A new owner, a new face: NAC celebrates a half-century in Alaska.

Reaching a 50th birthday is a milestone in anyone's life. But when a company turns 50-especially one that has survived in an industry that is among the toughest and most competitive in Alaska-it is truly a reason to celebrate. In 2006, Northern Air Cargo (NAC), headquartered in Anchorage, marked a half-century in the business. And they celebrated this occasion by making some very major changes.

"Through the years, we have received many offers, but with our 50th anniversary year approaching and the capital requirements for continued growth of the company, our family felt it was the right time for new ownership," said Rita Sholton, of the company's purchase by Saltchuk Resources. "My daughter and I have known the principals of Saltchuk for many years and in the end, the terms were satisfactory and we were comfortable that our employees and customers would be in good, capable hands."

Since day one, this concern for the people who make up Northern Air Cargo and the clients they serve has been the driving force behind the cargo airline's success. When Robert "Bobby" Sholton and Maurice "Morrie" Carlson first founded the airline in 1956, their vision was to build an all-cargo airline that would effectively serve Alaska's widespread rural communities. Their philosophy was simple: Do what needs to be done to meet the customers' need.

MEETING EXPECTATIONS

From the first flight to Dillingham carrying telephone poles, to moving 100 million pounds of cargo a year, NAC has exceeded customers' expectations in every way. "We have hauled just about everything imaginable," said Sholton, who became president and CEO of the company after her husband's death in 1982. "On one memorable trip, we flew a cow to Bethel so that the kids could finally see a real, live cow. After so many years, it's hard to say what trip was the strangest."

When Sholton and Carlson first started the airline, it was a relatively new concept to fly large items, including mining and construction equipment, into the Bush. "Both Bobby and Morrie recognized a need and an opportunity within the state," said Rita Sholton, who met Bobby two years after he began the business.

The two men, both of whom were captains for Alaska Airlines, purchased two C-82s "flying boxcars" from the U.S. Air Force and began a charter air freight service out of Anchorage International Airport. Though they had never flown these types of aircraft before, they studied the flight manuals and taught themselves "by the book" how to pilot the planes. In addition to their roles as pilots, the men also performed maintenance, loaded the planes and sold the company's services.

EARLY EXPANSION

As the men's experience in handling all types of cargo grew, so did the need for the company to expand. In 1969, NAC acquired its first DC-6, which turned out to work so well on the Last Frontier that the company bought 14 I more over the next quarter-century. As the years passed, the company also added Boeing 727-100Fs to the fleet as well as an ATR-42 aircraft.

In 1982, the company came under new management when Bobby Sholton died after a long illness and his widow, Rita, took over the day-to-day operations. "I had many roles-I was a mother of three children who had just lost their father. I was a widow and had to go to work as the president and CEO of Northern Air Cargo. I was too busy, and too focused, to be worried," said Sholton of being thrust into the new position.

As her children grew, they also became involved in the business. "Each of my children were shareholders in the company and were very helpful in different ways," said Sholton.

Oldest son, Adam, an accomplished pilot, served as one of Alaska Airlines youngest captains before joining NAC for several years to fly and to help put jet aircraft on the company's operating certificate. Daughter Mary started in sales at Northern Air Cargo and became president in the 1990s. She most recently served as CEO until the company was sold in February. Youngest child Paul, a lawyer, worked as NAC's general counsel.

Under Rita Sholton's guidance, Northern Air Cargo continued to grow into the state's senior all-cargo airline, serving more than 50 locations in Alaska with scheduled and charter service, as well as Russia, Canada and the Lower 48 on an ad hoe basis. In 2005, NAC earned in excess of $52 million in revenue and employed roughly 300 people.

"The success of the company is solely a result of the many fine people at Northern Air Cargo and its loyal customers," said Sholton. "NAC people have always been committed to its mission of serving the often unique and challenging needs of our customers."

THE FUTURE OF NAC

With the acquisition of Northern Air Cargo by Saltchuk Resources, a number of changes are taking place within the company, all of which are geared toward providing even better service to the customer. "The entire organization is thrilled with the purchase by Saltchuk, as well as very grateful to Rita for her tenacity in hanging on and waiting until the right combination came along," said William Dix Fowler, the new president and CEO of NAC. Fowler previously served as COO of the company. "Though Rita was at a time in her life when she needed to divest herself of her interest in the company, she thought about the employees as much as, or even more than, herself. She waited for the right suitor to come along."

Saltchuk Resources has already committed to refurbishing the fleet, and the company is in the process of purchasing three 737-200 freighter aircraft as well as expanding warehouse facilities. "They have made a significant investment in equipment, with the biggest benefit being that we will see a higher level of reliability with the new aircraft because they are 15 to 18 years younger than what we have," said Fowler. "We will also see cost savings in fuel, and in crew costs, since the new planes allow us to move from three-man to two-man crews."

The company will continue to have one 727-100 in the fleet for ad hoc charters and to support the heavy summer load, and will be replacing some of the work the DC-6s do with the new 737-200s. The ATR-42 will be removed from the fleet.

According to Fowler, clients will benefit from these changes because the new aircraft will allow for more consistent scheduling, as well as increased flight frequency due to smaller payloads. "Physically, the things we need to do to make our service better we will be able to do," said Fowler. "Saltchuk has shown a willingness to invest in things that have good long-term benefits both for the company and its customers. Because we plan to still be here in 50 years, major initiatives are taking place to ensure that we are providing what our clientele needs."

NAC's 'Perfect Suitor". Saltchuk Resources

BY VANESSA ORR

When Rita Sholton and her daughter, Mary Sholton Witte, decided to sell Northern Air Cargo to Saltchuk Resources, it wasn't a decision they made lightly. They looked for an owner who not only had a passion for serving Alaska, but who understood the unique challenges of the market and was committed to the future of the company.

Formed in 1982, Saltchuk Resources is a privately owned family investment holding company based in the Pacific Northwest. The company made its first foray into Alaska with the acquisition of Totem Ocean Trailer Express (TOTE), which later became Totem Resources Corp. and then Saltchuk Resources, the parent company of TOTE.

Saltchuk, which means "saltwater" in the trading language of Pacific Rim Natives called Chinook Jargon, later expanded its holdings to include the Delta Western fuel business in Western and Southeastern Alaska. The company also owns subsidiaries Inlet Petroleum in Anchorage, a lubricant distribution business, and Foss Maritime, a tug and barge operator based in Seattle, as well as logistics and hospitality industries located in Washington, Puerto Rico and Hawaii. Saltchuk owns 14 companies and employs approximately 4,500 people through its subsidiaries.

"Our acquisition of Northern Air Cargo had more to do with its reputation than anything else," said Mark Tabbutt, president of Saltchuk Resources. "They have a great reputation; they are known for safe service; and culturally, they are a good fit with our people. They have been a steady, stable operation for some time, and we want to be good stewards by providing capital that will help grow the business."

Under terms of the NAC sale, Saltchuk acquired 100 percent of Northern Air Cargo Inc., Northern Air Maintenance Services Inc. and NacLink Inc. In separate, but related transactions, Saltchuk also purchased the Sholton family's Fairbanks airport facility and supporting ground equipment as well as the remaining assets of Northern Air Fuel.

Northern Air Cargo will continue to operate as an independent business and will be guided by the same management team. New hires at NAC include Saltchuk's Dave Karp as senior vice president and chief operating officer, and Eric Van Andel as chief financial officer. William Dix Fowler, who formerly served as COO, has been named chief executive officer.