Saturday, August 05, 2017

PenAir flight cancellation disconcerting

Several communities in Nebraska were shocked last week when their lone air carrier, PenAir, announced that it would no longer be serving those towns. 

Alaska-based PenAir filed for Chapter 11 bankruptcy reorganization a week ago and announced it is closing its Denver hub. PenAir flew between Denver and North Platte, Kearney and Scottsbluff in Nebraska.

Those three Nebraska cities are now scrambling to find a replacement.

“We were caught off guard,” Mike Sharkey, manager of the North Platte Regional Airport, told the North Platte Telegraph.

PenAir flew Essential Air Service routes between Denver and North Platte, Kearney and Scottsbluff, as well as Liberal and Dodge City, Kan.

Because of the terms of PenAir’s contract, it is required to continue providing service until a suitable replacement is found and can provide daily flights to Denver, Sharkey said.

Essential Air Service funding is crucial in providing air service to small communities. Without that help from the federal government, airlines couldn’t afford to make flights to rural communities.

However, as the PenAir case shows, even the EAS funding is no guarantee that those flights will be successful. And, as the PenAir case also shows, an airline can be struggling for a number of reasons that will force them to pull out of EAS routes.

These three Nebraska communities had high hopes for PenAir as the previous airline serving them, Great Lakes, had struggled to provide reliable service.

Now their air service has taken another hit with PenAir pulling out.

All of this illustrates how fortunate Grand Island is to have the air service it has with flights provided by Allegiant Airlines to Las Vegas and Mesa/Phoenix and flights by American Eagle to Dallas.

The American flights are Grand Island’s EAS routes. They have proven popular with travelers as the flights are almost always close to full and travelers have found that in Dallas they can make connections to almost anywhere.

PenAir’s pullout from Denver shows once again the great judgment and foresight that Central Nebraska Regional Airport officials have shown. They have worked closely with Allegiant to make sure those flights are a success. And they made the right decision in choosing Dallas as the destination for its EAS routes.

While other central and western Nebraska airports are struggling, Grand Island travelers are fortunate to continue to have outstanding service right here in Grand Island.

About 18 months after arriving in Humboldt County amid much fanfare, PenAir sent out a press release shortly before 7 p.m. on Aug. 7 announcing it was shuttering its route from Arcata/Eureka to Portland.

Some 72 hours later, its last plane had departed the airport in McKinleyville and the airline had filed for Chapter 11 bankruptcy protection, looking to end its flights into and out of Crescent City.

"The steps we are taking today will allow PenAir to emerge as a stronger airline, while continuing to focus on safe operations," PenAir CEO and Chair Danny Sybert says in a press release.

The move leaves United, once again, as the last airline standing in Humboldt County, limiting the routes and schedules available to customers, and potentially driving up costs. It will, however, have little impact on the local workforce, as PenAir spokesperson Missy Roberts says the company only has one local employee — a longtime PenAir staffer who will have the option of relocating with the company — and contracts others through SkyWest, which has indicated it doesn't expect any staffing changes stemming from PenAir's decision.

The stakes are substantially higher up in Crescent City, where PenAir is the only airline service, offering a pair of daily roundtrip flights to Portland. But the small Del Norte County airport also has more protections, as it has the federal distinction of being an "Essential Air Service" airport. That means PenAir can't pull up shop until it gets federal approval and another airline has agreed to service the airport, a process which typically takes at least 90 days.

Del Norte County Airport Director Matthew Leitner says he expects the Department of Transportation will soon issue a request for proposals to all air carriers in the nation, seeking bids to take over Del Norte's air service. The airport's EAS status means its airlines get federal subsidies to service the market, which makes it a sought after contract for most airlines. The subsidies come from foreign overflight fees, or tariffs placed on foreign flights that pass over U.S. airspace — like, say, a flight from Havana to Toronto. The whole idea, according to Leitner, is to ensure that markets that need airport service due to their geographic isolation get it at an affordable cost.

Unfortunately for Humboldt County, we don't have that designation and there's no guarantee — and possibly only limited optimism — that an airline will step in and take PenAir's place. The good news is that Humboldt still has a pot of cash aimed at luring another carrier.

The shuttering of the route represents a relatively stunning turn of events for PenAir, which opened it without demanding a minimum revenue guarantee — the promised revenues that airports in small areas generally offer to airlines in case the companies are unable to fill seats as projected. While that move may represent a bit of irrational confidence on the part of the airline — a local official estimated it costs at least $8 million to start a new route in a new market — it also means Humboldt County still has some money to try to leverage into a replacement option.

The group Fly Humboldt has raised more than $1 million in funds to offer minimum revenue guarantees, launch marketing efforts and make improvements intended to recruit new air service options locally. Because that money wasn't spent on PenAir, it's still available.

Emily Jacobs, program coordinator for the county's aviation division, says efforts to recruit another airline to Humboldt never stopped and remain ongoing.

"We're always interested in more flights to more destinations," she says. "We've already been in contact and talking with airlines, and will be meeting with some in October."

But for the time being, those going commercially airborne out of Humboldt will do so on United flights to San Francisco. And that has a bit of a potentially reverberating impact, from the airport's grounds crew to Ramone's, which recently opened a cafĂ© there. Jacobs says United is adding another afternoon flight to San Francisco — sporadically this month and then daily in September — which will fortunately help offset the loss of PenAir.

For those holding a PenAir ticket out of Arcata/Eureka, they'll have to make other arrangements — either getting the purchase refunded or trying to channel their itinerary through Crescent City and making the hour-plus drive north. (Ticket holders can call (800) 448-4226 to explore their options.)

PenAir, meanwhile, will continue operations in eight destinations in the Alaska and Boston areas, presumably because they remain profitable, as it enters bankruptcy proceedings and looks to reorganize as a company.

Founded in 1955, PenAir is one of the largest family-owned airlines in the United States, with 700 employees nationwide.

WASHINGTON, D.C. (KNEP) - The airline providing service between Scottsbluff and Denver won't fight the Western Nebraska Regional Airport Authority's quest for a new essential air carrier.

PenAir filed a notice of termination of service for all subsidized essential air service to and from Scottsbluff with the U.S. Department of Transportation. In the July 28, 2017 filing, PenAir requests that the DOT issue an order "as soon as possible inviting proposals from carriers interested in providing essential air service to/from Scottsbluff", and then to promptly select a new carrier.

WNRA Board members voted earlier in July to petition the U.S. DOT to vacate the order awarding EAS to PenAir and issue a new Request for Proposal. In their letter to DOT officials dated July 12, WNRA officials noted enplanement numbers for PenAir improved only marginally over the previous EAS carrier, on track for about 4,000 for the year. However, airport officials also said through June 2017, 17 percent of flights were cancelled, with a similar percentage delayed more than 30 minutes and a change in schedule that didn't work for WNRA customers.

PenAir has not suffered a similar level of flight cancellations with service provided to either North Platte or Kearney. In June, PenAir officials said a pilot shortage was presenting challenges contributing to the service issues involving the Scottsbluff airport.

PenAir's filing indicated they intended to continue their Scottsbluff service until a replacement service could begin operation.

Humboldt’s soaring woes continue. After just over a year, our fastest escape route to Portland is no longer an option. 

PenAir quietly informed local airport officials today that it would cease its services between ACV and PDX. The last flights will be this coming Monday. 

Emily Jacobs, program director with the Humboldt County Aviation Division, told the Outpost that she learned of PenAir’s decision in a phone call this afternoon around the same time as did PenAir’s locally based employees. 

Humboldt is not the only airport PenAir is quitting. Jacobs said she was told that the airline told her they would be leaving all non-essential air service markets in the lower 48 states — for those keeping score, that means Crescent City will keep its cheap flights to Portland. 

“We’re definitely disappointed,” Jacobs said. “It was a very successful route, and they were pretty full. But we’ll keep on going and keep presenting our data on passengers to the airlines, and try to find something else.”

Jacobs said one of the main issues affecting PenAir is a national pilot shortage.

“The mandatory retirement age for pilots is 65. It’s such a large population that pilots are retiring – hundreds by the day. The major airlines are hiring pilots from the regional airlines.”

UPDATE: A press release from PenAir below:

Alaska-based PenAir cancels Pacific Northwest area air service

Effective Tuesday, August 8, 2017, PenAir will cease operations of all non-EAS routes in the Pacific Northwest. This includes air travel on PenAir between Portland and Redding, Eureka/Arcata, North Bend/Coos Bay or Klamath Falls. The last scheduled flights in and out of Portland will be Monday, August 7. Flights operated by PenAir between Portland and Crescent City will continue as scheduled.

“The steps we are taking with closing Portland area routes will allow PenAir to cut costs, while management continues its focus on financial stability and safe operations,” said PenAir CEO and Chairman Danny Seybert.

PenAir flies to eight destinations within Alaska, as well as the Denver and Boston areas. Passengers on all other routes can expect continued operations with no changes to flight times or services.

Passengers scheduled to fly out of the Portland markets after August 7, may contact the airline at 800-448-4226.

As a cost-cutting measure, PenAir will stop commercial air service flights and operations in Klamath Falls starting Monday, as well as all non-essential air service routes in Redding, Eureka/Arcata and North Bend/Coos Bay.

The announcement came to John Barsalou, airport manager at Crater Lake-Klamath Regional Airport, at about 3:30 p.m. Friday afternoon.

The last flight leaves Klamath Falls Monday night, according to Melissa “Missy” Roberts, vice president of marketing and sales for PenAir.

Flights operated by PenAir between Portland and Crescent City will continue as scheduled, according to the airline.

“The steps we are taking with closing Portland will allow PenAir to cut costs, while management continues its focus on financial stability and safe operations,” said Danny Seybert, chief executive officer and chairman of PenAir, in a news release.

EAS (Essential Air Service) routes are subsidized by the federal government. Klamath Falls is not subsidized.

Klamath Falls Transportation Security Administration (TSA) workers and employees working for PenAir will be affected by the air service loss, Barsalou said.

“We were moving forward and to get that news, it was just … very disheartening,” Barsalou said.

“I'll be working with the city manager and others in the community … to see what other options we have. We'll continue to work hard at finding options. The realities are that the pilot shortage is hitting the country, not just us.”

“We loved being there,” Roberts said of Klamath Falls. “We loved the people and we loved the environment, and we just as a group of employees, we felt that there was a lot of potential.”

The commercial air service provider, based out of Alaska, has offered flights from Klamath Falls to Portland International Airport since October 2016.

Barsalou encourages those with tickets to contact PenAir, as there may be refunds available for flights already booked.

“Obviously it's a business decision on their part,” Barsalou said. “We've done everything we could do to ensure their success. I've done everything I know how to ensure their success.”

Barsalou said he plans to hold a staff meeting on Monday to discuss a way forward.

“I just want to encourage those losing their jobs or may have jobs relocated that we are praying for them and hope that things work out for them,” he said.

“I encourage them to reach out to the community to see if they can help.”

Klamath County Economic Development Association Executive Director Greg O'Sullivan commented on the announcement.

“Very disappointing and in the short term is likely setback to business development in the Basin,” O'Sullivan said in an email. “However, the national and local jobs report reflects an economy that is growing. We will persevere!”

Passengers scheduled to fly PenAir after Sunday should call 800-448-4226.

PenAir was founded in 1955 by Orin Seybert and operates Saab 340 aircraft with current flights to eight destinations in the United States. PenAir currently employs 700 employees nationally with 25 destinations.


  1. Please remember that these flights are all subsidized by taxpayer money. The real challenge will be when the subsidies run out.

  2. The money to fund this program comes out of the Airport and Airways trust fund. It is a self funded program through airports. PFC's are what funds this NOT taxpayer money.... If you fly then you help pay for this program. If you don't fly then you don't pay for this program..Please get your facts right before speaking nonsense.