15 October 2009

Mesa and Mokulele Kiss and Make Up- Competition to Suffer

The giant battle for second place in the Hawaiian intra-island market took a remarkable turn yesterday with the two challengers agreeing to back off and cooperate.

From here on in - Republic - the controlling shareholder of Mokulele will bring its 3 E170s back to the mainland and instead it will become 25% owner of the local lift of the JV.

The two apparently will mix and match routes. Republic, for example, will pull three E-170s it had allocated to Mokulele back to the US mainland to be operated by one of a number of carriers the company owns. Go! will take over the routes that Mokulele operated with those aircraft.

As with all deals - this one is probably an unnatural act. The real winner here is going to stay Hawaiian Airlines the 80% dominant carrier. And of course the big loser (drum roll please) - the consumer.

Cheers

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