Pinnacle Contract Terminated by Delta in ATL
 

Pinnacle Airlines Calls Delta Attempt to Terminate Contract 'Wrongful'
Tuesday June 10, 8:13 am ET

Regional Carrier 'Surprised, Disappointed'

'Business as Usual' for Passengers, No Immediate Effect on Routes, Schedules

MEMPHIS, TN--(MARKET WIRE)--Jun 10, 2008 -- Pinnacle Airlines Corp. (NasdaqGS:PNCL - News) reported today that its Pinnacle Airlines, Inc. subsidiary has been notified by Delta Air Lines of Delta's intent to terminate Pinnacle's contract as a Delta Connection carrier, effective July 31. Pinnacle believes that this attempted termination is wrongful.

Delta contends that Pinnacle did not meet minimum arrival-time performance requirements for a period since flights began late last year. However, many factors affecting on-time performance are beyond Pinnacle's control, said Phil Trenary, Pinnacle Airlines Corp.'s president and chief executive officer. The operational schedule created by Delta is a key factor affecting on-time performance, he said. Under the capacity purchase agreement, Delta is required to collaborate with Pinnacle to create a mutually acceptable operating schedule. Delta has created Pinnacle's operational schedule since the beginning of operations in December 2007.

"We are extremely surprised and disappointed that Delta is attempting to take this drastic and improper action," said Trenary.

"From the very beginning of our Delta Connection operations, we expressed our concern that the flight schedules Delta created were unrealistic. Our position was affirmed when recent schedule changes by Delta allowed immediate improvement in our on-time performance, well above the agreed minimum standard and above most other Delta Connection carriers."

Pinnacle entered into a new capacity purchase agreement with Delta in April 2007 to operate 16 CRJ-900 aircraft as a Delta Connection carrier and began operations under the agreement in December. The CRJ-900 has operating costs that are the lowest among comparably sized regional jets, providing for an economic, efficient aircraft in the Delta network. Pinnacle has currently taken delivery of nine of the 16 CRJ-900 aircraft on order.

"We believe that the attempt by Delta to terminate this contract is wrongful, and we intend to pursue appropriate remedies," Trenary said.

Trenary emphasized that the issue between Pinnacle and Delta will have no immediate effect on schedules, routes or staffing.

"At this time, it remains business as usual for our passengers and our People," he said. "We look forward to building on our hard-earned reputation for operating a safe, reliable and cost-effective airline."

About Pinnacle Airlines Corp.

Pinnacle Airlines Corp. (NasdaqGS:PNCL - News), an airline holding company, is the parent company of Pinnacle Airlines, Inc. and Colgan Air Inc. Pinnacle Airlines, Inc. operates a fleet of 138 regional jets in the United States and Canada as Northwest Airlink and Delta Connection. Colgan Air Inc. operates a fleet of 57 regional turboprops as Continental Connection, United Express and US Airways Express. Pinnacle Airlines Corp. operating units fly over 1,000 daily flights and transport more than 10 million passengers a year to 140 cities and towns in North America. Visit www.pncl.com for more information.

Attempting to terminate...this is going to go like the Mesa thing, a long court battle. Sound slike the exact same press release used for Mesa.

Delta tried to pull this on Freedom Air and got spanked, now they want to do the same thing on Pinnacle? What the F?

i gotta say i didn't see this coming. however i don't think we will lose the contract but hopefully it scares management enough to get a contract so we can actually staff the airline.


"From the very beginning of our Delta Connection operations, we expressed our concern that the flight schedules Delta created were unrealistic. Our position was affirmed when recent schedule changes by Delta allowed immediate improvement in our on-time performance, well above the agreed minimum standard and above most other Delta Connection carriers."


this is why i find that we wont. as soon as we got a schule we could work we had excellent performance.

and also like i said earlier just a few days ago there was a HUGE increase in atlanta vacancies. i am sure the company has known that delta was going to do this for a bit and there is probably a deal already worked out. but who knows. we will have to see i guess.

Wow, didn't really see this coming either. Who out there is still hiring again? I don't really wanna leave ATL.

Oh yea Mesa gave Delta a spanking all right.

Somehow I see these 900's ending up in DTW or MSP after the dust settles....

I wouldn't be surprised to see some more contract terminations in the future. Just because you have a long-term contract, doesn't mean you are safe or have complete stability. If you don't meet the terms of the contract, it can be broken.

That fight hasn't even gotten started yet. The court only said that DL couldn't terminate the contract until Mesa gets to have their lawsuit heard. You really need to read beyond just the headlines.

if we did lose the contract i wouldn't doubt that either. we own the planes. we have 9 right now and 8 more on the way by the end of the year. we will find a way to put them on the nwa side still in delta colors, then when the merger goes through we will still be flying 900's for delta. i think the entire thing is a sham.

smoke and mirrors, smoke and mirrors.

Mesa and Pinnacle WERE meeting the terms of their contracts... You can't blame Mesa or Pinnacle for cancellations when you pro-actively cancel their flights in order to get mainline out. In the case with Pinnacle, they were also making them fly to St. Croix which required deadheading a double crew to fly the plane back, as well as the fact that Pinnacle planes aren't overwater certified - the indirect routings often caused fuel diversions.

Guys why I feel sorry for the pilots at Pinnacle, a good buddy of mine is in training right now and hopefully this won't mean he just quit his job for nothing, but you all just got done bashing me the other day at questioning why you were praising your on-time %. Stop acting like no-one is immune with a 10-year contract, we are ALL GOING TO FEEL THE PAIN this year.

And good luck though, hopefully no one gets the F letter because of this crap. I'm just afraid my buddy will have his class canceled and they'll send him home before he gets on the line.

Delta had gotten on our case in LAX a couple months back and we have since improved our on-time performance there, but I wouldn't be too surprised if something like this comes our way.

Um you might wanna double check to see if you guys really own those airplanes.:confused: Im not sure but Delta might hold the lease on those things.

ha. you tell me to double check.. maybe you should have double checked before saying delta holds the lean on the planes...

doesnt delta own the 900's?

sorry........shouldve checked pg 2. my bad......................... proceed.

I thought i read somewhere that delta owned the -900s too but i guess i misread. Does delta own freedom -900s?

It seems that Delta just straight up is trying to reduce the amount of their regional partners. I don't think it's a matter of them playing "scare tactics" or using "smoke and mirrors". Delta just plain doesn't want "elevendy-billion" regionals flying for it anymore.

I hate to say it, cause i like pinnacle, but I think (just like freedom) that Delta will probably just buy the rest of the contract out (or pay an early termination if there are terms for it). Even though they don't own the 90's, they still have some on order, and as part of some of the domestic roll backs could downsize these routes to 70 seaters for the time being, which ASA and Comair have a ton of already in/out of ATL frequently.

Good luck guys and gals.

no delta doesn't own the 900's. delta went to bombardier and said "hold x amount of 900's for us" so thats what they did. then when we signed the agreement delta said ok, some of those planes you were holding for us can be sold to pinnacle. so then we went and bought the ones delta was holding for us. they never owned them, just wanted to have some ready for delivery to their regionals.

Yes Freedom's and Comair's.

I'm not sure about skywests though..

I think SKW owns their own, but I may be mistaken...anyone know?

As an outside observer, who is writing these contracts then for the regional partner?? Pinnacle certainly didn't cover the details of specific flying and left themselves exposed in a bad busines contract. If this is the case, appears like DAL wrote something they believe is airtight, Why? They dropped Mesa, Mesa gets injunction, DAL obviously believes they will prevail in court against Mesa because they are doing it again and clearly aren't worried about Pinnacle getting an injuction. The DAL lawyers must feel pretty confident about their end of the contract. No excuses in business, ooops, they got us on that one stuff.
I hope you all do OK, but sounds like management signing off on a poor contract and DAL knows exactly what they want. Pilots scrogged by bad management.

the reason i say smoke and mirrors is because of this. we have 16 crj 900's we have bought painted in delta colors on their way. i am sure if we went to nwa with our own planes they could find some use for them since it is legal under the contract we have with nwa. then at the end of the year we when dal/nwa merge we will once again be flying for delta, and will still have our planes in dal colors. so they terminate the contract we have with them (which i don't think will happen) but in the end we will still be flying for them, just maybe not out of ATL.

I hate to see any pilot lose their job. Best of luck to everyone at Pinnacle.

That being said, I truly do not believe that Delta would be doing this if they did not feel that they would be successful in the process. Again, good luck to everyone at Pinnacle. I personally know lots of pilots over there!

Airsupport -- you should kick it down a notch just a bit. Noone is pointing fingers at you or trying to rub anything in your face. Good luck, guy. Nevermind, I see you edited your original post.

trust me my friend i am not getting riled up over this. i don't fly the 900, i don't live in atl, and i am getting up in the seniority list so i am not "too" worried about being furloughed, (there are about 800 pilots below me). i was just correcting the guys who kept saying that delta owned the planes.

and i dont think anyone is going to lose their job over this. we only have 72 pilots in atl.

Isn't it funny that our company...as we speak...are in contract talks...I smell a TA coming...hope I didn't jinx anything!!!

You heard it first here folks!!!

I don't know, I hope that works out. But DL/NW management are already in bed together. If DL wants Pinnacle out, I highly doubt it would then let it's future merger partner to go and make their own deal (unless it's extremely favorable to the airline).

What we can all take away from this is that NO regional carrier is safe right now. Everyone, even the financial sector/investors, thought Pinnacles deal was rock solid and DL would never touch it. Delta knows what they're trying to do(at least they should...) and I cannot see them making these decisions (which could end up financially backfiring BIG TIME) unless they're extremely confident in an outcome in their favor.

I can't believe that everyone says they didn't see this coming.

IT ROLLS DOWN HILL!!!

This is just the start. The majors and legacy carriers have been hammered by fuel and they honsetly believe that they can't raise prices anymore with out parking more aircraft and reducing thier OWN companies even further.

you are right no one is safe. and everyone like you said thought that we were the safest.. oh well i will just keep going to work as little as possible till they finally say my services are not required.

yeah it is kind of interesting that they are negotiating right now as we speak as this comes down the pipe. i heard things went good yesturday, so hopefully tonight we hear something... and yes you better not have jinxed it!!! :p

I am hearing this happened in part because the New DAL (NWA/DAL) will have dc9's flying out of atl to replace a bunch of regional jets with the upcoming capacity reductions. Good luck guys we all will need it with the upcoming changes to our industry.

Look at this from NW/DL perspective....I would have to wonder....is DL contract with PNCL cheaper or is NW with PNCL cheaper....the smart thing for DL/NWA is to cancel the most expensive one right?!?! Ok say PNCL rolls those 900's into NW operations then they are under a cheaper and more efficent contract for both DL/NWA....so this could all mean is that NWA/DL are shuffling this around to make things more streamline....per say

Hey you learn something new everyday right?:cool:

To be totally honest I just didnt care enough to research.

If that would be the case, congrats for mainline pilots. Any time a major will take away regional flying and give it back to you guys the better. -900 is a joke that is replacing you DC-9 flying anyways.

ha... interesting thought... sounds like more smoke and mirrors to me!

lets just all enjoy the pizza party they are having tomorrow for our STELLAR performance!! LOL

Tper which way do you really feel? you posted this just yesterday...
"I feel pretty good with 2,000 pilot jobs guaranteed for the next 7 years here."

You waffle more than the Clintons! :)

dont have time to read all of the posts, so it might have been said. But if that is true (or if it happens) it explains why comair is madly hiring.

Nope Trenary is working on a press release saying they are going to Colgan :rolleyes: Then he is gonna tell the pilots "whoever wants to fly these for $50/hour can have them......"

we have 2,800 pilots right now, so that would make my point valid. I was stating we could very much be a 2,000 pilot airline next year if things keep getting worse.

you think they could paint the 900's that fast to pput em in the NWA system then turn em around and paint em Delta again a few months later?

I've never heard getting an injunction as being spanked. It just means you can't cancel the contract until the matter is decided in court. It will be a while before that happens so don't be so quick to toss Delta over your knee and get the spanking hand ready!