One of the oldest family-owned airlines in the country is filing for Chapter 11 — a reorganization that should allow it to avoid bankruptcy.
Alaska-based PenAir says service in Alaska and Boston will continue unaffected, but the company’s Portland and Denver hubs will begin closing scheduled service over the next 90 days.
“The steps we are taking today will allow PenAir to emerge as a stronger airline, while continuing our focus on safe operations,” said PenAir CEO and Chairman Danny Seybert.
“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.”
PenAir recently announced the termination of the Portland-area regional routes as part of an immediate cost-cutting plan in the Pacific Northwest. All but the essential Air Service (EAS) route between Portland and Crescent City, California, will be shut down effective close of business today, August 7. This impacts scheduled flight operations between Portland and Klamath Falls and North Bend/Coos Bay, Oregon and Redding and Eureka/Arcata, California.
PenAir announced the additional closing the Denver hub pending approval from the Department of Transportation.
PenAir is also filing a request with the federal DOT to end routes between Crescent City, CA and Portland and all regional routes served from its Denver hub. This will impact EAS routes operating between Denver and Liberal and Dodge City, Kansas and North Platt, Kearney and Scottsbluff, Nebraska.
Once approved, this transition usually takes 30 to 90 days until a new carrier can be secured in the market, the company said in a news release.
PenAir serves eight Alaska communities: Dutch Harbor, Cold Bay, Sand Point, King Salmon, Dillingham, St. Paul, St. George and McGrath; and three routes in the Boston area: Bar Harbor and Presque Isle, Maine and Plattsburgh, New York.
The company said that passengers in the Alaska and Boston markets can expect continued operations with no changes to scheduled flight service.
“Our employees are a key part of our success, and we are doing everything we can to keep our PenAir family intact,” said Seybert.
Passengers scheduled to fly out of Portland may contact the airline their travel was originally booked on, or PenAir at 800-448-4226.
PenAir was founded in 1955 by Orin Seybert in Pilot Point, Alaska. The airline is one of the largest regional airlines in Alaska and the Northeast U.S., and one of the largest operators of Saab 340 aircraft in the US. The company has 700 employees and serves 25 destinations.
PenAir has almost had a monopoly in serving Alaska cities. As a result the service has been quite poor overall. Flights are cancelled at the last minute with phony excuses related to weather or mechanical issues. But the real reasons have generally been the flight did not have enough passengers to justify its expense. Never mind the serious displacement of the passengers. And the fare charged for these flights charged by an airline that has a virtual monopoly are outrageous! For what it charges for a round trip to King Salmon one could go to most places west of the Mississippi. With the company now facing bankruptcy, expect even higher fares. It truly is a sign of mismanagement when a company that has a monopoly needs to reorganize under our bankruptcy laws. A strong audit of where the money had gone might be revealing.
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