Scramble for air share.

• Author: Stricker, Julie
• Position: Alaska's air freight and passenger services - Includes related article - Cover Story

With MarkAir out of the Alaska air-transport picture, remaining carriers are hustling to find their new niche.

Fairbanks businessman Rob Everts spent more than a year trying to unravel the red tape that kept his proposed air cargo carrier on the ground. Then in April 1995, MarkAir dropped off the screen and left a big gap in Alaska's air freight and passenger services.

"As it turned out, the timing of it was such that it fell into place pretty good," Everts says. "(MarkAir's departure) was kind of the straw that broke the camel's back." Everts got his permits and launched Air Cargo Express in July.

MarkAir's departure, and drastic cutbacks in subsidiary MarkAir Express' services, shaped the skies over Alaska in 1995 as other carriers jockeyed to fill the void.

In April, MarkAir, which had flown under the slogan "Alaska is our home," packed its bags and moved out. The financially troubled airline transferred its operations to Denver, abandoning a legacy of low fares and Permanent Fund Dividend ticket specials, and laying off 600 employees.

Its financial problems followed, however, and a week later MarkAir filed for bankruptcy protection. Six months later the carrier went out of business.

When MarkAir moved its operations to Colorado, it left behind a subsidiary, MarkAir Express, which served more than 70 villages in the Alaska Bush. When MarkAir folded, its debt was shifted to Express, collapsing the smaller carrier. In November, MarkAir Express was forced to file for Chapter 11 bankruptcy protection to reorganize its finances.

"We got stiffed by our parent company," MarkAir Express President Mike Bergt says.

The bankruptcy was "purely a cash-flow problem," according to MarkAir Express spokesperson Lana Johnson. "While Express's balance sheet looked great - its balance sheet looked wonderful - there's a big difference between revenue stream and cash."

Once Alaska's largest in-state airline, MarkAir Express dropped its passenger service entirely, but continues to carry freight to seven rural communities. The airline laid off 220 employees. Before the dust could settle, other players in Alaska's competitive market rushed to close the gap left by the two carriers, and a handful of new businesses emerged.

Rural Alaska

Peninsula Airways picked up routes to Aniak, McGrath and St. Marys, Ralph Samuels, Anchorage manager, says. Samuels says he wasn't surprised at the pullout, but the timing, coming right before the busiest week of the year, caught him off guard.

"We knew they were having some problems and we thought something might be happening," he says, "but we didn't expect the Friday before Thanksgiving."

Reeve Aleutian Airways welcomed MarkAir's pullout. Battered by the military's withdrawal from Adak in 1994, the carrier had expected tough times in 1995, but found itself expanding instead. "The excess capacity situation in Alaska has cured itself with...