PNCL Files Chapter 11
 

Pinnacle Airlines Files for Chapter 11 Reorganization to Continue Implementing Turnaround Plan

Pinnacle Airlines Corp. (NASDAQ: PNCL) 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.
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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.
More information about Pinnacle's restructuring is available online at Home Page. Court filings and claims information are available at Epiq11 Home.
Davis Polk & Wardwell LLP and Akin Gump Strauss Hauer & Feld LLP are serving as the company's legal advisors in the restructuring. Barclays Capital and Seabury Group LLC are serving as financial advisors.
About Pinnacle Airlines Corp.
Pinnacle Airlines Corp. (NASDAQ: PNCL), a $1 billion airline holding company with 8,000 employees, is the parent company of Pinnacle Airlines, Inc. and Colgan Air, Inc. Flying as Delta Connection, United Express and US Airways Express, Pinnacle Airlines Corp. operating subsidiaries operate 199 regional jets and 62 turboprops on more than 1,540 daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in Memphis, Tenn., and hub operations are located at nine major U.S. airports. Visit Welcome to Pinnacle Airlines Corp. | Located in Memphis, Tenn. for more information.
Forward-Looking Information
This press release contains "forward-looking statements." These statements are based on management's current expectations and assumptions, and as such involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those that the Company now anticipates -- both in connection with the Chapter 11 filings the Company is announcing today and the Company's business and financial prospects. Statements of management's expectations, including its desire to successfully restructure in order to return the Company to long term viability and financial strength, to compete effectively in the marketplace, to cut costs and to restore profitability, are based on current assumptions and expectations. No assurance can be made that these events will come to fruition. Readers are referred to the documents filed by the Company with the Securities and Exchange Commission, which further identify the important risk factors which could cause actual results to differ materially from the forward-looking statements in this release. The Company disclaims any obligation to update any forward-looking statements.

We be Pucked.....

April Fools?

Qs are gone! Saabs are gone! Delta will not control the future of PCL and the pilots as well.

Sorry, nope!

Yep, the way I read is the Colgan side is pretty much done. How many pilots are on the Colgan side now, any idea?

Real deal..

So everyone is going to be a Pinnacle pilot and they are going to all jet service? Or am I not reading that correctly?

you think?

All the saabs gone by 31 Aug and the Q's gone by Nov 30...yeah i'de say Colgan is done...

http://troll.me/images/mac-tonight-damn/dayum.jpg

...sorry to hear that fellas ! :(

Damn guys, best of luck.

How many pilots will be left when this is all said and done? I'm betting they will be asking the court this week for an out of seniority furlough. The training nightmare caused by this mess will cost twice as much as the last cluster. This makes me wonder if United thinks they will be getting scope relief and replacing the Q's with the bigger variety of RJs. Let's hope United leaves Continental scope in place and Delta takes all 50+ seaters to mainline. Exciting times we live in . . . Good luck everyone.

Are they getting rid of the Q's entirely? I thought they wanted more...?

Just some sources fyi.....good luck

Pinnacle Airlines Files for Chapter 11 Reorganization to Continue Implementing Turnaround Plan - Yahoo! Finance

No suprise here!!! I would guess up to 800 furloughs.

So Pinnacle and Eagle will solve the pilot shortage! We are doomed :mad:

Based on the manning in November Pinnacle was so short staffed we could park all the Saabs and not furlough. Parking the Qs will result in furloughs. My guess is around 300 or so. This could have been worse, at least Delta is giving us the money to get through bankruptcy. Without that we'd be looking at liquidation.

Its great to know that our great leader can get a raise, despite not being able to keep the ship afloat...

This industry is sickening... Just when we think we see the light at the end of the tunnel... My condolences guys...

REMEMBER WHO SAID THEY'D WAIT UNTIL END OF MARCH TO FILE? Oh, that's right--it was me.

...as of today, Phil Trenary's golden parachute payment agreement passed the one-year mark, so as of today, the Bankruptcy court cannot forcibly reapprpriate those payments.

This was planned a year ago, around March 29th. Phil got his parachute, they sat out a year until Phil's money was safe from the bk trustee, and now he's home free with his money!

America's corporate monarchy at its finest, ladies n gentleman...capitalism at its finest.

I was gonna ask who it was that predicted that, good job flaps!

The out of seniority order furlough thing will definitely be a hot topic. At least 9E and XJ guys wont have to ***** about the colgan fences much longer. 5 year FO with no upgrade in sight here I come.

With this in mind, are the signing bonuses paid to the pilots from the new contract signed last year in any possible jeopardy?

[HTML]We appreciate all you have done to support our turnaround efforts. Your
hard work, professionalism and talents have given Pinnacle the solid
foundation it needs to complete a successful restructuring. On behalf of
the Board of Directors and the entire Pinnacle management team, thank you
for your ongoing focus and dedication.

Sincerely,

Sean[/HTML]

no prob. lemme know what i can do to help!

No. they can't retroactively take money from us. Plus I already paid taxes on mine :)

But if the judge touches our pay, management's future on-time bonuses.....well....;)

And the 16 original pinnacle 900's. Gone starting January 2013. Oh boy......

Looks like we're losing 74 aircraft by Jan 2013. So plan on roughly 700-800 furloughs over the next year.

where's that at?

Menkes message on our site has a FAQ sheet added

I'm betting some of the 200's will end up parked as well. We could easily see 100+ planes gone from this.

Well, this should reignite the seniority list debacle. Good luck to us all.

Looks like the out of seniority furlough issue is not going to be an issue. The FAQ's is stating that any of the displaced pilots will be able to re-train on any aircraft their seniority can hold.

So what replaces all the Saab's flown out of IAH for L CAL? Nothing? We just drop all of those cities completely? What happens to the new turboprop concourse, the gate agents, the rampers, the FA's, and pilots that operate out of that concourse? Gone?

I'll bet it went something like this...

The Office - I declare bankruptcy! Michael Scott - YouTube

I could see SKW making a play for Horizon, then United getting it's Q400 feed from Horizon. The other option would be RAH.

RAH: Not doing to good (might have a larger pilot pool now from Eagle & Pinnacle)
SKW: Not Making money right now and looks like it will have the most expensive labor moving forward
Eagle: Will get spanked by AMR (Future up in the air, or grounded depends how you look at it)
Pinnacle: Just filled

Are we really going to see SKW and RAH control the regional market moving forward, ladies and gentlemen we are in for an epic summer and not in a good way... I was about to take a break from Eaglelounge and APC. Now I can't :(

http://www.airlinepilotforums.com/re...cle-rumor.html

was true. The personal attacks were uncalled for.

Anyway, no point crying over spilled milk. Good luck to all.

Do you want a cookie? Who cares if you called it or not.

Wow so your the winner! Congrats!! Now can we get back to the fact that an entire airline will be unemployed soon... Glad your so proud of that prediction

NO NO NO! You said JAN 1.


That's like that mayans saying they were right when the world ends in 3908 instead of 2012....