Alaska’s North Slope Borough government has stepped up to seize the assets of RavnAir Group (RavnAir) after it declared bankruptcy due to the impact by the coronavirus pandemic. Keeping the view to protect its region’s air service, the government has also set to enter a potential legal battle with the airline’s lender besides seeking some rescue package for the airline from the US federal government.
RavnAir, the largest regional carrier in Alaska, filed for Chapter 11 bankruptcy since it halted operations on Sunday, April 5, 2020, after the airline company has run out of cash due to the restrictions on travel caused by the pandemic. The closure of the airline company posed a big threat to some remote regions including the North Slope Borough, which is an area roughly the size of Minnesota and has close to 10,000 residents, has no road access to connect outside.
North Slope Borough Mayor Harry Brower, who made a seizure order on Sunday, said his government, which serves a mostly Inupiat population, “must, in this time of the disaster, ensure that its residents have food, medical supplies, and medical transport.”
Assistant Alaska attorney general Rob Schmidt testified the airline’s condition by teleconference at a US Bankruptcy Court hearing in Delaware on Tuesday. Meanwhile, Schmidt told Reuters that the seizure order was counterproductive because Ravn’s lender, BNP Paribas had to give $12 million to the company for bankruptcy financing.
Seeking Federal Assistance
Last week, Alaska’s congressional delegation had warned the US government about the possibility of many state’s airlines including RavnAir to undergo cease of operations and declare the state of bankruptcies. Among these ailing airlines, RavnAir, which has a partnership with Seattle-based Alaska Airlines, had been seeking federal aid to help them through an unprecedented decline in air travel.
The Mayor, Brower said in an e-mailed statement late on Monday that he would suspend his move for the asset seizure order as soon as other airlines get access to Ravn’s facilities. Meanwhile, some smaller Alaska-based carriers have also agreed to make up the service vacuum led by RavnAir by flying to and from remote villages.
Brower declared citing the needs for help, “We don’t want profit or bankrupt Ravn’s planes and calculators, we wanted the facilities under Borough control so they would not be boarded up and locked during the largest pandemic in modern history and could be used by other airlines.
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