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Ravn Air Picks Up PenAir

by Jun 10, 2019Magazine, Transportation

Protecting PenAir jobs, service routes, and operations

A PenAir Saab 2000 flies past Denali.

Ravn Air Group

The Ravn Air Group is launching a “new” PenAir, following the acquisition of PenAir’s assets by investment affiliates of J.F. Lehman & Company (JFLCO) for $12.3 million.

As the owner of Ravn Air Group, JFLCO’s acquisition of PenAir protects a substantial majority of company jobs, ensures continuity of operations and service to PenAir routes, and creates stability and better travel opportunities throughout Alaska, according to a news release announcing the acquisition.

“It is a testament to the strength and fortitude of PenAir employees and the hard work and commitment of all Ravn Air Group team members that JFLCO was able to pursue the acquisition of such a storied airline, which, like Ravn, has a rich history of serving Alaska,” says Dave Pflieger, president and CEO of Ravn Air Group.

Among the key assets acquired in the purchase of PenAir are five forty-five-seat Saab 2000s and leases on several airport facilities.

“This is a big win for Ravn Air Group, as well as for PenAir and all of our team members, customers, and Alaska communities,” Pflieger says. “The two companies coming together provides an incredible opportunity to better connect Alaska, with the ability to provide broader, more reliable, and more consistent service.”

As a subsidiary of Ravn Air Group, PenAir will keep its current name and continue to operate as a separate company under a separate FAA certificate. With the completion of the transaction, PenAir will be a financially sound organization with a significantly enhanced ability to serve the state of Alaska, Ravn Air Group says.

“The acquisition of PenAir represents another successful step in expanding Ravn’s unique service offering and enables us to better serve the residents and businesses of Alaska,” says Alex Harman, a partner at JFLCO.

The purchase of PenAir by an Alaska-based airline means that about 250 jobs will remain in the state, Pflieger notes. Will Hanenberg, principal at JFLCO, points out that PenAir’s “exceptional safety culture and talented group of employees represent a strong fit” for the Ravn Air Group.

“For Ravn team members, this acquisition marks the culmination of over a year of hard work and effort that has resulted in a stronger, better company that is ready to expand,” Pflieger says. “Likewise, we recognize and value PenAir’s strong team, assets, and rich history of serving Alaska and are eager to welcome PenAir employees to the Ravn Air Group. We look forward to working together toward a shared goal of providing the best in safe travel throughout the great state of Alaska.”

Among the original concerns following PenAir filing for bankruptcy was how it would impact service to the about 450 people that comprise one of the Last Frontier’s farthest-flung communities: the one on St. Paul Island in the Bering Sea.

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“We are the only community that has so much water between us and the mainland that PenAir serves,” Amos Philemonoff, president of the Aleut Community of St. Paul, told KTVA in December. “I don’t legally think that St. Paul or any community on the 1979 list of Essential Air Service communities could have a lapse in service. It’s hard to believe.”

The Essential Air Service program was put in place to guarantee that small communities—being taken care of by certificated air carriers before airline deregulation—maintain a minimal level of scheduled air service. The Department of Transportation is mandated to provide eligible communities, such as the one on St. Paul, access to the National Air Transportation System.

Following negotiations, Ravn confirmed there would be no interruption in service to St. Paul. PenAir’s Saab 340B continued servicing the community through about mid-February, after which Ravn’s Dash 8 airplane took over the St. Paul operation and schedule.

Ravn continues to provide regional service for Alaskans.

Ravn Air Group

“This [acquisition] is a big win for Ravn Air Group, as well as for PenAir and all of our team members, customers, and Alaska communities.”

—Dave Pflieger, President/CEO, Ravn Air Group

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The delay in the handover between the aircraft was due to the need for Ravn to obtain an extended certification for over-water flight to allow its smaller Dash 8 airplane to service the area.

“The addition of PenAir to the Ravn Air Group route network is an excellent fit, adding the Aleutians and St. Paul in the Pribilof Islands to a network that already serves much of the state,” Pflieger says.

“As we do regularly, we review schedules and market destinations to determine how we can best serve our customers and the communities. If any changes do occur, as both PenAir and Ravn have always done, we will communicate with you to make sure you are kept informed of any service changes,” Ravn says on its website.

In early May, PenAir started service between Anchorage and Kodiak. The announcement was made on Ravn’s website and noted flights from Anchorage to Kodiak would be available on both Ravn and PenAir carriers and transition to a PenAir market with the Saab 2000 aircraft, “providing more capacity to the market.”

Ravn Air Group, headquartered in Anchorage, operates a fleet of about seventy aircraft with more than 400 flights per day. Ravn provides passenger, mail, freight, and charter flights and logistical services to more than 115 destinations throughout the Final Frontier, with hubs in Anchorage, Fairbanks, Bethel, Aniak, St. Mary’s, Nome, Kotzebue, Unalakleet, Utqiaġvik, and Galena. The company expanded service in 2018 to include Dillingham, King Salmon, and McGrath.

“With PenAir joining Ravn Air Group, customers of our two airlines will now be able to fly to more destinations in Alaska. PenAir will continue to operate under its own, separate operating certificate. Like Ravn Alaska and Ravn Connect, it is now part of Ravn Air Group.”

—Dave Pflieger, President/CEO, Ravn Air Group

PenAir, a significantly smaller operation, serves six communities in Southwest Alaska, including Dutch Harbor, which was marketed and sold by Alaska Airlines.

“With PenAir joining Ravn Air Group, customers of our two airlines will now be able to fly to more destinations in Alaska. PenAir will continue to operate under its own, separate operating certificate. Like Ravn Alaska and Ravn Connect, it is now part of Ravn Air Group,” Pflieger says.

One of the most prominent changes customers are already seeing is the merger of airport operations for check-in and departures at Ted Stevens Anchorage International Airport, Pflieger says.

“This was done from day one of the acquisition and this has already provided better customer experience and significant cost savings,” he says. “We have also merged our airport operations in King Salmon and Dillingham and many of the back office and commercial functions have been merged. The main flight operations remain independent.”

Pflieger also notes that Ravn’s frequent flyer program will be expanded with the inclusion of PenAir.

“More importantly, we will also be offering our frequent flyer program to all our PenAir customers soon, allowing them to earn points that can be used for free flights,” Pflieger says. The announcement is a major change since the successful acquisition was originally detailed on the company’s website. Ravn hasn’t announced a timeline for when the frequent flyer program will be updated.

“Joining forces with the Ravn Air Group will enable us to reach our full potential. Together, we will offer our customers a broader network, greater resources, and more travel opportunities—all while maintaining our renowned customer service that PenAir passengers have appreciated for more than sixty years,” Brian Whilden, PenAir’s new president and COO, said in a news release. “We couldn’t be more pleased to become part of the Ravn family.”

Alaska Business Magazine October 2019

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