Is the transition altitude around Denali still 18 kft AMSL, and, if so, how is this handled? In North America, the transition altitude - the altitude below which everyone reports their altitude in feet above mean sea level (AMSL) and sets their altimeter to whatever the weather dictates that the local altimeter setting be, and above which everyone reports their altitude as a flight level (FL)1 and sets their altimeter to 29.93 inches of mercury (inHg) - is 18 kilofeet AMSL, this altitude having been chosen so as to put the transition altitude well above the elevation of every airport on the continent.

However, although the highest airports in North America are well below 18 kft, the highest land in the continent is not; Denali, the highest mountain in North America, reaches up all the way to 20.31 kft AMSL.  It’s also not particularly inaccessible, and happens to sit in one of the most aviation-centric - indeed, in great measure, aviation-dependent - regions of North America, fairly close to said region’s major city and said city’s major airport.

Given that one’s ability to maintain terrain clearance (read “avoid flying into the side of the mountain”) depends on one’s height above the ground, which depends on one’s actual altitude, on the ground’s actual altitude, and on the difference between the two,2 how is the situation of a mountain poking its nose above transition altitude handled?  Is there a higher-transition-altitude bubble surrounding Denali?  Are pilots required to set one baroaltimeter to 29.93 inHg (for flight-level purposes) and a second baroaltimeter to the local altimeter setting (for terrain-clearance purposes)?  Do they simply have to watch their radar altimeters like hawks anytime they’re flying near Denali’s peak?  Something else?



1: One flight level is roughly equal to one hectofoot; it does not equal exactly one hectofoot unless the sea-level barometric pressure happens to be 29.93 inHg and the atmospheric profile happens to match the International Standard Atmosphere (ISA).

2: And given that, while terrain clearance is always a high priority, it’s even more so where even the gentlest crash would be unsurvivable for anyone but a well-acclimated mountaineer, due to Denali being inconsiderate enough to locate its peak in what is, for non-acclimated persons, the Death Zone.
The US AIP (ENR 1.7 Altimeter Setting Procedures) is pretty clear about the question being asked, and provides an example.

Minimum altitude comes first.

The lowest usable FL is raised, and not just around Denali (Mount McKinley) in Alaska where the ground juts above 18,000 feet, i.e., the lowest FL can be higher than FL 180 in the contiguous United States.



Let's say the area is not marked yellow and is therefore not congested, and no natural reserves or special conditions exist. In this case the minimum safe altitude is 500 feet AGL.

Let's say ground is 20,300 feet as you present, it means the minimum safe altitude is now 20,800 feet (based on local altimeter setting and accounting for cold temperatures). This is what the AIP says in all caps:


  1.2 EXTREME CAUTION SHOULD BE EXERCISED WHEN FLYING IN PROXIMITY TO OBSTRUCTIONS OR TERRAIN IN LOW TEMPERATURES AND PRESSURES.


Now that we've established 20,800 plus correction for temperature (assume none for the sake of explanation), the lowest FL now depends on that 20,800 plus a correction based on pressure via table ENR 1.7-2 (uploaded as image).


  2.1.3 (...) the lowest usable flight level must be the flight level equivalent of the minimum altitude plus the number of feet specified in TBL ENR 1.7-2.


(Bold emphasis mine.)

If it's a rather low-pressure day, then the correction can be upwards of 2,500 feet. Assume that for emphasis. Our total is now 23,300 feet, which makes the lowest usable FL, FL 235 (or as directed by ATC as stated in 91.159 for VFR, which the AIP mentions).

The example the AIP gives:


  The minimum safe altitude of a route is 19,000 feet MSL and the altimeter setting is reported between 29.92 and 29.42 inches of mercury. The lowest usable flight level will be 195, which is the flight level equivalent of 19,500 feet MSL (minimum altitude plus 500 feet).




This answer is based on the USA AIP at the time of writing this, it is generic, and it is not about a specific location, so do not use for flight.