Ravn To Stop All Service, Lay Off All Staff, And File For Bankruptcy
After announcing a drastic cut to service last week, RavnAir Group said on April 5 that 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 over 100 communities with over 1300 employees. The company said in a statement sent out on Sunday morning, and later revised, that the decision to end service was due to the coronavirus pandemic and a 90% drop in passenger revenue.
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 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,” Rupert said.
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.