Kenai Aviation (KNW, Kenai) suspended all flight operations on November 3, 2025, buckling under a post-COVID debt burden that it was no longer able to service.

"We are financially insolvent," owner Joel Caldwell said in a statement. "COVID gave us a debt load that we haven't been able to get back on top of. Carrying that burden increased the effects of every obstacle that we’ve had to navigate. When our plane was grounded for maintenance and not being able to serve Unalakleet this summer, this not only hurt a community that I love, it hurt us financially too."

Caldwell emphasised that the airline's current operations were operationally successful, but not sufficient to service the lingering debt. While he conceded he did not “know how” to keep the airline operating, Kenai Aviation will continue to assess how to restart.

"We need capital, we need partners, we need a lifeline. That investor is out there, we just need to find them," Caldwell said.

The airline operates as a Part 135 carrier with a fleet of three Tecnam P2012s, one King Air B200, and one Cessna U206F. It focused on the high-frequency Anchorage Ted Stevens-Kenai shuttle, while also operating subsidised Essential Air Service flights from Anchorage to Seward under a contract running through April 2027, and unsubsidised EAS from Anchorage to Unalakleet. The latter was awarded to Kenai Aviation on an interim basis following the collapse of Ravn Alaska, but the US Department of Transportation was recently seeking a new operator due to the community criticism of Kenai Aviation's low capacity and poor reliability.