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Largest in-state air carrier to set headquarters in FairbanksBy Amanda BohmanStaff WriterPublished January 24, 2008Rural Alaska’s two biggest passenger airlines are joining to form the largest air carrier based in the state, and the headquarters will be in Fairbanks.Frontier Flying Service Inc. of Fairbanks and Hageland Aviation Services of Anchorage are merging to form the airline Frontier Alaska, said company president Bob Hajdukovich.The new $65 million air carrier will have 63 aircraft and about 500 employees with service to almost 100 Alaska communities.Competition drove the two airlines to join forces.“Aviation is a tough business,” said Mike Hageland, who started Hageland Aviation in 1981. “There’s too many carriers in most of the markets. Possibly, we’ll make one good company out of two that were just rolling along.”The airlines will continue to function under separate licenses but will combine operations and unite under a common name on March 1, Hajdukovich said.Officials will be looking for ways to reduce expenses, but Hajdukovich hesitated to predict layoffs.Company officials have no immediate plans to raise ticket prices and are hoping to lower ticket prices in some communities.The merger will result in fewer flights in communities where the two airlines overlap, but company officials are hoping to add some flight times and to make Bush travel easier. Freight service should also improve, Hajdukovich said.Frontier Flying has been around since 1950, when a retired U.S. Air Force colonel started the company at the Fairbanks International Airport. Hajdukovich bought the company in 1974.Frontier Flying employs almost 300 people with nine hubs across the state. Hageland has about 200 employees, 12 hubs and scheduled passenger flights to more Alaska destinations than any other airline in the world, according to its Web site.The Frontier logo, an outline of the state flanked by wings, will carry over to the new airline, Hajdukovich said.Hajdukovich approached Hageland about a deal over a year ago, he said. Neither company had the cash to buy the other out, so officials began exploring a merger, he said.The merger will be better for the long-term prospects of both companies, Hajdukovich said.“Both companies were struggling,” he said, “not necessarily from a going-out-of-business next month situation, but both were struggling to come up with a business model for the future.”It’s unclear how the merger will affect other Bush airlines.One competitor who was reached adopted a wait-and-see attitude about the deal.“I don’t know enough about their business plan to really make a judgment about what affect, if any, it will have on us,” said Bob Bursiel, owner of Wright Air Service in Fairbanks.Frontier Alaska will be owned by a holding company, HoTH Inc., whose shareholders will include Hageland and Hajdukovich.“It is a little sad in a way,” said Hageland, who started his company in Mt. Village, flying passengers and cargo in a Cessna 180. “It’s exciting in a way, too. It will be better, hopefully.”Contact staff writer Amanda Bohman at 459-7544.
