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.
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