Pinnacle Airlines Files Chapter 11 Bankruptcy

Pinnacle Files for Bankruptcy Protection

Pinnacle filed for Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York.

Pinnacle Airlines is an operator of regional jets for several carriers from United Express to US Airways Express, but their largest operation by far is with Delta Connection.  The company is made-up of three units, Pinnacle, Mesaba Aviation, and Colgan Air.

The company more or less admitted their strategy with the three business units is not working and is taking steps to cut costs and streamline the units.

Colgan Air, operating as Continental Connection, was involved in a fatal crash in Buffalo, New York, in 2009, killing 50 people.  The company plans to eliminate the Colgan unit altogether, as well as exit from contracts from United and US Airways, along with any essential air service programs.

When it comes to cost cutting, the company will likely have to downsize, but both union and non-union staff who stay will likely face lower pay.  This will be difficult in an environment where wages are already low in the regional jet industry.

The company needed debtor-in-possession (DIP) financing so they looked to Delta Air Lines.  Pinnacle was able to obtain $74.3 million in DIP financing from Delta that will allow it to continue operating while it restructures.

We are not aware of any specifics with respect to their re-organization, but given the large role regional operators like Pinnacle play they should hopefully be able to find a workable solution.

Pinnacle will continue to operate its regional flights as usual while re-organizing with bankruptcy protection.  Customers traveling on Delta Connection flights operated by Pinnacle or Mesaba should not be concerned with the bankruptcy.

On a final note, Delta Connection uses several regional carriers, Pinnacle and Mesaba are only two of the several carriers operating under the Delta Connection name.

 

 

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One Response

04.02.12

I heard some of these pilots, or first officers make like only $16,000 a year starting at regional carriers and pay cap for even the most senior will make it difficult to cut employee salary.

Didn’t know Pinnacle owned Mesaba, so that means a lot of Delta Connection is in bankruptcy protection. I hate the small jets, real small ones, but don’t mind the larger ones like the cr9 they fly with medallion first class seats.

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