Friday, February 05, 2016

SeaPort declares bankruptcy

SeaPort Airlines announced Friday it filed for Chapter 11 bankruptcy, although the company says day-to-day operations will not be interrupted.

According to a press release, SeaPort will continue to operate its current flight schedule, including the route between Pendleton’s Eastern Oregon Regional Airport and Portland.

The airline also promised to continue paying its employees as the company attempts to reorganize in the midst of a national pilot shortage and a severely reduced flight schedule.

In addition, CEO Rob Kinney has resigned. Tim Sieber, most recently executive vice president, was named president.

Although SeaPort has reassured city officials that business will continue as usual, the development follows some downward trends for the Portland-based airline.

Once operating almost two dozens routes in 11 states and Mexico, SeaPort announced that it would dramatically cut its service area in January, focusing most of its attention toward airports in Oregon and Arkansas.

SeaPort was sued in U.S. District Court by Caravan Air LLC last week, with the Oxford, Conn.-based company claiming SeaPort owed it an estimated $500,000 after failing to pay rent on a leased airplane. Sieber did not return a request for comment.

While SeaPort has managed to maintain flight service in Pendleton, the airline attracted only 4,015 boardings in 2014, SeaPort’s lowest total since the first full year it started serving Pendleton in 2009.

Commercial flights from the Pendleton airport are made possible through a $1.8 million subsidy from the U.S. Department of Transportation’s Essential Air Service program. If SeaPort’s boarding numbers continue to decline, the airport is in danger of having its subsidy stripped.

SeaPort’s contract ends Dec. 31, and Steve Chrisman, Pendleton’s airport manager and economic development director, said potential bids must include concrete proposals to boost boardings.

Even though SeaPort has run “a clean operation” in the past, Chrisman said the company’s bankruptcy could be a factor if they submit another bid for the Essential Air Service contract.

“We want to be objective, but you can’t say that its ideal,” he said.

Although he expects service to continue, Chrisman said the city has the option of putting out an emergency request for bids if SeaPort drops its flights from Pendleton.

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