Northern Pacific Airways aims to start flying later this year and plans to connect price-sensitive leisure travellers between the US and Asia via Alaska
Until the spread of wide-body jets in the 1970s, taking a commercial trans-Pacific flight usually involved a refuelling or technical stop en route, often in Alaska. Now, a mix of pandemic-era entrepreneurialism and cryptocurrency fervour is birthing a new airline whose strategy is to connect price-sensitive leisure travellers between the US and Asia via a stop in the 49th state.
“The numbers are there of how many travellers, and that’s not giving any credit towards spurring new traffic,” says Rob McKinney, CEO of both Anchorage-based Northern Pacific and intrastate carrier Ravn Alaska, and former operations chief at Mokulele Airlines, a regional carrier in Hawaii. “I just believe that if we do the right things with the right machine that it will be a success.”
The FlyCoin loyalty programme recently raised $33m from venture capital investors and the airline will borrow some of that capital, but company officials declined to disclose loan terms. Northern Pacific itself will need to raise about $100m in total this year, McKinney says. Northern Pacific’s founders are relying heavily on Icelandair as a model, betting that pricing below the existing nonstop US-Asia competition can lure budget-minded travellers to stop — and possibly take a stopover holiday — in Alaska. It’s also using an Icelandair subsidiary, Loftleidir, to operate three 757s for its initial Asia service.
JTB, Japan’s largest travel agency, estimates that international travel demand will recover in the first half of 2023, with inbound visitors to the country gradually rising later in the year. Japan may end its strict border controls at the end of February, potentially leading to a greater reopening of tourism.
Boeing’s 787s and Airbus’s A350s are increasingly creating new long-haul nonstop options for carriers in the North Pacific. So the Alaska start-up’s business model of offering lower fares for taking connections is different in the region, says Yasuo Hashimoto, principal analyst at Japan Aviation Management Research. “Having stable demand is difficult,” he says. “It’s aiming at a niche market, which can be gambling.
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