Reeve Aleutian suspends flights, to file for bankruptcy

Posted: Wednesday, December 06, 2000

ANCHORAGE (AP) -- Reeve Aleutian Airways Inc. suspended all of its regularly scheduled flights Tuesday, laid off 250 workers and will file for Chapter 11 bankruptcy protection, company President Dick Reeve said.

''Competitive forces over the last several years have eroded our business base to the point where we don't have enough customers on our scheduled flights to support operations,'' Reeve said.

The company will continue to fly its charter and contract flights while it reorganizes under Chapter 11 bankruptcy protection. The service cuts and layoffs are a last ditch effort to keep the carrier flying, Reeve said.

In addition to tougher competition, Reeve cited high fuel prices and the increasing maintenance costs for its aging fleet as the reason for the cuts.

Reservation counters in Anchorage, Adak, Bethel, Cold Bay, Port Heiden, Sand Point, St. Paul and St. George were closed Tuesday.

Reeve Airways began operations in 1932 in Valdez when company founder Bob Reeve began flying gold miners and their supplies into remote areas.

When World War II broke out, Reeve moved to Anchorage and won an exclusive contract with the military to fly men and supplies to bases throughout the state, including the Aleutians. When the war ended, Reeve upgraded his fleet with military surplus DC-3s and continued serving the Aleutians.

Reeve has cut service to several communities in southwestern Alaska recently. The company pulled out of Dutch Harbor last spring and recently dropped service to Dillingham and King Salmon.

Company officials reached an agreement with Alaska Airlines last year to provide flights to Petropavlovsk and Yuzhno-Sakahlinsk in the Russian Far East. Under the agreement, Reeve planes and pilots flew passengers to the two cities, but Alaska Airlines was able to sell the flights, check baggage and give mileage-plan credit for the flights.

Reeve said the company's business to the Russian Far East tripled in the past two years, but it wasn't enough to keep the company going.

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