Ravn Alaska, a regional airline based in Alaska (and also the parent company of New Pacific Airlines) is restructuring, and has just laid off over one-third of its staff. I can’t help but wonder what this means for the future of both Ravn Alaska and New Pacific Airlines.
In this post:
Ravn Alaska lays off 130 employees
On Friday, February 23, 2024, Ravn Alaska informed employees of a major restructuring, as the airline laid off 130 of its roughly 350 employees. Ravn Alaska CEO Rob McKinney stated that the airline isn’t “giving up or throwing in the towel,” and will “emerge a stronger company” as a result of this restructuring.
McKinney blames the situation on inflation, labor shortages, and “unexpected competition.” As he explains:
“This is like what so many other airlines have gone through to become a viable service that can then begin to grow anew. The hard truth is that we never really left oldco [old company] in the past. Due to the need to restart as quickly as we did, we ended up adopting many practices and policies that are inefficient at best.”
“Despite our best efforts with schedules, pricing, and previous attempts at right sizing, we still were not hitting the profitability mark.”
So far this has only been communicated internally, so it remains to be seen what the airline will say publicly, and how operations will be impacted. After all, if you lay off such a large percentage of your staff and are restructuring, it’s hard to imagine that it will be business as usual for passengers.
The below series of posts on Twitter/X sums up the Ravn Alaska situation more concisely than I ever could, and reflects what a ride the company has had up until this point. As you can see, many people aren’t surprised by this development.
What does this mean for New Pacific Airlines?
With the restructuring of Ravn Alaska, one big question is what exactly this means for New Pacific Airlines (formerly known as Northern Pacific Airways). While Ravn Alaska has operated turboprops around Alaska, New Pacific Airlines is the company’s new venture, whereby the airline flies Boeing 757s.
The initial plan was for the airline to fly to Asia via Anchorage, though somehow that business model has evolved into the airline flies nearly empty 757s from Ontario to Reno and Nashville, as one does.
I’m not sure how exactly the funding situation works between the two companies, but I can’t imagine that either operation is making money. If Ravn Alaska restructures without giving up (or something) on New Pacific Airlines, then one really has to wonder what the motives are for keeping that company alive.
It’s sad the extent to which Ravn Alaska’s management has been focused on making New Pacific Airlines a thing, rather than being focused on the core business of making Ravn Alaska profitable.
When Ravn Alaska’s CEO talks about how the airline has adapted some practices and policies that “are inefficient at best,” does that include spending millions of dollars on a lounge for New Pacific Airlines at Anchorage Airport, which hasn’t seen a single customer to date?
Bottom line
Ravn Alaska is undergoing a restructuring, as 130 employees at the company have been laid off. Ravn Alaska has had a rather rough ride independently, and management’s huge focus on launching New Pacific Airlines hasn’t helped either. With Ravn Alaska restructuring, I can’t help but wonder what this means for the future of New Pacific Airlines.
What do you make of these changes at Ravn Alaska, and what do you think they mean for New Pacific Airlines?
What a breath of fresh air to read an article that articulates how confusing it is to watch them blow money on that project while we struggle to stay afloat with the Dash. From the inside it is clear that management only cares about the B757 side. It seems to me they bought the airline as a cheap way to get a 121 certificate with no real intent of keeping the current operation running. I...
What a breath of fresh air to read an article that articulates how confusing it is to watch them blow money on that project while we struggle to stay afloat with the Dash. From the inside it is clear that management only cares about the B757 side. It seems to me they bought the airline as a cheap way to get a 121 certificate with no real intent of keeping the current operation running. I am guessing we will see the Dash disappear in the next few months so they can make a final attempt at profitability with the B757.
I find it amazing blaming labor shortages for laying off people.
Maybe they mean pilots?
This issue is not a lack of pilots, it is lack of policy to retain pilots. Ravn offers the lowest regional airline pay in the nation and the B757 pay scales are laughable. Great place to fly, but soon as you can you move on from Ravn and you don't look back.
Very unfortunate news. I still don't understand why they've taken the route with New Pacific that they have. Literally all they had to do was start flying those 757s to Japan at a relatively competitive price. Them being American is reason enough for them to be able to fill those please as long as the ticket prices are decent. This short haul test run thing is a big mistake.
LOL
New Pacific is a fake airline! The Asia plan was nonsense! The Ontario plan is some kind of inexplicable placeholder nonsense!
The fact that anyone thinks it was real is hilarious!
I’m trying to understand how laying off over a third of their employees will help with labor shortages.
Maybe it's just to save money so upper management won't have to lose any of their salary/bonuses?
They are also deleting negative comments/passenger complaints off their social media and blocking those who post. Even those with legitimate complaints and documentation.