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.
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.
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?
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