14 August, 2017

PenAir Files Chapter 11 in US

The Small regional Alaskan Airline PenAir filed for Chapter 11 bankruptcy last week after its major expansion to hub airports beyond its home in Alaska failed to generate as many passengers as expected.

Peninsula Airways Inc, which advertises the PenAir brand as the "Spirit of Alaska" mainly flies government-subsidized routes to small towns such as Boston to Presque Isle, Maine and Anchorage to King Salmon in Alaska.

Many of the PenAir routes have already been suspended however some are continuing as the airline is under contract with the Department of Transport, those routes include Portland to Crescent City, Dodge City to Denver, Liberal to Denver, North Platte to Denver and Scottsbluff to Denver.

Photo Erik Hill / Alaska Dispatch News
PenAir chief executive Danny Seybert (pictured left) said the bankruptcy proceedings were not a surprise and could be seens as a prudent and vital measure for future development, saying he was "quite excited about." it.

"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," Seybert said last week when news broke of the Chapter 11 filing. "We're going to come out of this a stronger, healthier company."

Mr Seybert declined to say what exactly was the main reason, saying "not any one single thing; it was a series of things that happened."  He confirmed that both the Portland and Denver hubs had "not done as well" as had previously been hoped or envisioned

According to the financial declaration filed in U.S. Bankruptcy Court Sunday from PenAir Chief Operating Officer David Richards, the company's financial statements show "rapid deterioration" during the last fiscal year.  PenAir reported a $6 million net loss for the 12 months that ended in March.  Among the unsecured creditors is the  actual state of Alaska, which according to the documents, is owed more than $1.4 million. Second on the list of creditors is SAAB Defense and Security USA which supplied numerous parts to keep their aircraft flying.

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