After announcing a drastic cut to service last week, RavnAir Group said Sunday it would park all 72 of its planes, lay off its remaining staff and file for Chapter 11 bankruptcy.
The company, which operates Ravn Alaska, Ravn Connect and Penair, was the largest rural carrier in Alaska, serving more than 100 communities with over 1,300 employees. The company said in a statement sent out on Sunday morning, and later revised, that the decision to end service was due to a 90% drop in revenue due to coronavirus restrictions around the state.
The statement says that the company won’t resume operations until it has enough money to rehire staff and begin operating again.
In the statement, Ravn said that it would stop its operations until it receives word about the status of the grant application it submitted to the federal government, as well as any other financial assistance it could receive the government. The decision to file for Chapter 11 bankruptcy petitions for relief would allow the company to “hit pause” as it awaited those decisions, according to the statement. The recently-passed $2.2-trillion federal CARES Act set aside over $50 billion for the airline industry.
Sunday’s decision again sent other air carriers scrambling to keep mail, freight and passenger service going to villages.
“Normally you would have some sort of notice that somebody wasn’t gonna provide the route anymore and it’s an advance logistical decision, and obviously this time around, we didn’t have that luxury of time,” said David Rupert, a spokesperson for the U.S. Postal Service, which contracts with regional carriers to deliver mail to villages.
After Thursday’s decision that cut service to most smaller villages, Rupert said, that the USPS already had to scramble to fill in service gaps, but was able to do it within 24 hours. Rupert said that the postal service had pieced together service after Sunday’s shutdown as well.
“We were able to cover just about all of the communities through one means or another, so either through commercial or cargo carriers and to add those to some emergency contracts and we were able to cover just about all of those routes through the full service,” he said.
Other issues were also cropping up. In Utqiagvik, Ravn ground personnel had previously been providing the ground service — fueling, operating hangars, sorting mail and cargo — for several freight carriers that served North Slope communities. Now that those employees have been laid off, Wright Air Service is looking for ways to keep those operations running, according to Matt Atkinson, part-owner of Wright.
“We’re working very diligently with the other key stakeholders and with the borough and we’re confident that we’ll work out something to keep the facilities available to support the great ground crew that’s here,” he said.
Over the course of Sunday afternoon, Atkinson said the company was able to hire five of the ground crew that had formerly worked for Ravn in Utqiagvik. He said the company was still at work resolving facility access issues to make sure that service would continue.
Like the postal service, Atkinson said that he learned of the Ravn’s decision over email on Sunday morning.
“I happened to be here (in Utqiagvik). The coworkers here were on a conference call and they received an email on the cessation of the remainder of the operation and layoffs of the remainder of Ravn,” he said.
For communities that rely on Ravn for the federal Essential Air Service program, which subsidizes air service to communities that would otherwise be unprofitable to serve, the picture isn’t clear. According to the most recent list, released in November of 2019, Ravn serves McGrath and St. Paul Island.
On Thursday, the Federal Aviation Administration wrote in a statement that, “Ravn will continue to serve their Essential Air Service communities and continue flights to the other markets it currently serves with the RavnAir Alaska Dash-8s.” As of Sunday afternoon, FAA spokesperson Allen Kenitzer had not heard directly from Ravn that it would no longer be operating those routes.
RavnAir Group spokesperson Debbie Reinwand said that the company would not be giving any phone interviews or information on the company’s plans outside of the information provided in the release.