RavnAir warns it will collapse without more federal coronavirus loans
Alaska’s largest regional air carrier will be liquidated unless it can receive more federal coronavirus loans.
that it was laying off all staff, ceasing all operations and filing for Chapter 11 bankruptcy protections due to coronavirus-related losses.
Dave Pflieger, the CEO of RavnAir, sent an email Friday morning, explaining that the air carrier needed to secure loans from a
to survive a 90% drop in passenger bookings.
“Unfortunately, we received news this week that while eligible for payroll grant assistance, we will not be eligible for loans because the Treasury is using an Available Seat Mile (ASM) formula for loan allocations that does not enable smaller airlines to get material CARES Act assistance,” Pflieger wrote by email.
The regional air carrier requested $75 million but was only able to secure $5.2 million in federal loans, according to RavnAir.
“This flawed formula massively favors large well-capitalized airlines and leaves very little for small regional carriers like Ravn,” Pflieger said. “It is not representative of the criticality of an airline to its state, its communities, and its citizens.”
The U.S. Treasury Department would need to change the ASM allocation method for RavnAir to receive more funding.
Pflieger asked Alaskans to get on social media to ask the president to step in:
- #SaveRavnAirAlaska Alaska's largest regional airline @realDonaldTrump
- Drop the Available Seat Mile (ASM) formula for #CARESAct loans to airlines @USTreasury @StevenMnuchin1
- Ensure small airlines get critical federal aid. #COVID19 #Coronavirus #Bailout #SaveRavnAirAlaska
- Ensure small airlines get critical federal aid. #COVID19 #Coronavirus #Bailout Without federal assistance, rural Alaskans will go without vital food, medicine, and air service @realDonaldTrump @USTreasury @StevenMnuchin1 #SaveRavnAirAlaska