Kearney's Airline Provider PenAir Files for Bankruptcy - News, Weather and Sports for Lincoln, NE; KLKNTV.com

Kearney's Airline Provider PenAir Files for Bankruptcy

Kearney's Airline Provider PenAir Files for Bankruptcy

Posted By: Channel 8 Eyewitness News

8@klkntv.com

PenAir (Peninsula Airways, INC.) operating out of Kearney, North Platte, and Scottsbluff has filed for bankruptcy.

According to bankruptcy court documents, the Alaska-based airline filed for Chapter 11 bankruptcy Sunday night.

According to court documents, "PenAir's hubs in Portland and Denver have not lived up to expectations. For this reason, PenAir has decided to wind down its operations at those two hubs."

And according to those documents, Kearney, North Platte, and Scottsbluff flights will be discontinued to Denver.

"The federal Department of Transportation is responsible for managing the Essential Air Service contract with PenAir to provide air service in our community. With the departure of PenAir, the City of Kearney will pursue immediately, with the DOT, a re-bid process to secure a new air carrier," according to a statement released by the City of Kearney.

PenAir has been operating in Kearney since November of last year.

Approximately 700 people are currently employed by PenAir, according to court documents.

Now city leaders are dealing with the uncertainty it has left them.

"This impacts the service of the Nebraska and Kansas communities that PenAir presently serves."

On Monday morning the city was notified that PenAir plans to discontinue service in the next 90 days.

"Well I really haven't had discussions with PenAir. This kind of caught us off guard a little bit and of course those are some of the discussions we'll be having in the next few days. But at this point they just made their announcement and we're trying to regroup internally here at city hall to determine what our options are," City of Kearney Mayor Stan Clouse said.

The federal Department of Transportation is responsible for managing the Essential Air Service with PenAir.

The city will pursue immediately with the DOT for a rebid process to secure a new air carrier.

"It gives them the opportunity to reorganize, to figure out what their debt looks like and how do they manage their debt going forward and stay in business. Based on their preliminary plans they don't believe that they can continue to operate the Portland, Oregon and Denver hubs," said Clouse.

A passenger I spoke with says she is shocked.

"I'm flying out Wednesday and they never mentioned it nor said a thing when, at any time we flew with them today. I'm also flying to Alaska in a couple of weeks on them and no one said a word about it either.," PenAir passenger Kaye Kamp said.

"It enables your rural areas to connect with the larger hub and that's what were faced with now with the DOT managing the Essential Air Service program, so they can get a reliable carrier so they can connect with the larger hub," said Clouse.

The mayor of Kearney plans to talk to the DOT and PenAir for more details.

“Today’s news regarding PenAir is concerning for Nebraskans, especially those in our state’s rural areas and the Panhandle," Deb Fischer released in a statement Monday. "Reliable air service connects our families, businesses, and communities to the rest of our country and the world. As Congress considers the FAA reauthorization this year, I will continue to shore up support for the Essential Air Service program. I will also work to reduce burdensome regulations that harm Nebraska’s small and community airports by reducing the number of available pilots and increasing service costs.”

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