RavnAir’s CEO said in a memo to all staff today that the company will seek to reorganize under Chapter 11 bankruptcy rules.
Due to the loss of revenue created by the COVID-19 pandemic, the company parked all 72 of its aircraft today.
“Due to our critical need for additional funds, our company has also made the necessary decision to seek Chapter 11 protection in order to obtain immediate Debtor-in-Possession (DIP) funding. Chapter 11 gives us the ability to “hit pause” while we seek federal grants and other sources of financial assistance that will allow us to weather the Coronavirus pandemic and emerge successfully once it has passed,” CEO Dave Pflieger wrote.
“How long we must wait is uncertain, but I want to express my deepest gratitude to: our State and Federal officials, in particular Senator Sullivan, Senator Murkowski, and Congressman Young; our owners and lenders; and most importantly, everyone who is a part of our team at RavnAir Group. I am grateful for everything being done to help us preserve and protect the vital air service, jobs, and support that our company provides to over 115 separate communities and so many other residents throughout Alaska,” he wrote.
“Please know that we will continue to do everything possible to ensure our airline gets back in the air very soon. For now, I hope you, your families, and your loved ones all remain safe and healthy during these incredibly trying and difficult times,” Pflieger wrote in a note to all staff.
Earlier from today:
Looks like RAVN wants some of that “viral” funding. The only ones hurt here are the citizens that depend on RAVN. I don’t think they receive any “virus” funding for their inconvenience and inability to travel. Do you think RAVN really cares? Sir “laughs-a-lot” must be cracking up at that.
This is very troubling, this comes as a bit of a shock to all of us on the slope, we were supposed to fly home on there flights from Prudhoe to Anchorage. Our company had chartered flights with them for transportation to and from the slope so that we could remain quarantined until returning safely to work. Now just one day before we were supposed fly home we are left without flight reservations, most of us have been away from our families for a month now and are uncertain to when we will be able to see them. Frustrating portion is that just a week ago Raven assures all of us that our travel needs would be a priority. On the other hand I also know these are all difficult times, I also feel they could have fulfilled there charter contract with our company before grounding every plane they had. Such is life and we move forward. I hope Grant Aviation takes this opportunity to expand there services within the State of Alaska.
This is just the beginning, open the economy Governor or be forever known as the man who destroyed Alaska.
Yeah, the governor thought up killing the whole world.
This comes as no surprise. The house majority, aka Schooner tuna says they are going to fix it. LOL.
Ravn used credit to buy out competitors, creating monopolies on routes. Now, having to weather a rough spot, and unable to pay its debts, they look to feed at the public trough, while leaving some routes completely without service. Meanwhile, smaller companies that have survived Ravn’s abuse, scramble to pick up the pieces to provide even the most rudimentary service. Had their financial shell games been successful, their profits would be privatized – their losses will be socialized.
This episode shows the dangers of allowing companies to use financialization to monopolize markets. The company should be liquidated, allowing carriers who have better judgement, to move into the empty space and compete in a more robust and resilient market. The days of Frontier, Era, Pen, Hageland and others competing for market share provided both better service and more resilience.
Can’t wait to see the bankruptcy financial disclosures. They overpaid for the assets substantially – probably what they will be asking for in bailout money.
They have taken multi-millions in Essential Air Contracts. Governor needs to have Dept of Law open an investigation. They were solvent enough to buy Penn Air out just 6 months ago.
They are a conglomerate of 3 failed airlines. Bankrupt PenAir, Hageland and Ravn.
My sources tell me that Ravn management/owners tried to run like an airline in the lower 48. It was not working here. The pandemic only hastened what would have happened eventually. Hopefully they sell to an organization that understands that a Alaska is not workable like Fiji Air.
Just the first casualties in this self-inflicted, medical tyranny induce Greatest Depression.
RAVN CEO Dave Pflieger, who titles himself “an aviation and business development executive”, was formerly with Virgin America, Air Pacific, Silver Air, and past CEO of Island Air. Anyone see a trend of here? Guess he is always looking for his next victim, er, airline to ‘turn around’.
A heavily subsidized business with a terrible safety record. This firm should not be within 100 yards of any passenger aircraft. Mismanagement is common, and too often the government tries to fix that, but killing passengers cannot be fixed.
One of the toughest industries in Alaska. Even with the mail bypass contracts, every one of the states major rural carriers has struggled to stay in business. These guys have been teetering for years on the verge of Chapter 11. This service is critical to rural Alaska and the state at large. One hopes they can successfully restructure or another operator can take over the routes sooner than later.
More people are on “lockdown” today throughout the Globe than were even Alive during WW2?
Our national deficit was running at a $Trillion dollars a year (in the Red) Before the pandemic occurred?
So much for the cure being less worse than the “disease”…
Future generations will have a huge hole to make our way out of and Bankruptcy and Foreclosure will be in the headlines for many more months to come.
You put too much value in the dollar. Its all about trade. In Gene Roddenberry’s world, money was non-existent. We out grew it. Nobody will be kicked out of their house. The fear mongering that they brainwashed into you in Vermont is unsettling. What would Bernie do? If you had a job, you get to keep your job without any loss in pay. Calm down!
But Greg, who pays for it?
Over night the official government projection model was cut in half. It is now officially no more dangerous than the seasonal flu. It’s not too late to save the economy from complete destruction as well as the lives that will be lost to depression, suicide, domestic violence, and malnutrition from a Greatest Depression.
The constitution allows for suspending Habeas Corpus during time of national disaster. This qualifies.
Question:. Was RAVN in financial trouble prior to the pandemic? If so, the Coronavirus presented perfect timing as an opportunity to go with Chapter 11 and seek federal bankruptcy protection and federal $$$.
Opportunism is everywhere during a crises.
Yes. It was the last straw.
This company lost my package I had an email chain of 25 responses with this company reminded them 4 different times of my lost package Submitted a claim and they paid me back less then 10% the value of the package.
I am obviously prejudiced, being the original founder of Penair over sixty years ago, but this is just another Markair situation ten times over.
Our industry is extremely competitive, and already numerous smaller carriers are filling the gaps statewide. Once Ravn liquidates, the carriers will be able to get private funding, and obtain the Ravn aircraft very cheaply. The American Free Enterprise system is alive and well!
Yes, the virus situation stopped most travel in the state, cutting off their daily cash flow But you do not get to be ninety million in debt in one month!
Suffice it to say that if Ravn liquidates, there is plenty of hangars, aircraft, and trained employees ready to be put into service on short notice. Orin Seybert
Comments are closed.