ti717
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Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 1:31 am

Sir, don't you think we should turn on the runway lights?" "No, that's just what there expecting us to do!"
 
SkyexRamper
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 1:33 am

Only 20 million?? Wow, that's nothing.
Good Luck to all Skyway Pilots! It's been great working with you!
 
BigOrange
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 1:39 am

Any word on if they are going to keep Manassas as home base?
 
ti717
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 1:44 am

From Yahoo link
"Pinnacle Airlines, Inc. and Colgan Air will operate as two separate entities with independent and separate management structures. Pinnacle Airlines Corp. and Pinnacle Airlines, Inc. will remain at the current headquarters in Memphis, TN. Colgan Air will maintain its operational headquarters in Manassas, VA, provided it continues to make operational and financial sense for the organization."

Looks like Manassas will remain.
Sir, don't you think we should turn on the runway lights?" "No, that's just what there expecting us to do!"
 
sunking737
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 1:48 am

Gee $20 Million for a company that had revenue of $137 million in 2005?

That's not a bargain, that's a steal.

Good luck to all employees on both sides.
Just an MSPAVGEEK
 
D L X
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 2:07 am

Quoting Sunking737 (Reply 4):
Gee $20 Million for a company that had revenue of $137 million in 2005?

And their debt. Don't forget that Pinnacle has to take on Colgan's debts too.

Quoting Ti717 (Reply 3):
Looks like Manassas will remain.

For now. I'll have to roll out to sleepy HEF some time and see what people think. I bet they're packing their bags.

I'm still surprised that Colgan kept HEF as their base considering you can't buy a ticket there.
 
DeltaGuy
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 2:15 am

Wow, big news. I wonder if there's going to be any mixing of service or aircrews in the future- or will you still be hired with Pinnacle or Colgan seperately?

DeltaGuy
"The cockpit, what is it?" "It's the little room in the front of the plane where the pilot sits, but that's not importan
 
v1valarob
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 3:23 am

Quoting D L X (Reply 5):

For now. I'll have to roll out to sleepy HEF some time and see what people think. I bet they're packing their bags.

I'm still surprised that Colgan kept HEF as their base considering you can't buy a ticket there.

Just got off the phone with my boss at Colgan. She said that for at least a year we are safe in Manassas. The reason that Colgan will never move from Manassas is because the Senator has invested so much into that airport. It wouldnt be what it is today if it wasnt for him, and if Colgan where to leave, who knows what would happen to it. Its also cheaper to buy land and have our two huge hangers at KHEF than at KIAD im sure. If I was in dispatch or something that Pinnacle could easily take over, I would be packing my bags. But pilots and f/a's, I dont see why they would. They still need people on those aircraft.

-Rob
 
NASCARAirforce
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 4:00 am

Its a good deal, but why would they get Colgan?

For more Saab 340s that will end up with Mesaba?

Or for the Beech 1900s to use out of MSP to podunk Minnesota small towns and DTW for use to the UP?
 
v1valarob
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 4:09 am

Quoting NASCARAirforce (Reply 8):
Its a good deal, but why would they get Colgan?

For more Saab 340s that will end up with Mesaba?

Or for the Beech 1900s to use out of MSP to podunk Minnesota small towns and DTW for use to the UP?

From what I got from the airline, both companies will remain separate. No swapping of aircraft. Nothing of the sort. From the outside, and to employees, the companies will look separate. Pinnacle will not fly Colgan routes and vice versa.

-Rob
 
KarlB737
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 4:15 am

Press Release Source: Pinnacle Airlines Corp.

Pinnacle Airlines Corp. Announces Purchase of Colgan Air, Inc.

Thursday January 18, 11:00 am ET

MEMPHIS, TN--(MARKET WIRE)--Jan 18, 2007 -- Pinnacle Airlines Corp. (NASDAQ:PNCL - News) today announced the purchase of Colgan Air, Inc., which maintains its headquarters in Manassas, Virginia. Pinnacle Airlines Corp. is the parent company of Pinnacle Airlines, Inc., a regional airline doing business as Northwest Airlink.

Pinnacle Airlines Corp. will pay $20 million for all of the issued and outstanding capital stock of Colgan Air, with $10 million in the form of an immediate cash payment and $10 million in the form of a one-year note secured by the stock of Colgan Air. The acquisition will be completed today subject to any applicable regulatory review.

Colgan Air is a premier turbo-prop regional airline operating as Continental Connection, United Express and US Airways Express. Launched in 1991 as a family-owned and operated company, today Colgan Air offers 354 daily flights to 53 cities in 13 states. Colgan is recognized for the exceptional service levels it provides its Customers and is a leader in providing air service to small and medium-sized cities in the United States. Colgan operates 39 Saab 340 and 11 Beech 1900 regional airliners, and has hub operations in Boston, Houston, New York, Pittsburgh and Washington, D.C. Colgan Air employs approximately 1,100 People and transported nearly 1.5 million Customers in 2006. Colgan has experienced strong revenue growth over the past years. In 2005 Colgan had revenues of approximately $137 million. Colgan projects that it will have revenues of approximately $190 million in 2006.

"This is a strategic move for our organization and offers Pinnacle Airlines Corp. extraordinary opportunities by diversifying and expanding into multiple platforms," said Philip H. Trenary, President & CEO of Pinnacle Airlines Corp. "Colgan Air has a highly productive workforce with knowledge, experience and fantastic dedication."

This purchase provides Pinnacle Airlines Corp. with two separate platforms for growth.

Mr. Trenary continued, "The purchase of Colgan Air gives our corporation access to and relationships with three of the largest carriers in the United States: Continental Airlines, United Airlines and US Airways. When combined with Pinnacle Airlines, Inc.'s airline services agreement with Northwest Airlines, Pinnacle Airlines Corp. now code-shares with a significant proportion of the major airlines in the United States. These new relationships will be invaluable to helping grow both Pinnacle Airlines, Inc. and Colgan Air."

Mr. Trenary also explained that the newly expanded corporate organization will be better able to diversify fixed costs across a wider base, creating more efficiency and lowering unit operating costs at both carriers. "We believe both airlines will be more competitive in the marketplace as a result of this purchase."

Pinnacle Airlines Corp. expects that the acquisition of Colgan Air will result in a slight increase to consolidated earnings per share for the year ended December 31, 2007, with a more significant positive impact in future years as both airlines benefit from the customer relationships and economies of scale that this acquisition brings.

Mike Colgan, President & CEO of Colgan Air, will remain in his current capacity as President and CEO of Colgan Air, Inc. for the immediate future. Mr. Colgan will be an instrumental liaison between Pinnacle Airlines Corp. and Colgan Air as they create a seamless transition for the current Colgan customers.

Mr. Colgan stated, "We are very proud of Colgan Air and see this as an exciting step forward. While this was not an easy decision for our family, we considered the strength of Pinnacle Airlines Corp. and its management team as an opportunity to continue the growth of the company in an ever-evolving industry. The employees of Colgan Air are more than just employees here -- they are family. Collectively, the entire Colgan Air Family, along with our customers, has made this possible. The management team of Pinnacle Airlines Corp. has been long-time friends and industry colleagues; I join them in welcoming everyone to this new and exciting venture."

Phil Trenary added, "Colgan Air is a family-centric organization with a positive attitude and an excellent team of service focused professionals. This makes Colgan an excellent cultural fit with our company and our People. Additionally, we are pleased that several members of the Colgan family will continue to work with us through the transition and into the future."

Pinnacle Airlines, Inc. and Colgan Air will operate as two separate entities with independent and separate management structures. Pinnacle Airlines Corp. and Pinnacle Airlines, Inc. will remain at the current headquarters in Memphis, TN. Colgan Air will maintain its operational headquarters in Manassas, VA, provided it continues to make operational and financial sense for the organization.

Pinnacle Airlines Corp., an airline holding company, is the parent company of Pinnacle Airlines, Inc. and Colgan Air, Inc. Pinnacle Airlines, Inc. operates under the name Northwest Airlink and operates 127 Canadair Regional Jets in the United States and Canada. Colgan Air, Inc. operates as Continental Connection, United Express and US Airways Express. Colgan Air operates a fleet of 39 Saab 340 and 11 Beech 1900 turbo-prop regional airliners.

Safe Harbor

This press release contains various forward-looking statements that are based on management's beliefs, as well as assumptions made by and information currently available to management. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable; it can give no assurance that such expectations will prove to have been correct. Such statements are subject to certain risks, uncertainties and assumptions, including those set forth in our filings with the Securities and Exchange Commission, which are available to investors at our web-site or on line from the Commission. Should one of more of these risks or uncertainties materialize, or should underlying assumptions prove erroneous, actual results may vary materially from results that were anticipated or projected. The Company does not intend to update these forward-looking statements before its next required filing with the Securities and Exchange Commission.

Contact:
For further information, please contact:

Philip Reed
Telephone: 901.348.4257
E-mail: Email Contact

--------------------------------------------------------------------------------
Source: Pinnacle Airlines Corp.
 
AwysBSB
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 4:17 am

Another doubt: would the acquisition of Colgan be one step to NWA expand in BosWash?
 
sunking737
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 4:45 am

Does NWA own any stock still in Pinnacle Airlines Corp.?

Why would NWA have anything to do with Colgan if they don't.
Just an MSPAVGEEK
 
planespotting
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 5:08 am

Quoting SkyexRamper (Reply 1):
Only 20 million?? Wow, that's nothing.

No kidding.

Colgan has 50 aircraft (39 340's and 11 1900's) -- those aircraft are probably worth $75 million by themselves (at least).

They certainly purchased it at a severe discount; does Colgan have a tremendous debt load?
Do you like movies about gladiators?
 
D L X
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 5:22 am

So, now the next question is, what does an All-CRJ airline do with a bunch of Saabs and 1900s?
And the question after that is, what happens to all those Colgans that are painted in US, CO, and UA colors?
 
flyinryan99
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 6:20 am

I think this is to protect themselves (Pinnacle Airlines Corp) against problems with Northwest. This deal is the exact same type of thing MAIR has with Mesaba and Big Sky. Pinnacle cannot fly for another airline (correct?) so they bought another certificate to operate under a different name so they can grow. All of the money will go to one home office. I guess they aren't putting all of their eggs in one basket with Northwest.
 
KingAir200
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 6:25 am

Quoting D L X (Reply 14):
So, now the next question is, what does an All-CRJ airline do with a bunch of Saabs and 1900s?

Keep Colgan flying them for UA, US, & CO. The initial reports don't seem to indicate that there will be any fleet mixing. Like someone said above, the MAIR and Big Sky deal comes to mind. It is probably just another source of income for 9E.

I don't think 9E can really use this to get a foot in the door with any of the aforementioned airlines, because I believe their contract with NWA has an exclusivity clause in it.

[Edited 2007-01-18 22:27:19]
 
v1valarob
Posts: 42
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 6:28 am

Quoting KingAir200 (Reply 16):
Keep Colgan flying them for UA, US, & CO. The initial reports don't seem to indicate that there will be any fleet mixing.

I don't think 9E can really use this to get a foot in the door with any of the aforementioned airlines, because I believe their contract with NWA has an exclusivity clause in it.

Correct. As I stated before, In my letter from Colgan as an employee it says that Colgan will keep its name, its planes, its routes, its maintenance facility, its everything. You wont see any Saabs or Beechs with Pinnacle across them that where former Colgan planes, at least not for the time being.

-Rob
 
FCYTravis
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 6:28 am

Quoting D L X (Reply 14):
So, now the next question is, what does an All-CRJ airline do with a bunch of Saabs and 1900s?
And the question after that is, what happens to all those Colgans that are painted in US, CO, and UA colors?

Pinnacle Airlines INC. will remain an all-CRJ airline - Colgan Air becomes a subsidiary of Pinnacle Airlines CORP. As the release notes, Colgan's strength lies with its multiple contracts with three different major airlines for Saab and Beech service - so Pinnacle Corp. is no longer dependent on NW for 100 percent of their revenue.

All of Colgan's service for US is operated either under EAS contracts or on an at-risk, revenue-sharing basis. I don't know about their CO and UA arrangements.
USAir A321 service now departing for SFO with fuel stops in CAK, COS and RNO. Enjoy your flight.
 
flyibaby
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 6:38 am

Quoting NASCARAirforce (Reply 8):
Its a good deal, but why would they get Colgan?

For more Saab 340s that will end up with Mesaba?

Or for the Beech 1900s to use out of MSP to podunk Minnesota small towns and DTW for use to the UP?

NWA has no control over these aircraft as NWA no longer has any real substancial stake in Pinnacle anymore.

Quoting AwysBSB (Reply 11):
Another doubt: would the acquisition of Colgan be one step to NWA expand in BosWash?

Again, Pinnacle is publicly owned but with no signifigant ownership by NWA.

Quoting Sunking737 (Reply 12):
Does NWA own any stock still in Pinnacle Airlines Corp.?

Why would NWA have anything to do with Colgan if they don't.



Quoting KingAir200 (Reply 16):
I don't think 9E can really use this to get a foot in the door with any of the aforementioned airlines, because I believe their contract with NWA has an exclusivity clause in it.

Pinnacle was spun off and eventually NWA sold nearly all if not every share they owned in Pinnacle.

Pinnacle Holdings can definately get their foot in the door now with the Colgan certificate which includes buying newer and larger RJs (E-Series, or CR7s and CR9s) to serve more routes. This might give some serious competition to Mesa and Skywest eventually.
 
sllevin
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 7:00 am

Quoting Sunking737 (Reply 4):
Gee $20 Million for a company that had revenue of $137 million in 2005?

But how much of the $137 million was PROFIT?

Quoting Planespotting (Reply 13):
Colgan has 50 aircraft (39 340's and 11 1900's) -- those aircraft are probably worth $75 million by themselves (at least).

I suspect Colgan's equity in those aircraft is fairly low.

Steve
 
KingAir200
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 8:36 am

Quoting Flyibaby (Reply 19):
Pinnacle Holdings can definately get their foot in the door now with the Colgan certificate which includes buying newer and larger RJs (E-Series, or CR7s and CR9s) to serve more routes. This might give some serious competition to Mesa and Skywest eventually.

Pinnacle Holdings may be able to use Colgan to do it, but 9E, Pinnacle Airlines themselves, which is what I meant, can't.
 
doug_or
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 8:47 am

Quoting Flyinryan99 (Reply 15):
This deal is the exact same type of thing MAIR has with Mesaba and Big Sky.

That is a good analogy, this is the purchase a whole company and its operations, not a purchase of a set of assets. The cynic in me, however, see even more similarities in Skywest and ASA (a non union carrier with multiple contract and a union carrier in contentious contract negotiations with its pilots.) Whipsaw anyone?
When in doubt, one B pump off
 
EMBQA
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 8:54 am

Quoting Planespotting (Reply 13):
Colgan has 50 aircraft (39 340's and 11 1900's) -- those aircraft are probably worth $75 million by themselves (at least

CJ does not own the Saab's as they're leased. You can't look at buying a $137M dollar in revenue company for $20M as a deal. If the operating cost is $200M they just bought a $43M dollar debt.
"It's not the size of the dog in the fight, but the size of the fight in the dog"
 
Kuna
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 9:08 am

Quoting Flyinryan99 (Reply 15):
Pinnacle cannot fly for another airline (correct?)

Wrong, under our new ASA with NWA, we can fly for whoever we like, NW does reserve the right to remove aircraft after we reach 20 with an airline. But that also has limits that they cannot exceed 5 (if I remember the letter I got from the company) in a year.
Pinnacle Airlines
 
Kuna
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 9:11 am

Quoting Flyibaby (Reply 19):
Pinnacle Holdings can definately get their foot in the door now with the Colgan certificate which includes buying newer and larger RJs (E-Series, or CR7s and CR9s) to serve more routes. This might give some serious competition to Mesa and Skywest eventually.

Been told as well that 9E is getting 13 of the 36 CR9's that NW ordered. Delivery date not set yet, but we are to expect them. We are currently type rated for those aircraft, only requires a 2 day training course.
Pinnacle Airlines
 
planespotting
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 9:18 am

Quoting EMBQA (Reply 23):
You can't look at buying a $137M dollar in revenue company for $20M as a deal. If the operating cost is $200M they just bought a $43M dollar debt.

$63 million debt, but yes, that is a good point. I was not aware of the leased status of the Saab's.

[Edited 2007-01-19 01:18:48]
Do you like movies about gladiators?
 
funflyer
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 11:24 am

Now does anyone know if the told there meployees ahead of time, because I was talking to a Colgan pilot and he had just found out about it. (We took a delay because the lav. was leaking)


He seemed really suprised by the whole thing.
Who cares about status?
 
flyinryan99
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Fri Jan 19, 2007 12:35 pm

Quoting Kuna (Reply 24):

Ok, thanks I wasn't sure. I just remembered the last I knew, Pinnacle Airlines, Inc. couldn't fly for anyone else. I figured this was a way to get around the rules.
 
A330323X
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Sun Jan 21, 2007 10:33 am

Quoting NASCARAirforce (Reply 8):
Its a good deal, but why would they get Colgan?

The same reason most every other regional company owns two certificates nowadays--to whipsaw one pilot group against the other.  Wink
I'm the expert on here on two things, neither of which I care about much anymore.
 
bobnwa
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Sun Jan 21, 2007 10:04 pm

Quoting Funflyer (Reply 27):
Now does anyone know if the told there meployees ahead of time, because I was talking to a Colgan pilot and he had just found out about it. (We took a delay because the lav. was leaking)


He seemed really suprised by the whole thing.

Employees are not told about pending mergers or buyouts until they are officially announced to the business community.
 
Kuna
Posts: 269
Joined: Sat Aug 19, 2006 10:38 am

RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Tue Jan 23, 2007 4:49 am

I been told that Colgan Air actually doesnt have much of a debt load if any. So it appears it was a steal.
Pinnacle Airlines
 
toltommy
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Tue Jan 23, 2007 1:32 pm

Quoting Flyinryan99 (Reply 28):
I just remembered the last I knew, Pinnacle Airlines, Inc. couldn't fly for anyone else. I figured this was a way to get around the rules.

Its a way to get around the rule, yes. The new ASA between 9E and NWA allows 9E to fly for other carriers. But, 9E would lose airplanes at a set ratio if they were to fly for another carrier. They can use Colgan to get around that. Mesaba returned a number of SF340's that were leased from 9E. Those planes are still sitting in Mississippi, and will likely go into service with Colgan.
 
burnsie28
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Tue Jan 23, 2007 3:45 pm

Quoting Sunking737 (Reply 12):
Does NWA own any stock still in Pinnacle Airlines Corp.?

Last I knew it was about 40%

Quoting Flyibaby (Reply 19):
Again, Pinnacle is publicly owned but with no signifigant ownership by NWA.

They used to have atleast 40%

Quoting Kuna (Reply 24):
Wrong, under our new ASA with NWA, we can fly for whoever we like, NW does reserve the right to remove aircraft after we reach 20 with an airline.

NW owns all your aircraft (well sub leases them to 9E), they tell you where and when to fly and such, without it 9E has nothing. NW can pull the plug just like that.
 
azjubilee
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RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Tue Jan 23, 2007 6:44 pm

Actually, I believe NWA retainede only 13% of PNCL after the IPO. Any Pncl or Colgan employee need only to look as far as BigSky and Mesaba. Yea, alot of good that purchase did. PT was hardly original in this deal... he's following the lead of other regional management teams by creating another whipsaw monster.

As far as what your ASA says... yea, PNCL may be able to fly for other carriers, but NWA just may not let it happen. Don't forget who REALLY runs the show here. In the 2005 ASA between Mesaba and NWA, it also included this provision as well as 15 new CRJs and the next 20 options, exclusive rights to the avro and anything that was acquired to replace the avros. Now look at Mesaba.


AZJ
 
Kuna
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Joined: Sat Aug 19, 2006 10:38 am

RE: Pinnacle Airlines Buys Colgan Air For $20 Mln

Wed Jan 24, 2007 4:43 am

Quoting Burnsie28 (Reply 33):
Quoting Kuna (Reply 24):
Wrong, under our new ASA with NWA, we can fly for whoever we like, NW does reserve the right to remove aircraft after we reach 20 with an airline.

NW owns all your aircraft (well sub leases them to 9E), they tell you where and when to fly and such, without it 9E has nothing. NW can pull the plug just like that.

Burnsie, I know they own all our aircraft never said they didn't, but under the old ASA we could not operate for another carrier, now we can under this new ASA.

Quoting Azjubilee (Reply 34):
As far as what your ASA says... yea, PNCL may be able to fly for other carriers, but NWA just may not let it happen. Don't forget who REALLY runs the show here. In the 2005 ASA between Mesaba and NWA, it also included this provision as well as 15 new CRJs and the next 20 options, exclusive rights to the avro and anything that was acquired to replace the avros. Now look at Mesaba.

Azjubliee I understand where your coming from, but we are already seeing some of the benefits in the new ASA. Like getting 14 of our CRJ's they took when they filed bankruptcy. They are all 44 seaters, and they are already in the system. Also we are getting atleast 13 CR9's. I know things come and go, but I have faith.
Pinnacle Airlines

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