Peninsula Airways, best known as PenAir, has filed for Chapter 11 bankruptcy.
In a Twitter announcement on Aug. 7, PenAir said that “with heavy hearts, we announce that PenAir has filed for Chapter 11 protection.” Service in AK to continue unchanged, the company said.
According to Danny Seybert, chairman and chief executive officer of the carrier, PenAir initiated the process of filing Chapter 11 reorganization with the state. Chapter 11 of the federal Bankruptcy Code offers some protection from creditors, in that it provides for reorganization, usually involving a corporation or partnership.
A chapter 11 debtor usually proposes a plan of reorganization to keep the business alive and pay creditors over time.
Seybert said the action would allow PenAir to emerge as a stronger airline, while continuing its focus on safe operations. “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,” he said.
PenAir noted in a statement that the company had recently announced termination of the Portland area regional routes as part of an immediate cost-cutting plan in the Pacific Northwest. The company shut down all but one route to Oregon on Aug. 7, and planned to close its Denver hub as well, pending approval from the federal Department of Transportation.
Seyert said that PenAir had filed a request with the federal DOT to end essential air service routes between Crescent City, CA and Portland, OR, and all regional routes served from its Denver hub. PenAir flies within Alaska to Dutch Harbor, Cold Bay, Sand Point, King Salmon, Dillingham, St. Paul, St. George and McGrath, and also has three routes in the Boston area, including Bar Harbor and Presque Isle, ME, and Plattsburgh, NY. Passengers in both markets can expect continued operations with no changes to scheduled flight service, the company said.
Employees in these markets are expected to play a key role in the reorganization process. “Our employees are a key part of our success and are doing everything we can to keep our PenAir family intact,” Seybert said.
PenAir, founded in 1955 by Danny Seybert’s father, Orin Seybert in Pilot Point, is one of the oldest family owned airlines in the United States. The elder Seybert resigned in early 2012 as president of Pen Air and his son was elected as chairman and chief executive officer.
PenAir is also one of the largest regional airlines in Alaska and one of the largest operators of Saab 340 aircraft in the U.S. System wide, Pen Air has 700 employees and serves 25 destinations, the company said.