After Ravn Alaska announced in December that it would suspend service to Unalakleet, Kenai Aviation began operating twice-daily flights on April 29. The hub community of 741 people is eligible for Essential Air Service subsidies, which are designed to entice airlines to service routes that otherwise may be unprofitable due to their remote locations and low passenger counts.
Ravn’s exit triggered the start of a formal DOT process that invited carriers to bid on the route. While two other carriers, Sterling Airways and Alaska Central Express sought federal subsidies, Kenai was the only carrier to submit an unsubsidized proposal.
Kenai’s CEO, Jacob Caldwell, said the carrier began flying the Anchorage to Unalakleet route with ticket prices at “market rate”. Kenai’s website lists one-way fares at $495.
“We could do that just fine with the standard course of what the ticket revenues would bring. So we just said, ‘hey, there's an oppor–, we can just step in and fill the hole. And we don't need to have a request for subsidy involved’,” Caldwell explained.
Caldwell said the fare aligns with other unsubsidized routes flown within Alaska. He said the purpose of the EAS is to support communities that cannot otherwise be served, not to drive down ticket prices.
“When you go back to the intent of what the Essential Air Service Program is for, it was for if there was a community that couldn't get service at the levels they needed at a market rate,” Caldwell said.
For Unalakleet, the implications of unsubsidized service are significant. A subsidized proposal from Sterling Airways, doing business as Aleutian Airways, proposed one-way ticket prices as low as $216, over half the price of Kenai.
Unalakleet resident and former City Administrator Kelsi Ivanoff, said the community favored Aleutian's Option B, which placed one-way fares at $231. With that option, Aleutian would operate four round trips per week and require an annual subsidy of $4,090,724. Representatives for 10 local entities signed onto a letter supporting the option.
Ivanoff said she was frustrated by Kenai’s pricing and reliability. She claimed flights were cancelled without explanation for three consecutive days in early May, raising concerns among residents who rely on air service for medical appointments, meetings and emergencies.
“Then we're stuck buying last minute tickets through Bering [Air], through Alaska [Airlines],” Ivanoff said.
In its proposal, Kenai said it would primarily operate the route using its nine-passenger Beechcraft King Air. Flight records indicate that in just the last week, Kenai used its slower Tecnam P2012 at least five times to service the route. In the month of May, the airline also relied on King Airs owned by Reeve Air to service the route for at least eight twice-daily round trips. Kenai's website also lists "no flights" available between June 21 and 30.
Over 100 public comments from individuals, businesses and local government entities were submitted to the DOT, with many urging the department to consider awarding a subsidized contract.
Mitchell Wisniewski, owner of Unalakleet River Lodge, expressed concerns over Kenai’s capacity in a May 5 comment. The summer lodge hosts high-paying fishing enthusiasts, which Wisniewski said generates over a half million dollars in tax revenue to the state a year.
“Without access to a larger carrier capable of moving up to 30 passengers at a time into Unalakleet, I will be unable to operate this season,” Wisniewski wrote. “This situation threatens the very survival of my business.”
Others like Unalakleet School Activities Director, Thurman Jack, urged the DOT to consider Aleutian’s proposal, which would use larger SAAB 2000 aircraft. The Swedish aircraft can carry up to 58 passengers, enough for both of Unalakleet’s varsity basketball teams with room leftover.
“Without affordable air service, our students are shut out of regional competitions, cultural exchanges, and academic opportunities that are critical for their development and morale,” Jack wrote. “Please do not overlook the real, tangible impact this decision will have on our youth, our elders, and our future.”
When reached by email, the DOT confirmed that “no decision has been issued for the Essential Air Service (EAS) at Unalakleet, and the Department welcomes feedback on the air service situation at EAS communities.” Meanwhile, Ivanoff said the community has been “left in the dark”.
“Every single day we're wondering what's going on with it. We have no clue,” Ivanoff said.
