Anchorage, Alaska-based regional carrier, Peninsula Airways, commonly referred to as PenAir, has filed for Chapter 11 bankruptcy protection as of Sunday, August 6. Chapter 11 gives companies temporary protection from its creditors, giving them the opportunity to restructure their finances and organization.
The airline, which is one of Alaska’s largest regional air carriers and has hubs in three other states, has said it has been in bankruptcy proceedings for quite some time.
“It gives us a chance to reorganize and do some things with the company that we wouldn’t be able to do unless we were under the protection of reorganization,” Chief Executive Officer Danny Seybert said in an interview with Alaska Dispatch News. “We’re going to come out of this a stronger, healthier company.”
The airline has not attributed its bankruptcy to one particular reason but has faced a period of financial decline, leading to the closing of their Portland, Oregon and Denver hubs. Additionally, all routes to and from Portland, Oregon, besides the Crescent City, California route, will be terminated by close of business Monday. The Denver hub has 90 days to cease operations.
The companies financial records have shown major losses and liabilities, including a $6 million net loss and between $10 million to $50 million owed to creditors.
Founded in 1955 as a regional air taxi, PenAir grew into a large regional carrier serving Alaskan communities such as Dutch Harbor, Cold Bay, and King Salmon. In 2012, the airline expanded outside of Alaska, creating flights in the Northeast, Pacific Northwest and Midwest portions of the U.S. as part of the government’s Essential Air Service program.
Operating a fleet of Saab 340s and 2000s, the airline has 700 employees across the U.S. The airline has stated that some employees may be relocated to other positions in the airline while others will be helped to find positions with other carriers.
The bankruptcy operations will not affect flights in the airline’s Alaska and Boston markets, which have remained strong even during the financial downturn.