The Chess Match

The analogy of a chess game works well to explain the current battle for survival in Hawaii’s interisland market. On one side of the board is Jonathan Ornstein, who’s go! airline is a subsidiary of mainland-based Mesa Air Group. On the other side are the investors and managers of Aloha Airlines and Hawaiian Air. This is a fight to the finish, a game where checkmate is the objective. If Ornstein loses, his go! airline leaves the Hawaii market. A loss for either Aloha or Hawaiian Airlines likely means the end of that company’s existence. The surviving legacy carrier then gains a strengthened go! as a long-term competitor, not a desirable outcome either.

In this conflict there’s hand-to-hand combat amongst the pawns in the front lines, but the real game takes place in the backfield as the major players maneuver for advantage. The match may appear dull to a spectator unfamiliar with the subtleties of the game, and yet a master will practically hold his breath as he watches the pieces align and the lines of power develop.

The fare skirmishes, the addition or deletion of a plane or two, and the PR successes are each relatively minor moves in this game. In order for Ornstein’s go! to claim a checkmate, he must bring one of his competitors to its financial knees. If that airline enters bankruptcy, cannot find funding, and goes out of business, Ornstein will have succeeded in making room in the market for go!. Without the departure of a competitor, go! is unlikely to find profits. For Hawaii’s traditional interisland airlines to win, they must convince the directors of Mesa to override Ornstein’s enthusiasm for this venture into Hawaii and cut their losses through retreat.

Sometimes a competitor will perceive a weakness on the left or right side of the board and concentrate his attack there. Ornstein likely felt that Aloha’s corner provided the best opportunity for a victory, because he announced Mesa’s venture into Hawaii on the same day that Aloha publicized the names of its chosen investors for bringing the airline out of bankruptcy. For this reason, developments in the Aloha corner of the board will have a particularly strong impact on the outcome of this game. If Ornstein’s opponents announced that a grandmaster of Bobby Fischer’s caliber had joined forces with their team, then this would be a significant development indeed.

Aloha recently announced the appointment of airline heavyweight Gordon Bethune as Chairman of the Board. Bethune is primarily responsible for Continental’s stunning turn-around, and many consider him the most capable airline executive available today. Surely his experience will aid Aloha’s cause. There’s a much bigger implication here, though. By bringing Bethune onboard, we learn much about the positioning of Aloha’s major pieces. No airline executive wants to have a company go belly up during his watch, especially one with 60 years of proud history. No doubt Bethune and billionaire shareholder Ron Burkle discussed Aloha’s prospects prior to Bethune’s decision to come aboard. If Bethune believes there’s good reason Aloha will succeed in repelling Mesa’s invasion, then we can expect that Aloha’s major pieces are positioned better than meets the eye of the casual observer.

So, grab a chair and make yourself comfortable. The game is livening up.