In November 2020, eight months after entering Chapter 11 bankruptcy, Ravn Alaska took to the skies again. CEO Rob McKinney spoke to Paul E Eden about the airline’s remarkable recovery and ambitious plans
Rob McKinney had been CEO of the reborn Ravn Alaska just short of a year when he spoke to AIR International in July 2021. A California entrepreneur, McKinney and a group of partners assumed control of what was left of the legacy airline on August 3, 2020. The process of reintroducing the Ravn brand has been fraught with challenge, yet McKinney insisted: “Even when it was a struggle, I’ve loved every single day that I’ve been in Alaska and every day with this company.”
Today, Ravn Alaska has a ten-strong fleet of de Havilland Canada (Bombardier) Dash 8-100 turboprops, each configured for between 29-37 passengers, plus a larger Series 300 added earlier in 2021. The Dash 8s typically carry a little more than 30 passengers on every flight.
There are further ambitious plans to introduce a fleet of ten Boeing 757s and, in June 2021, Ravn signed a letter of intent (LOI) for 50 nine-passenger Airflow eSTOL electric airliners. The carrier advanced its environmental aims further still with a July 14 announcement from Universal Hydrogen that it had signed an LOI with Ravn Alaska for five sets of equipment required to convert the Dash 8 to hydrogen power.
From its headquarters at Ted Stevens Anchorage International Airport, Ravn Alaska now serves 12 destinations regularly, reliably and, above all, safely. It’s a turnaround few Alaskans or industry observers would have predicted on April 5, 2020, when the ‘old’ Ravn filed for Chapter 11 bankruptcy. Ostensibly a result of the COVID-19 pandemic, the route to Chapter 11 was littered with obstacles, of which coronavirus was but the last and terminal bump in the road.
Rise and demise
‘Are you the same Ravn?’ is among several questions under the FAQ tab on the airline’s website, which speaks volumes for its history and hopes for the future. Explaining the story from his perspective, McKinney said: “A private equity firm had bought five heritage airlines in Alaska and attempted to put their combination of large and small [aircraft] into one operation.” The Ravn Air Group, operating as Ravn Alaska, was the umbrella organisation behind the services. “They were carrying around US$95m worth of debt that was pretty leveraged and when COVID-19 hit, it couldn’t survive. We purchased and returned to operations with the larger, Part 121 airplanes [for more than ten passengers].”
But the story is more complex than that and stretches back almost half a century. Understanding it requires knowledge of the US Postal Service (USPS) Alaska Bypass Mail system, in force since 1972, and the Rural Services Improvement Act (RSIA), which took effect in 2002.
The Alaska Bypass Mail system pressed responsibility upon the USPS for delivering essential goods, including food and drink, domestic products and a variety of everyday groceries into the Alaskan bush. It is essentially a subsidised delivery service that was costing around US$100m per annum by summer 2020. Of that, around one-third was paid by customers and the rest by the USPS.
Intended to reduce the USPS bill and support passenger-flying services into the bush, the RSIA ensured Part 121 carriers handled the majority of bypass. It further split the work so that 75% of the cargo went into aircraft also carrying passengers, so long as those aircraft carried 20% of the passenger traffic into the same destination, and the remainder into pure freighters. Part 121 operators were paid less for moving bypass, saving the postal service money, but since they were allocated more, they enjoyed a reliable income source – RSIA was effectively saving the USPS money and subsidising bush passenger services on larger aircraft that were deemed safer.
Should a Part 121 operator enter a new market, incumbent Part 135 outfits – typically flying smaller aircraft in commuter or on-demand services – were given a deadline by which they were obliged to complete the multi-million dollar upgrade process to Part 121 or lose their right to carry any mail at all. The original deadline for Part 121 compliance was set as 2008, but in 2006 the requirement was dropped, although not before the demise of several Part 135s. The dominant Part 121s, Era Aviation, Frontier Flying Service and PenAir, began manoeuvring – acquiring choice routes as other operators disappeared.
What’s in a name?
Among the region’s major players, Frontier and Hageland Aviation became one under the Frontier Alaska brand in 2008, before acquiring Era to become Era Alaska. In 2014, Era Alaska rebranded as Ravn Air Group, then took control of PenAir in 2018. By then, control had passed to a private equity firm and a cycle of rapid turnover in experienced employees and company executives followed, resulting in poor customer service, flights cancelled at the last minute and, worst of all, accidents. With considerable debt and an appalling reputation, it is no surprise that COVID-19 broke the Ravn Air Group.
The Ravn Alaska name, therefore, had a less-than-positive association, not to mention an apparent typographic error. “One of the previous owners had an affection for the raven bird and shortened the word to make a trademarkable term – Ravn,” McKinney explained. “When I first took over, people told me I needed to change the name because the previous administration had done such a poor job of customer service and no one would ever trust the airline again. Luckily that’s turned out not to be true.
“I chose not to take the advice because it was going to cost millions of dollars for new signage, repainting airplanes and similar,” McKinney continued. “That money was better spent ensuring the airline was rock solid financially – and there to bring back all the employees we needed. It was thrust upon me, but I’ve grown to love the name.”
Taken at face value, the nine-seat eSTOL is at odds with Ravn’s Dash 8 operation, but McKinney explained that the aircraft are part of a larger concept. “They’re four or five years down the road, by which time we want to be vertically integrated for our pilot and mechanic flow into the organisation. We think the pilot shortage that was here before COVID-19 will come back soon.”
The eSTOLs are more than just a new aircraft type for Ravn, forming the cornerstone of its strategic operational vision. “Our plan is to work with the federal government to change the ruling, so that people can go to accredited community colleges with aviation programmes and use student loans, essentially, to fund their flight training. Those graduates would then fly small electric airplanes, probably somewhere in the Lower 48 continental US, then work their way onto the Dash 8 and our larger fleet. Our plan is that, out of the 50 eSTOLs, some will provide air service in Alaska, but a lot will be in the Lower 48.”
Ravn Air’s eSTOLs will be hybrid-electric aircraft – placing the airline among the pioneers of electric commercial operations, with a brand-new airframe. It shows considerable ambition for a recovering regional carrier. Would buying an electric conversion of, say, the Cessna Caravan, have reduced complexity and investment?
“We could have done that,” McKinney agreed, “but I’ve been a proponent of electric aviation for more than a decade. I’ve partnered with, helped and contributed to several companies working towards the electric aviation goal, because I think it will be good for the country’s aerial infrastructure, as well as the planet. I believe it’s the way of the future. Airflow is a continuation of the effort I’ve made to see someone get across the finish line with an electric airplane.
“I looked at their technology; I think they’re on a sound path, with excellent engineering and their numbers look good. They’ve been very co-operative and responsive to what we’ll need as a commercial operator. We’re happy to have them as a partner; they realise that we have to have a machine that’s economically viable”
He believes Alaska is the perfect proving ground for the eSTOL, which is good, because, apart from introducing an aircraft into service, Ravn will face the challenge of establishing a new market using a novel platform. “Like any other aircraft, the eSTOL will have FAA certification, so its safety and reliability will have been proven long before it enters service. Plus, there are lots of airplanes operating in Alaska, carrying only two or three passengers, that people living in a large metropolitan area probably wouldn’t get on. The acceptance of smaller airplanes is way higher here, and once it becomes familiar, I think it’ll become more widespread, until it’s as normal as sitting in a Tesla.”
Surprisingly, its STOL (short take-off and landing) capability was not among the reasons why Ravn Alaska selected the Airflow product, although it does open the possibility of adding new airfields to the network. “It just sort of came with the plane,” McKinney admitted. He is also adamant that the eSTOL is no vanity project for Ravn. “The airline business is challenging, it’s a for-profit endeavour, not a social experiment. If I didn’t think we could make money with these machines, we wouldn’t be going down that path.”
Hydrogen for the Dash 8
For the time being, Ravn Alaska’s focus remains on the Dash 8, but even here the airline is looking at futureproofing. “We’re really excited about our partnership with Universal Hydrogen,” McKinney enthused. “It’s an evolution that provides a greener opportunity to continue operating our Dash 8s. Our vision is to have a future fleet that operates off sustainable energy as much as possible.”
Excluding engine overhauls and aircraft checks, Dash 8 regular and line maintenance are typical of the work Ravn completes internally. Given the remoteness of some of its operating airfields, it is interesting to note that all the airline’s line maintainers and many of its ‘backroom’ people are employees. The pre-collapse Ravn Alaska employed around 1,300 people, many of them in parts of the business that no longer fall under the airline’s banner. Speaking of those working in the areas subsequently acquired by McKinney and the team, the CEO stated: “One of the things we’re most proud of, in bringing the company out of bankruptcy, is that we were able to bring back almost 400 jobs in the state. The lion’s share is in Anchorage, but it includes all the people at the outstations, from ramp workers to customer service agents.”
Long-haul and long term
A large part of Ravn Alaska’s future looks set to revolve around business growth on a basis of sustainability, but in a YouTube video released to employees on June 29, McKinney set out company plans to acquire ten Boeing 757 narrowbody jets for services to Tokyo, Japan; Seoul, Republic of Korea; Orlando, Florida; Newark, New Jersey; Las Vegas, Nevada; and Oakland and Ontario, California.
Services would operate out of Ted Stevens Anchorage International Airport’s North Terminal under the Northern Pacific Airways brand, but little more is known. McKinney and the team are ‘working the numbers’ and it is interesting to speculate whether sustainable aviation fuel (SAF) features in the plan. Boeing’s 757 is noted for its efficiency but placing used aircraft burning Jet A-1 into service seems at odds with the Ravn ethos.
Since picking up the reigns of the airline, McKinney and his team have not only coaxed it back to life, but implemented a forward-thinking, pioneering programme to acquire a fleet of hybrid-electric aircraft.
The challenges have been great and the risks high, but McKinney said: “I think I have the most amazing team. They’ve helped me resurrect a great airline. It’s been a labour of love and I couldn’t be happier with my choice to come here.”
Although it is engineered to accommodate batteries or hydrogen fuel cells, the eSTOL, in its initial form supplied to Ravn Alaska, will be a hybrid-electric aircraft using a turbine engine to generate power for its electrical propulsion system. Generating electricity with a turbine rather than deriving all an aircraft’s drive from it is more efficient, while burning SAF reduces carbon emissions further, even with the blended fuels currently certified.
With a hybrid system, the power turbine can be designed and optimised for the smaller power requirements of cruise, while batteries pick up the additional load on take-off. Once 100% SAF is widely available, a hybrid-electric aircraft will come close to delivering carbon-zero flight.
Electric power could also open the door to distributed propulsion, which enables previously impossible configurations and unique capability. The eSTOL is configured with several – eight or ten on the nine-passenger Series 200 – electric motors driving small propellers positioned ahead of, and just below, the wing.
Marc Ausman, Airflow CEO and co-founder, explained the configuration’s advantages: “Distributed electric propulsion is our secret sauce. It’s [enabled] us to develop blown-wing technology, which uses a much smaller wing than would otherwise be required at cruise speeds, giving more efficient cruising, and low landing speeds. It expands our envelope, with the ability to cruise faster and land slower than a traditional aircraft, while the operating economics are also lower. And electric motors are very simple, our systems are solid state, and we expect easy maintenance and extended times between overhaul.”
Additionally, Ausman noted, with multiple motors, propeller diameters are smaller, slowing tip speeds and reducing noise, thus promising to make local airfields good neighbours.
In its July 8, 2021 announcement of the Ravn Alaska LOI, Airflow suggested a 2025 service entry. Ausman told AIR International: “There’s definitely some unbridled enthusiasm in the industry, but we’re building a conventional aircraft with new technology on it. We’re working on the production design and a Cessna 210-based technology demonstrator in parallel. I think2025 is a reasonable timescale, within a year or two. Too early and we’re not being honest with ourselves, too late and people will think we’re not competitive.”
“Our vision is to have a future fleet that operates off sustainable energy as much as possible”
“One of the things we’re most proud of, in bringing the company out of bankruptcy, is that we were able to bring back almost 400 jobs”
Flying in Alaska
The pre-bankruptcy Ravn Air operated a disparate fleet of piston and turboprop aircraft to a variety of airports and bush strips. Now, CEO Rob McKinney said, “With the Dash 8, we operate into developed airports with all the safety features and facilities required by our size [of] aircraft, but our mission is still to serve rural Alaska.
“We ensure people have connections to the national transportation network, but also that they have access to shopping and medicine – all the essentials that an isolated community, with no road service whatsoever, needs. Our passengers can’t hop into a car and get somewhere, they have to fly. That’s why we’re in the business we’re in – making sure we’re serving Alaskans.”
McKinney is confident that Ravn Alaska has done a good job of ensuring its compliance to COVID-19 regulations and guidance while continuing to deliver essential air service. “It’s not been easy, but we’ve navigated through and made sure our passengers stayed safe. I think we’re out of the worst of it, but we’ll always be compliant with what the federal government asks us to do.”