The Way the Wind Blows: Airlines evolve to meet customer needs, changing economics.

• Author: Orr, Vanessa
• Position: TRANSPORTATION

Turbulence in Alaska's aviation industry has forced some course corrections in the last couple of years. In-state air carriers have gone through a lot of changes to meet the needs of passengers, cope with supply chain issues, and adapt to the COVID-19 pandemic.

"The pandemic really changed the dynamics of aviation, especially on the 135 side," says Dan Knesek, vice president of operations for Grant Aviation. Part 135 of Federal Aviation Regulations applies to helicopters, air ambulances, and commuter planes that carry fewer than ten passengers on at least five round trips per week. Part 121 covers larger scheduled airlines, while private general aviation pilots are under Part 91.

Knesek explains, "When Ravn filed bankruptcy [in April 2020], they were operating a 121 and a 135 program, and all of a sudden, smaller carriers in the 135 world had to band together to make sure that the citizens of Alaska who had previously been served by Ravn had other options." The result was a regional division among four remaining carriers: Grant for Southwest Alaska, Bering Air in Northwest, and Wright Air Service in the northeastern Interior. Ryan Air also picked up the slack for cargo deliveries out of Bethel and Aniak.

"We've all evolved and carry strength within our regions," says Grant Aviation President and CEO Robert Kelley. "It is better for the state and its communities to not have one large carrier over a majority of the state that has a significant portion of market share. If they fail, it creates a massive hole in the system."

The energy to grow and the resilience to stay airborne remains evident in the COVID-19 era, with expanded airline partnerships, restructured routes, and value-added services to encourage more people to fly.

Friendly Merger

Grant Aviation is securing its market share, not by expanding statewide but by consolidating in its region. Grant acquired Tanana Air Service and Shannon's Air Taxi at the end of 2021.

"Tanana, Shannon's, and Grant all want what's best for Bristol Bay communities, and this agreement helps us do just that," Kelley says. "The combined companies are now able to provide better service to the region."

According to Knesek, part of the reason for Grant's decision to merge with Tanana and Shannon's Air Taxi was to meet the needs of customers affected by Ravn's 2020 bankruptcy.

As part of the transaction, Grant absorbed the two companies' assets, and all of Tanana's employees were invited to become Grant Aviation...