PenAir (Anchorage Ted Stevens) has announced it has filed for Chapter 11 bankruptcy protection with a U.S. Bankruptcy Court in Anchorage on Sunday, August 6.
In a statement, the Alaskan carrier said the move would allow it to reorganize its finances and restructure its operations following heavy losses at its Denver International and Portland International bases which will now be closed over the next ninety days.
The carrier's Portland area regional routes, with the exception of its EAS route to Crescent City were terminated with effect from the close of business on Monday, August 7. This will affect scheduled flight operations between Portland and Klamath Falls and North Bend/Coos Bay, OR as well as Redding Municipal and Eureka Murray/Arcata, CA. The closure of the Denver hub is pending approval from the US Department of Transportation.
PenAir has also filed applications with the DOT to end Essential Air Service (EAS) routes between Crescent City and Portland and all regional routes served from its Denver hub. This will impact EAS routes operating between Denver and Liberal and Dodge City, KS and North Platte, Kearney and Scottsbluff, NE. Once approved, this transition usually takes thirty to ninety days until a new carrier can be tendered for and awarded the relevant contracts.
Despite the Denver and Portland base closures, PenAir has said it will maintain scheduled operations in Southwest Alaska and at its Boston hub. PenAir flies to eight destinations within Alaska including Dutch Harbor, Cold Bay, Sand Point, King Salmon, Dillingham, St. Paul Holman Downtown, St. George Municipal, and McGrath and three routes in the Boston area including Bar Harbor and Presque Isle, ME and Plattsburgh International, NY.
“The steps we are taking today will allow PenAir to emerge as a stronger airline while continuing our focus on safe operations,” PenAir CEO and Chairman Danny Seybert said. “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.”
According to court documents seen by the Alaska Dispatch newspaper, PenAir reported a USD6 million net loss for the financial year ended March 2017 with liabilities and equity of USD28 million as of March 31.
In terms of creditors, the airline owes the state of Alaska more than USD1.4 million in terms of unpaid landing fees and unpaid taxes, USD1.4 million to parts supplier SAAB Defense and Security USA, as well as various sums to Northern Air Cargo (NC, Anchorage Ted Stevens), First National Bank of Alaska, and Kaladi Brothers Coffee.
Founded in 1955, Penair operates five Saab 2000s, two Saab 340(F)s, and fifteen Saab 340Bs. It specialized in Alaskan operations until 2015 when it made its foray into the US mainland market with services from its Boston, Denver, and Portland hubs.
