Former Aloha Airlines CEO: go! was a parasite

Published: Mar. 20, 2014 at 5:08 PM HST
Email This Link
Share on Pinterest
Share on LinkedIn
David Banmiller
David Banmiller

HONOLULU (HawaiiNewsNow) - The last CEO of Aloha Airlines was right. But he's not happy about it.

David Banmiller said all along that Mesa Air's go! was deliberately flying at a loss to put Aloha Airlines out of business, and would raise fares later.

"Go was a parasite and destroyed so many people's lives," Banmiller said from Ireland where he now lives. "We warned everybody from the Justice Department to the governor and the editorial boards but to no avail."

Go! launched in June 2006 with a fare war that lasted two years. With go!, Hawaiian Airlines and Aloha are flying at a loss, Aloha ran out of cash first and shut down forever on March 31, 2008.

Banmiller predicted fares would rise significantly after Aloha was gone and they did.

"Everything we said six years ago has come true," he said. "The fares went from an average of $60 to $93."

U.S. Department of Transportation statistics show the average neighbor island fare to be $72.52.

Banmiller also spoke with the Honolulu Star Advertiser's Dave Segal and told him the entry of go! into the Hawaii market was "provocative and misguided," leading to the demise of Aloha Airlines without ever making a sustained profit for its own parent company.

Mesa also wound up paying millions to settle litigation filed by Hawaiian and Aloha, after its executives, who saw internal contracts, spreadsheets and strategic plans of both carriers while presenting itself as a potential purchaser of each airline, showed its own prospective investors information they were not supposed to share under non-disclosure agreements.

Banmiller and others accused go! of predatory pricing but the Justice Department never went after the company, despite a memo that outlined a plan to sell tickets at a loss until Aloha ran out of money.

Weeks before Aloha Airlines shut down, in negotiations that were not disclosed at the time, Aloha executives were close to a deal to be acquired by United Airlines, but as jet fuel prices soared United became concerned with its own costs and decided against pursuing the deal. A Los Angeles hui that had been funding Aloha's money-losing operations cut off the spigot and Aloha was forced to shut down.

This and the almost simultaneous shutdown of ATA Airlines took a sixth of transpacific airlift out of the market in a period of three times, triggering a recession in Hawaii tourism. It took years to build back capacity. Aloha's shutdown put 3,000 out of work.

Related stories:

go! passengers react to airline's exit

Mesa Air to shut down go! at the end of the month

Copyright 2014 Hawaii News Now. All rights reserved.