When Haines resident Greg Podsiki was diagnosed with bladder cancer in 2020, doctors told him he would need to go to Juneau for five laparoscopic surgeries under anesthesia and another half dozen intrusive follow ups.
Luckily, doctors caught Podsiki’s cancer in time, but he faced a different sort of challenge: paying for it. Podsiki ultimately traveled to Juneau a dozen times, paying thousands of dollars for flights as prices surged to more than $200 each way.
“It was just killing me financially,” he said. “I was just like ‘I can’t live here, I have to move.’”
Podsiki was forced to adapt: he left a beater car in Juneau for a while when he was getting treatments and parked it at Mendenhall Glacier, where he could sleep instead of paying for a hotel. During a more recent health scare, he realized it was cheaper to drive his Ford F-150 more than 750 miles to Anchorage rather than to fly there through Juneau.
Podsiki, who is retired and on Social Security, faced an extreme version of what nearly all Haines residents know: prices for air travel have spiked in the past five years. In 2018, a flight to Juneau was $139. In 2023, prices reached as high as $223, though they have since dropped slightly.
Prices on flights around the country have climbed in the last few years, pressured by inflation and a tight labor market, but rural Alaska has been particularly hard hit. In particular, labor, fuel, and insurance have all been rising during the past half decade or more.
“In 2020 you throw the pandemic on top of that and it was an absolute perfect storm,” said Kent Craford, co-owner and president of Alaska Seaplanes, Haines’ sole regular flight service.
The high prices have forced Haines residents to rely on the atrophied schedule of the Alaska Marine Highway System, which can take them to Juneau for about $60 but takes more than four hours, instead of the quick 30-minute flight.
Reasons price rises
Flight prices around the country have risen sharply in the last several years, but rates in rural Alaska have far outpaced national trends.
Craford said the first rumblings began as early as 2009 when a plane crash in Buffalo, N.Y., prompted Congress and the Federal Aviation Administration to ramp up training requirements for small plane pilots. Among other changes, copilots had to quintuple their training hours, which some critics warned would make it harder to recruit pilots since many pay out of pocket for hours.
“That really put a pinch in our pilot pipeline,” said Craford.
During the pandemic, many pilots decided to retire, further squeezing the supply. Airlines around the world have been scrambling to fill their cockpits, sometimes by cutting flights.
It’s not just pilots. Airplane mechanics have also been in short supply in the last few years. The problem reflects a national trend of an aging airplane mechanic workforce. A national study found that more than a third of airplane mechanics are 55 years or older.
“We’ve had to raise wages pretty dramatically,” said Craford, “But we also had to do things we’ve never done before like offer housing.”
Even with higher wages, workers are still leaving. Craford said he’s hired pilots, only to have them arrive in Juneau where they weren’t able to find affordable housing and left.
“It’s just a gut punch,” said Craford.
Outside of labor, insurance rates also have spiked for small airlines in Alaska, Craford said. The rise in insurance began in the mid-2010s, when Alaska was rocked by a string of deadly plane crashes. In 2016 alone, Alaska recorded a dozen fatal crashes. None involved Alaska Seaplanes, but Craford said it still led adjusters to bump up prices for small airlines in rural Alaska.
“We get tarred with the same brush,” said Craford.
On top of that, airline insurance companies faced steep losses for the thousands of planes that were trapped in Russia or Ukraine. Insurance companies wrote off $15 billion in losses during the first few months of the war, according to S&P Global. Craford believes this trickled down to rates for small Alaska carriers, which buy insurance from international carriers.
The Ukraine war also had an effect on fuel, sending gas prices soaring by up to 40%. Since then, prices have dropped, which Craford said has helped Seaplanes to drop prices slightly.
Finally, Craford said problems with Haines’ Airport that have been plaguing its sewage system because of an error by state engineers has forced Seaplanes to spend about $30,000 to pump sewage. The costs amount to a $2 tax per flight.
Few possible solutions
Despite the price increases, Seaplanes says it’s doing what it can to keep prices low. Craford said on average, in the last 10 years or so, prices have risen a steady 3% per year, despite investing more than $20 million in new turbine planes that are safer and more reliable. In 2022, for the first time ever, the company increased prices on tickets three times throughout the year.
“We’d never done that more than once in a year,” he said.
Prices have begun to subside, if only slightly. As of Monday, tickets were as low as $174 between Haines and Juneau.
“Our hope is that when these inflationary pressures subside, we will be able to pull back a little bit — at least bend our increases,” said Craford.
Some community members have wondered aloud whether having more airlines would encourage competition that could drive down prices. Longtime pilot Sam Wright said he remembers when a ticket to Juneau cost just $25. He says there were more than five private airlines back then.
“Back in the old days, they used to fight for the last dollar,” he said. “Competition is always good for the consumer.”
Still, he acknowledged the industry has become more challenging to make a profit, in part because it has become safer. Cessna Caravans, which Seaplanes uses, sell for around $2.5 million, according toAircraft Bluebook’s Spring 2023 data. New requirements for training and navigation have also made things safer.
“A lot of people don’t want to fly here because of the fog and the snow and all that,” Wright said. “It’s a tough market — you can make more money in Anchorage than you can here.”
Borough officials say there is little they can do to encourage more airlines to come, despite continued public opinion research in Haines showing that transportation is the biggest barrier for residents to living here. Borough manager Annette Kreitzer said that she’s discussed options with the Mayor and chief financial officer, but there are no easy answers. She said, among other ideas, is to spur more housing development which would make prices cheaper for workers, but there haven’t been any concrete proposals.
“We haven’t settled on any sort of approach about anything we can do,” said Kreitzer.
She said the state is planning an airport improvement project that she says she hopes will help pilots do instrument landings when visibility is low. Seaplanes itself is improving the system its pilots use to orient themselves during landings, which is expected to reduce cancellations.
“We don’t know how much it will help until we start flying regularly, but just based on the minimums, we think it will be a significant benefit,” said Craford.
In the meantime, borough officials, Alaska Seaplanes, and Haines residents say they’re adapting to conditions at the end of the highway system. The ferry schedules have been partially restored to pre-pandemic levels and the four-hour ride has its appeals. Haines Borough School District superintendent Roy Getchell said the district can send seven students on the ferry for the same price that it takes to buy one plane ticket, and students can nap on their chairs.
“If you’ve seen our students on the ferry, they’ll just kinda camp out there,” he said.
Seaplanes says the ferry system, which is state subsidized, acts as a competitor to keep flight prices as low as possible. With the ferry running to Juneau daily this summer, Craford said Seaplanes has had a drop in passenger demand which he called “disconcerting.”
Often for residents, the four-hour ride or the $200 flight isn’t worth it, so they’re passing on frivolous trips.
“It’s $1,000 to go to McDonald’s with your wife, so we stay at home more,” said Wright.