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PenAir Files For Bankruptcy Protection As CEO Promises To Refocus On Alaska Routes

Aug 7, 2017

Credit PenAir

Updated 8/7/17 at 1 p.m.

The largest air carrier in southwest Alaska has filed for bankruptcy protection.

“PenAir filed for reorganization under Chapter 11," said CEO Danny Seybert on Monday. "There's a number of reasons for this. I won't go into all the reasons, but we're going to reorganize the company."

Seybert said the filing will not affect scheduled flights in Alaska, where the company serves eight communities: Unalaska, Cold Bay, King Salmon, Sand Point, Dillingham, St. Paul, St. George, and McGrath.

PenAir’s Boston flights won’t be affected either, but the airline is closing operations in Portland and Denver.

Seybert expanded to those markets in an effort to turn the regional carrier into a wider-ranging airline.

"That isn't working out for us," he said. "We have to reorganize and focus on what made us successful in the past, which is the state of Alaska."

The Chapter 11 filing comes two months after PenAir canceled daily freight service to Unalaska, citing declining revenue from its contract with the U.S. Postal Service.

It also comes two years after PenAir spent $27 million on a fleet of Saab 2000s, which replaced the smaller Saab 340s in most of the region.

Seybert said PenAir is committed to serving southwest Alaska in the long term. Beyond that, the company’s next steps are still up in the air.

"There might be some equipment changes," said Seybert. "You might see more 340s in the market versus the larger planes, but that hasn't been decided yet." 

PenAir has already sold their Saab 340s. Since flying the 2000s, the company has announced a slew of mechanical cancellations and posted the worst reliability rates in its history.

-- -- -- Original Story

The largest air carrier in southwest Alaska has filed for bankruptcy protection.

In a statement released Monday, PenAir officials said the Chapter 11 reorganization won’t affect scheduled flights in Alaska, where the company serves eight communities: Unalaska, Cold Bay, King Salmon, Sand Point, Dillingham, St. Paul, St. George, and McGrath.

PenAir’s Boston flights won’t be affected either, but the airline is closing operations in Portland and Denver.

The bankruptcy filing comes two months after PenAir canceled daily freight service to Unalaska, citing declining revenue from its contract with the U.S. Postal Service.

In a spring visit to the island, PenAir CEO Danny Seybert said he’s committed to serving southwest Alaska in the long term. He’s also pledged to improve passenger service after a slew of mechanical cancelations over the winter. 

“The steps we are taking today will allow PenAir to emerge as a stronger airline, while continuing our focus on safe operations,” said Seybert in the statement. “We will be working with a restructuring officer to present a reorganization plan that will allow the management team to focus on our employees, safe operations, retiring debt and taking care of our customers.

This is a developing story. Please check back for updates.