Aloha Airlines can proceed with a lawsuit alleging that Mesa Air Group, the parent of go! airlines, used confidential information to try to drive Aloha out of business.

U.S. District Judge David Ezra this week rejected Mesa's motion to dismiss Aloha's Jan. 9, 2007, federal court lawsuit, which alleged that Mesa improperly used confidential information it obtained while Aloha was in bankruptcy.

Mesa had argued that the Airline Deregulation Act pre-empts Aloha's claims, but Ezra said the federal law does not pre-empt allegations of fraud and breach of contract.

In its suit, Aloha said that Mesa was given access to Aloha's confidential financial information in January 2005 when Mesa was considering investing in Aloha after Aloha filed for Chapter 11 bankruptcy protection in December 2004.

The information was subject to a confidentiality agreement, but Aloha alleged that Mesa used the data to launch go!

According to Aloha, Mesa Chief Executive Officer Jonathan Ornstein told investors in a 2006 teleconference that he felt strongly that the company's interisland carrier would be profitable because he had the "benefit of looking at Aloha and Hawaiian during their respective bankruptcies."

The Aloha lawsuit also cited a 2006 e-mail in which Mesa Chief Financial Officer George Murnane stated: "We definitely don't want to wait for them (Aloha) to die; rather we should be the ones to give them the last push."

The charges are similar to those in a lawsuit filed earlier this year against Mesa by Hawaiian Airlines, which also alleged that Mesa is selling tickets below cost.

Mesa said the e-mails cited by Aloha were taken out of context and that Mesa did not use information gained during Aloha's bankruptcy to help them compete against Aloha.

go! triggered a fare war when it opened for business on June 9 with $39 one-way interisland tickets. Since then, Mesa lowered one-way fares to $29 on several occasions and then dropped them temporarily to $19 in September. Each of the discounts was matched by Aloha and Hawaiian.

A study by Aloha's consultants, Texas-based Sabre Airline Solutions, concluded that Mesa, Hawaiian and Aloha are each losing money when they sell interisland tickets below $50.

Reach Rick Daysog at rdaysog@honoluluadvertiser.com.