Regional airline Peninsula Airways Inc. filed for bankruptcy over the weekend, blaming its financial decline on money-losing hubs in Portland, Ore., and Denver that it plans to shut down.
Alaska-based Peninsula, which does business as PenAir, will wind down the Portland and Denver hubs while maintaining operations at its more successful hub in Boston, according to a bankruptcy document submitted by Chief Operating Officer David M. Richards. He said the bankruptcy was necessary after a "rapid deterioration" in financial results.
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PenAir posted a pretax loss of almost $8 million in the fiscal year that ended in March on revenue of $99 million, according to draft financial statements. From April through May, the company lost an additional $577,000.
"PenAir management is currently analyzing the reasons for this deterioration of financial performance," Mr. Richards said.
Chairman Daniel P. Seybert owns a controlling stake of about 57% in the company, while founder Orin D. Seybert, who started the business with a single two-seater in 1955, is the second-largest shareholder, with a 17.6% stake.
The airline expanded its footprint outside of Alaska in 2012. But its new hubs in Portland and Denver "have not lived up to expectations" and would be wound down in favor of the "very successful" operation in Boston, Mr. Richards said.
On Friday, PenAir stopped taking reservations on routes from Portland to North Bend and Klamath Falls, Ore., and to Eureka and Redding, Calif.
The company participates in a U.S. Transportation Department program known as Essential Air Service designed to provide small communities a minimum level of scheduled air service.
PenAir, which employs about 700 people, owes between $10 million and $50 million to its creditors, according to bankruptcy documents. The company plans to cut its fleet of 19 aircraft after reducing its footprint under bankruptcy protection.
Write to Andrew Scurria at Andrew.Scurria@wsj.com
(END) Dow Jones Newswires
August 07, 2017 13:06 ET (17:06 GMT)