Is Chapter 7 bankruptcy next for Ravn Air?
The regional carrier that filed for Chapter 11 reorganization earlier this month messaged some bad company news to social media today: “Our CARES loan application will NOT be possible due to the ASM (Available Seat Miles) formula — the total number of airline seats multiplied by the total miles flown in one year.”
Ravn was one of the first and most visible business failures to come from the COVID-19 economic fallout. It had served myriad small communities around Alaska until it parked its all of its planes on April 5, as communities began to close down travel due to the highly contagious Wuhan coronavirus.
Chapter 11 it is then. It isn’t a death sentence. Trump filed, most of the movie stars have. No big deal.
Another case of poor rules being used to exclude smaller businesses but awarding money to bigger air carriers. It is amazing how they can brag about how they are helping the little guy but in reality it goes to those that need it least. They are trying to get the big businesses to return money that the President thought they should never have received. Legislation is written in hundreds of pages most of the voting Congress never read. They have passed five crisis bills and are working on the next to add more must fund programs that they didn’t put in the first four. Alaska will miss Rave\n but someone will get rich buying the assets for pennies on the dollar and bringing back the airline with a new name.
Actually the chapter 11 helps them better than the handout.
It’s called a “Bust Out” and it is what organized crime does to its victims.
Hopefully Ravn just folds up and goes away – Mark Air style. Smaller, better run companies will fill the gap. Ravn seems overextended because it has been creating monopolies by buying up competitors. Service on hub routes has totally collapsed over the years, as Frontier and Pen were absorbed. Village hops are even worse, as folks in Delaware tried to apply blanket policies that fit rural circumstances. It is probably a bad idea to combine large 121 and 135 operations under the same brand. Ravn is just a bad business, and the best thing for everyone is for it to just disappear.
How about the Arctic Slope Regional Corporation stepping up to the plate and hitting a home run by boiling them out to provide uninterrupted mobility for THEIR SHAREHOLDERS. They’ve made Billions thanks to America’s Free Enterprise system and All Alaskans
It’s time they gave back.
Good idea, except ASRC’s responsibility to its shareholders includes not doing bad deals.
JLF paid way too much for Ravn, and almost immediately thereafter the price of oil fell, making the overpayment much worse. Now the Covid-19 has made it impossible to continue doing business. Let the next operator(s) have the opportunity for a clean start and not have to deal with Ravn’s ~$100 million of liabilities.
Agreed. Times change. They absorbed bankrupt PenAir and that didn’t help them.
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