Case
Supplementary Resources
Abstract
Two Hawaiian airlines’ cooperative environment is disrupted by the entry of a third competitor, Mesa Airways. The price war leads to fares as low as $0 and causes more than $100 million in losses in the first year with no end in sight. Industry risk factors for price competition were reduced in 2001 when the government granted a one-year reprieve from anti-trust laws, but increased dramatically after Mesa’s announced entry.
This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2024 Sage Publications, Inc. All Rights Reserved
Resources
Exhibit 1: Hawaiian Airlines Route Map, 2007
Exhibit 2: Aloha Airlines Route Map, 2007
Exhibit 3: go! Route Map, 2007
Exhibit 4: Timeline of Events
Date |
| Event |
September | 2005 | Mesa announces plans for inter-island airline, go! |
November | 2005 | Startup FlyHawaii Airlines shuts down one month after Steve Case backs out of planned investment |
February | 2006 | Hawaiian sues Mesa |
March | 2006 | Mesa announces $39 fares for service beginning in June |
March | 2006 | Aloha and Hawaiian match $39 fare |
June | 2006 | Mesa launches go! with $19 fares on remaining seats |
June | 2006 | Hawaiian matches $19 price while Aloha gives 1,000 tickets away |
October | 2006 | A federal judge rejects Hawaiian’s attempt to stop go! from flying |
October | 2006 | Aloha sues Mesa |
June | 2007 | go! Web site crashes after offering limited number of $1 anniversary fares |
October | 2007 | Federal bankruptcy judge rules Mesa breached its confidentiality agreement with Hawaiian |
March | 2008 | Aloha files for bankruptcy and stops passenger service |
April | 2008 | Mesa and Hawaiian reach a settlement; Mesa will pay $52.5 million |
This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2024 Sage Publications, Inc. All Rights Reserved