one-year injunction against go! for selling tickets because he said the award of the money damages adequately redressed the harm suffered by Hawaiian.”

More info here.

Our first take? About what we had expected. Judge Faris basically split the money request down the middle and let’s go! continue to fly. I never thought he would shut the airline down. The only question was how much in damages he would award to Hawaiian. (Please see this post for an updated take.)

$80 million is no small hit for Mesa. Should be interesting to hear the Mesa response to the ruling. Nothing yet. Guess we’ll hear from them tomorrow.

Ticker: (MESA:Nasdaq), (HA:AMEX)

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