Alaska regional air carrier Kenai Aviation shut down operations abruptly Monday, citing financial insolvency.
The demise of the airline, which offered scheduled service and charters to destinations around Southcentral Alaska and to Unalakleet, left customers with canceled flights and communities with questions.
Airline officials said that the company was shutting down operations in a statement posted on social media Monday. Kenai Aviation had been steeped in a “debt load that we haven’t been able to get back on top of” since the pandemic, owner Joel Caldwell wrote in the statement.
Earlier this year, the maintenance grounding of an aircraft that was supposed to serve the Anchorage-Unalakleet route left the Western Alaska community without reliable direct air service for months. The plane had been fixed and flights running, Caldwell wrote in the statement, but the missed service was also a financial blow.
“Today, the bank is calling that debt,” he wrote. “We have to cease all operations immediately. I am devastated.”
Kenai Aviation was founded in 1959 as an air service to support the Cook Inlet energy industry, and was purchased by Alaska Airlines captain Caldwell in 2018, according to the company’s website.
Some people with reservations to fly with Kenai later this week received emails saying their flights had been canceled.
Caldwell did not immediately respond to questions about the details of the closure Monday, including whether the company will issue refunds or honor points. It was also not clear whether the company would continue flying charters.
In the statement, Caldwell said he hoped for a new iteration of the airline in the future.
“I refuse to give up. I don’t know how. I can’t make promises. But I believe that Flight 114 will board again,” he wrote, referring to a Kenai Aviation route. “We need capital, we need partners, we need a lifeline. That investor is out there, we just need to find them. One promise that you can hold me to, is that, if at all possible, I will find that life line.”
Kenai flew to communities including Fairbanks, Glennallen, Homer, Seward, Kenai, Valdez and Unalakleet.
In Unalakleet, the demise of the company means the community again has no regularly scheduled air service.
Work on awarding a new essential air service subsidized carrier contract was halted by the government shutdown, said Kelsi Ivanoff, a Unalakleet resident who has worked extensively on flight service issues.
Ivanoff said the news about the end of Kenai Aviation’s operations came out of nowhere Monday. Flights had been running and were full, after the summer and fall of cancellations.
Now, Unalakleet is back to square one, she said — the only way to fly out is an expensive and circuitous trip through Nome.
The closure of Kenai Aviation comes less than three months after Ravn Alaska, once a major airline serving rural routes, also shut down abruptly.
