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PenAir files for bankruptcy protection

August 11th, 2017 | Dave Bendinger and Laura Kraegel, KDLG News Print this article   Email this article  

Following months of problems, Peninsula Airways is cancelling service in Portland and Denver as it restructures financially. CEO Danny Seybert pledges to refocus on Bristol Bay and Aleutians routes.

The largest air carrier in southwest Alaska has filed for bankruptcy protection.

"PenAir filed for reorganization under Chapter 11," said Seybert on Monday. "There's a number of reasons for this. I won't go into all the reasons, but we're going to reorganize the company."

Seybert said the filing will not affect scheduled flights in Alaska, where the company serves eight communities: Unalaska, Cold Bay, King Salmon, Sand Point, Dillingham, St. Paul, St. George, and McGrath.

PenAir's Boston flights won't be affected either, but the airline is closing operations in Portland and Denver.

Seybert expanded to those markets in an effort to turn the regional carrier into a wider-ranging airline.

"That isn't working out for us," he said. "We have to reorganize and focus on what made us successful in the past, which is the state of Alaska."

The Chapter 11 filing comes two months after PenAir canceled daily freight service to Unalaska, citing declining revenue from its contract with the U.S. Postal Service.

It also comes two years after PenAir spent $27 million on a fleet of Saab 2000s, which replaced the smaller Saab 340s in most of the region.

Seybert said PenAir is committed to serving southwest Alaska in the long term. Beyond that, the company's next steps are still up in the air.

"There might be some equipment changes," said Seybert. "You might see more 340s in the market versus the larger planes, but that hasn't been decided yet."

Since flying the 2000s, the company has announced a slew of mechanical cancellations and posted the worst reliability rates in its history.


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