The Alaska-based PenAir is filing for Chapter 11 bankruptcy, the company announced today. Its routes in Alaska will be unaffected by the reorganization.
“The steps we are taking today will allow PenAir to emerge as a stronger airline, while continuing our focus on safe operations,” said PenAir CEO and Chairman Danny Seybert in the statement.“We will be working with a restructuring officer to present a reorganization plan that will allow the management team to focus on our employees, safe operations, retiring debt and taking care of our customers.”
PenAir CEO and Chairman Danny Seybert told the KDLG in Dillingham, one of the locations the airline serves, that its expansion into Lower 48 markets “isn’t working out for us.”
He told the radio station that under the Chapter 11 bankruptcy reorganization will refocus its efforts on Alaska. The station also notes that the bankruptcy announcement comes two months after it canceled daily freight service to Unalaska and two years after the carrier spent $27 million on upgrading its fleet.
The upgrade didn’t work out well, KDLG notes:
PenAir has already sold their Saab 340s. Since flying the 2000s, the company has announced a slew of mechanical cancellations and posted the worst reliability rates in its history.
Seybert went on to tell KDLG that the airline may return to the smaller planes it replaced.
Boston-area service will also be unaffected. PenAir will, however, be shutting down service out of its Portland and Denver hubs over the next 90 days.
PenAir serves eight Alaska airports in Dutch Harbor, Cold Bay, Sand Point, King Salmon, Dillingham, St. Paul, St. George and McGrath, according to the announcement.