ANCHORAGE (KTUU) - Three Alaska communities are facing an air carrier shakeup.
After PenAir announced it will terminate service to McGrath, St. Paul Island and St. George last week, the remote communities are wondering who will provide transportation in and out of their villages if their only air carrier leaves.
“We can't not have air service out here for crying out loud,” said mayor of St. Paul Island Simeon Swetzof Jr, who said the island of about 500 people have no feasible transportation off the island.
“Without the air service, the little economy that is going on the island would essentially disappear,” said the president of St George Tanaq Corporation Nathan McCowan.
CEO of PenAir Danny Seybert said his company has been losing money on flying to those markets for decades, and after the air carrier’s decision to file Chapter 11 bankruptcy earlier this month, Seybert said he knew he had to make a change to the flights offered.
PenAir filed a notice to terminate services at McGrath, St. George and St. Paul Island on Aug. 14. Still, Seybert said despite the notice, he has no intention of abandoning the markets.
The decision is part of a larger business plan, Seybert said, of triggering the process of bringing federal subsidies to the table.
“I just got the letter back from DOT today ordering us not to leave the market, and the process has been started,” said Seybert.
Because there are no other air carriers in the three villages, the federal government will now be opening the communities up to the possibility of becoming part of a network of 60 communities in Alaska subsidized under the Essential Air Service Program (EAS).
According to the US Dept of Transportation, EAS is written into the Federal Aviation Act “to ensure that smaller communities would retain a link to the National Air Transportation System.”
“I chose to fly subsidy-free and accept a loss in order to keep the markets, but in the situation we're in today, that's no longer acceptable. I need to turn it into a profitable market,” said Seybert.
On Tuesday, the US DOT opened up a 30 day window to accept proposals from any airline to apply for the EAS subsidy and provide services to those three communities. PenAir said it’s already preparing its own competitive bid.
According to Penair, there will be no lapse in service coverage to St. Paul Island, St. George or McGrath.
After 90 days of bids and public comment, there could be a decision of which air carrier will serve those communities.
“It's worrisome right now. We don't know what's going to happen,” said mayor Swetzof Jr. “But I have to believe that it's all going to be OK.”