Aviation

At Dillingham public meeting, PenAir CEO speaks frankly about drugs, fares

Last Friday afternoon, the Dillingham City Council held an informal workshop with Danny Seybert, chairman and CEO of PenAir. By request of Mayor Alice Ruby, Seybert and his colleague Kristin Folmar visited Dillingham to provide airline updates and answer questions. More than a dozen community members attended.

This year marks the 60th year of PenAir service to Dillingham, and Seybert discussed his company's challenges with an eye to the future.

"I can probably name 30 different carriers in this area that I've seen come and go over the years, but ... we've survived."

For Seybert, a big part of that survival is recouping losses. The CEO explained that due to factors like inflation, competition and fuel costs, PenAir has seen a net loss of $1 million in rural Alaska over the past four years. Seybert says he's made hard decisions to keep the company afloat, including ending PenAir's small airplane operation three years ago.

Still, the primary concern raised by workshop attendees was the increasing cost of PenAir flights. A round-trip ticket from Dillingham to Anchorage ranges from $450 to $600, which some residents feel is prohibitively expensive.

Seybert explained that one reason for high prices is that PenAir does not fill planes to capacity. Airplanes going in and out of Dillingham on average fill just over half of available seats, compared to 70-80 percent in larger markets such as Bethel.

Seybert attributed some of that imbalance to the huge fishing industry in Bristol Bay, calling it "both a curse and a blessing" for PenAir.

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"Between King Salmon, Naknek and Dillingham, that's 20,000 people who come out in June and 20,000 that go back in July," he said.

Empty planes on those return trips mean added cost.

He added that PenAir, like any company, gives discounts to organizations that provide a large amount of business, like Peter Pan and the hospital.

Seybert presented some financial numbers to emphasize that he is not in a position to reduce prices for flights in rural Alaska.

"I'm very comfortable in the dollar amount that I'm charging, and probably not going to lower it," he said.

Several meeting attendees did not find this acceptable. One woman appealed, "We pay through the nose for everything we do out here ... Remember where you got your start from -- it was Bristol Bay. Remember the people out here."

The company executive, who grew up in Pilot Point and lived in Dillingham for eight years, assured attendees that he does not forget his roots.

Seybert presented one option that could balance community needs with cost effectiveness: reducing the number of flights to Dillingham. He tried this strategy in Unalakleet, cutting flights from 7 days to 5 days a week.

"I said if you guys [in Unalakleet] support me, I'll cut back to five days a week, we'll continue to serve the community and we won't raise the prices," he said.

Per this agreement, Unalakleet declined to invite other air carriers in. Seybert said the arrangement worked well for a while.

To the contrary, Seybert says he doesn't see Dillingham committing to reduce service from its current three flights per day. He said that cutting back to one flight per day, though it might temporarily pull down ticket prices, could open the Dillingham market to competition from other airlines that could eventually push PenAir out altogether. That's not a risk he's willing to take.

Community members also asked what could be done about frequent delays and flight cancelations, citing PenAir's nickname, "WhenAir." One workshop attendee, Greg Marxmiller, said better communication about these schedule changes is needed between airline staff and customers.

Seybert acknowledged his carrier's reputation and apologized for these inconveniences. "Getting information to the right people is something we struggle with, so we're continually working on that."

Director of sales and marketing Kristin Folmar also responded to concerns about the quality of PenAir's front desk service, saying the airline is soon to implement a new customer service training program. She said, "We're working to do a better job giving our colleagues, and especially our frontline employees, the tools to deliver better customer service."

Another common customer service complaint was about PenAir's handling of baggage. According to several workshop attendees, even after PenAir's recent increase in baggage fees, bags frequently go missing. Seybert responded that he is working on that issue, but the best thing for travelers to do is to carry fewer and smaller bags.

He said, "I was hoping I would charge enough that customers would then use the post office and mail stuff home."

Another major topic of discussion was the influx of drugs, especially heroin, into Dillingham and other villages via PenAir planes. Seybert stated bluntly, "I am without a doubt the biggest drug runner in the state. I am hauling more drugs than anybody in the state and I don't like it."

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Seybert said PenAir's options for stopping drug traffic are limited. Employees are prevented from searching bags without cause, and he says that TSA officers are mainly concerned with bombs and weapons. Seybert said a solution would be to place drug-sniffing dogs in Alaska airports. He says this expense should not fall on the airlines, airports, or individual communities, but rather on the state. He urged Dillingham residents to write their legislators asking for assistance in paying for drug-sniffing dogs and their handlers.

Several attendees expressed understanding for PenAir's myriad challenges and offered appreciation for the company's role in the Dillingham community. One attendee said, "Danny Seybert will always come to our aid if there's family crises or if there's a problem." Mayor Ruby added that when she served as an EMT, PenAir always provided help for EMTs to get into Anchorage for trainings.

Marxmiller said he's discouraged by the outlook for flight prices, but he's hopeful that the situation could improve. "Danny Seybert said he wanted to come back, and maybe this is the start of a conversation that may someday lead to an understanding of ... prices and all the stuff that goes along with it."

PenAir recently purchased three 45-passenger planes, which will begin flights at the end of July.

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