Kenai Aviation Abruptly Ceases Flights, Citing Mounting Debt

In a minorly tearjerking yet hopeful letter from Kenai Aviation owner Joel Caldwell, it was confirmed that the Alaskan regional airline had officially closed its doors. The carrier had been plagued with financial burdens since the 2020 COVID outbreak spurred debts that it has been unable to bounce back from.

“COVID gave us a debt load that we haven't been able to get back on top of,” Caldwell explained. “...Today, the bank is calling that debt. We have to cease all operations immediately. I am devastated. Our operations may stop, but this vision continues.”

The closure leaves major gaps in Alaska’s regional air network, particularly in Unalakleet and St. Paul Island, where Kenai had been providing flights to Anchorage. The carrier had stepped in to fill the void left by Ravn Alaska’s earlier withdrawal from the market, operating routes without federal subsidy under the Essential Air Service program. Its shutdown means both communities are once again without regular scheduled service.

Performance issues had already troubled Kenai’s recent operations. Residents reported unreliable schedules, limited baggage capacity, and smaller aircraft than promised. By August, Kenai had completed fewer than half its scheduled flights between Unalakleet and Anchorage before grounding its aircraft altogether for maintenance.

Kenai’s closure mirrors a broader struggle for smaller carriers worldwide. The year has already seen the collapse of Silver Airways, Fly PLAY, Air Belgium, and countless others. Extremely high operating costs, limited margins, and intense competition have made regional flying especially difficult, and the post-COVID bounce back just hasn’t been enough.

“I can't make promises. But I believe that Flight 114 will board again. We need capital, we need partners, we need a lifeline,” Caldwell added. “One promise that you can hold me to, is that, if at all possible, I will find that life line. While today all flights cease operations, who knows what tomorrow will hold. It's hard to ground a vision.”

Local leaders are urging the Department of Transportation to redirect service contracts to Aleutian Airways, hoping to restore essential links before winter travel peaks.

FMI: www.kenaiaviation.com