pilotfox
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 3:28 am

http://finance.yahoo.com/news/pinnac...es-files-chapter-11-030000890.html

From the yahoo finance link

MEMPHIS, Tenn., April 1, 2012 /PRNewswire/ -- Pinnacle Airlines Corp. (NASDAQ: PNCL - News) today 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. 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.

(Logo: http://photos.prnewswire.com/prnh/20110112/CL29411LOGO )

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, 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 340 aircraft.

The remaining Saab 340 fleet that Colgan operates for United Express will be wound down over the next several months, with these operations projected to end by Aug. 1, 2012. Similarly, Colgan's Q400 aircraft operations will be wound down by Nov. 30, 2012.

[Edited 2012-04-01 20:30:41]
 
catiii
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 3:34 am

Quoting pilotfox (Thread starter):
Similarly, Colgan's Q400 aircraft operations will be wound down by Nov. 30, 2012.

Wow. So who does that UAX Q400 flying out of EWR go to?
 
PSU.DTW.SCE
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 3:37 am

Well this is not an April Fools joke here. What a shame. Everyone knew this was the path Pinnacle was headed over the past few months.

Too bad for what this may mean for employees and communities served by Colgan.

Interesting how DL basically is bailing them out, but they more or less have to because of the significant amount of CR2 and CR9 lift they provide.
 
DashTrash
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 3:43 am

Wasn't an April Fools joke when Menke and his cohort got a huge raise either...... Nothing like getting a raise when you're asking your employees for concessions.
 
thegoldenargosy
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 4:06 am

Quoting pilotfox (Thread starter):
The remaining Saab 340 fleet that Colgan operates for United Express will be wound down over the next several months, with these operations projected to end by Aug. 1, 2012. Similarly, Colgan's Q400 aircraft operations will be wound down by Nov. 30, 2012.

Why are they shutting Colgan down? I thought they were getting rebranded as Mesaba?
 
F9Animal
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 4:16 am

Menke is a snake in disguise! He is really proving to be a bankruptcy king to force concessions. Could we be witnessing a modern day Lorenzo? It will take a ton of proof to sway me away from my concerns about Menke. I wish the employees the best.
I Am A Different Animal!!
 
suisjes
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 4:41 am

I see people hating on Mesa a little less. I see the next hate rant coming on though. They are businesses if the business model is failure they change it. Pure and simple, unfortunately, the employees take the brunt of the punishment! They are all dirty! Face it!
 
F9Animal
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 4:56 am

Oh man. Just visited a pilots forum. Menke got a $400,000.00 raise, bringing him to $650,000.00 a year? I honestly can't see any justification for that raise, especially since he has been pushing employees to take paycuts! I heard that Pinnacles headquarters was decorated with thousands of copied news articles posted everywhere this morning about Menke and his raise. This really boils my blood. This clearly shows how awful corporate America has become. I don't care to hear that this raise will help keep this talented Mr. Menke in place.... Pinnacle is in bankruptcy because of poor executive performance, and that raise sends a terrible message to employees facing pay cuts. If Menke was so talented, he would have turned the company away from bankruptcy starting the day he arrived at Pinnacle.

Yes, I am ranting. And yes, I am peeved. I can't blame the employees for being angry! No CEO of any company deserves a raise like that, especially if they are partly responsible for taking a company into bankruptcy! JALs CEO was honorable when he took a cut to help the airline. This is absolute greed.

A true good hearted leader leads by example. A poor leader pleads with workers to sacrifice pay, yet accepts a large raise, and forces employees to cut pay by going the way of bankruptcy. A true leader would accept a pay cut, and join his/her workforce in sacrifice to save the company. He joins the likes of these Wall Street cons. I don't care if he is the most talented godly CEO,,,, he does not deserve a raise. If he brings Pinnacle out of bankruptcy as a successful, profitable company.... Then and only then should he be rewarded with a raise..... And so should all of the employees of Pinnacle. I am just sick to my stomach!

[Edited 2012-04-01 22:17:42]

[Edited 2012-04-01 22:21:42]
I Am A Different Animal!!
 
NorthstarBoy
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 5:10 am

One thing doesnt seem to make sense: Pinnacle owes DL 44 millon via a promissory note, so DL is going to loan Pinnacle 74 million, then Pinnacle will turn around and give 44 of that 74 million back to DL to pay off the note. That's like me owing my father ten thousand dollars, then asking dad for a 15,000 loan so I can pay him back the ten thousand I owe him. Why doesn't DL just forgive the note, write off the loss, and give Pinnacle 30 million?
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PHX787
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 5:16 am

Hasn't Pinnacle been under Chapter 11 before, or was that just Mesaba?
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hatbutton
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 5:26 am

Quoting F9Animal (Reply 7):
I honestly can't see any justification for that raise, especially since he has been pushing employees to take paycuts!

While I agree with you that the principle of getting a raise in the midst of requesting concessions is ludicrous, he apparently took on the CFO role in addition to the CEO role once the CFO left to work for NK. Not saying I agree with it, but the filing that talked about his raise stated that as being one of the reasons for it.
 
usflyer msp
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 5:27 am

Quoting NorthstarBoy (Reply 8):
One thing doesnt seem to make sense: Pinnacle owes DL 44 millon via a promissory note, so DL is going to loan Pinnacle 74 million, then Pinnacle will turn around and give 44 of that 74 million back to DL to pay off the note. That's like me owing my father ten thousand dollars, then asking dad for a 15,000 loan so I can pay him back the ten thousand I owe him. Why doesn't DL just forgive the note, write off the loss, and give Pinnacle 30 million?

I'm guessing there is some sort of tax-related reason for this weird transaction...

I am not looking forward to work to tomorrow. 9E is one of the accounts I handle for my company and now we pretty much have to write of $40000.

Fun.
 
thebyte
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 7:04 am

Quote:

The remaining Saab 340 fleet that Colgan operates for United Express will be wound down over the next several months, with these operations projected to end by Aug. 1, 2012. Similarly, Colgan's Q400 aircraft operations will be wound down by Nov. 30, 2012.

So I guess this explains the E135's returning to UA's fleet? This make sense. Just pull a few parked E135's from the desert to cover the loss of the Saab's. It puts these planes, that are already costing them money, back into service.

The big surprise to me is the UA Q400 aircraft. Aren't the Q400's owned by UA? Are they going to find another carrier to fly them or are they actually leaving leaving UA's fleet? Aren't the Q400's in the process of receiving first class?
 
crjavionics
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 9:20 am

The amount the Menke and the other one got is more that the salary of the departing CFO. Also, if and when they hire a new CFO in the future, do you think those two are just going to take a cut back to what they were originally at?

[Edited 2012-04-02 02:37:37]
 
bmibaby737
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 9:48 am

Pinnacle has filled to reject the following aircraft leases:

SAAB 340:
N237MJ, N239CJ, N242CJ, N251CJ, N309CE, N321CJ, N339CJ, N356CJ, N402XJ
N407XJ, N412XJ, N413XJ, N414XJ, N416XJ, N418XJ, N420XJ

Q400 Dash 8:

N33WQ 4033 lsf Bombardier Capital (Was only a 12month lease to support 1st Class Mods)
N351NG 4351
N354NG 4354

http://dm.epiq11.com/PinnacleAirlines
 
bjorn14
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 9:56 am

Quoting catiii (Reply 1):
Wow. So who does that UAX Q400 flying out of EWR go to?

ConnectAir? Not sure if they have Q400s.

Quoting F9Animal (Reply 7):
I honestly can't see any justification for that raise

Yep. As a British banking regulator said...."You can always reward excellence and should, even mediocrity but never failure."

[Edited 2012-04-02 03:00:59]
"I want to know the voice of God the rest is just details" --A. Einstein
 
bjorn14
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 10:04 am

Quoting crjavionics (Reply 13):
the departing CFO

So this is why Ted Christie jumped....can't blame him (if he wasn't at fault of course)
"I want to know the voice of God the rest is just details" --A. Einstein
 
bhmdiversion
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 11:11 am

The Saabs will be going away as part of United's plan. 9L had until yesterday to improve their operational scores, or be kicked to the curb.

Menke did this to the employees, and shareholders. His whole story about how he's going to change Pinnacle for the best was all BS and in the end he only cared about himself.

Sorry to my former coworkers.
 
bhmdiversion
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 11:48 am

This is a good summary from the employee FAQ website:

4. What changes are going to happen to our operations?
 We intend to complete the wind-down of EAS flying with US Airways.
 Beginning in May, we will begin the wind-down of our Colgan Q400 and Saab 340 operations with United Airlines. The Saab 340 wind-down is planned to be completed by the end of July and the Q-400 operation will come to an end in November.
 We will continue to operate all CRJ200s and the former Mesaba CRJ-900 aircrafts.
 Beginning in January 2013, we will wind down the 16 Pinnacle CRJ-900 aircrafts over a period of five months.
 PinnPro ground-handling associated with the Colgan Saab 340 operation will wind down in coordination with air service termination to specified cities.

5. How many planes will be taken out of service, and when?
 [3] Saab 340 aircraft associated with the US Airways EAS flying will conclude operations in June 2012.
 [24] Saab 340 aircraft associated with United Express service will wind down between May and July 2012.
 [31] Q400 aircraft associated with United Express service will wind down between May and November 2012.
 [16] CRJ900 aircraft associated with Delta Connection service will wind down between January and May 2013.

The Saab's, Q's, and the ATL CR9's are gone in the future.
 
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Revelation
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 11:49 am

Quoting F9Animal (Reply 7):
Oh man. Just visited a pilots forum. Menke got a $400,000.00 raise, bringing him to $650,000.00 a year? I honestly can't see any justification for that raise, especially since he has been pushing employees to take paycuts!

The ones to be angry with are the members of the board of directors, who represent the shareholders, and who approve the hiring/firing of corporate officers and set their pay.

Apparently they thought the company was better off spending the $400k and suffering the ill will of the employees vs seeing Menke go.

But the joke is on them: CH11 wipes out the shareholders, and in bankruptcy a new BOD gets elected.

Quoting NorthstarBoy (Reply 8):
One thing doesnt seem to make sense: Pinnacle owes DL 44 millon via a promissory note, so DL is going to loan Pinnacle 74 million, then Pinnacle will turn around and give 44 of that 74 million back to DL to pay off the note. That's like me owing my father ten thousand dollars, then asking dad for a 15,000 loan so I can pay him back the ten thousand I owe him. Why doesn't DL just forgive the note, write off the loss, and give Pinnacle 30 million?

Because loans between business entities have all kinds of terms and conditions attached to them that your dad's loan doesn't have, and this kind of transaction allows the T&Cs of the old loan to be replaced by the new.

Also there are totally different accounting, tax and legal implications for "forgiving" a loan (which is really writing off a bad debt) vs getting payment for one loan and issuing a new loan.

Writing off a bad loan then immediately issuing a new loan would look to regulators like you were trying to shift losses from Pinnacle to DL, so would receive a lot of scrutiny.
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FlyPNS1
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 12:04 pm

Quoting bhmdiversion (Reply 18):
Beginning in January 2013, we will wind down the 16 Pinnacle CRJ-900 aircrafts over a period of five months.

I assume these will go to another DL Connection carrier since I can't imagine that DL wants to dump CRJ-900's right now.
 
crjavionics
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 12:21 pm

I wonder which 16 will go? Is it a coincidence that Pinnacle owns 16 CRJ900s (the PQs)?
 
Cubsrule
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 12:29 pm

Quoting bhmdiversion (Reply 17):
The Saabs will be going away as part of United's plan. 9L had until yesterday to improve their operational scores, or be kicked to the curb.

What was the problem operationally? At least at Dulles, 9L seemed on par with other Express carriers (though with their short stage lengths, they were disproportionately affected by bad weather and airfield delays).
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Mir
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 12:48 pm

Quoting pilotfox (Thread starter):
achieving cost savings from its workforce

How the hell do you cut when the workforce is hardly making anything to begin with? What a disaster for the employees, and I feel horrible for them. They don't deserve this - this one is on management, for trying to expand faster than was sustainable.

Quoting PHX787 (Reply 9):
Hasn't Pinnacle been under Chapter 11 before, or was that just Mesaba?

Mesaba filed for bankruptcy back when Northwest did, but I don't think Pinnacle has been in Chapter 11.

-Mir
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bhmdiversion
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 1:12 pm

Quoting Cubsrule (Reply 22):
Quoting bhmdiversion (Reply 17):
The Saabs will be going away as part of United's plan. 9L had until yesterday to improve their operational scores, or be kicked to the curb.

What was the problem operationally? At least at Dulles, 9L seemed on par with other Express carriers (though with their short stage lengths, they were disproportionately affected by bad weather and airfield delays).


United (as part of the pre-restructuring) had informed Pinnacle that they had until April 1 to improve performance, or UA would take the flying off Colgan. The performance on the Q's and Saab's was getting worse and worse due to MX and allegedly a "money losing" contract.

This might be a coincidence, but wasn't Trenary's last day March 31, so his "bonus" couldn't be taken away by the courts?
 
Cubsrule
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 1:16 pm

Quoting bhmdiversion (Reply 24):
so his "bonus" couldn't be taken away by the courts?

That may or may not be true, though it's a complicated question.
I can't decide whether I miss the tulip or the bowling shoe more
 
DashTrash
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 1:30 pm

Quoting bhmdiversion (Reply 24):
This might be a coincidence, but wasn't Trenary's last day March 31, so his "bonus" couldn't be taken away by the courts?

We have a winner. This bankruptcy has been in the works for quite some time. The exec raises were part of it.
 
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kgaiflyer
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 1:46 pm

Quoting bjorn14 (Reply 15):
Quoting catiii (Reply 1):Wow. So who does that UAX Q400 flying out of EWR go to?
ConnectAir? Not sure if they have Q400s.

Are there still ATRs (former CO planes) in storage?

If so, could they be 'Febreezed' and brought online like the 135s.
 
VictorKilo
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 1:47 pm

Quoting bhmdiversion (Reply 18):
5. How many planes will be taken out of service, and when?
 [3] Saab 340 aircraft associated with the US Airways EAS flying will conclude operations in June 2012.
 [24] Saab 340 aircraft associated with United Express service will wind down between May and July 2012.
 [31] Q400 aircraft associated with United Express service will wind down between May and November 2012.
 [16] CRJ900 aircraft associated with Delta Connection service will wind down between January and May 2013.

Is the plan for UA to find another carrier to operate Q400 lift, or is the elimination of 55 turboprops part of United's planned domestic capacity reduction? This to me is the big news from this announcement.

How much of a blow is it to Bombardier if nine percent of the world's Q400 fleet is parked (31+ 4 Malev / 388)?

And how much longer before we see an annoucement that those 16 CR9 are headed to GoJet?
 
bhmdiversion
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 1:53 pm

There is an employee conference call at 10am Central. That should be an interesting call...
 
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coronado
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 1:54 pm

Quoting pilotfox (Thread starter):
n 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.

Delta, is agreeing to provide 30million in fresh cash DIP (Debtor in Possession) financing, but this is conditional on the courts effectively agreeing to move up, by converting it into new debt as part of the DIP, the existing 44mm Delta loan. So the entire 74mm goes to the top of the heap and so following their emergence from bankruptcy it would be the first priority debt to get repaid. Ingenious.
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JBo
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 1:55 pm

This explains why they haven't followed through with rebranding Colgan as Mesaba.

Assuming UA owns the Q400s, I imagine they will find a new home. The question is with whom?

Horizon is the only current active operator of the type in the US, and they have contracted outside of AS before (the F9 flying prior to Lynx).

Republic is certified for the type, but whether UA would contract that flying to RAH is another story.

I wouldn't be surprised if SkyWest ends up with the Q400 flying.

If they're leased or owned by PNCL then it's anyone's guess where they end up going.
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MountainFlyer
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 2:08 pm

Quoting bhmdiversion (Reply 18):
Beginning in January 2013, we will wind down the 16 Pinnacle CRJ-900 aircrafts over a period of five months.

Why would they get rid of CR9s and keep CR2s? Aren't CR9s more profitable than the CR2s?
SA-227; B1900; Q200; Q400; CRJ-2,7,9; 717; 727-2; 737-3,4,5,7,8,9; 747-2; 757-2,3; 767-3,4; MD-90; A319, 320; DC-9; DC-1
 
KingAir200
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 2:14 pm

Quoting MountainFlyer (Reply 32):
Why would they get rid of CR9s and keep CR2s? Aren't CR9s more profitable than the CR2s?

Generally yes, but that would depend on the terms of the CPA they were flown under. At any rate, 9E owns the 16 ATL CR9s, while DL leases the 200s and in turn subleases them to 9E. The original XJ and F8 CR9s are owned by DL.
 
cbphoto
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 2:22 pm

Quoting JBo (Reply 31):
Horizon is the only current active operator of the type in the US, and they have contracted outside of AS before (the F9 flying prior to Lynx).

incorrect, RP currently operates a few of them out of DEN for F9! For how much longer is unknown, but they do operated them. Realistically RP could pick them up for United, but I know RP has it's own issues right now!


Either way, this is really sad news for the entire Pinnacle family! With the reduction of the saabs, Qs and the CRJ9s I expect a pretty hefty furlough announcement in the near future, unless a max exodus happens before then!

Good Luck guys!
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tjwgrr
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 2:34 pm

Quoting bjorn14 (Reply 15):
ConnectAir? Not sure if they have Q400s.

I'm sure you mean CommutAir which operates the -200 & -300 varients, but not not the Q400.

Quoting VictorKilo (Reply 28):
Is the plan for UA to find another carrier to operate Q400 lift, or is the elimination of 55 turboprops part of United's planned domestic capacity reduction? This to me is the big news from this announcement.
Quoting JBo (Reply 31):
Assuming UA owns the Q400s, I imagine they will find a new home. The question is with whom?

CommutAir would make sense since they operate both the -200 & -300, but how quickly could they be certified for the Q400?
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enilria
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 2:38 pm

Quoting PSU.DTW.SCE (Reply 2):
Interesting how DL basically is bailing them out, but they more or less have to because of the significant amount of CR2 and CR9 lift they provide.

My question is whether DL will use this to extricate themselves from the Pinnacle 50 seater flying. I'm told the contract allows them to do that. The DL DIP financing basically means that DL now "owns" Pinnacle. It is hard to imagine DL would not take the opportunity to dump a ton of CRJs on the creditors. That seems like a certainty. DL is content to screw over UA/US for now by pulling these airplanes immediately, but they will come up with a more elegant stage exit from a lot of Pinnacle's CRJs IMHO. Pinnacle is going to emerge MUCH smaller.

Here's another thought. They could dump the PNCL CRJs, get costs down to ridiculously low levels, and then dump the Comair CRJs (that Delta is on the hook for) on to Pinnacle. That's best case for Delta. I know it seems dumb, but it would really be about dumping the planes they can rid of using Ch11 and making the ones that are "owned" more cheap to operate.
 
LOWS
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 2:39 pm

Quoting JBo (Reply 31):
I wouldn't be surprised if SkyWest ends up with the Q400 flying.

That would be nice, but whether or not that happens depends on OO's own financial problems right now.
 
EricR
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 2:40 pm

Quoting Mir (Reply 23):
How the hell do you cut when the workforce is hardly making anything to begin with?

I always believed that the Regional / Mainline carrier relationship placed too much risk on the regional carriers. Regional carriers bare all of the expense risk. Therefore, when costs increase (ie. fuel prices), margins at the regional carriers get squeezed unless mainline carriers are willing to offset the higher costs with higher ticket prices. Mainline carriers need to have a larger vested interest in this relationship (ie. allow regionals more pricing power or assume some of the cost burden), otherwise this relationship will be difficult to maintain long term in an environment of increasing fuel prices.
 
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JBo
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 2:55 pm

Quoting cbphoto (Reply 34):
incorrect, RP currently operates a few of them out of DEN for F9! For how much longer is unknown, but they do operated them. Realistically RP could pick them up for United, but I know RP has it's own issues right now!

I stand corrected. I thought the few remaining former Lynx Q400s had already been phased out. And yes Realistically RW/RAH could pick up the flying for UA. I'm sure RAH would love the additional CPA flying, but who knows if UA wants to give it to them.

Quoting tjwgrr (Reply 35):
CommutAir would make sense since they operate both the -200 & -300, but how quickly could they be certified for the Q400?

CommutAir is another logical option provided they could handle that rapid of an expansion in such a short amount of time.
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flight152
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 3:07 pm

Quoting tjwgrr (Reply 35):
CommutAir would make sense since they operate both the -200 & -300, but how quickly could they be certified for the Q400?

Commutair can't even reliably operate the aircraft they have, let a lone doubling their fleet and number of pilot domiciles. I don't see them taking these aircraft.
 
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coronado
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 3:33 pm

Quoting enilria (Reply 36):
It is hard to imagine DL would not take the opportunity to dump a ton of CRJs on the creditors. That seems like a certainty.

As I understand it Delta leases from outside leasing companies virtually all of the 120+ CRJ-200 operated by Pinnacle, and in turn subleases them to Pinnacle. Delta is not in b/k, so they can't abrogate their lease obligations with the leasing companies. All they (Delta) really can do is:
a) Return the aircraft when their leases expire. I would be interested to see what the calendar of CRJ200 lease expirations that Delta has with the leasing companies looks like over the next few years.
b) Terminate or reduce the CPA agreement with Pinnacle for performance reasons which is also presumably permitted since Pinnacle is bankrupt and most CPA's provide for termination if the operates files for bankruptcy, in which case Delta could decide to:
a) Park some/all the planes while still having to pay the remaining lease payments. Would not be the first time an airline parks a leased aircraft if the calculations show losses will be lower to just continue making the lease payment on a parked plane without actually flying it.
b) Move some/all of the CR2 to another carrier to operate.
c) Restructure the CPA to try and reduce the contractual payments to Pinnacle. I recall something that the basic CPA agreement at one time provided Pinnacle an 8% profit margin. Since the existing shareholders will be wiped out, Delta could just operate Pinnacle on a flat break-even until the CRJ2 leases expire.
d) Fold Pinnacle into one of their other carriers.
e) The timetable for Delta beefing up its smaller lift mainline fleet including the additional MD90's (and perhaps there is validity to these noises over a deal for 717's) will probably have a significant bearing on how quickly they park CR2's.
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durangomac
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Mon Apr 02, 2012 3:58 pm

Quoting EricR (Reply 38):
I always believed that the Regional / Mainline carrier relationship placed too much risk on the regional carriers. Regional carriers bare all of the expense risk. Therefore, when costs increase (ie. fuel prices), margins at the regional carriers get squeezed unless mainline carriers are willing to offset the higher costs with higher ticket prices. Mainline carriers need to have a larger vested interest in this relationship (ie. allow regionals more pricing power or assume some of the cost burden), otherwise this relationship will be difficult to maintain long term in an environment of increasing fuel prices.


Actually in a CPA scenario the mainline partner pays the regional a flat fee per hour and the mainline partner usually takes all the variable expenses like fuel. In this model the regional is isolated from a lot of risk, it's the mainline partner taking the risk.
 
bhmdiversion
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Mon Apr 02, 2012 4:00 pm

As a highlight to the employee call - Menke began to cry when talking about his new raise. He said he didn't want his family to go through ANOTHER bankruptcy.
 
flyPBA
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 4:03 pm

Quoting VictorKilo (Reply 28):
How much of a blow is it to Bombardier if nine percent of the world's Q400 fleet is parked (31+ 4 Malev / 388)?

I hear Westjet is looking for about 30 turboprops ...
 
toltommy
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 4:04 pm

Quoting enilria (Reply 36):
It is hard to imagine DL would not take the opportunity to dump a ton of CRJs on the creditors. That seems like a certainty.

DL can't. DL owns the planes and subleases them to 9E. 9E can reject them, but they go back to the owner/lessor, which in this case is DL. Since DL has provided the DIP financing, I would hazard to guess that the plan is to keep 9E flying. They'll likely own 9E when all is said and done. The Mesaba name is dead now that the turboprop flying is going away, no w need to bother putting Mesaba's name on Colgan's certificate.


Quoting JBo (Reply 31):
Assuming UA owns the Q400s, I imagine they will find a new home. The question is with whom?

IIRC, Pinnacle purchased the Q400's. May have done a sale/leaseback transaction, but UA doesn't own them.

Quoting FlyPNS1 (Reply 20):
I assume these will go to another DL Connection carrier since I can't imagine that DL wants to dump CRJ-900's right now.

You guys gotta quit assuming.... Delta doesn't control those planes, the 16 are Pinnacle owned. DL may cut a deal with the lessor and take the rejected planes, but they'll probably want the lessor to take -200's in return. The lessor will put the plane wherever they can make the most money from the plane.
 
Goldenshield
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 4:05 pm

Quoting bhmdiversion (Reply 43):
As a highlight to the employee call - Menke began to cry when talking about his new raise. He said he didn't want his family to go through ANOTHER bankruptcy.

You know that scene at the end of The Lion King, where Scar gets taken out by the hyenas? That's what I'm imagining from what you're describing.
Two all beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun.
 
9lflyguy
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 4:08 pm

With all the negativity in this thread, I think we have forgotten about the employees of Colgan who are now on the street. My thoughts go out to all my friends and family at Colgan Air. I wish you luck in the future. Such a sad day for all the employees.
319 320 321 722 732 733 734 735 737 738 739 752 753 763 772 CR2 CR7 CR9 DHA D8B D8C D95 145 170 175 190 M82 M88 M90 S340
 
PSU.DTW.SCE
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 4:14 pm

Quoting Coronado (Reply 41):
As I understand it Delta leases from outside leasing companies virtually all of the 120+ CRJ-200 operated by Pinnacle, and in turn subleases them to Pinnacle. Delta is not in b/k, so they can't abrogate their lease obligations with the leasing companies. All they (Delta) really can do is:

This is correct.

On the DL connection side, the former XJ and F8 CRJ-900s are all leased by DL with Pinnacle as the operating carrier. Same with the 9E CRJ-200s. This goes back to the NW era. The only exception is the 16 ATL-based CRJ-900s that 9E owns.

That being said, DL simply cannot walk away from the CRJ-900 or CRJ-200s. The bankruptcy does give them the ability to rework the air service agreement and possibly move airplanes to another carrier.

It is a fact that DL will operate every CRJ-900 going forward. It is almost a certainty that the ATL-based 16 9E-owned CRJ-900s will likely turn up again somewhere operated by someone else for DL.

The CRJ-200s are interesting, particularly since they are actually some of the newest -200s in the DL Connection fleet. They range from 1999-2005. A significant portion of the CRJ lift is less than 10 years old. These aircraft are also generally in very good condition. Unlike some of the older OH and EV CRJs.
 
apodino
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Pinnacle Airlines Files For Chapter 11 (Part 1)

Mon Apr 02, 2012 4:23 pm

I could say a lot about what this means for the crew members and hard working employees, but most of its already been said. The people I really feel bad for in this case are the shareholders. The Shareholders have not been happy with the BOD for some time and it seems like really the shareholders (Who the company is supposed to be working on behalf of) had no say, were completely mistreated in recent months, and when they tried to get some say on the BOD, the BOD turned them down. Pinnacles actions in recent months have not only been bad for the employees at Pinnacle, but Sean Menke and the BOD have basically given the Shareholders the finger, and I hope there is at least one law firm that is investigating this on behalf of the shareholders.