Ravn Air Group Approved To Receive $31.6 million in CARES Act Payroll Support Program (PSP) Grants

Ravn Air Group announced today that it has been approved by the U.S. 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. 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.

“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,” said Dave Pflieger, Ravn’s President & CEO.

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. 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,” said Glen Gardner Jr., Mayor of the City of Sand Point.

As announced on June 5th 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 5th. Judge Shannon established June 24, 2020 as the deadline to receive bids for all or substantially all of its three airlines and other assets.

About Ravn Air Group

Before it filed for Chapter 11 protection on April 5, 2020, following a 90% drop in bookings and revenue due to the arrival of COVID-19 in Alaska, and a resultant state-mandated travel ban to slow the spread of the Pandemic, Ravn was Alaska’s largest and most vital regional air carrier. The company and its three separate airlines were supported by over 1,300 employees, and it carried passenger, mail, freight, and charter customers to more than 115 destinations throughout Alaska.

Headquartered in Anchorage, Ravn Air Group operated a safe and highly reliable fleet of 72 aircraft on more than 400 flights per day, annually carrying over 750,000 passengers per year, from hubs and communities including Anchorage, Fairbanks, Galena, Barrow, Nome, Kotzebue, Unalakleet, Bethel, Aniak, St. Mary’s, McGrath, Dillingham, and King Salmon. In late 2018, Ravn acquired Peninsula Airways and its five Saab 2000s as part of a sale process that ended PenAir’s two-year financial bankruptcy and added the company to the Ravn Air Group portfolio. Later, in 2019, Ravn Air Group started Essential Air Service flying to St. Paul in the Pribilof Islands with its highly reliable 29 & 37 seat DHC-8 (Dash 8) aircraft.

Ravn Air Group’s two Part 121 air carriers are FAA-approved Safety Management System (“SMS”) airlines. In addition, in May 2018 and again in April 2020, RavnAir Alaska became one of a few regional airlines in the U.S. to pass the challenging International Air Transportation Association’s (IATA) Safety and Operational Audit (IOSA), and in 2019 RavnAir Alaska became the first and only IOSA-approved Part 121 regional airline in the State of Alaska.