April-Issue-1 2001

Regulators look at ACS decision to stop building new phone lines

FAIRBANKS -- The Regulatory Commission of Alaska is investigating whether Alaska Communication Systems is violating any rules by refusing to build new phone lines in Fairbanks and Anchorage.  ACS announced last month it had abandoned plans to install new copper wire phone lines. The utility said it will offer wireless phones instead to home and business owners seeking new service in areas without existing lines. The decision was made because an order allowing rival General Communications Inc., or GCI, to lease ACS lines would put the utility’s new investment at risk, company officials said. The commission began its investigation because of consumer complaints. Copper wire lines allow Internet and fax services while wireless offers fax service but not the Internet. "I cannot afford to wait any longer for phone service, as this is an expected part of running any business," wrote Paul Welton, a Fairbanks businessman who wants to build an apartment complex. Commission spokeswoman Agnes Pitts said the panel will decide if ACS can offer a wireless phone in place of a copper wire phone line. The commission approves and enforces rules under which most state telephone utilities operate. The forced GCI agreement, completed in October, allows GCI to lease ACS equipment in Fairbanks and Juneau and then offer telephone service via the leased lines. If ACS installs new lines, then those lines can be leased by GCI, therefore eliminating any chance for ACS to get a return on its investment, ACS President Wes Carson said. That gives GCI an unfair advantage, he said. Several lawsuits are pending in state courts to stay the agreement. Dana Tindall, GCI’s senior vice president of regulatory affairs, said ACS’ refusal to install phone lines is another stab at keeping competition out of Fairbanks and Juneau. The two companies have a separate interconnect agreement for Anchorage. Some customers aren’t happy. Welton, the Fairbanks businessman, said he began two years ago seeking 50 to 100 phone lines for his apartment complex and initially was promised copper phone lines. The company told him recently about its decision to offer wireless, he said. ACS’ wireless service is inefficient and ineffective for the upscale apartment complex he is planning, he said. "It’s a multimillion dollar project," Welton told the Fairbanks Daily News-Miner. "I’ve already got a couple of (construction office) buildings, but we don’t have any phones." Ron Illingworth, who lives off Eielson Farm Road near Moose Creek, said he was assigned ACS’ wireless phone service even though he tried to get a regular phone line since moving there four years ago. "This is just the excuse of the day," Illingworth said. Frank Biondi, ACS’ general manager for Fairbanks, said he was aware of Welton’s and Illingworth’s complaints. He declined comment about Welton’s situation but said there were other reasons why Welton wasn’t getting phone service. Biondi contended those weren’t ACS’ fault. "He’s well aware of those reasons," Biondi said. Biondi said he has been working with Eielson Farm Road residents for years in trying to provide service. It would cost $700,000 to install regular phone service for that area, he said. Residents would have to pay a portion of those costs, but no one has agreed to that, he said. Biondi said his company anticipates growth and tries to plan for service, but the GCI agreement has stalled any plans.  

Development company gets cold feet, won't construct ski resort at Hatcher Pass

The on again, off again saga of a ski resort in Hatcher Pass is off again. On March 14, officials from the Hatcher Pass Development Co. notified the Matanuska-Susitna Borough that they had decided a "re-evaluation of our participation in the project was warranted." The company informed the borough the change was due to a recent consultant’s evaluation, the new assembly’s makeup and the new mayor.The letter came about a month after the firm of Thomas, Head & Greisen released an independent accountant’s report on Hatcher Pass. The report, commissioned by the borough, concluded, "While significant and extensive studies of the feasibility of developing a ski area at Hatcher Pass have been performed, it’s difficult to determine if the project will ever come to fruition."Hatcher Pass Development Co. is not the first to back away from developing a ski resort at Hatcher Pass. In 1986 the borough and the state began negotiations with a Japanese firm, Mitsui Corp., for the development of a site in Hatcher Pass. Many said the idea was too big and it came at the beginning of a huge economic downturn in Alaska. The plan failed.Shortly after, Idaho Ski Resort developer Fred Rogers took over the 11,000-acre lease to pursue his dream of a world-class ski resort. Rogers was unable to keep up on the property taxes and that plan failed too.In 1997, an Alaska firm, Davis Constructors Engineering came along. They paid Roger’s back taxes and took over operation of the firm he created, Hatcher Pass Development Co. The new "homegrown" plan was to build in phases, start small and grow accordingly. The idea gained the support of the previous borough administration and assembly.Then, six months ago, a new mayor was elected, along with three new assembly members. One of Matanuska-Susitna Borough Mayor Tim Anderson’s first actions was to ask for an independent financial analysis of the development plan. The report concluded that there were a number of unanswered questions that that had to be resolved before development could proceed.Borough Manager John Duffy said many of the unanswered questions centered around developing an infrastructure. "That was something we were prepared to do. We were just days away from going to the Assembly and asking for the money needed to begin putting in that infrastructure."Anderson said the borough was preparing options to come up with $10 million needed to bring in electricity, gas, communications, a road system and sewer and water. Anderson said one option would have been to seek approval from the voters for bonds to pay for the work. He said the initiative could have been on an April ballot, and the money, if approved, would have been available for the development to begin this summer.On March 20, the Borough Assembly was informed of the HBDC’s decision to cease development. At that meeting another group, Friends of Hatcher Pass, issued a statement criticizing the borough’s recent actions, including the independent feasibility study and taking the development issue to the public for a vote.The borough says it is committed to the Hatcher Pass development. One of its first orders of business will be finding an entity to take over the lease currently held by the HBDC. Friends of Hatcher Pass says it is prepared to take over that role if the borough will transfer its lease assignment of Hatcher Pass to the state. Duffy said the borough will consider the request, along with other alternatives that are now being explored.

Around the World April 1, 2001

StateKnowles seeks missile chief JUNEAU -- The state House approved a bill March 26 that would let the state hire an assistant adjutant general for space and missile defense in the state Department of Military and Veterans Affairs.Gov. Tony Knowles asked for the position, which he said would be federally funded. The National Guard officer appointed to the job would be the state’s official military representative in matters related to deployment of a national missile defense program in Alaska.The job would be authorized for as long as the federal government is working on the missile defense program in Alaska and is paying for the position. That’s expected to be at least three years.Fish processor sentencedANCHORAGE -- The owner of Kenai Custom Seafoods and his son were sentenced March 26 to federal prison for purchasing illegally harvested halibut, the U.S. Attorney’s Office said.James Hill Sr. and James Hill Jr. were sentenced to 15 months each after pleading guilty to conspiracy and violating federal wildlife statutes.The Hills admitted purchasing about 20,000 to 34,000 pounds of halibut they knew had been illegally harvested by Kenai fisherman Lloyd Collins, said Assistant U.S. Attorney Kevin Feldis.NationAmericans sleep lessWASHINGTON -- Americans are sleep-deprived workaholics, with only about a third sleeping the recommended eight hours a night, and about 40 percent say they have trouble staying awake on the job, according to a poll released March 27.The survey by the National Sleep Foundation said Americans are spending more time working and less time having sex than they did five years ago."Instead of working to live, they are living to work, a shift that has had a profound impact on their personal lives,’’ the foundation said.The 2001 Sleep in America poll of 1,004 adults found that 63 percent get less than eight hours a night and about 31 percent get less than seven hours. While they are spending less time sleeping, 40 percent of those polled say they are working longer hours than five years ago. The average work week was 46 hours, while 38 percent said they worked 50 hours or more a week.Women smoke moreWASHINGTON -- The latest surgeon general’s report gives dire new meaning to that old cigarette ad "You’ve come a long way, baby.’’ Women now account for 39 percent of smoking-related deaths, a proportion that has more than doubled since 1965.Worse, more teenage girls are smoking, and increased tobacco industry marketing threatens to derail recent progress in fighting the killer habit, concludes Surgeon General David Satcher in a report released March 27.Smoking is the nation’s leading cause of preventable death, claiming more than 400,000 lives a year, according to the federal government. Smoking has killed nearly 3 million women since the surgeon general last investigated female smoking in 1980, the new report says. It can cut short a woman’s life by an average of 14 years.Homes sales fallWASHINGTON -- Sales of new and existing homes both dipped slightly in February, but demand remained strong as housing continued to demonstrate few adverse effects from the slowdown in the overall economy.Sales of new single-family homes fell by 2.4 percent last month after a steeper 5.4 percent decline in January, the Commerce Department reported March 26.Even with the back-to-back declines, sales of new homes remained at a healthy annual rate of 911,000 units in February.WorldRussia opens pipelineALMATY, Kazakstan -- With a ceremonial twist of a valve, Russian and Kazak officials on March 26 began pumping crude oil down the first major pipeline to be built in the resource-rich Caspian Sea region in a decade.The opening of the pipeline, which runs from Kazakstan’s Tengiz field to Russia’s Black Sea port of Novorossiisk, was a victory for Russia. It will bring Moscow welcome new transport tariffs for years to come -- and added political clout in the strategic region.The United States has struggled to limit Russia’s control over petroleum exports from the Caspian region, thought to hold vast oil reserves and described as a key source of energy for the 21st century.-- Compiled from business and wire reports.

Winner lives by motto to make a positive difference in world

A passion for her life’s work in the banking industry and in the community drives Betsy Lawer. As vice chairwoman and chief operating officer of First National Bank of Anchorage and a lifelong Alaskan, she also possesses a keen interest in the economic health of the state. Lawer easily quotes her mother and role model: "We were put here to make a difference and that difference better be positive." The Anchorage ATHENA Society honored Lawer on March 19 for the difference she has made in the lives of others by presenting her with the 2001 ATHENA Award. The award is handed out each year to an Anchorage ATHENA Society member who has demonstrated excellence in their business, has contributed to the community and has encouraged women in their business and professional endeavors. Betsy Lawer, vice chairwoman and chief operating officer of First National Bank of Anchorage, is the 2001 ATHENA Award recipient. Lawer was recognized for promoting women to leadership positions at First National and for helping to add another woman to the bank board of directors, said last year’s ATHENA recipient Arliss Sturgulewski in presenting the award to Lawer. Lawer also works in the community to promote women in business by providing development assistance, funding for the YWCA’s WOMEN$fund program and loans to women-owned businesses. "This is a very great honor, and I’m humbled to receive it," Lawer said at the event. The award also is "recognition for what I feel so lucky to be able to do in my life," she said in an interview. Lawer also is thankful for the opportunity, as part of the Anchorage ATHENA Society and its programs to encourage women in business, "to help other women be successful in their lives," she said. Born in Anchorage, she started working at the bank in her late teens. Lawer first attended college at the University of California at Santa Barbara before transferring after two years to Duke University in North Carolina. Lawer cited a turning point in her career path. In September 1969, immediately after the landmark North Slope oil lease sale, Lawer had the opportunity, since First National worked with Bank of America on the deal, to fly aboard the jet carrying the multimillion dollar check to New York. When Lawer returned to Duke University for the fall term, she changed her major from interior design to economics, completing her degree in 1971. She has held numerous titles at the bank, working in several departments. Lawer has served in her current post as vice chairwoman and chief operating officer since May 1992. She has been on the bank board since 1982. Lawer continues her service as a member of the Seattle branch of the Federal Reserve Bank of San Francisco. Lawer also considers the future of Alaska ranging from the state’s economic health to creating jobs here for young Alaskans, including Lawer’s 21-year-old daughter. "I think that in coming years if we can get the gas pipeline coming through Alaska there could be some exciting times," she said. "Another passion of mine is to make sure we create enough good jobs here for our young people," she said. Lawer also believes that Alaskans directing their dollars to Alaska businesses can make a difference in the state economy. "One of my many passions is Buy Alaska," she said. "If we support other Alaskans we can expand our economy."  

Arctic Slope optimistic on development

Arctic Slope Regional Corp. President Jacob Adams gave an upbeat assessment of his corporation’s prospects and the future of North Slope oil, gas and mineral development in a March 22 talk to the Resource Development Council in Anchorage. ASRC is the Alaska Native regional corporation for northern Alaska, based in Barrow. Because of extensive land holdings and its industry-support subsidiaries, the corporation is extensively involved in resource development on the North Slope. Adams announced that ASRC will be sending checks totaling $20 million to other Alaska Native regional and village corporations this year -- and payments of a similar amount in following years -- as royalty-sharing payments from revenues from the new Alpine oil field. ASRC owns part of the mineral rights under Alpine, a new oil field on the Colville Delta west of Prudhoe Bay, which began producing in late November. The state of Alaska owns the remaining mineral rights under Alpine. Under terms of the 1971 Alaska Native Claims Settlement Act, regional corporations are required to share 70 percent of net resource revenues with other Native corporations. With Phillips Alaska Inc. and BP Exploration (Alaska) Inc. busy exploring for more oil in the National Petroleum Reserve-Alaska to the west of Alpine, Adams said ASRC is hoping to persuade the federal government to allow the corporation to select lands in the reserve. On coal, Adams said prospects for commercial use of ASRC’s very large deposits of bituminous coal in the western Arctic are looking better. "New technologies that Cominco and NANA Regional Corp. are looking at to produce zinc at the mine site in the Red Dog Mine area could make it economic to also mine coal," Adams said. What’s being discussed with Cominco is a coal-fired power plant that would supply large amounts of power needed for zinc metal processing. ASRC would supply coal for the power plant. That, combined with long-range plans for transportation infrastructure in the region, could also see western Arctic coal being exported to market, he said. On a natural gas pipeline, Adams said the sooner the producing companies make their decisions on the project the better it is for Alaska. "However, we are very cautious that Alaska can develop a petrochemical industry based on natural gas," he said. "We may become the plastics-manufacturing capital of the world, but it will be incremental opportunities based on gas," Adams said. ASRC also has a big stake in petroleum exploration in the coastal plain of the Arctic National Wildlife Refuge. The corporation owns mineral rights under 91,000 acres of land in the northern part of the coastal plain, with the surface lands owned by the village corporation of Kaktovik, the nearest village, Adams said. "I’m optimistic that Congress will recognize the large contribution ANWR can make to the nation’s energy needs," he said. ANWR holds potential for new oil and gas discoveries, development and more employment for Alaskans, but Adams cautioned that, "these jobs and opportunities will not be available overnight. It will take some time to develop the mechanics of leasing and to get exploration under way." Adams had two areas of concern, however. "The right of way for the trans-Alaska pipeline system is up for reauthorization. There are those who would like to load up the reauthorization with conditions to the point where the pipeline’s economics might be jeopardized," he warned. "It’s incumbent on all of us to let our government leaders know how important this reauthorization is." Secondly, Adams is concerned with the long-term study of cumulative oil impacts on the North Slope that is now under way by the National Academy of Science. "I will tell you that the habitat which our people rely on has been well protected by the petroleum industry. The industry has also respected the views of our people," Adams said. "There have been mistakes, certainly," Adams said. "But we learn from our mistakes. In future development ... we will not see the kind of industrial sprawl we see around Prudhoe Bay."  

Kodiak complex launches third rocket

KODIAK -- The third launch at Kodiak’s Rocket Launch Complex went off perfectly, officials of the facility said March 23. The launch caught a good-weather window just ahead of a storm front that settled onto Kodiak."Watching a rocket go off is a patriotic thing," said Alaska Aerospace Development Corporation Director Pat Ladner, who has lobbied hard to build the commercial space facility in Kodiak.The rocket’s suborbital trajectory was 100 miles high by 360 miles long. Ladner said the rocket flew right down the center of its projected pathway.The AADC contracted a unique mobile range safety system to track the rocket and destroy it if it did not function appropriately. The launch was the first mission of the mobile Army "Honeywell" unit, which allows for the safety of rockets fired in remote locations.The AADC plans to build two similar range safety systems, one local and one down range, to make the commercial facility self sufficient sometime next year.The March 22 launch was not visually impressive from a vantage point in Kodiak 40 miles away but Ladner said that will change when the range launches an Athena rocket.The multistage Lockheed Athena, scheduled for August, will carry several payloads into outer space, the first orbital shot from the Kodiak site, Ladner said.One other launch is scheduled this year. The Army on June 12 plans a suborbital three-stage shot to provide a target for a Department of Defense missile defense program exercise.The most recent launch was witnessed by state Sen. Allen Austerman, R-Kodiak, who said he hopes Kodiak can diversify its struggling economy into the space industry. He envisions Kodiak as a center for building satellites."The long-term economic growth pattern is the most important part of this," Austerman said. "We need to capitalize into what they’re going to be putting into space. We need to bring parts here (for assembly), train people here."

White Pass Railroad puts off Carcross service

SKAGWAY -- The White Pass & Yukon Route Railroad says it plans to delay indefinitely scheduled service from this historic Gold Rush city to the Yukon community of Carcross. The railroad blamed a sagging economy, a weak showing in advanced bookings and a change in cruise ship departure times for the decision.Maintenance required on its steam locomotive also played a part, said Fred McCorriston, White Pass president."The White Pass, a publicly held company, has a requirement to its shareholders to deploy its assets in a fiscally responsible manner," McCorriston said in a prepared statement.A great deal of work remains to be done on the narrow-gauge line between Bennett and Carcross, he said. The company decided to delay the operation’s scheduled start-up rather than open with service not up to customer standards, McCorriston said.The railroad, which carried more than 300,000 passengers during last summer’s tourist season, believes a market exists for service to Carcross.

Tight commercial rental market gets tighter

Major segments in the Anchorage commercial real estate market show low vacancies, with industry officials expecting the trend to continue in 2001. Office space vacancies continue to decline while some types of warehouse and industrial space is also growing scarce, real estate representatives say. The Anchorage office vacancy rate hit 2.4 percent for February, down from 3.2 percent in February 2000, according to a survey by Anchorage real estate appraisers and consultants Kincaid & Riely LLC. The survey included 211 buildings representing more than 7 million square feet of office space. Most of the change in Anchorage office vacancy rates came in the Midtown area, the survey said. One reason can be traced to vacancies created when state offices moved out of the Frontier Building then being filled between 2000 and 2001, said Kincaid & Riely managing member Heather Fair. She also expects to see more construction in mid-Anchorage. For example, Arctic Slope Regional Corp. has proposed consolidating its office space into a new building in the area, she said. However, that project would not be completed for another two years, she said. "Midtown is becoming more attractive" to office tenants, she said. Another example, Fair noted, is a new office building at 2610 Gambell St. The $7 million four-story building features 40,000 square feet plus one floor of covered parking. Work on the building, which began last fall, is now being completed, said Chris Stephens, listing agent for the property at Bond, Stephens and Johnson Inc. "This is the first new spec office building built since 1985 or 1986 when Resolution Plaza was built," he said. Stephens and leasing agent Lottie Michael are in negotiations with possible tenants, he said.

Tour guides get the pitch

Alaska visitor destinations and companies showcased their wares to potential clients as part of a national convention in Anchorage. Several Alaska cities hosted members of the National Tour Association, including major package tour operators and other industry officials, during the organization’s annual spring meeting. Familiarization tours before and after the event visited the Alyeska Resort in Girdwood and destinations in Fairbanks, Juneau, Seward, Talkeetna and Valdez.More than 300 participants were set to attend the National Tour Association Spring Meet in Anchorage on March 21-25, said Hank Phillips, president of the 4,000-member organization based in Lexington, Ky. Participants included representatives from about 180 tour companies plus other industry suppliers.The Anchorage conference marked the first time NTA has held a large event in Alaska, Phillips said. "We’ve had board meetings in Alaska," said Phillips, who has visited Alaska three previous times.Anchorage was chosen as a host city for the event because it is in high demand as a destination, he said. Other cities have hosted the group, including Albuquerque, Boston, Indianapolis and Pittsburgh. "As an organization we try to present a diverse type of destination to our members," he said.The event represents possible new business for the host city and its tourism industry, he said."Many (NTA members) send groups to Alaska, but many still don’t," he said.Tourism officials in Anchorage were pleased to host the event."Having this prestigious industry event enables us to showcase Anchorage -- and Alaska -- to hundreds of travel planners, including many who may not have experienced the city or state before," said Bruce Bustamante, president and chief executive of the Anchorage Convention and Visitors Bureau."NTA attendees plan tours all over the world, and they sell to the public and group leaders," Bustamante said. "There is tremendous potential here for building group travel business to Anchorage."NTA’s Phillips offered advice for Alaska tourism operations."One of the things we tell people who are selling to tour companies is to work together. Few attractions are an island," he said. "To maximize success, local tour providers should look to each other and develop joint strategies."Tour operators need the basics for their tour participants, like food and lodging, but they also look for history and culture about an area or a unique experience not offered by other companies, he said.

Three file motion to stop Tanana Flats intertie

FAIRBANKS -- Three people have filed a motion in Superior Court here aimed at stopping the state from issuing permits to Golden Valley Electric Association for construction of the Northern Intertie. An attorney for the plaintiffs contends some unique wetlands in the Tanana Flats, called fens, are navigable waters.Harry Bader said that means the state should have asserted a claim over the area and used different criteria in evaluating the permits."This is not an issue anymore about the intertie," Bader told the Fairbanks Daily News-Miner. "This is an issue of constitutional interpretation regarding the state’s fiduciary responsibility toward a public trust resource."The fens are navigable because of a history of airboat use by hunters, trappers and recreational users, Bader said. Under the Alaska Constitution and common law, the state owns the beds of the fens in trust for the people of Alaska, he contends.Fens are bodies of water with floating vegetative mats. They are rare elsewhere, but many are found in the flats.Stacey Fritz, Edward Murphy and David Valentine are listed as plaintiffs in the motion. All are members of the GVEA Ratepayers Alliance, a group formed in opposition to the so-called "Rex/South route."That route drew fire because a portion of it would cross the flats.The motion was filed March 1, or shortly after Natural Resources Pat Pourchot approved the Rex/South route for the 100-mile electric transmission line from Healy to Fairbanks.Plaintiffs had 30 days to file a motion to stay the decision.Superior Court Judge Ralph Beistline will make a ruling on the motion to stop the permit from being issued after the Department of Natural Resources files its response.

This Week in Alaska Business History April 1, 2001

Editor’s note: "This Week in Alaska Business History" revisits events that shaped our past."Those who cannotremember the past arecondemned to repeat it."-- George Santayana, 1863-195220 years ago this weekAnchorage TimesApril 2, 1981Interim findings support Susitna power projectBy Steven HansenTimes WriterThe $32 million study of the proposed Susitna hydropower project has turned up nothing so far that indicates the project is not economically feasible or environmentally sound.A report written at the midpoint of the 30-month study also says that preliminary indications are that the region will need the power the $3.4 billion project would provide and that earthquakes apparently do not pose any sizable risk.The study is being conducted to help state officials decide whether to build dams on the Susitna River 125 miles north of Anchorage.The interim report was written by the consulting firm conducting the study, Acres American Inc., for the Alaska Power Authority, the state agency charged with the responsibility of constructing and operating electrical generating facilities across the state.Anchorage TimesApril 2, 1981Native corporation suffers huge lossThe Associated PressSEATTLE -- The 13th Regional Corp., established to invest millions of dollars given to Alaska Natives by the federal government, has disclosed it lost more than $10 million in a 20-month period ending Nov. 30.As a result, the company is cutting back staff, reducing operations and selling assets ranging from crab fishing boats to office furniture."The company has to be rebuilt by selling whatever we have to in order to achieve that," David Sparks, 13th Regional controller said today."But it’s not going to turn around just by selling assets. Obviously we need income in the long term," he said, adding that the company is still solvent.Since Oct. 29, the company cut its full-time staff from 70 to 30. Last month, it cut its office space from two floors to one in a modern building, Sparks said.10 years ago this weekAlaska Journal of CommerceApril 1, 1991New oil field on lineBy Ray TysonFor the Journal of CommerceConoco Inc. has begun producing oil from its new Schrader Bluff field on the North Slope.The crude is being transported via a six-mile flow line to Conoco’s Milne Point production facilities where it is being combined with oil produced from the company’s Kuparuk field.Al Hastings, Conoco’s Alaska director of external affairs, said four wells were to be in operation by March 30 and 12 more by July, adding about 5,000-6,000 barrels of oil to current daily production of about 21,000-22,000 barrels.The Schrader Bluff field overlies the Kuparuk formation. Because Schrader Bluff oil is cooler and situated in sandy soils, special gravel filters and deep-well pumps are being used to extract the oil.Alaska Journal of CommerceApril 1, 1991United Building will close its doorsUnited Building Supply, for years one of the major building supply firms in Alaska, has decided to liquidate rather than face complete reorganization to compete in the reviving market place."Our business has just started coming back," said owner Dick Evans, who said he was sad to be going out of business after more than 30 years.Even with the economy improving, Evans said it would take complete reorganization and refinancing to really compete, so he made the decision to liquidate and retire.The company will be liquidated in one final sale, under the direction of a professional liquidation firm Innovative Marketing Inc. of Seattle, he said.-- Compiled by Ed Bennett.

As summer nears, NWA Cargo adds new flights to Pacific Rim

The first hints of the summer air cargo shipping season’s increase in frequency and destinations are showing up as Northwest Airlines Cargo announces new service to Pacific Rim locations. Northwest Airlines Cargo announced March 20 that its new freighter service to Seoul, South Korea, is in full swing. The new service connects Seoul to the rest of NWA Cargo’s entire freighter network via its hubs in Anchorage and Narita, Japan.Limited service began March 2 with one weekly flight departing Anchorage on Fridays. Service will increase to three weekly flights in April when all international traffic arriving in Seoul will be routed through the new airport at Inchon, South Korea, according to Mike McKinley, local manager for NWA Cargo.According to Northwest, shippers in Seoul will have access to the rest of NWA Cargo’s U.S. network via the Narita hub on Tuesdays and Wednesdays and via the Anchorage hub on Sundays.NWA flight frequencies increased from 131 fights monthly in January to 135 in February and to 160 in March -- and will increase to 168 in April, according to company officials.Northwest Airlines announced in January that its cargo division has been incorporated as a wholly owned subsidiary, Northwest Airlines Cargo Inc., doing business as "NWA Cargo."Mickey Foret will serve as NWA Cargo’s chairman and chief executive officer, in addition to his responsibilities as executive vice president and chief financial officer of NWA Inc., the parent of the new air cargo company."Northwest was founded to carry air mail for the U.S. Post Office, and cargo is expected to generate approximately $1 billion in annual revenue this year," said Foret in a press release. "The international air cargo market is expected to double in the next 10 years, and the incorporation of NWA Cargo as a wholly owned subsidiary will increase our focus on this lucrative growth opportunity."NWA Cargo is the largest cargo business among U.S. combination airlines, comprising 8 percent of total Northwest revenues. The fleet of 747 freighters has grown 50 percent in the last 18 months, with capacity being deployed to the growing cities of Shanghai, Taipei and Hong Kong.NWA Cargo grew its revenue 17 percent last year by improving yields by 9 percent and carrying record amounts of traffic per flight, according to NWA statistics.Locally, NWA Cargo will increase its transloading operation from four jets to five in May and will increase its option to take additional parking, warehouse and office space at the Williams Lynx Alaska CargoPort.

Yute Air offers charter service to the Aleutians

Yute Air has announced that it will offer charter service to the Aleutian Islands starting April 2, as the company expands its fleet and services statewide. "We are going to offer additional service to the Aleutians with Lear jet service," said Skip Nelson, vice president and chief operating officer of Yute Air. "We will offer charter service in addition to our contract service to Amchitka, offering additional charter service to Adak and Cold Bay."Yute’s contract service will use two eight-passenger Lear jet model 35 aircraft for a total of six flights a week to service an exclusive transportation contract with Bristol Environmental and Engineering Service Corp., which has a Department of Defense master contract for cleanup activities on Amchitka Island, according to Nelson.Yute will also offer flights to Adak residents or to individuals wishing transportation from Anchorage to Adak."The seat fare will be equivalent to a Reeve round trip, only this will be in an executive jet in seven seat configuration, with dove gray leather and wood interior suitable for executives," added Nelson.Reeve discontinued scheduled service to the Alaska Peninsula, Aleutian and Pribilof Islands and the Russian Far East last December, creating a demand for air service to these locations. "Round-trip fares on the charter flights could range for as little as $1,500," according to Nelson. "The difference here is that the flight hours will be much shorter flying at 440 knots (506 mph)."The addition of the Lear aircraft will enable Yute to charter to the Russian Far East and the Lower 48 for high speed VIP transport.Flight International Inc., the parent company of Flight Alaska Inc., which does business using the Yute Air name, will have operational control of the flights because they need Department of Defense certification, a qualification that Yute Air is in the process of attaining.Flight International has had this certification since its inception. Eventually the contract for these flights will transfer to Flight Alaska.Yute Air is also adding two additional Casa 212 aircraft to its fleet, making four total. One of the new Casa aircraft, a 300 model, will offer better operational speed and range, according to the company. The high performance cargo aircraft will also be used to service Bristol Environmental’s contract needs in Amchitka.According to Nelson the other three aircraft will be used on contracts with Phillips Petroleum Co., the U.S. Forest Service for its "smoke jumpers," with the fourth Casa aircraft used as a maintenance spare.Although the contract for service to Amchitka is for 150 days, Nelson indicated that the company will re-evaluate its service options near the end of the contract for continued service to the islands."Because it’s been a good year on the North Slope we sense that the business climate is good enough to expand our operations," Nelson said. "And if ANWR pops up we will be in a very good position for additional flights to and from the Slope."

Peninsula radio stations return

KENAI -- Two central Peninsula radio stations are back on the air after 11 months of silence. KSLD 1140 FM and KKIS 96.5 FM had new life breathed into them about a month ago after a dispute between their owner and the company operating them was settled. Chester Coleman, owner of American Radio Brokers of San Francisco, owns KSLD and KKIS, though they had been operated under an agreement with John Davis, owner of KSRM 920 AM and KWHQ 100.1 FM. That is until a dispute over a sale gone south put KSLD and KKIS off the air on March 31, 2000.Prior to that, Davis had been in negotiations to sell his two stations to Coleman, but the deal fell through.Now, Davis is buying Coleman out."Things change over time," Coleman said from his office in San Francisco. "John and I have had a long-term relationship dating from the mid-70s, and sometimes things change."Davis, in the meantime, is still interested in selling out."That’s pretty obvious when you’re 60 years old," he said. "I’ve got to quit sometime."He said there are three different prospective buyers for what will be a four-station package, but he did not expect anything to be finalized for a year or so."We need to shake out the new formats," he said, of the programming changes coming to the stations.

Price of salmon at the dock is just the beginning of what fish will eventually cost

Salmon fishermen often wonder why there is such a large difference between the prices they get and the prices they see quoted in markets, both at home and abroad. The Salmon Market Information Service offers this generalized background: A sale price has three major elements. These are the cost of fish, cost of manufacture and cost of shipping. The starting point for cost of fish is the ex-vessel price, the amount paid to fishermen at the dock. This price is not adjusted for taxes paid by fishermen. Cost of fish is the processor’s cost of raw material, adjusted for recovery rate. The raw fish tax of 3.3 percent is factored in, but no other expenses involved in making a finished product are included. To calculate the cost of fish, the amount paid is divided by pounds of finished product. If a processor bought 100 pounds of sockeye to make fillets, he would get 53 pounds of finished product. If he paid $1 per pound ex-vessel plus 3.3 percent tax, his cost is $103.30. Divide that by 53 pounds to calculate cost of fish: $1.95 per pound in this case. Cost of manufacture is the total of cost of fish, plus all other expenses involved in turning raw fish into finished product, packaged for shipment. Cost of manufacture is normally just called cost and is expressed in cents per pound of finished product. Information on processors’ cost of manufacture is not available to the public. Some processors are willing to share this information with fishermen and others, but most consider it confidential. Once fish has been purchased, processed and packaged, it is ready to be shipped. Shipping is the final element of what makes up a sale price, and is one of the most important items in a sales contract. When a seller and buyer agree on a price, that price includes the cost of getting it to a specific location. In some cases, price is "FOB plant" meaning there is no shipping cost included. In other cases the sale price includes shipping the product several thousand miles. There are 13 standard shipping terms that define exactly how far product will be shipped and exactly what expenses will be paid by the seller in the process of getting it there. Some of the most common are: FOB, meaning freight on board. The seller pays for the cost to deliver the goods to a named port of destination. If it’s FOB Seattle, for example, it means the shipper pays the cost of freight to that port. CFR means cost and freight, in which the seller pays cost of goods and freight to the named port of destination. The more common term used is C and F. CIF means cost, insurance and freight. The seller pays cost of goods, freight and insurance to bring the goods to the named port of destination, such as CIF Japan. FAS means free alongside ship, and the seller pays cost of goods, insurance, inland freight and all other expenses to deliver the goods alongside the vessel at the named destination. U.S. government data define value of seafood exports as FAS port of export, meaning the value is affected by point of departure from the country. A case of salmon exported via Boston, for example, will have higher value than if it left the country from Seattle. Value of the Boston-departure fish includes the cost of shipping it 2,500 miles from Seattle to Boston. More eco-label fish The Marine Stewardship Council has announced that the New Zealand hoki fishery has met its standards for a sustainable and well-managed fishery. The certification allows products from the fishery to bear the MSC sustainability eco-label. The hoki fishery is the fourth fishery certified so far by the MSC. More than two dozen fisheries are undergoing the certification process, including Alaska’s pollock fishery, which is the largest fishery in the United States. Other fisheries include South Georgia Patagonian Toothfish and the Burry Inlet Cockle Fishery in Southwest Wales. Last year, Alaska salmon was the second fishery to receive MSC certification. Hawaiian fleet idled A court order shutting down the Hawaiian longline fleet of 115 vessels went into effect on March 14. The fleet will remain inactive until May 31, in accordance with an Aug. 4 ruling by U.S. District Judge David Ezra. WorldCatch reports that the judge could lift the closure following the completion of an updated environmental impact statement for the fishery by the National Marine Fisheries Service, which is expected to be completed by April 1. Resolutions have been drafted in both houses of the Hawaiian Legislature to urge Ezra to delay the closure. Western Pacific Fishery Management Council spokesperson Sylvia Spaulding said because the Hawaiian fleet operates on just a 7 percent profit, yielding a $50 million fishery in landed value, the closure would have a severe economic impact on the industry. "Right now, each day the fleet lands $180,000 worth of fish," she said. The closure is expected to cause severe repercussions in seafood markets, not only in Hawaii, but also on the U.S. mainland. Hawaiian markets are likely to be empty of fish for at least three weeks. Affected species include yellowfin, albacore and bigeye tuna, swordfish, Opah, Ono and other South Pacific species. Prices for tuna and other species could shoot up by more than 30 percent to 40 percent in the coming weeks, according to Roger Tasaka of Hilo Fish in Honolulu.  

Eklutna kills Eagle River outlet mall

EAGLE RIVER -- A Hawaiian developer’s hope of building Alaska’s first outlet mall in Eagle River has evaporated without a stick of wood being erected on the proposed site. Wally Birk envisioned building the Great Alaska Factory Outlet Mall on 35 acres owned by Eklutna Inc. west of the North Eagle River exit, but delays in signing tenants doomed the project. "Mr. Birk’s option with Eklutna has expired," said Deborah Luper, company spokeswoman. She said Eklutna allowed Birk "several extensions" but the landowner’s patience finally ran out. "We did not see the progress we had expected," Luper said, "and with the current economic outlook for malls we did not believe the project would get off the ground." Eklutna won’t try to find another developer to build a mall on the location. Luper said the company’s board of directors has not decided whether to pursue a different type of commercial development or to turn the acreage back to residential property. Last June, with the mall project a year behind schedule, Birk won a deadline extension from the Planning and Zoning Commission. The new timetable called for ground-breaking this fall. However, Eklutna’s decision ends the project. Luper said development "had not progressed to the point where ground-breaking or the installation of infrastructure specific to the outlet mall was necessary." Birk pinned much of the problem on failing to sign Nike as a major tenant in the mall. The plan was to build the mall in three phases. Phase I would have included about 133,000 square feet of shopping space on 17 acres.  

Ketchikan borough helps veneer plant

KETCHIKAN -- The Ketchikan Gateway Borough will spend up to $5.5 million to relieve Ketchikan-based creditors of Gateway Forest Products, developers of a financially troubled veneer plant. Following two hours of discussion, the assembly on March 21 approved a plan that envisions the borough taking local creditors’ places in line for eventual repayment by a reorganized, profitable company. Gateway filed for Chapter 11 bankruptcy in February within weeks of peeling its first log.The plan to help creditors was suggested in a letter March 5 from South Coast Inc. President Jerry Renich. South Coast is owed $2 million and is one of Gateway’s main creditors.However, terms of an interim financing package could affect creditors’ chances of obtaining full or even substantial payment on claims. Borough Attorney Scott Brandt-Erichsen reviewed a memorandum describing a proposed 60-day interim financing loan to Gateway from Foothill Capital, Gateway’s major lender.Foothill has been negotiating a new interim loan with terms that could offer it full security at the expense of other creditors. The borough also is in negotiations to extend a loan to the company to operate while it reorganizes.Assemblyman Mike Sallee and other assembly members objected to the plan to purchase the company’s debt. Sallee questioned whether non-local vendors would have legitimate legal objections to payment going only to Ketchikan vendors.Brandt-Erichsen said as long as the borough’s actions were taken with the intent of furthering legitimate government purposes, there should be no problem.He said the assembly should state that it is taking the action as a means to avoid harm to the local economy; to avoid a decrease of the local tax base, to further the original intent of the economic disaster relief fund provided by the U.S. Congress; to enhance Gateway Forest Products’ chances to survive and contribute to the economy; and to reduce the likelihood of creditors pushing for liquidation of the company.Sallee said he had great difficulty bailing out businesses that took a risk and asked why the assembly would not rather provide loans to the creditors.The company has already received a $7 million loan from a federal economic disaster fund. The money comes from a $25 million economic disaster fund Ketchikan received from a 1996 federal appropriation engineered by Sen. Ted Stevens, R-Alaska, to help offset job losses in the timber industry. Two large pulp mills and several saw mills closed in Southeast in the mid- to late-1990s.

Sturgulewski: Pursue a passion

Alaskans should examine their hearts and pursue their passions -- regardless of age -- in service to the community, said longtime Alaskan and former lawmaker Arliss Sturgulewski.She spoke March 19 at the Anchorage ATHENA Society luncheon at the Sheraton Anchorage Hotel. The Anchorage ATHENA Society is a program of the Anchorage Chamber of Commerce.Sturgulewski’s own passion to serve ranges from Alaska universities to small businesses and numerous organizations. Her influence extends beyond more than 20 trustee and committee member roles to just casual mentorship, offering advice over the telephone."I’m able to care about my passions to a greater community," she said. "I care a lot so I do a lot."Sturgulewski was first elected to public office in 1975, serving on the commission that penned the charter uniting the borough and city of Anchorage. She next served on the Anchorage Assembly for two years, then in the state Senate from 1978 to 1992, when she chose not to run for re-election. Sturgulewski was the Republican candidate for governor in 1986 and 1990.The Alaska Public Offices Commission says Sturgulewski has been the state’s only major woman candidate for governor.In past years women moved into more important roles in increasing numbers, and "we heard a new word: networking," Sturgulewski said.By contrast, she recalled her early days in the Legislature when she faced profanity, sexually charged jokes or nicknames like Snow White and Goody Two Shoes."It was really tough. I had nobody to turn to," she said.Sturgulewski believes working environments have changed for women, and she praised the Anchorage ATHENA Society for its work honoring diversity in the community.She also urged the audience to be poised for change."As your lives and circumstances change, your enthusiasm and interests change," she said.Sturgulewski offered her list of life rules. First, read to expand knowledge.Second, "show up and participate," she said.Third, take some risks in life. "I’ve taken some hits -- some really big hits -- but I have learned about myself."She also encouraged people to set goals, as well as advised, "Don’t do life alone. Take time to be involved in family, fun or sports.""There are so many things to do," Sturgulewski said. "Expand your horizons. Be involved in life."


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