Colgan Air (2nd) SAAB 340B N321CJ (msn 321) IAD (Brian McDonough), originally uploaded by Airliners Gallery.
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.
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Colgan’s routes in the Northeast: