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Interview: Northern Pacific Airways Refocus on Trans-Pacific Service and Pause on Mexico
AirlineGeeks had the opportunity to talk to the CEO of Northern Pacific Airways(NPA), Rob McKinney, after he completed the airline’s show-and-tell tour in Saipan and revealed the latest updates to the company’s terminal at Anchorage. The startup airline is planning on connecting the US and Asia via Anchorage in Spring 2023 on what the CEO describes as the ‘nicest passenger 757 in the world.’ The airline is putting the final touches on its four Boeing 757-200 airplanes at its maintenance base.
Mr. McKinney discussed the startup’s latest strategy and route network aspirations. As it stands now, the startup is shelving plans for Mexico to give way for the partnership in the Northern Mariana Islands (CNMI). The move helps Northern Pacific to refocus on the Asia Pacific region.
The airline is still planning on starting Japan and South Korea service next Spring. While the company has two airplanes that have already been retrofitted with new interiors, there are still pending registration changes to put them on the airline’s operation certificate. ‘We are expecting to put that(the route) application in December. That takes anywhere between 30-45 days. Then we can take a look at when we can start selling tickets.’
However, the Russian air space closure added headwinds to the Asia service, as the plane now needs to be ETOPS certified. When asked about the company’s plan for servicing the area, it appears the company’s not only taking Icelandair’s business model but also their planes. The company hopes to launch the service through wet-lease, and Icelandair is the top runner as the provider. ‘Our preference would be a partnership with Icelandair. They’ll be the ideal partner, but they create another level of complexity because now two different countries are trying to partner together. There are some restrictions that we are working through.’
The company is also working on a potential joint venture with a company based in CNMI, which will initially provide service from Saipan to Sydney, Brisbane, and Manila. The company expects to file for regulatory approval in the near future. ‘we are probably a couple of months out from that. If Saipan comes to fruition, it’ll probably be in late March or early April.’ Anything more final would take a little more time.
Saipan is right on the route from Australia to Japan and South Korea, so AirlineGeeks also asked if the carrier’s planning on serving those destinations. Despite having a shorter distance than traveling to Australia, Japan and Korea services will require ETOPS. Therefore they are not an option at launch, but the airline considers those destinations as a second step when it has its ETOPS certification.
The service from Saipan will be on Northern Pacific airplanes operating under the company’s 7H code. However, the planes will wear a slightly different livery where ‘Northern Marianas’ will replace ‘Northern Pacific’ on the Fuselage.
The company also planned on serving Mexico from California as a stop-gap measure before the Asia Service starts. However, the company has pulled back on the effort with the latest opportunity in CNMI. ‘We are still moving forward with regulatory approvals for Mexico, so that can always be an option for us. But at the moment, it’s a better business model for us to go to Saipan than Mexico.’
The Alaska-based carrier plans to fly from Anchorage to Los Angeles, San Francisco, New York, and Orlando from the mainland. Notably, the airline will serve the LA area via Ontario International Airport(OIA). ‘Our demographic study shows that there’s a more dense Asian population close to the Ontario airport than LAX.’ On top of that, OIA is actively seeking more international services and has cheaper fees compared to the mega hub LAX.
The CEO also expressed interest in serving several locations in China. However, that can only happen once China opens back up. The Alaskan government had worked on initiating routes from northeastern China even before the inception of Northern Pacific Airways, which would help provide leads should the country opens back up again.
There’s also interest in serving further south to places such as Taiwan. Although, that capability will largely depend on the evolution of the CNMI partnership. Alternatively, it could happen when the company scales up to flying Airbus jets or possibly widebodies.
First look at the new terminal
Mr.McKinney also shared more details about the $6m renovating project at the airline’s future home in the North Terminal at Anchorage. The company’s renovation is almost done except for some cabinets and ceilings. Some highlights in the company’s leased area include its premium passenger lounge, the ‘Navigators Club’ and a small IMAX theater that will open to all passengers.
The compass-shaped lounge logo with Northern Pacific’s bright blue color will greet passengers upon entering the lounge. The lounge features a glamouring bar area with large open spaces. When opened, it’ll provide hot and cold drinks as well as food services. It’ll also provide ample seating options for premium passengers.
The IMAX theater is a unique development aiming to attract passengers to spend a few more days on their next pass-through. The theater seats 50 people and will be playing an 8-10 minute movie on a looping basis to show people what the great state of Alaska has to offer.
Like Icelandair, the Alaska-based airline will also offer options for passengers to create a more extended layover to experience the last frontier. Since Ravn Alaska owns the startup airline, ‘It’ll be really easy for us to book the same reservation on the same code. If they(passengers) want to divert, stay here or hop on a dash 8 and see part of Alaska, it’ll be incredibly easy for them to do that.’
Like the other newly started airline, Breeze, NPA has to fight for its branding due to the recent BNSF lawsuit on the Northern Pacific name. The former changed its name from Moxee to Breeze due to an infringement with an incumbent Marriott brand. On the other hand, Mr.McKinney is optimistic that the company would prevail since the BNSF branding has not been used commercially for over 50 years.
Even though the airline suffered a few delays in inaugurating services, the delay is nothing out of the ordinary compared to almost all airlines that began services in the last two years, such as Breeze and Avelo. Securing airplanes and regulatory approvals have caused all these companies to postpone services. Nevertheless, Northern Pacific is inching closer to its first passenger flight with two completed planes and a near-finished terminal.
‘Just like any business, we have to pivot and there are bumps in the road, but we are making progress. In the grand scheme of things, I’m really pleased with the progress we’ve made to have two finished airplanes and the opportunities we have. It’s very exciting.’
AG: Since your latest visit was to Saipan, can you tell us what NPA’s plan for the region is?
NPA: ‘We are in talks with some folks down there, maybe creating a joint venture project. It would be headquartered in the CNMI. For flights initially to Sydney, Brisbane, and Manila. They are just talks and plans. Australia and Phillepeans are just like Korea and Japan. We couldn’t make those actual applications until we have the airplanes on our op specs, so we are probably a couple of months out from that. Anything more final would take a little more time. If Saipan comes to fruition, it’ll probably be in late March or early April.’
AG: Is the initial plan to serve only Australia and the Philippians and potentially expand to Japan and Korea in the future?
NPA: ‘Expanding to Japan and Korea would be like a second step. It requires ETOPS, so it means we have to have a partner to do those flights for us until we can acquire our own ETOPS certification.’
AG: There have been reports that Northern Marianas Airways would wet-lease airplanes from Northern Pacific Airways. Will there be more involvement beyond wet leasing?
NPA: ‘We’ll most likely be part owners of it. The actual flights will be on an airplane branded in Nothern Marianas, but they’ll look substantially alike. If you glance at them, they’ll look just like ours: same livery, just Marianas instead of Pacific on the side. It’ll be our code, it’ll still be 7H-coded tickets. Everything will be ours.’
AG: Speaking of branding, what effect does the recent BNSF lawsuit has on your branding?
NPA: ‘We are hopeful not. I can’t really talk too much yet as we are still in the initial phases. It’s a shame that it came to this. The railroad has not used that brand commercially for 52 years. And they are a freight company and we are a passenger airline. It seems unfortunate that it has come to this, but we are hopeful that we will prevail in the end.’
AG: The last question in the CNMI region, Saipan island was a fairly popular destination for Chinese tourists before the pandemic. Do you see the possibility of opening China routes if the country reopens?
NPA: ‘That depends more on China than us. We have our eyes on several places in China regardless of what transpires at CNMI. So we are just like everybody else and waiting to see when China decides to open back up.”
AG: Since your main focus is Asia connections through Anchorage, can you share some updates on that?
NPA: ‘Just like I was describing the application process, we need to have the airplanes on our certificate before we can finalize that complete application. We are expecting to put that application in December. That takes anywhere between 30-45 days. Then we can take a look at when we can start selling tickets and other things. We are still moving forward on that. It’s just that making this big of a jump is a lengthy and complicated process.’
AG: The Russian air space closure adds more headwind to that, right? How has that affected your plans?
NPA: ‘It adds complexity. Now we have to circumnavigate Russia, which requires ETOPS, so it means we have to have a partner to do those flights for us until we can acquire our own ETOP certification.”
AG: Are you working on ETOPS?
NPA: ‘yes, but you have to start flying to work on ETOPS. The request is already there, so the second we start flying the airplanes, then that’s credit towards ETOPS. But you have to be in operation before you start working on ETOPS.’
AG: You talked about needing a partner to operate those routes, so have you already identified potential partners to operate those routes?
NPA: ‘We do, we are in talks with a couple, but our preference would be a partnership with Icelandair. We have had a couple of discussions, and I’ve been to Reykjavik a couple of times. They’ll be the ideal partner, but they create another level of complexity because now two different countries are trying to partner together. There are some restrictions there as well that we are working through.’
AG: Are you still planning on launching the Mexico service in the interim?
NPA: ‘We kind of put a pause on that. We considered that before the opportunity arose from Saipan. We are still moving forward with regulatory approvals for Mexico, so that can always be an option for us. But at the moment, it’s a better business model for us to go to Saipan than Mexico.’
AG: Since your focus is still in Anchorage and you just unveiled some exciting features for your new terminal, how’s the construction going?
NPA: ‘It’s almost done. Some cabinets and ceilings are missing in the premium passenger lounge, but everything else is done. It came out really well.’
AG: How do you plan on using those spaces? How would you promote a stopover in Alaska?
NPA: ‘That is the whole point of the little IMAX theater we’ve installed. It will be for everyone, not just the premium class lounge. That’ll be playing an 8-10 minute movie on a looping basis to show people that if you are only making a connection, this is what you’ve missed. These are some of the cool things you could’ve done if you were to stay in Alaska. To attract them on the next pass-through to spend a few days.’
AG: Will passengers have any flexibility to make the change on the spot and extend their layover in Anchorage?
NPA: ‘Absolutely, especially since we are the same company as Ravn Alaska. It’ll be really easy for us to book the same reservation on the same code. If they want to divert, stay here or hop on a dash 8 and see part of Alaska, it’ll be incredibly easy for them to do that.’
AG: What US destinations do you plan on serving from Anchorage?
NPA: ‘Los Angeles, San Francisco, Las Vegas, New York and Orlando.’
AG: You’ll serve the LA Area from Ontario, why?
NPA: ‘Ontario airport has availability and they were actively seeking new international service. Our demographic study shows that there’s a more dense Asian population close to the Ontario airport than LAX. The airport cost is not even in the same league. So Ontario made a lot of sense for us.’
AG: Why is the airplane you took on the tour back in Ontario?
NPA: ‘Well Ontario airport is our maintenance base. There are always little things that can be tweaked. We still have to install the refreshed ceiling, it’ll be a dark ceiling with twinkle LED lights. I dare say we have the nicest passenger 757 in the world right now. Those are still left to go in. We are working through the FAA conformity process for the Ontario base. The other part is Ontario is a way better place to store an airplane than Alaska.’
AG: China Airlines runs a direct flight from Ontario to Taipei. Any chance you are looking to serve Taipei in the future?
NPA: ‘It depends on how Saipan goes because we can’t get to Taipei from Anchorage. We are not really looking to do Tech Stop routes because that’ll be a competitive disadvantage. Unless we connect out of a Saipan hub, probably not in the short-run until we step up to the widebodies.’
AG: Do you have any plans to upgauge to widebodies?
NPA: ‘I think that’s the natural evolution. Not right out of the gate, our five-year plan shows a scaling to 50 airplanes in seven years, but all narrowbodies.’
AG: How much life do you think you can get out of those airframes, and how do you plan on scaling to 50 airplanes?
NPA: ‘I think we have at least ten more years on these frames. Delta just announced they are extending their 757 fleets. But I’m not delusional to think that we can scale to that with the 757s, so at some, we’ll have to change over, most likely to Airbus. But as it stands right now, we want to stay in the narrowbody space, it’s better for the business model.’
AG: How many airplanes do you have now?
NPA: ‘We have four right now. Two of them are done with retrofitting except for the headliner I described. One is in C check right now and the other one is queued up to go through C check as soon as this one is done.’
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