A piece of Alaska aviation history may soon have a new owner.

The owners of Ravn Air Group, private equity firm J.F Lehman & Company, have agreed to purchase Alaska airline PenAir for $12.3 million.

The announcement was made Wednesday afternoon after an auction at the Dena‘ina Center.

Ravn Alaska and Wexford Capital, a Connecticut-based company that manages hedge funds, both submitted bids to purchase PenAir.

PenAir filed for Chapter 11 bankruptcy protection more than a year ago after mounting financial problems. The airline owes millions of dollars to creditors, some of which will be paid off according to Michael Markham, the attorney representing the trustee in the bankruptcy case.

"What's important is that PenAir will continue, the vast majority of its of employees will keep their jobs and routes that PenAir has been servicing will continue to get serviced," said Markham.

PenAir employs about 400 people. More than 1,000 people work for Ravn, which is the state's largest regional airline.

The Anchorage-based company, which has been operating in Alaska for 63 years, serves a number of rural communities — the only air service available for some rural communities.

A court hearing is scheduled for Friday to approve the sale. After that, Ravn Alaska will also have to get approval from the Federal Aviation Administration and the Department of Transportation.