Anchorage, United States: Regional carrier Kenai Aviation has announced an immediate shutdown of all operations, citing severe financial distress and aircraft maintenance issues that have rendered continued service impossible. The abrupt closure has left several Alaska communities without scheduled passenger air service, raising concerns over rural connectivity in the state.
In a message posted on the company’s website on Monday, Kenai Aviation owner Joel Caldwell said he was “devastated” by the decision but could no longer sustain operations amid mounting debt.
“We have to cease all operations immediately. I am devastated,” Caldwell wrote. “Our operations may stop, but this vision continues… I believe that Flight 114 will board again. We need capital, we need partners, we need a lifeline.”
Founded in 1959, Kenai Aviation originally supported Cook Inlet’s oil and gas operations before expanding into passenger and charter services across south-central Alaska. Caldwell acquired the company in 2018 and attempted to modernize its fleet and restart scheduled service to underserved communities.
The company faced a growing debt burden dating back to the pandemic period, which intensified after its King Air aircraft, a key asset serving the Anchorage Unalakleet route, was grounded for maintenance. The setback severely affected the carrier’s ability to maintain service reliability and cash flow.
“Kenai Aviation has been struggling to keep up with the cost of operations in an environment where rising fuel, maintenance, and insurance expenses are hitting small regional carriers hardest,” the ADN report stated.
Earlier in 2025, the airline’s performance had already been under scrutiny when data showed that only about 45% of scheduled flights between Anchorage and Unalakleet were completed during a three-week span starting in July.
The shutdown is a major blow to Unalakleet, a western Alaska community that relied on Kenai Aviation for passenger travel and cargo. With the airline’s exit, the village now lacks a regularly scheduled passenger carrier.
Kenai Aviation’s departure could disrupt essential mobility for residents and delay medical, educational, and commercial travel. The U.S. Department of Transportation (DOT) is expected to reassign the Essential Air Service (EAS) contract for the affected route, though no replacement operator has yet been confirmed.
