Mesa Air launches controversy in Hawaii

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Mesa says the claims are without merit, noting it had been studying the market more than a decade.

"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."

Island Air, a smaller turboprop operation, has also joined in the fight, saying go! has "damaged yield throughout the marketplace."

'Irrational pricing structure'
"It is difficult to make a rational business decision when you're dealing with an irrational pricing structure and a competitor that has the ability to lose money on every flight," Island Air CEO Rob Mauracher said.

The battle for Hawaii's skies comes during record fuel prices and as Hawaiian and Aloha face pressure to perform for new investors after each 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.

Mann said Delta Air Lines didn't take AirTran Airways seriously in Atlanta and allowed the newcomer to prosper.

Several companies have tried to start up in Hawaii, but were quickly squeezed out of the market.

Mesa, however, is one of the nation's largest regional carriers, with 182 jets, 5,000 employees and revenues exceeding $1 billion.

Aloha CEO David Banmiller has called Mesa's cut-rate fares a "sham" and a direct attack on the livelihood of Aloha's 3,500 employees and their families.

'An act of desperation'
"The scare tactics are just an act of desperation," Ornstein said.

A group of Aloha, Hawaiian and Island Air employees called "HERO" for Hawaii's (Airline) Employees Repelling Ornstein have created a Web site: http://www.dontflygo.com.

Things got ugly last month when the group sent a T-shirt to Ornstein containing a scribbled insult to his Jewish faith, along with profanities.

HERO later apologized for the remark.

"The more they attack me personally, I'm not going to say it doesn't affect me," Ornstein said. "I'll be very frank. I don't like it. As a result, it may make us change our plan. If you guys want to make it to the death. Have it your way.

"We've been tame so far. Very tame."

Hawaiian and Aloha are fighting back by aggressively marketing themselves as local companies with deep roots in the islands. They are hoping go! would just go away.

"We've been much more than simply another business doing business in Hawaii. We are woven into the fabric of Hawaii," Dunkerley said.

Ornstein, however, said he's in Hawaii for the long haul with plans of replacing his 50-seat aircraft with more efficient larger jets.

"We have no huge plans of dominating anything. We want to carve out our niche," he said.

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