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Category Archives: Pinnacle Airlines

Pinnacle Airlines emerges from Chapter 11 bankruptcy reorganization as a Delta subsidiary

Pinnacle Airlines (Pinnacle Airlines Corporation) (Minneapolis/St. Paul) emerged from Chapter 11 bankruptcy protection and reorganization on May 1. The airline is now a subsidiary of Delta Air Lines (Atlanta). As previously reported, Pinnacle is moving to the Minneapolis/St. Paul hub. Delta is investing $52 million in the reorganized carrier.

Pinnacle filed for Chapter 11 on April 1, 2012 in the U.S. Bankruptcy Court for the Southern District of New York.

Read the full story from the Atlanta Journal-Constitution: CLICK HERE

Copyright Photo: Bruce Drum. Pinnacle will operate a large Bombardier CRJ900 fleet for Delta (eventually 92 aircraft). The smaller 50-seat CRJ200 fleet of 140 aircraft is being gradually phased out. Bombardier CRJ900 (CL-600-2D24) N147PQ (msn 15147) arrives at the Atlanta hub.

Pinnacle Airlines Corporation logo-1

Delta Connection-Pinnacle: AG Slide Show

 

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Pinnacle Airlines to move its headquarters from Memphis to Minneapolis/St. Paul

Pinnacle Airlines Corporation logo-1

Pinnacle Airlines Corporation (Memphis) has announced its headquarters will relocate to Minnesota. The decision came after an exhaustive evaluation of the most cost-effective option as the Company emerges from Chapter 11. The present headquarters location in Memphis, Tennessee was also evaluated.

Pinnacle’s operation will be located in vacant space leased by Delta Air Lines on Minneapolis-St. Paul International Airport property.

Pinnacle presently occupies 170,000 square feet at One Commerce Square in downtown Memphis, which houses approximately 500 employees. Tentative plans call for the move to Minnesota to be completed by May 2013.

PAC is the holding company of Pinnacle Airlines (Memphis) and previously of Colgan Air (2nd) which was shut down in September 2012. Pinnacle Airlines now flies exclusively as a Delta Connection carrier. Since Memphis is a smaller hub for Delta, Pinnacle will have more work at Delta’s MSP larger hub.

The company was established in February 1985 as Express Airlines I and started a code sharing and feeder agreement with Republic Airlines in May 1985. Republic was the dominant carrier in Memphis.

Delta Connection-Pinnacle Airlines: AG Slide Show

The bankruptcy court approves Pinnacle’s path out of bankruptcy, Delta to invest

Pinnacle Airlines Corporation (Memphis) has announced that the comprehensive agreements it reached with Delta Air Lines (Atlanta), the Air Line Pilots Association, International (ALPA) and the Official Committee of Unsecured Creditors (Creditors’ Committee) in Pinnacle’s Chapter 11 cases have been approved by the Bankruptcy Court overseeing Pinnacle’s cases. The agreements together provide a path for the Company to emerge from bankruptcy with a competitive cost structure and a viable long-term business plan. Under Pinnacle’s new business plan, the Company will transition to operating a fleet of 81 fuel-efficient, two-class regional jets for Delta.

The comprehensive agreements include:

  • An amendment to the Company’s existing debtor-in-possession credit facility to provide Pinnacle with $30 million of additional liquidity to support its continued operation through emergence from Chapter 11 and an additional $22 million to fund certain required payments to Pinnacle’s pilots under a Bridge Agreement and related employer taxes. The amendment would also extend the maturity date for the credit facility from April 1 to May 15, 2013.
  • Amendments to the existing operating agreements with Delta that form the basis of the new business plan. Pinnacle will receive Delta Connection’s next 40 CRJ900 aircraft awarded, setting Pinnacle’s long-term fleet plan at 81 CRJ900 aircraft. The 40 additional CRJ900 aircraft deliveries are planned to begin in the fall of 2013 and are expected to be completed by year-end 2014. Pinnacle’s 140 CRJ200 aircraft will be removed from operation over the next two to three years.
  • A new collective bargaining agreement with Pinnacle’s pilots, as well as a bridge agreement that provides transitional payments, furlough benefits and specified career opportunities at Delta to Pinnacle’s pilots.
  • A restructuring support agreement among Pinnacle, Delta and the Creditors’ Committee setting forth certain principal terms for a plan of reorganization to emerge from Chapter 11. The reorganization plan will provide for Delta or an affiliate to acquire the equity in the reorganized Pinnacle Airlines Corporation after it emerges from bankruptcy. Pinnacle must file a plan of reorganization acceptable to Delta and the Creditors’ Committee by February 15, 2013.

Copyright Photo: Bruce Drum. Bombardier CRJ900 (CL-600-2D24) N161PQ (msn 15161) arrives at the Atlanta hub.

Delta Connection-Pinnacle Airlines: AG Slide Show

Pinnacle Airlines’ pilots ratify the restructuring contract

Pinnacle Airlines’ (Delta Connection) (Memphis) pilots, represented by the Air Line Pilots Association, Int’l (ALPA), today ratified a bankruptcy restructuring contract that was tentatively agreed to in December. With more than 86 percent of eligible pilots casting ballots, 85 percent of Pinnacle pilots voted in favor of the agreement.

The new seven-year agreement includes, among other cuts, a 9 percent reduction in pay for all pilots plus longevity caps to all pay scales which will further cut the pay of more than half of Pinnacle’s pilots by as much as another 16 percent. In addition to almost 25 percent pay cuts, the deal also increases health-care costs for all pilots while reducing pilot retirement benefits by more than 50 percent for Pinnacle’s most senior pilots. In recognition of the magnitude of the pilots’ concessions, the contract also includes a bridge agreement that provides a one-time longevity transition payment and guaranteed hiring for many Pinnacle pilots at Delta Air Lines. Pinnacle Airlines flies exclusively as a Delta Connection carrier and Delta will likely own Pinnacle as a result of having provided the financing that allowed Pinnacle to reorganize.

“Management failures are responsible for Pinnacle’s current financial crisis,” Capt. Wychor added, “but only this sacrifice by the pilots could preserve a future for the airline and its employees. In that future, we will seek out new employment opportunities for our pilots who no longer see a viable career path at Pinnacle while we protect and shore up the restructured contract for those who remain.”

The pilot-ratified contract will now be submitted to the Bankruptcy Court for the Southern District of New York for final approval.

Copyright Photo: Bruce Drum. Bombardier CRJ900 (CL-600-2D24) N146PQ 9msn 15146) of Pinnacle Airlines arrives at the Atlanta hub.

Delta Connection-Pinnacle Airlines: AG Slide Show

Pinnacle Airlines Corporation prepares to exit Chapter 11 with new agreements, will phase out its 140 CRJ200s in the next 2-3 years

Pinnacle Airline Corporation (Pinnacle Airlines) (Memphis) today issued the following statement:

Pinnacle Airlines Corporation announced today that it and its wholly owned subsidiaries have entered into comprehensive agreements that, among other things, provide a path forward for the Company to emerge from bankruptcy with a competitive cost structure and a viable long-term business plan. Under Pinnacle’s new business plan, the Company will transition its fleet to operate a fleet of 81 fuel-efficient, two-class regional jets for Delta Air Lines Inc.

The comprehensive agreements among Pinnacle, Delta, the Air Line Pilots Association, International (ALPA) and the Official Committee of Unsecured Creditors (Creditors’ Committee) in Pinnacle’s Chapter 11 cases include:

  • An amendment to the Company’s existing debtor-in-possession credit facility, to provide Pinnacle with $30 million of additional liquidity to support its continued operation through emergence from Chapter 11 and an additional $22 million to fund certain required payments to Pinnacle’s pilots under a Bridge Agreement and related employer taxes. The amendment would also extend the maturity date for the credit facility from April 1 to May 15, 2013.
  • Amendments to the existing operating agreements with Delta that form the basis of the new business plan. Pinnacle will receive Delta Connection’s next 40 Bombardier CRJ900 aircraft awarded, setting Pinnacle’s long-term fleet plan at 81 CRJ900 aircraft. The 40 additional CRJ900 aircraft deliveries are planned to begin in the fall of 2013 and are expected to be completed by year-end 2014. Pinnacle’s 140 Bombardier CRJ200 aircraft will be removed from operation over the next two to three years.
  • A Bridge Agreement that provides transitional payments, furlough benefits and specified career opportunities at Delta to Pinnacle’s pilots in conjunction with the recently negotiated letter of agreement between Pinnacle and ALPA.
  • A letter of agreement to amend Pinnacle’s collective bargaining agreement with the ALPA pilots. This letter of agreement and the Bridge Agreement are subject to ratification by the ALPA membership by Jan. 15, 2013.
  • A restructuring support agreement among Pinnacle, Delta and the Creditors’ Committee setting forth certain principal terms for a plan of reorganization to emerge from Chapter 11. The reorganization plan will provide for Delta or an affiliate to acquire the equity in the reorganized Pinnacle Airlines Corp. after it emerges from bankruptcy. Pinnacle must file a plan of reorganization acceptable to Delta and the Creditors’ Committee by February 15, 2013.

Pinnacle filed motions with the Bankruptcy Court seeking approval of the various components of the comprehensive agreements. All of the components of the comprehensive agreements are interdependent and are subject, among other things, to Court approval.

Copyright Photo: Fernandez Imaging. With the CRJ200s being retired, Pinnacle Airlines will concentrate on the larger CRJ900 in the future with its Delta Connection contract. Bombardier CRJ900 (CL-600-2D24) N176PQ (msn 15176) lands at Houston (Hobby).

Delta Connection-Pinnacle Airlines: AG Slide Show

Pinnacle Airlines reaches a tentative agreement with its ALPA pilots, will increase its Delta Connection Bombardier CRJ900 fleet to 81 aircraft

Pinnacle Airlines Corporation (Memphis) wholly owned subsidiary, Pinnacle Airlines Inc. (Memphis), has announced it has reached a tentative agreement with the Air Line Pilots Association (ALPA), the legal representative of the Pinnacle Airlines pilot group on cost reductions that cover pay, retirement, work rules and benefits.

A separate agreement was reached among Pinnacle Airlines, Pinnacle pilots and Delta Air Lines that includes long-term career opportunities and the addition of 40 Bombardier CRJ900s to the Pinnacle fleet. With this agreement, Pinnacle’s long-term fleet plan has been established at 81 CRJ900 aircraft. The CRJ900 deliveries are planned for the fall of 2013 and are planned to be completed by year-end of 2014. Pinnacle will remove its 140 CRJ200 aircraft from the fleet over the next two to three years.

ALPA members will have the opportunity to vote on the tentative agreement in January and, if approved, the changes would become effective when similar changes are implemented for Pinnacle’s other labor groups and non-union employees. The tentative agreement also remains subject to approval and review by the Bankruptcy Court.

Flying as a Delta Connection carrier, Pinnacle Airlines operates 197 regional jets on 1,000 daily flights to 131 cities in the United States and Canada.

Copyright Photo: Bruce Drum. Bombardier CRJ900 (CL-600-2D24) N181PQ (msn 15181) of Pinnacle Airlines arrives at Delta’s Atlanta hub.

Delta Connection-Pinnacle Airlines: AG Slide Show

Pinnacle Airlines reaches a tentative contract agreement with its flight attendants

Pinnacle Airlines Corporation’s (Memphis) wholly owned subsidiary, Pinnacle Airlines Inc. (Memphis), announced  it has reached a tentative agreement with the Association of Flight Attendants-CWA (AFA), the legal representative of the Pinnacle Airlines Flight Attendant group. Pinnacle is seeking concessions from all of its employees in order to emerge successfully from Chapter 11 proceedings with a competitive cost structure. The two sides reached a tentative agreement on concessions that cover pay, retirement, work rules and benefits. The concessions would become effective when concessions are implemented for other labor groups and non-union employees. AFA members at the airline will now have the opportunity to vote on the tentative agreement in the coming days and, if ratified, will avoid the Section 1113 litigation process in bankruptcy court.

The tentative agreement also remains subject to required corporate approvals and review by the Bankruptcy Court.

Copyright Photo: Bruce Drum. Pinnacle Airlines’ Bombardier CRJ200 (CL-600-2B19) N8918B (msn 7918) taxies at Charlotte.

Delta Connection-Pinnacle: 

Pinnacle Airlines’ pilots react to the company’s motion to void the current contract

Capt. Tom Wychor, Chairman of the Pinnacle Airlines arm of the Air Line Pilots Association, Int’l (ALPA), released the following statement regarding the Section 1113 filing by Pinnacle Corporation.

“Late last night Pinnacle filed a motion in the U.S. Bankruptcy Court for the Southern District of New York to reject the pilots’ collective bargaining agreement. While this filing was expected, we do not think that it was necessary for Pinnacle to take this step so shortly after contract negotiations resumed. We believe the filing is an ill-advised distraction from the real work of negotiating a consensual agreement that maintains industry standard pay, work rules and benefits and can garner pilot support to help Pinnacle move through this difficult period.

“We acknowledge that concessions are necessary to allow Pinnacle to successfully reorganize. The extraordinary level of concessions sought by Pinnacle, however, would set a new floor for pilot contracts within the regional airline industry. The bottom line is this: in the five months since company executives filed for bankruptcy, they have not been able to justify the level of concessions they are seeking. Rather than solving its problems, Pinnacle executives are attempting to use the bankruptcy process to gain an overwhelming and unfair competitive advantage in the industry. We firmly believe that if the bankruptcy court allows Pinnacle to implement steep reductions in our wages, work rules and benefits that it is proposing, the cost of pilot attrition and inability to hire new pilots in the future would vastly outweigh the assumed short-term benefits of the imposed cuts.

“We encourage our management to bring to the bargaining table the same energy they have used to run to the courtroom. We must find enough common ground to form the basis for a new agreement, one that provides a future for both Pinnacle Airlines and its pilots.”

Copyright Photo: Bruce Drum. Bombardier CRJ440 (CL-600-2B19) N8790A (msn 7790) arrives at the Minneapolis/St. Paul hub.

Delta Connection-Pinnacle Airlines:

Pinnacle Airlines wins Delta debtor-in-possession financing approval by the bankruptcy court

Pinnacle Airlines Corporation (Memphis) has announced that it has received final approval from the United States Bankruptcy Court for the Southern District of New York for $74.3 million in debtor-in-possession (DIP) financing. The funding is being provided by Delta Air Lines, Inc. (Atlanta).

As previously announced, $44.3 million of the DIP financing will be used by Pinnacle to repay a secured promissory note held by Delta. The remaining $30 million will be available to fund operations during the restructuring process.

Pinnacle Airlines Corporation is the parent company of Pinnacle Airlines, Inc. and Colgan Air, Inc.

Pinnacle intends to shut down the Colgan Air (United Express) operation at Houston (Bush Intercontinental) on July 1. However the Colgan Air Albany, New York maintenance base is expected to remain operational until December 1. Colgan intends to end Bombardier DHC-8-402 (Q400) operations as an United Express operator (to be replaced by Republic Airlines) by December 1 according to this article by the timesunion.com. Colgan Air is expected to be shut down as an airline at this time.

Read the full article: CLICK HERE

Top Copyright Photo: Jay Selman.

Delta-Pinnacle Slide Show: CLICK HERE

Colgan Air Slide Show: CLICK HERE

United Express-Colgan Slide Show: CLICK HERE

Three Bottom Copyright Photos: Brian McDonough.

Pinnacle to shed 450 pilot positions over the next 18 months

Pinacle Airlines Corporation (Memphis), currently reorganizing under Chapter 11 bankruptcy protection, is planning to shed around 450 pilot positions over the next 18 months. The group intends to also shed 97 Bombardier DHC-8-402 (Q400), SAAB 340B and Bombardier CRJ900 aircraft as it adjusts its contracts. Colgan Air will also be closed down by November 2012. The United Express and US Airways Express operations will also be terminated under the current reorganization proposals.

Read the full report from Memphis Business Journal: CLICK HERE

Copyright Photo: Tony Storck. The current Colgan Air operates for United Express and US Airways Express

United Express-Colgan Slide Show: CLICK HERE

CEO Sean Menke to leave Pinnacle Airlines after filing for bankruptcy protection

Pinnacle Airlines Corporation (Memphis) has announced a leadership transition under which John Spanjers, currently chief operating officer of the company, will succeed Sean Menke as chief executive officer, effective on June 1, 2012. Spanjers has been COO at Pinnacle since September 2011, and was president of Mesaba Aviation prior to joining Pinnacle.

According to the company, Menke has chosen to resign from the company on June 1 and will work closely with Spanjers and the other members of Pinnacle’s leadership team to support a seamless transition over the next five weeks. Pinnacle does not anticipate this transition will impact the timeline of the company’s Chapter 11 proceedings or Pinnacle’s ability to successfully restructure and emerge from Chapter 11.

Sean Menke was the former CEO of Frontier Airlines (2nd) (Denver).

As of Menke’s departure on June 1, Pinnacle expects to have achieved a number of important restructuring objectives during the initial 60 days of its Chapter 11 proceedings, including having:

  • Renegotiated key business agreements with Delta Air Lines, United Airlines and EDC;
  • Obtained final approval of its debtor-in-possession (DIP) financing;
  • Completed the Section 1110 aircraft process;
  • Received final court approval of its “First Day motions” to help the company continue to operate in the ordinary course; and,
  • Initiated a collegial and collaborative relationship with the Unsecured Creditors Committee and its advisors.

Read the analysis of the move by Bloomberg Businessweek: CLICK HERE

Copyright Photo: Brian McDonough.

Delta Connection-Pinnacle Slide Show: CLICK HERE

Pinnacle Airlines Corporation files for Chapter 11 bankruptcy protection, will phase out Colgan’s SAAB 340Bs and Q400s

Pinnacle Airlines Corporation (Memphis) yesterday (April 1-not an April Fool’s Day joke) announced that the Company and its subsidiaries have filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York (the “Court”). Pinnacle intends to use the Chapter 11 process to continue implementing a comprehensive turnaround plan aimed at addressing its operational and financial challenges in a rapidly evolving regional airline industry.

According to the company, “During this process, the company will remain focused on providing passengers with safe, reliable and timely service in collaboration with its network partners, Delta Connection, United Express and US Airways Express.”

Pinnacle expects to accomplish several key initiatives during the restructuring process to help ensure that it returns to profitability and remains viable over the long term as the regional airline industry continues to contract and transform. These initiatives include restructuring its key operating agreements with Delta Air Lines, winding down its operations with United Airlines, completing the wind-down of its Essential Air Service (EAS) flying with US Airways, achieving cost savings from its workforce, identifying additional opportunities across the organization to reduce costs, and ensuring that it has the appropriate fleet, staffing levels and network to operate profitably on an ongoing basis.

Sean Menke (formerly the CEO of Frontier Airlines), President and CEO of Pinnacle, said, “We intend to use the Chapter 11 process to reset our financial and operational structure in order to position Pinnacle for viability over the long term.  Quite simply, our current business model is not sustainable, as increasing operating expenses, liquidity constraints, business integration delays and difficulties associated with combining our operations have hindered our ability to maximize our growth potential.  Following a lengthy review process, and with the assistance of independent financial, industry and legal advisors, our Board of Directors determined that a court-supervised restructuring is the only feasible course of action to implement our turnaround plan.”

Menke continued, “We are committed to delivering safe, reliable travel throughout this process, and thank all of our employees for their continued focus on providing our mainline partners and their customers with on-time flights and superior in-flight service.  Our objective is to emerge from this process as a stronger, more focused company, with a revised business model, a substantially improved cost structure and operating agreements that will position us for profitable growth in the future.”

In conjunction with the filing, Pinnacle has received a commitment for secured super-priority debtor-in-possession financing (“DIP Financing”) from Delta Air Lines, Inc. in the amount of $74.3 million. Following Court approval, $44.3 million will be used by Pinnacle to repay a secured promissory note held by Delta. The remaining $30 million in DIP financing, combined with cash generated by Pinnacle’s ongoing operations, will be available to help ensure that Pinnacle has sufficient liquidity to meet its operational and restructuring needs.

Pinnacle has filed a series of customary motions with the Court seeking to ensure the continuation of normal operations, including requesting Court approval to continue to pay employee wages, salaries and benefits without interruption and to pay suppliers for fuel and other goods and services provided after the filing date.

Pinnacle noted that it previously filed withdrawal notices with the U.S. Department of Transportation (DOT) for all of the Essential Air Service (EAS) markets currently served by Colgan Air, a Pinnacle subsidiary. Pinnacle has asked the DOT to establish an accelerated process to identify replacement carriers for the EAS markets it serves, which are currently served by SAAB 340B aircraft.

The remaining SAAB 340B fleet that Colgan operates for United Express will be wound down over the next several months, with these operations projected to end by August 1, 2012.  Similarly, Colgan’s Bombardier DHC-8-402 (Q400) aircraft operations will be wound down by November 30, 2012 (see below).

Pinnacle Airlines Corporation is the parent company of Pinnacle Airlines, Inc. and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corporation operating subsidiaries operate 199 regional jets and 62 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize.

Top Copyright Photo: Jay Selman.

Delta Connection-Pinnacle Slide Show: CLICK HERE

United Express-Colgan Air Slide Show: CLICK HERE

Middle Copyright Photo: Mark Durbin.

Bottom Copyright Photo: TMK Photography.

Delta Air Lines to drop service to Huntington, WV on June 1

Delta Air Lines (Atlanta) will drop all service to Huntington, West Virginia and the Detroit-Huntington route on June 1 per USA Today. The route is operated by Pinnacle Airlines (Memphis) and its 50-seat Bombardier CRJ200 regional jets. The route is underperforming.

Copyright Photo: Brian McDonough.

Delta Connection-Pinnacle Slide Show: CLICK HERE

Pinnacle Airlines has received an open letter from one of its major stockholders

Pinnacle Airlines (Memphis) has received the following open letter from a group of stockholders calling for representation on the board for two stockholders. The group is unhappy with the massive decline in the value of the stock. Here is the statement:

“Wayne King, Private Investor, and Ryan Morris of Meson Capital Partners, LLC, the general partner of Meson Capital Partners, LP (the “Pinnacle Stockholders for Representation”), holders of 1,182,466 shares or 6.18% of the Pinnacle Airlines, Corporation, today release an open letter to stockholders.

Dear Fellow Pinnacle Stockholders:

In our December 23, 2011 press release, we called on Pinnacle to promptly appoint two stockholder representatives to the board. We were contacted by dozens of individual stockholders and received universal support for our proposal. We encouraged all stockholders to communicate their views directly to Pinnacle. On February 17, 2012 we met with Donald Breeding, Chairman of the Board, and Susan Coughlin, Director and Head of the Nominating and Corporate Governance Committee to discuss the merits of our proposal.

At the meeting, we alerted the Pinnacle representatives to the current outrage among stockholders due to the following:

  1. 93% drop in Pinnacle’s market value (currently at $24mm) since January 1, 2007.
  2. Non-performing capital investments of $173mm since January 1, 2007.
  3. A mere 1.09% share ownership by the eight non-employee Directors.
  4. Virtually no shares purchased in the open market by Board members in the last 5 years.
  5. Outsized board compensation vs. market value, compared to peers.
  6. Corporate bylaws designed to entrench current board members.
  7. Lack of transparent communications with stockholders.

Without meaningful ownership at the board level, Pinnacle Stockholders for Representation believes board and stockholder financial incentives are dangerously out of alignment. Warren Buffett insightfully remarked, “Who bothers to take a rental car to the car wash?” By appointing us to the board (stockholders who collectively own 6.18%), the board could immediately begin to correct this critical misalignment. We emphasized to Mr. Breeding and Ms. Coughlin that a rejection of our proposal would force us to engage in an expensive and time consuming proxy contest in which we would nominate three directors for a stockholder vote at the Company’s annual meeting in May 2012.

Our proposal offers Pinnacle’s board a golden opportunity to make a positive, pro-active, stockholder friendly move that would begin rebuilding stockholder trust: a root problem that is easily fixed with stockholder representation on the board.

Regrettably, the board has responded to our proposal with a de-facto rejection, claiming that “it is not the ‘concept’ of adding you to the board that we are struggling with. It is the timing.” In addition to this rejection, the board has disenfranchised stockholders by indefinitely delaying the annual meeting, originally scheduled for May 2012.

We could not disagree more with the board’s stated reason for rejecting our proposal on the basis of bad “timing.” Indeed, we believe strongly that NOW, during this chaotic period for the Company, where decisions with long term consequences for stockholders will be made, is EXACTLY the time when stockholder representation is needed most. An expensive and time-consuming proxy contest is not in the best interest of all parties, yet the board has currently chosen a path of entrenchment that leads directly to it.

We reiterate that we are supportive of CEO, Sean Menke and applaud the progress he is making and the intellectual honesty with which he is approaching the significant hurdles facing Pinnacle. We believe that, by choosing to engage in a proxy contest and not being open to stockholder representation at this critical juncture, the board is dangerously undermining Mr. Menke’s efforts to transform Pinnacle into a sustainable enterprise.

Entrenchment tactics will not work. As one stockholder who contacted us said: “Enough is enough!” Delaware law permits the court to order an annual meeting if management does not call one within 13 months after the previous meeting on May 17, 2011 and we are fully prepared to petition the court to order an annual meeting.

There has never been a more critical time for Pinnacle stockholders to have proper representation. We urge the board to listen to the Company’s stockholders and to accept our proposal today.

Thank you for your support as fellow owners of the Company,

Pinnacle Stockholders for Representation”

Copyright Photo: Bruce Drum.

Delta Connection-Pinnacle Slide Show: CLICK HERE


Sean Menke attempts to turn around Pinnacle

Pinnacle Airlines Corporation (Memphis) hired Sean Menke in July as its new chief executive officer (CEO). Menke, formerly the CEO of Frontier Airlines (2nd) (Denver), faces some tough decisions — cut the carrier’s costs, cut a deal for more cash from Delta Air Lines and possibly move to larger aircraft according to this article by The Commercial Appeal of Memphis.

PAC is the holding company of Pinnacle Airlines, Mesaba Airlines and Colgan Air (2nd).

Read the full article: CLICK HERE

Copyright Photo: Bruce Drum.

 

Pinnacle Airlines Corporation reports a net loss in the third quarter

Pinnacle Airlines Corporation (Memphis) Net loss and net loss per share for the third quarter of 2011 were $3.5 million and $0.19, respectively. Excluding special items, net loss and net loss per share for the third quarter of 2011 were $1.7 million and $0.09, respectively.

PAC is the holding company with 7,700 employees and is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. flying as Delta Connection, United Express and US Airways Express carriers. Pinnacle Airlines Corporation operating subsidiaries operate 199 regional jets and 82 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize.

The holding company is planning to transfer all of its regional jet operations under the Pinnacle Airlines certificate by the end of 2011. Turboprop operations are also expected to be merged under the Mesaba AOC.

Delta Connection-Pinnacle Slide Show: CLICK HERE

Copyright Photo: Bruce Drum.

Pinnacle Airlines’ flight attendants ratify the new contract

Pinnacle Airlines (Delta Connection)(Memphis) announced the revised tentative agreement with the United Steelworkers AFL-CIO (USW) to amend the collective bargaining agreement covering 871 flight attendants has been ratified. The contract provides a five-year extension to the collective bargaining agreement that became amendable on Jan. 31, 2011.

Pinnacle operates as a Delta Connection carrier and operates from five Delta hubs, specifically Detroit, Memphis, Minneapolis/St. Paul, New York (JFK) and Atlanta.

Delta Connection-Pinnacle Airlines Slide Show: CLICK HERE

Copyright Photo: Bruce Drum. Please click on the photo for additional information.

Pinnacle Airlines Corporation loses $2.4 million in the second quarter

Pinnacle Airlines Corporation (Memphis) reported a net loss and net loss per share for the second quarter of 2011 of $2.4 million and $0.13, respectively.

Pinnacle Airlines Corporation is the airline holding company with 7,700 employees and is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. flying as Delta Connection, United Express and US Airways Express.

Pinnacle Airlines Corporation operating subsidiaries operate 202 regional jets and 84 turboprops on more than 1,500 daily flights to 196 cities and towns in the United States, Canada, Mexico and Belize.

The 35% year-over-year increase in the price per gallon of aircraft fuel negatively impacted Colgan’s Pro-Rate operations by $2.1 million during the second quarter of 2011.

Copyright Photo: Bruce Drum. Please click on the photo for the aircraft information.

Visit our new website: CLICK HERE

Pinnacle hires former Frontier CEO Sean Menke

Pinnacle Airlines Corporation (Memphis) has named Sean E. Menke as its new President and CEO. Menke, a veteran airline executive and Managing Partner at Vista Strategic Group LLC in Denver, Colo., succeeds Philip H. Trenary. He is expected to begin his new duties on July 1, 2011. Menke will also become a member of the company’s board of directors.

According to the holding company, “Mr. Menke, 42, brings 20 years of airline management experience. He was previously Executive Vice President and Chief Marketing Officer of Republic Airways Holdings Inc. and President and CEO of Frontier Airlines, where he helped position Frontier as one of the lowest cost and most efficient airlines in North America.”

Prior to his senior posts at Republic and Frontier, he was Executive Vice President and Chief Commercial Officer at Air Canada; and Senior Vice President and Chief Operating Officer at Frontier, where he was also Senior Vice President of Marketing and held Vice President positions in planning and revenue management. Additionally, he held management positions with United Airlines, Western Pacific Airlines and America West Airlines.

Pinnacle Airlines Corporation is a $1 billion airline holding company with 7,800 employees and is the parent company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 202 regional jets and 88 turboprops on more than 1,650 daily flights to 196 cities and towns in the United States, Canada, Mexico and Belize.

Copyright Photo: Jay Selman. Please click on the photo for additional information.

Pinnacle’s first quarter net profit slips to $100,000

Pinnacle Airlines Corporation (Memphis) reported financial results for the first quarter of 2011. Net income and diluted earnings per share were $0.1 million ($100,000) and $0.01, respectively, excluding a special item.

This is the first period in which the holding company is experiencing the effects of the new pilot contract with the Air Line Pilots Association (ALPA) that was entered into in February 2011, increasing pilot compensation and benefits costs by $2.1 million for the quarter.

The holding company recorded $5.8 million ($3.1 million, net of related income taxes) of special charges for integration, severance, and contract implementation costs. Including these special items, the Company’s net loss and net loss per share were $(3.0) million and $(0.16), respectively.

Breakdown by each company:

Pinnacle Airlines, Inc. (Memphis) reported first quarter 2011 operating income and an operating margin of $9.0 million and 5.5%, a decrease of $4.8 million and 3.3 points, respectively, from the first quarter of 2010. Pinnacle’s operating income decreased primarily as a result of weather related performance penalties and increased pilot wages under the new labor agreement with ALPA.

Mesaba Aviation (Minneapolis/St. Paul) reported operating income and an operating margin of $1.1 million and 1.6%, respectively. Mesaba’s financial results were negatively impacted by weather conditions during the quarter as well as the wind-down of Delta’s turboprop operations as structured under the capacity purchase agreement (“Saab DCA”). The Saab DCA is structured to adjust revenue at the beginning of each year and on a prospective basis to reflect increased pilot and mechanic costs associated with the wind-down of operations. During the first quarter of 2011, the Company did not record estimated revenue of approximately $0.5 million associated with this rate adjustment. Revenue will be recorded upon final determination of the rate adjustment, which the Company expects to occur in the second quarter of 2011.

Colgan Air, Inc. (Memphis) reported an operating income and an operating margin of $2.0 million and 2.9%, an improvement of $3.1 million and 4.8 points, respectively, from the first quarter of 2010. The increase in operating margin was mainly attributable to the growth of Q400 operations during the quarter with United, partially offset by lost revenue from cancellations associated with winter weather. The improved operating results were also negatively impacted by an increase in pilot wages and a 32% year-over-year increase in the price per gallon of aircraft fuel.

Pinnacle Airlines Corporation is a $1 billion airline holding company with 7,700 employees and is the holding company of Pinnacle Airlines, Inc.; Mesaba Aviation, Inc.; and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 202 regional jets and 88 turboprops on more than 1,600 daily flights to 196 cities and towns in the United States, Canada, Mexico and Belize. Hub operations are located at 11 major U.S. airports.

Copyright Photo: Brian McDonough. Please click on the photo for additional information.

Colgan’s routes in the Northeast:

Pinnacle Airlines Corporation has a successful fourth quarter and 2010

Pinnacle Airlines Corporation (Memphis) today reported fourth quarter 2010 net income of $2.6 million and diluted earnings per share (“EPS”) of $0.14, excluding a $10.9 million ($6.8 million after-tax) special charge to accrue for a signing bonus and related payroll taxes for pilots under a new tentative collective bargaining agreement (the “Pilot Signing Bonus”). Including this charge, the Company reported a net loss of $4.3 million and a net loss per share of $0.23 for the fourth quarter 2010. The Company reported net income and EPS of $5.6 million and $0.31, respectively, for the fourth quarter 2009.

Excluding the Pilot Signing Bonus, the Company’s consolidated net income for the full year 2010 was $19.6 million, a decrease of 16% compared to 2009 net income excluding special items. Full year 2010 EPS excluding the Pilot Signing Bonus was $1.06, a decrease of 17% as compared to 2009 EPS excluding special items. For a summary of the Pilot Signing Bonus and special items affecting 2009, please see the attached “Reconciliation of Non-GAAP Disclosures” tables.

In addition to the Pilot Signing Bonus, the Company’s fourth quarter 2010 financial results were negatively impacted by costs related to the initiation of new Q400 service for United Airlines. Colgan Air, Inc., (“Colgan”), the Company’s regional turboprop operating subsidiary, accepted delivery of six Q400 aircraft during the fourth quarter. Prior to placing the aircraft into service under the capacity purchase agreement with United, Colgan incurred interest and depreciation expense on the aircraft and labor costs associated with hiring and training crews for the aircraft. Implementation of the Q400 fleet expansion will continue through the first quarter, after which the Company expects the Q400 growth to have a favorable impact to 2011 earnings. In addition, the Company’s financial results for the fourth quarter were negatively impacted by winter storms in December. As is common within the regional airline industry, the Company’s subsidiaries cancelled a higher percentage of flights during irregular operations than the Company’s major airline partners so as to minimize the number of passengers affected by weather cancellations.

Mesaba Aviation, Inc. (Minneapolis/St. Paul), which the Company acquired on July 1, 2010, achieved operating income of $3.8 million and $6.8 million for the three and twelve months ended December 31, 2010, respectively. After taking into account interest expense on a $63.3 million note issued as part of the acquisition, Mesaba’s financial results have been accretive to the Company’s consolidated net income and EPS. In addition, the Company’s operating cash flows were improved by approximately $23 million during 2010 due to the acquisition of Mesaba.

Above Copyright Photo: Bruce Drum. Please click on the photo for additional information.

Colgan Air Route Map:

Below Copyright Photo: Tony Storck. Please click on the photo for additional information.

Delta Air Lines to expand at Tokyo Haneda and London Heathrow

Delta Air Lines (Atlanta) is preparing to expand service to two key international business airports – Haneda Airport in Tokyo and Heathrow Airport in London.

Delta begins nonstop service between Tokyo-Haneda and Detroit and Los Angeles on February 19, and will launch its new routes between Boston and Miami and London’s Heathrow Airport on March 26. The Heathrow-Miami route will be in direct competition with Oneworld partners American Airlines and British Airways.

Under multinational air service agreements, Delta has only been allowed to serve Heathrow since 2007 and is gaining access to Haneda this year. Delta is now the fastest-growing U.S. carrier to Heathrow, and with new Haneda flights, will become the largest U.S. carrier to both of Tokyo’s major airports – Haneda and Narita.

Delta is adding new nonstop flights between the three cities and Miami International Airport to enable convenient connections to Heathrow for customers across Florida. The intra-Florida flights will be operated by Delta Connection carriers Comair (Cincinnati) and Pinnacle Airlines (Memphis) using 50-seat Bombardier CRJ200 regional jets.

Copyright Photo: Brandon Farris. Please click on the photo for aircraft details.

Pinnacle Airlines Corporation reaches a tentative agreement with ALPA

Pinnacle Airlines Corporation (Memphis) announced on December 17, 2010 that it had reached a tentative agreement with the Air Line Pilots Association, International (ALPA) on a single contract covering pilots at all three of Pinnacle’s operating subsidiaries — Pinnacle Airlines, Inc., Colgan Air, Inc. and Mesaba Aviation, Inc.

Copyright Photo: Jay Selman. Please click on the photo for additional details.

Pinnacle Airlines Bombardier CRJ200 diverts to Fargo

Pinnacle Airlines (Delta Connection) (Memphis) Bombardier CRJ200 diverted to Fargo yesterday. The Minneapolis/St. Paul to Grand Forks flight made an emergency landing at Fargo due to “suspicious condition in the lavatory” by a passenger who was questioned. There were no injuries and no charges resulted from the incident.

Pinnacle Flight DL 4375 operated with a Bombardier CRJ200 left MSP at 9:15 a.m. (0915) and diverted to Fargo.

Read the full report from INFORUM:

CLICK HERE

Copyright Photo: Bruce Drum. Pinnacle Airlines’ Bombardier CRJ200 (CL-600-2B19) N8588D (msn 7588) approaches MSP for landing.

Pinnacle Airlines Corporation reports 2Q net income of $5.9 million

Pinnacle Airlines Corporation (Memphis), the holding compay for Pinnacle Airlines, Colgan Air and Mesaba Aviation (Mesaba Airlines), reported second quarter 2010 net income of $5.9 million and fully diluted earnings per share (“EPS”) of $0.32, as compared to net income and EPS for the second quarter of 2009 of $7.3 million and $0.40, respectively, excluding prior year special items. The Company reported consolidated operating income of $19.8 million in the second quarter of 2010, a decrease of $3.9 million from the second quarter of 2009, excluding prior year special items. Among other items, the second quarter of 2010 was negatively affected by higher aviation insurance premiums that were the subject of a previously reported dispute with Delta and were not reimbursed totaling $1.7 million ($1.0 million net of related income taxes). The Company has resolved this dispute with Delta and does not expect to incur any additional future un-reimbursed aviation insurance premiums under its Delta Connection agreements. Second quarter 2010 pre-tax income was also reduced by a $1.5 million ($1.0 million net of related income taxes) adjustment to the fair value of interest rate options that the Company purchased to hedge interest rates in connection with the Company’s Q400 growth program.

The Company acquired Mesaba Aviation, Inc. from Delta Air Lines on July 1, 2010. Mesaba operates a fleet of 60 Canadair regional jet aircraft and 32 Saab 340B+ turbo-prop aircraft. With this acquisition, the Company’s consolidated fleet has grown from 190 regional aircraft to 282.

In late July, the Company took delivery of the first of 15 additional DHC-8-402 (Q400) regional aircraft to be operated by Colgan Air under the Company’s operating agreement with Continental Airlines. The Company expects to take delivery of seven additional Q400 aircraft in 2010, and seven Q400 aircraft in the first half of 2011.

Copyright Photo: Bruce Drum. Pinnacle Airlines’ (Delta Connection) Bombardier CRJ200 (CL-600-2B19) N8588D (msn 7588) arrives at the MSP hub.

Delta agrees to sell Mesaba Airlines to Pinnacle Airlines

Delta Air Lines (Atlanta) today (July 1) also announced it has entered into a definitive agreement to sell is wholly owned regional airline subsidiary Mesaba Airlines (Mesaba Aviation) (Minneapolis/St. Paul) to Pinnacle Airlines Corporation (Pinnacle Airlines) (Memphis) for $62 million.

Mesaba, like Compass Airlines, will continue to serve Delta as a Delta Connection carrier with a long-term, extendable agreement, ranging from seven to 12 years depending on aircraft type. Compass will continue to be headquartered in Minneapolis/St. Paul.

Copyright Photo: Bruce Drum. SAAB 340B N453XJ (msn 453) of Mesaba arrives back at the Delta hub at MSP.

Pinnacle Airlines Corporation reports 4Q and 2009 financial results

Pinnacle Airlines Corporation (Memphis) reported fourth quarter 2009 net income of $5.6 million. This represents an increase of 153 percent over net income recorded in the fourth quarter of 2008 of $2.2 million.

For the year ended December 31, 2009, the Company reported net income of $41.9 million, an increase of 68 percent over net income of $13.8 million in 2008, excluding special charges.

Pinnacle Airlines Corporation, an airline holding company, is the parent company of Pinnacle Airlines, Inc. and Colgan Air, Inc. Pinnacle Airlines, Inc. operates under Delta brands and operates 126 CRJ200 and 16 CRJ900 regional jet aircraft. Colgan Air, Inc. operates as Continental Connection, United Express and US Airways Express and operates a fleet of 14 Bombardier DHC-8-402 (Q400) and 34 SAAB 340 turboprop aircraft throughout the United States and Canada.

Pinnacle’s pilots vote against new contract

Copyright Photo: Bruce Drum.  Please click on photo for more photos.

Copyright Photo: Bruce Drum. Please click on photo for more photos.

Pinnacle Airlines’ (Memphis) pilots, represented by ALPA, have failed to ratify an agreement to amend the current contract.

Press release:

finance.yahoo.com/news/Pinnacle-Airlines-Pilot-iw-414954069.html?x=0&.v=1

Pinnacle reports $6 million 2nd quarter profit

Pinnacle Airlines Corporation (Pinnacle Airlines and Colgan Air) (Memphis) reported a second quarter net profit of $6 million.

Press release:

finance.yahoo.com/news/Pinnacle-Airlines-Corp-iw-3168201526.html?x=0&.v=1

Pinnacle and ALPA reach a tentative agreement

Pinnacle Airlines (Memphis) and ALPA representing the 1,250 pilots have reached a new tentative agreement subject to ratification.

Press release:

finance.yahoo.com/news/Pinnacle-Airlines-ALPA-Reach-iw-2478139144.html?x=0&.v=1

Delta to return to Love Field via Pinnacle CRJ200

Delta Air Lines (Atlanta) will return to Dallas’ Love Field on July 6, 2009 through Pinnacle Airlines (Delta Connection) (Memphis) which begins flying three daily roundtrips with Bombardier CRJ200 regional jets. Pinnacle will connect DAL with the MEM hub.

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