Ravn Air Group Approved to Receive $31.6 Million in CARES Act Payroll Support Program Grants
Ravn Air Group announced that it has been approved by the US Treasury to receive $31.6 million in airline support payroll grants under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) Payroll Support Program (PSP) subject to Bankruptcy Court approval, which would be available to Treasury-approved bidders seeking to buy the entire air group in an upcoming Chapter 11 sale process.
“Today’s announcement about CARES Act payroll grants is fantastic news for our creditors, our employees, our customers, and the 115 communities we served before we had to ground our fleet due to the COVID-19 Pandemic and subsequent travel restrictions,” says Dave Pflieger, Ravn president and CEO. “We are grateful to Alaska’s congressional delegation, Senator Lisa Murkowski, Congressman Don Young, and especially Senator Dan Sullivan, for their incredible support and tireless work ensuring Ravn and other air carriers in Alaska were able to receive CARES Act support during this global crisis.”
Pflieger continued: “Given this news, and the fact that we now have a number of interested, enterprise-wide bidders who want to buy the entire air group and its three airlines, we remain optimistic that we will be able to maximize creditor recoveries, exit Chapter 11 protection, and ensure that Alaska’s largest and most vital regional airline can resume operations later this summer.”
According to a recent Alaska Public Media report, the regularly scheduled passenger and cargo service that Ravn previously provided has been missed by many rural communities—with only limited service now offered to many Alaska villages—and caused organizations like the Yukon Kuskokwim Health Corporation (YKHC), to pay $1,000 or more to charter flights and transport sick and ailing patients.
Alaska’s essential seafood industry has been similarly affected. “The City of Sand Point has been devastated by the loss of Ravn Air Group carrier service to the chain,” says Glen Gardner Jr., mayor of the city of Sand Point. “We have very limited options to come and go to Anchorage for medical, business, grocery shopping, and some leisure activities. It sure would be nice to see Ravn back servicing our community. The cost of leaving the community has become prohibitive, leaving our residents in quite a bind.”
As announced on June 5 by the Honorable Brendan L. Shannon in the United States Bankruptcy Court for the District of Delaware, Ravn Air Group has also been authorized to run a sales process for all or substantially all of its three airlines and their assets in parallel with the consideration of the plan of liquidation that was initiated when the airline filed for Chapter 11 protection on April 5. Judge Shannon established June 24, 2020 as the deadline to receive bids for all or substantially all of its three airlines and other assets.
In This Issue
Hardware Hangs In
Turns out, predicting the effects of a pandemic on a global economy is kind of impossible. In the midst of the uncertainty, those companies that crumbled and those that found ways to thrive seemed random at times, depending on local economies, access to financial aid, the unpredictability of consumers, changing regulations, and a little bit of “who knows.”