SeaPort Airlines (Portland International) says it has voluntarily filed for Chapter 11 bankruptcy protection in a Federal Bankruptcy Court in Oregon.

In a statement, the carrier blamed its woes on an ongoing shortage of qualified flight personnel brought on by new US Federal Aviation Administration (FAA) regulations which require First Officers to have a minimum of 1,500 hours ATP experience to operate for a Part 121 airline.

"The announcement comes after the airline took a number of necessary steps to reduce its route network as a result of a national pilot shortage," it said.

Though it is a Part 135 carrier, SeaPort says the poaching of their pilots by Part 121 carriers has severely affected its operations so much so that last month, it was forced to close stations at Sacramento International, Visalia, Burbank, San Diego International, Imperial/El Centro Country, San Felipe International (Mexico), Salina, Great Bend, and Kansas City International while EAS contracts to Tupelo and Muscle Shoals were abandoned in October last year.

Under the supervision of an Oregon Bankruptcy Court, SeaPort will draw up a restructuring plan that will allow it to emerge a strong and viable airline. As part of its turnaround, Rob McKinney has resigned as president and CEO with his senior vice president, Timothy Sieber, having now assumed the reigns at the company.

“The difficult decision to file for bankruptcy protection was necessary to preserve the future of our airline," Sieber said. "I am confident we will come out the other side of reorganization with a financially stronger airline in a better position to handle the challenges of the industry and provide the quality service our customers, employees and partners deserve.”

SeaPort's financial standing was called into question earlier this month when Executive Express Aviation LLC (trading as Southern Airways Express (9X, Memphis International)) filed an objection to the US Department of Transportation's (DOT) impending decision to award SeaPort's sister carrier ADI Aerodynamics (Pontiac Oakland County International) scheduled interstate passenger service rights.

In its objection, EEA said it had not been paid for leasing work undertaken for and on behalf of SeaPort on its Salina, Harrison, and Great Bend EAS contracts for January of this year claiming that the Oregonian carrier and ADI's principal owner, James Beardsley, had shifted funds away from the airline and its creditors towards ADI as it became apparent it would complete licensing.

"Executive Express Aviation believes that James Beardsley continues to operate SeaPort Airlines in a manner inconsistent with the public interest, and that, if his scheduled Certificate is made effective, he will do likewise with ADI," EEA argued. "We believe that SeaPort will again this month invoice the Department for EAS flights which were not operated by SeaPort and will allocate said funds to other purposes. We believe that the Department should fully investigate the unethical transfer of funds received by SeaPort, as the vast majority of their revenue comes directly from the Department."

ADI subsequently responded calling on the DOT to dismiss the “unauthorized objection,” arguing that it hinges on a contract dispute between EEA and SeaPort and “has nothing to do with ADI.”