The jump from small regional player in Alaska to long-haul, international airline is a major one. Recently recapitalized Ravn Alaska plans to do just that. In a message to employees released on Monday, CEO Rob McKinney announced intentions for the company to establish a passenger hub in Anchorage, carrying travelers between Asia and the Lower 48 on a to-be-acquired fleet of 757s.
The company aims to expand its existing operating certificate, adding the Boeing 757 type, with ETOPS, and international authority. It would then develop the North Terminal at Anchorage as a hub for a newly branded Northern Pacific Airways.
McKinney called out Tokyo and Seoul as the initial destinations in Asia, with Osaka to follow. On the US side, in addition to Anchorage the company would potentially operate to Orlando, Newark, Las Vegas, Oakland, and Ontario.
Those destinations are just the beginning, McKinney promises, with a potential fleet of 10 aircraft.
McKinney also assures employees that the operation will launch without taking on debilitating debt, though exactly how that will work remains unclear. While 757s are somewhat available on the secondary market they are generally being converted to cargo operations and are not free to acquire. Indeed, the rise in cargo demand could see the company fighting to locate suitable aircraft that can operate passenger services with reasonable economics.
Securing ETOPs certification is also far from a trivial task. It will require significant investment from the company to demonstrate competence to the Department of Transportation. Southwest Airlines took more than 16 months between its announced plans to serve Hawaii and receipt of ETOPS approval.
And that’s before the validity of the business model comes into focus. Icelandair built a similar model at Keflavik, but with generally shorter flights. Zipair wants to operate as an LCC nonstop from Japan to the US market, overflying the Anchorage connections, but it would not be able to reasonable serve as many destinations as the hub would permit.
Still, the history of long-haul LCC operations is anything but a resounding success. Breaking into the market with very old planes and zero history of international operations will prove challenging at best.
A full transcript of the recording is included below:
The things I have to share with you are the most significant in our time together since we restarted last August. Over the past few months Tom, Josh and myself have been looking at a plan that would utilize the empty north terminal here in Anchorage. And how we would do that is to develop a low cost carrier model using narrow-body jets, specifically 757s.
Our plan is to add Boeing‘s ETOPS and international operations to the Ravn certificate so that we can serve on the Asia side Tokyo and Seoul initially and then adding Osaka later. And on the US side we are looking at Orlando; Newark; Las Vegas; Ontario, CA; and Oakland, CA. And that’s just to get us going.
We’re looking to acquire probably around 10 aircraft, and this new operation will be called Northern Pacific Airways.
I know change like this, especially of this magnitude is scary to a lot of people. I want to reassure you that we are really digging in to these numbers and are very certain of the value that we’re going to be able to bring to the company. We’re also certain we can get this stood up and running without acquiring an excessive amount of debt like Ravn used to have. I also want to assure everyone that our commitment to Alaska and our Alaskan communities has never been stronger.
We are not walking away from our Dash 8 program. We are not going to diminish our commitment to our frequency or the level of service that we have now. And, most importantly, I want to assure you that no one’s job is in jeopardy and no one will be down-sized as a result of this. This will just give potential for upward mobility and advancement for many of you in the ranks that would like to transition into our eventual Boeing international program.
I know you’re going to have lots of questions over the coming days and weeks, and I’m going to be here to answer them for you. But it is going to take time as we roll things out, and still we’re making decisions on exactly what the new complexion of this development is going to look like.
I thank you in advance for your trust in us as a leadership team that we have everyone’s best interest at heart. And hopefully you’re as excited as I am to look at what this whole new future of Ravn Alaska and Northern Pacific Airways will bring.
Also with thanks to Colleen Mondor for noticing the initial video and eventually getting a copy of it back online:
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