Kenai Aviation, a regional Alaskan carrier known for connecting remote communities, has announced the immediate cessation of all operations after entering financial insolvency.
In an emotional letter to staff and customers, owner Joel Caldwell revealed that despite full flights and operational success, the airline’s heavy debt load – dating back to the pandemic – forced it to end service.
“By all operational metrics, Kenai Aviation is successful. But we are still financially insolvent,” Caldwell wrote in a letter sent Tuesday.
He said the company’s bank had repaid its debt, leaving it with no choice but to stop flights immediately.
Grounded – for now
Caldwell reflected on how he saved Kenai Aviation in 2017 after hearing the historic airline was about to close.
“I was sitting at my kitchen table in Kenai when I got the call that Jim Bielefeld was in the process of finalizing the closing of Kenai Aviation, but if I wanted to act quickly, we could step in and keep this historic airline alive,” he said.
He described how the company launched its first scheduled flight just a few years later, fulfilling its dream of connecting Alaska.
“Very few founders get to see their vision come to life. Where some see travelers, I see connecting Alaskans,” he added.
Pandemic debt and operational problems
The COVID-19 pandemic, Caldwell said, left the company saddled with debt from which it could never fully recover.
“For most people this is just a painful memory. For me and Kenai Aviation, COVID has put us under a debt burden that we have not been able to recover from,” he wrote.
Maintenance delays and service disruptions, including the prolonged grounding of King Air’s aircraft, added to the financial burden.
“Not being able to serve Unalakleet this summer hurt not only the community I love, but also financially,” he said.
A plea for hope – and investors
Despite the shutdown, Caldwell expressed optimism that the airline could be revived if new investors or partners come on board.
“Our operations may stop, but this vision continues,” he said.
“We need capital, we need partners, we need a lifeline. That investor is out there, we just have to find them.”
He closed his letter with a heartfelt appeal: “If you are a prayerful person, I need your prayers. If you are not, I need your hope. This cannot be the end of the story… While all flights cease to operate today, who knows what will happen tomorrow. It is hard to ground a vision.”
Founded in 1948, Kenai Aviation has been a staple of Alaska’s aviation history, offering commuter flights between Anchorage, Kenai and remote regions such as Unalakleet. Under Caldwell’s leadership, the airline expanded its scheduled routes and became a lifeline for communities across the state.
While his planes are now grounded, Caldwell’s message suggests he’s still committed to keeping the dream of Kenai Aviation alive.
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