A bankrupt airline that provided critical transportation to rural Alaska will be sold at auction in early July.
The pending sale of Ravn Air Group is the result of proceedings in federal bankruptcy court in Delaware. Ravn, once the largest Alaska-based airline, plunged into financial crisis when the coronavirus pandemic hit. The company lost about 90 percent of its passenger revenue, prompting its shutdown and an April 5 bankruptcy filing.
Now there are multiple buyers interested in acquiring the airline, Ravn said. There are about 30 potential buyers in all, five of which are interested in buying the company as a whole, Ravn said.
The pending sale is the outcome of a liquidation plan that won approval on June 25 in U.S. Bankruptcy Court in Delaware, the state where the company is incorporated.
“The outcome of today’s hearing turned out as we had hoped, and we are excited that our employees, our customers, and the many communities we serve will now have a very real opportunity to see Ravn back in the skies later this summer,” said Dave Pflieger, Ravn’s president and chief executive officer, said in a statement released on the day of the hearing.
“While this has been a very difficult process for everyone affected, we strongly believe it will be a success for our creditors and all Alaskans if our upcoming auction leads to a successful buyer who wants to preserve the vital jobs and essential air service that Ravn previously provided to over 115 different communities in our state.”
Ravn, which operated three carriers serving remote areas of Alaska, was one of the first U.S. airlines to be pushed into bankruptcy by the coronavirus pandemic. Many of the rural communities it serves imposed strict lockdowns — some of which are still in place.
The sale is expected to be held sometime between the July 4 holiday and an upcoming July 9 hearing, Ravn said. At that hearing, U.S. Bankruptcy Judge Brendan Shannon will consider whether the sale should be approved.
To help stimulate buyer interest, Ravn has created an online sale notice describing it as “Alaska’s Largest & Most Vital Regional Airline.”
Ravn’s most recent update to its liquidation plan was filed June 26 in court. In a June 24 memorandum, the company said the evolving plan “represents the culmination of extraordinary efforts on the part of the Debtors and their professionals to manage the Debtors’ operations on a restrictive budget and against aggressive milestones while simultaneously pursuing their effort to sell the Debtors as a going concern.”
Ravn has secured over $30 million in funding from the federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act), money that would allow a purchaser who wants to continue operations to pay employees, the memorandum said.
Progress so far is “gratifying,” it said. “In short, in less than three months, the parties to these Chapter 11 Cases have found their way to a Plan pursuant to which restarting the Debtors is a distinct possibility — all within the strictures of the deal the Debtors struck with their lenders at the outset of the case.”