PHOENIX – Inside Jonathan Ornstein’s spacious top-floor office is everything one would expect in a CEO’s lair, plus a cranberry-colored scooter parked to the left of his desk.
The brash leader of Mesa Air Group buzzed around on the 1985 Honda Elite when he first entered the airline industry. It serves as a reminder of his humble start, which included handling baggage.
Depending on who you ask in Hawaii, Ornstein is either the man who brought competition and reasonable interisland airfares to the Aloha State or an underhanded businessman trying hard to run his competitors out of business.
“We have five airplanes out there. Four of them fly. One is a spare. Look at all hell break loose because of four airplanes,” Ornstein said. “It’s really remarkable when you think about it.”
Phoenix-based Mesa launched go! on June 9 as the third interisland jet carrier in Hawaii, entering the market dominated for decades by Hawaiian and Aloha airlines.
Mesa’s entry has sparked a brutal and sometimes silly airfare war, with the incumbent carriers matching every special go! has offered.
A day after go! offered $19 fares, Aloha held a promotion called the “Great Go Away Giveaway,” passing out 1,000 free round-trip tickets while taking a jab at its newest competitor.
Interisland fares used to run as high as $100 one-way, but now run as low as $29.
It’s a traveler’s market in Hawaii, which depends on air travel as its interstate highways.
Interisland traffic has increased since Mesa’s entry, reversing a five-year decline caused by rising airfares and more direct flights from the mainland and Asia to Maui, Kauai and the Big Island.
Ornstein said it was only a matter of time before someone stepped in, with Aloha and Hawaiian gouging interisland travelers to support its high-cost trans-Pacific operations.
“We were always afraid that it would be someone like a Southwest or a Jet Blue, who really could go in and wipe everybody out,” he said. “That’s why we felt we had to get in there ahead of them.”
Hawaiian CEO Mark Dunkerley said Mesa decided to enter the market based solely on the confidential information it obtained as a potential investor during Hawaiian’s bankruptcy proceedings.
“They could read our minds and look at our books. I think that’s what led them into the marketplace,” he said.
Once-fierce rivals Hawaiian and Aloha are now unified in opposing Mesa, and each has pending lawsuits alleging the company improperly used the confidential information to start its Hawaii operations in an effort to drive Aloha out of business.
“People don’t appreciate that competition is good and in the end, it makes everyone better,” Ornstein said.
Hawaiian welcomes competition, Dunkerley said.
“The issue here is not about competition,” he said. “You don’t play poker with people who have seen your hand.”
The battle for Hawaii’s skies comes during record fuel prices and as Hawaiian and Aloha each face pressure to perform for new investors after emerging from Chapter 11.
Industry analyst Bob Mann said the concern of the “big two is that they somehow slip into the perilous third airline slot.”
“That is a risk that any competitors should be, and apparently are, concerned about, and thus they match price even if their costs cannot match a new entrant competitor,” he said.
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