From all appearances, it’s business as usual at PenAir headquarters in Anchorage, where you’ll find owner Danny Seybert tracking flights on a large digital display in his office.

“This shows me where my airplanes are,” says Seybert, the company’s CEO. “So I’ve got three airplanes in the air right now heading down the (Aleutian) chain.”

PenAir also serves the Pribilof Islands, flying what may be one of the most challenging route systems in the Alaska.

“I’m 57, and I started flying when I was 14,” Seybert said.

His father, Orin, launched PenAir in 1955. Today it’s one of the longest running family-owned airlines in the nation.

But now, the Seybert family may lose control of the airline it started 60 years ago in Bristol Bay – a company that began with a small Taylorcraft airplane, used to ferry patients to the Dillingham hospital.

PenAir eventually grew into a large regional airline with more than 400 employees. Its fate is now in the hands of a bankruptcy court, after a 
judge ordered the airline's sale next month to settle debts. Seybert says PenAir owes about $19 million to creditors.

Despite that, Seybert remains hopeful that he can find the financing to buy the airline back.

“I would find it hard-pressed to believe that somebody could do a better job than my family has,” Seybert said. “We have been an airline that is the right airline for the region.”

On St. Paul Island, about 800 miles west of Anchorage, patience over the company’s money troubles is running out.

“It’s been deplorable,” said Amos Philemonoff, the president of St. Paul Island’s tribal government.

Philemonoff says the airline’s financial constraints have begun to affect essential services in the community like health care.

“Genuinely we are all concerned about what’s going to happen, especially with the sale going on," Philemonoff said. "We don’t know if things are going to get worse or better.”

The community’s frustrations with PenAir, the only airline that provides passenger service to the island, reached its peak in July when it suspended service for two weeks for aircraft maintenance.

Community leaders said the timing, which occurred during a peak travel period, was as an example of mismanagement.

“I think given all the variables, we handled it better than anyone else would have,” Seybert said.

“We have two airplanes that can fly out to St. Paul. It’s a very unique destination that requires special equipment to fly over water,” Seybert explained. “Both aircraft were down for maintenance. One was scheduled. The other was unscheduled.”

Critics say Seybert has made moves, including a failed expansion of PenAir into the Lower 48, that has caused the airline’s debt to snowball.

At the time, Seybert says, the expansion made sense – because it enabled PenAir to better utilize aircraft that it wanted to phase out, but couldn’t – because the planes had been leased under long-term contracts.

This week, KTVA’s Frontiers program will take an in-depth look at PenAir’s financial struggles. Watch “Alaska Aviation: Turbulent Times” on KTVA Channel 11 at 4:30 and 10:30 p.m., Sunday, Sept. 9.

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