During the year, Alaska Department of Transportation officials tried to raise state airport fees, but were thwarted by an economic downturn, high fuel prices and loud protests by user groups.

All aspects of transportation in Alaska were affected by skyrocketing fuel prices, at least through the November elections. After the Nov. 4 election the price of oil started to slip from $125 a barrel to well below $40 a barrel by early December.

Gasoline and diesel prices, however, didn't follow suit as closely. Prices remain well above the national average.

On the international front, Ted Steven Anchorage International Airport started seeing drops in cargo landings as early as November 2007 that continued to dwindle late into the year.

As expenses increased in the aviation industry, the US Postal Service introduced a proposal to create new bypass mail hubs in rural Alaska, leaving many in rural communities to worry about future service levels.

Two of Alaska's top air carriers, Hageland Aviation Services Inc. and Frontier Flying Service, signed an agreement Jan. 14 to operate under a single holding company under the name FrontierAlaska, beginning March 1.

The combination signaled potential changes in the future of carriers operating in rural Alaska. Still, the airlines continued to operate as two separate companies, and there were no major management changes at either airline.

Rural air cargo carrier Arctic Transportation Services acquired the aircraft and physical assets of Arctic Circle Air Service in Bethel and Dillingham in early March.

Arctic Circle Air Service continues to provide service out of its established hubs in Anchorage and Fairbanks while focusing on future expansion and equipment choices.

In the end of an era, Northern Air Cargo retired its four-engine propeller-driven DC-6s. Northern Air Cargo employees gathered on the east ramp at the Anchorage airport Sept. 30 to greet the last cargo flight of a Douglass DC-6 aircraft.

Making its last haul of fish from Emmonak to Anchorage, the plane did a low flyby over the runway, then returned to the pattern and made its last in-service landing.

One of the remaining aircraft will be donated to the Alaska Aviation Heritage Museum. The others will be sold for use outside of the U.S.

Cargo activity was impacted by rising fuel prices and a lagging demand for products from China to the U.S. that are landed at Ted Stevens Anchorage International Airport on the way to Lower 48 markets.

The airport saw an 18 percent drop in landed cargo tonnage when compared to same period a year ago, said Keith Day, the international airport system controller.

Listed as the world's No. 3 airport in landed cargo weights, the Anchorage facility has routinely posted an annual growth of between 5 percent and 6 percent in cargo.

Cargo weights for June 2008 dropped to 1.98 million tons, compared to less than 2.4 million tons a year ago, a decline of 18 percent, airport officials said.

The number of passenger enplanements - people who got on planes - rose 3 percent during the same period. Airlines carried 527,922 passengers in June 2007, compared to 544,695 this year.

Toward the end of the year, the Alaska Department of Transportation announced it would change how the Anchorage and Fairbanks international airports will be managed.

The state is reviewing applications for a system executive director, said Christine Klein, DOT deputy commissioner of aviation. The new position will be tasked to oversee both the Anchorage and Fairbanks airports, and to handle details of the use of Sitka and Cold Bay airports.

Sitka and Cold Bay airports are designated as alternates when flights from Seattle or Asia can't land in Anchorage.

The Anchorage airport currently has no executive director, but is being managed by airport manager John Parrot. The Fairbanks International Airport is managed by Jesse VanderZanden.

Klein wants to make both the Fairbanks and Anchorage airports dovetail to interact with other rural airports that feed the larger, hub airports. The Governors Aviation Advisory Board approved the position, which Kline introduced.

A number of rates and fees that were to go into effect on July 1 at state-owned airports were temporarily suspended in June due to surging increases in fuel costs to aviation businesses statewide.

The suspensions were effective May 30 for both rural Alaskan airports and the International Airport System, which includes Lake Hood leases.

Many leaseholders were faced with retroactive lease increases that could go back as far as five years and would need to be paid immediately.

The hold came after DOT officials accepted a petition that asked the department to look at 12 issues before implementing amendments on the state's Title 17 regulations, the pricing guidelines for state airports.

State officials are expected to approve the increased rates this in January 2009.

The U.S. Postal Service in February proposed adding more mail hubs to its list of places that can receive bypass mail. Problem is, the infrastructure at those airports would require air carriers to buy smaller aircraft and would require the state Department of Transportation to spend millions of dollars in runway improvements and maintenance.

It's an effort to reduce mail costs, and it is not popular with local air companies. Neither the air carriers nor the DOT have agreed to plans to accommodate the postal service.

USPS officials said the move would cut $7 million a year from the $150 million annual cost of bypass mail. Mail is subsidized at a lower rate when it is flown to a mainline hub.

The state's trucking industry was hard hit by fuel prices, and the industry responded by working to “green” up.

Trucks are now using ultra-low sulfur diesel, a new federal rule that aims to lower emissions. Meanwhile, two trucking companies that operate in Alaska have entered into the Environmental Protection Agency's SmartWay program.

Lynden Transport was the first to partner with the federal EPA program, becoming the first Alaska trucking company to qualify.

Lynden Transport had to submit data that compared mileage, fuel usage and tons moved to show the company's efforts to voluntarily improve fuel efficiency and reduce air pollution in its freight transport operations.

“Now that we are a partner our next goal is to forecast an action plan to see where we will be in 2010 on reducing our carbon footprint,” said Steve Schultz, Lynden Transport's director of health, safety and environmental.

The company has dramatically cut back on fuel usage by using newer trucks and onboard computers. It has also adopted a policy of cutting back on vehicle idle times.

Carlile Transportation Services also achieved the EPA status recently. The company's entire Washington fleet includes engines newer than model year 2000, which burn cleaner than the 1994 model average in the state.

Carlile introduced two new Kenworth “green” hybrid trucks into its Washington fleet in early December. They are the first to be used on the West Coast. The trucks enhance fuel economy by up to 30 percent in start-and-stop applications.

Linda Leary, meanwhile, took the wheel as president at Carlile this spring. Leary, who has been with the company since the mid-1980s, has a firm grip on the marketing side of Carlile, and has recently added several value-added aspects, such as logistics services for its customers, and additional shipping and forwarding service to Hawaii.

Crowley Marine Services Inc. added a new $10 million tug to its fleet for operation in the upper Cook Inlet in April. The Vigilant is one of two Valor-class tugs in the world.

“This tug has incredible power,” said Bruce Harland, Crowley's vice president of marine services.

The Vigilant's homeport is in Anchorage, but it will spend most of its time running between Homer and Nikiski, according to Richard Frost, chief mate and relief captain of the Vigilant.

The tug will be on contract to Tesoro for its tankers, but is also available for other assignments, Harland said.

Crowley also ordered two new Avik-class tugs for Alaska service set to begin in 2009.

The first tug of similar type, dubbed the Avik, was delivered to Crowley on June 2, 2004, and was put into service in the Northwest soon after with much success.

The tugs will handle barges transporting fuel and general cargo to communities in Alaska where shallow water and lack of docking facilities is common. In those cases, tugs and barges make a beach landing to load and unload cargo.