American airline Kenai Aviation halts all flights amid insolvency

KENAI Aviation, a regional Alaskan carrier known for connecting remote communities, has announced an immediate halt to all operations after becoming financially insolvent.

In an emotional letter to employees and customers, owner Joel Caldwell revealed that despite full flights and operational success, the airline’s heavy debt load—dating back to the pandemic—has forced it to cease service.

“By all operational metrics, Kenai Aviation is successful. But yet, we are financially insolvent,” Caldwell wrote in a letter posted Tuesday.

He said the company’s bank has called its debt, leaving no choice but to stop flights immediately.

Grounded — for now

Caldwell reflected on how he saved Kenai Aviation in 2017, after hearing that the historic airline was about to shut down.

“I was sitting at my kitchen table in Kenai when I received the call that Jim Bielefeld was just about to finalise shutting down Kenai Aviation, but if I wanted to act quickly, we could step in and keep this historic airline alive,” he said.

He described how the company launched its first scheduled flight just a few years later, fulfilling his dream of connecting Alaskans.

“Very few founders get to see their visions come to life. Where some see passengers, I see connecting Alaskans,” he added.

Pandemic debt and operational challenges

The Covid-19 pandemic, Caldwell said, left the company burdened with debt it could never fully recover from.

“For most people, it’s just a painful memory. For me, and for Kenai Aviation, the Covid gave us a debt load that we haven’t been able to get back on top of,” he wrote.

Maintenance delays and service disruptions, including an extended grounding of the company’s King Air plane, compounded the financial strain.

“Not being able to serve Unalakleet this summer not only hurt a community that I love, it hurt us financially too,” he said.

A plea for hope — and investors

Despite the shutdown, Caldwell expressed optimism that the airline could be revived if new investors or partners came forward.

“Our operations may stop, but this vision continues,” he said.

“We need capital, we need partners, we need a lifeline. That investor is out there; we just need to find them.”

He closed his letter with a heartfelt appeal: “If you are a praying person, I need your prayers. If you aren’t, I need your hope. This can’t be the end of the story… While today all flights cease operations, who knows what tomorrow will hold? It’s hard to ground a vision.”

Founded in 1948, Kenai Aviation has been a staple in Alaska’s aviation history, offering commuter flights between Anchorage, Kenai, and remote regions such as Unalakleet. Under Caldwell’s leadership, the airline expanded scheduled services and became a lifeline for communities across the state.

While its planes are now grounded, Caldwell’s message suggests he remains determined to keep the dream of Kenai Aviation alive.