Star Air Service

Mills and Waterworth were anxious to start a flying school and charter business in Seattle with hopes of expanding to Alaska. Mills, who was married and the father of two sons, mortgaged his home, and he and Waterworth purchased a two-place Davis monoplane, and started Northern Air Service. Waterworth completely destroyed the plane in a crash in Centralia, Washington. Their new company was without an airplane, and they needed a new partner to help finance the purchase of another airplane.[2]

Charlie Ruttan was an ideal prospect. He already had his transport pilot's license when the Davis crashed. He joined the company and loaned enough money to purchase a two-place Fleet Deluxe B-5 biplane in Glendale, California, in 1931. By then, it was too late in the year to take the plane to Alaska, so the trio kept working in Seattle through the winter.[2]

In the early spring of 1932, they shipped the Fleet biplane to Seward, Alaska, on the SS Yukon steamship, arriving March 26, 1932.[1][5][6][7] They incorporated their new Alaska company Star Air Service in Anchorage on April 14, 1932, with capitalization of $4,000. Mills was chief pilot, Waterworth was an instructor, and Ruttan was business manager. Earl Dunkle along with a small group of miners and local flying enthusiasts made investments.[2][6]

Star Air Service had a lot of flight instruction business and also did some charter flying. Al Monsen, who flew for Pacific International Airways, the Pan American subsidiary, borrowed the Fleet for a local charter flight. When he returned to Merrill Field, he overshot the runway by a large margin, crashing in willow brush past the field.[6] This put Star Air Service temporarily out of business. With more financial help from Earl Dunkle, they purchased a three-place Curtiss Robin which had an enclosed cockpit, allowing better winter operations.[2][5][6]

Three airlines were started in 1932 in Anchorage when it was a small frontier town of about 2,200 residents. They were McGee Airways, Woodley Airways and Star Air Service. These companies helped make Anchorage the major city in Alaska, overtaking Fairbanks in the competition for business, government contracts and international attention. Originally these Anchorage air services were entirely unscheduled "bush" operations. They flew trappers, hunters, tourists, salesmen, sport fishermen, commercial fisherman and game hunters to destinations throughout the Territory.[8] They flew from place to place delivering and picking up passengers and cargo, until getting a charter back to Anchorage. The pilots were often gone for weeks at a time before returning to home base.[2][8]

Star Air Service Curtiss Robin.

The pilots were paid on a commission basis, and since the major industries in Alaska were seasonal, they also issued credit.[8] The commercial fishermen, miners and trappers settled their credit accounts at the end of their seasons. When the Post Office Department began giving the air services air mail contracts, the steady income helped the companies, and expanded the flights into additional remote villages. Previously mail had been delivered by steamships in the summer and dog teams in winter. In winter months from October 1 until May 1 only letters, cards, packages of seeds weighing less than a pound, and newspapers going to libraries or newspaper publishers were carried. Packages were held in Seattle until the summer months when they could be delivered by boat.[2]

By 1934, all the airlines were suffering financially.[5][6][7] There was a surplus of airplanes and not enough business to allow the companies to accumulate sufficient cash reserves to survive through difficult times.[2]

In the winter of 1934, "Mac" McGee, founder of McGee Airways, was anxious to return to mining the several mines he had staked and felt that a consolidation of air services in Anchorage was necessary. He approached Star Air Service, who purchased McGee Airways for $50,000.[5][7] McGee stipulated that if he was not paid on time, he would return to manage the combined company until he received his full payment.[1][2][6][9]

The merger made Star Air Service the largest airline in Alaska, but money was not coming in as hoped for, and McGee was called back from his Kobuk mining operation to take over management of the company. He paid himself three percent of gross income until he accumulated all the money due him, then went back to mining. In 1935, Jack Waterworth's pilot's license was suspended for 6 months for flying stunts over Palmer during the fair. He left Star to work at Loussac's Drugstore as a pharmacist, the profession he had studied in college.[2]

In 1936, Star Air Service was operating 15 planes with a gross income of $190,000 per year.[6] By August 1936, McGee had left Star and returned to his mining operations. Kenneth W. "Kenny" Neese, one of the Star pilots, took over management of the company, and Steve Mills was chief pilot. On Sunday August 30, 1936, Mills took a group of two married couples and a single man on an all-day fishing trip to Russian River on the Kenai Peninsula. They crashed on a ridge 2,000 feet above Upper Russian Lake.[1][6] All were killed instantly. This was the worst aviation disaster in Alaska's history.[2]

Star Air Lines Bellanca in the snow.

Kenny Neese was attempting to put the air service on a scheduled basis. Don Goodman and Oscar Winchell, two of Star's pilots, did not agree with this strategy, and left Star to purchase airplanes and start Alaska Interior Airlines in November 1936. In the spring of 1937, Neese quit as Star manager and returned to flying. McGee was called back to manage the struggling company for the last time.[5][6] Charlie Ruttan, the last of the Star founders, left the company.[6] McGee bought Alaska Interior Airlines, adding two pilots and two planes to the fleet, and got the company back into good condition.[2][6][9]

Don Goodman approached several miners and businessmen and put together a corporation to buy Star Air Service, renaming it Star Air Lines on November 27, 1937. David Strandberg, a successful miner, and his sons were the major stockholders.[2][3][6][7][9]

In 1938, the Civil Aeronautics Act was passed, creating the Civil Aeronautics Authority.[7] This ended the free-wheeling bush flying era of Alaska aviation, and assigned specific routes to the air carriers. The new law established a "grandfather clause" which entitled existing carriers to receive certificates for routes where the carrier could prove that it had provided continuous service on a route during the period May 14, 1938 to August 22, 1938. This regulation resulted in the consolidation of several airlines; the big ones got bigger, and the small ones disappeared. Goodman and the Strandbergs determined to make Star Air Lines one of Alaska's major carriers.[2]

Star Air Lines Bellanca at Merrill Field in Anchorage.

At its peak before World War II, Star Air Lines had a fleet of 15 planes and had radio stations scattered across the Kuskokwim and Yukon deltas and down to Bristol Bay. It was the largest airline in Alaska, but as usual, was chronically short of capital and unable to invest adequately in new equipment.[2]

The Civil Aeronautics Board (CAB) hearings in 1940 increased government control over Alaska's airlines which completely reshaped the industry.[5][7] Both Star Air Lines and Woodley Airways did everything possible to obtain approval for a route from Alaska to Seattle. The CAB ruled in favor of a Seattle route for Star in March 1941, but President Franklin D. Roosevelt vetoed the ruling.[5][7] Pan American Airways started a Seattle – Ketchikan – Juneau service with a Sikorsky flying boat in 1940, but the route was discontinued when World War II started.[2]

In 1942, Art Woodley, founder and operator of Woodley Airways in Anchorage, wanted to buy Star Air Lines, and knew he could purchase the company for its debts, about $80,000. Due to the intense rivalries between the companies, he needed to be anonymous in any negotiations. He hired Homer Robinson, a New York attorney experienced in aircraft sales and aviation transactions, as a broker. Robinson was a close associate of Raymond W. Marshall, a wealthy international junk dealer who had made a fortune selling scrapped railroad equipment to South American companies, as well as other ventures. Robinson successfully concluded the negotiations, but then informed Woodley that Raymond Marshall would be the purchaser, not Art Woodley. Marshall was the new owner of the company![2][4][5][7]

The new owners expanded the company acquiring three active Alaska air services. On May 15, 1942, they acquired Mirow Air Service for $60,000, gaining the Nome to Fairbanks route, and Lavery Air Service for $60,000, gaining the Fairbanks–Anchorage route. On July 6, 1942, they renamed the expanded company Alaska Star Airlines.[4][6][9] On December 8, 1942, they acquired Pollack Flying Service for $125,000, gaining the Fairbanks to Kuskokwim area routes.[2][3][5][7] Mirow Air Service was founded by Hans Mirow, a German sailor who learned to fly in the late 1920s at Tex Rankin's Flying School in Portland, Oregon.[10] He went to Alaska in 1934 and started his successful operation in Nome, initiating the first scheduled flights between Nome and Anchorage.[11] Mirow was killed when he crashed while searching for Fred Chambers, one of his pilots who had been forced down between Nome and Fairbanks with passengers.[11] His widow Madeleine Mirow continued to operate the service until selling to Star Air Lines.[2]

Star Air Lines Bellancas at Lake Spenard, Anchorage.

Lavery Air Service was founded in Fairbanks in 1935 by William L. "Bill" Lavery who was born and raised in Fairbanks.[1][11] At age 15, Bill went to California to learn to fly, founded Lavery Air Service at age 20, and started the first scheduled service from Fairbanks to Anchorage.[2][11]

Pollack Flying Service was founded in Fairbanks in 1933 by Frank Pollack who began his Alaska flying with Noel Wien’s Northern Air Transport, flying out of Valdez, Fairbanks and Nome.[11] After selling his company to Alaska Star Airlines he became their operations manager in Fairbanks.[2]

Art Woodley had been advised that he would have to change the Woodley Airways name to something other than his own name in order to be considered a serious contender for new routes by the CAB regulators. Woodley sent his attorney to Juneau to file papers that would change the name to Alaska Airlines. The attorney filed the documents, but neglected to pay the $15 filing fee. Alaska Star Airlines quickly filed the legal documents to rename their company, becoming Alaska Airlines on September 16, 1943, and the company was incorporated under its new name on May 2, 1944.[2][4][5][6][7][9]

Woodley Airways changed its name to Pacific Northern Airways (PNA) in 1945, changing again in 1947 to Pacific Northern Airlines.[1][2][12]