Erickson Inc. declares bankruptcy
The helicopter contractor company providing regular passenger and mail service to Little Diomede declared bankruptcy last year.
On November 8, 2016, Erickson Incorporated and some of its subsidiaries filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division.
Kawerak Inc., the regional non-profit tribal corporation that contracts with the state and federal government to provide services to residents of the Bering Strait, acts as a fiscal agent and has advocated on behalf of Little Diomede to assure that the island residents have reliable transportation to and from the mainland.
Kawerak CEO and President Melanie Bahnke told The Nome Nugget that Erickson made Kawerak aware of the situation before they filed for bankruptcy. Their contract to provide services by transporting passengers and mail via helicopter to and from Little Diomede runs out on June 30, 2017.
As of now, service has not been interrupted due to the bankruptcy proceedings.
“Erickson gave us the heads up before they declared bankruptcy, and I reminded them of the moral and contractual obligations they have to continue the service,” Bahnke said.
Caitlin Harvey, a spokeswoman for the federal DOT, explained that they work with the community on the issue, but said that it is the responsibility of the community to submit a proposal for DOT to consider. According to the contract with Erickson, the federal Dept. of Transportation provides $380,952, a 50 percent match, through the Air Transportation to Noneligible places statute. The other 50 percent is paid by Kawerak, Inc. through a grant from the State of Alaska.
The DOT approved Erickson’s proposal to provide 42 round trips from July 1, 2016 through June 30, 2017 to Diomede. Of these round trips, 36 would occur three times a month. The remaining six trips would be on-demand basis. Services operate between Nome and Diomede, with a twin-engine Bell 212/412 helicopter with up to nine passenger seats.
“I don’t want to create false hopes or false fears at this point,” said Bahnke. “There is the risk of disruption, but we are aware of the situation and Erickson has been reassuring us that they will continue service. Of all the other contracts they have in Alaska, they understand that this is a vital service.”
Phone messages left with Erickson were not returned by deadline. According to an Erickson press release, the bankruptcy is first and foremost a financial restructuring. “During the restructuring, the company will operate in the ordinary course of business,” the press release said. “The company is committed to the same level of operational integrity, safety, compliance, and customer service that its partners are accustomed to. Ultimately, the reorganization will better position the company for the future with lower costs, stabilized businesses, and significant revenue growth opportunities.”