Latest 9E BK Update
 

A buddy sent this to me.>>>>Hello everyone –As you know, a primary focus of our Chapter 11 process currently isworking to obtain the cost savings necessary for our reorganization andour future.We are working to reduce those costs that we have the ability to control,including facilities, contracts, organization overhead and labor. Over thepast several weeks we’ve had numerous discussions with our labor unions toreach agreement on pay, benefit and work rule concessions. Thosediscussions began with us providing term sheets outlining the specificcost savings we believe are needed.However, there have been new developments since we presented our unionswith those term sheets that require us to pause our discussions while wereformulate our business plan.As many of you know, Delta recently reached a tentative agreement withALPA that includes a provision that could require a significant reductionin the number of 50-seat (CRJ-200 and ERJ-145) aircraft in Delta’snetwork. As we’ve communicated before, 140 of our 181 end state aircraftare CRJ-200s. The same agreement allows Delta to expand its 2-class76-seat regional jets by 70 aircraft as it adds additional mainlineaircraft to its fleet. As you can see, this agreement – if ratified byDelta pilots - presents both a challenge and an opportunity for thisorganization. Clearly our business plan will need to be reformulated inresponse.Delta’s new tentative agreement confirms that the future of our industryand platform for new regional flying is in larger 2-class aircraft typeslike our CRJ-900. In discussions with Delta about how and when theirproposed 50-seat reduction might impact Pinnacle, we also talked about ourCRJ-900 operations.In a nutshell, Delta told us that the bids they’ve received from otherregional carriers on 2-class flying were significantly below what they payfor Pinnacle’s CRJ-900 flying. It’s clear that we are competing withcarriers that have significant cost and pilot seniority advantages overPinnacle.Ultimately, as we look toward the future we must envision a Pinnacle fleetwith far fewer CRJ-200 aircraft. And if we hope to replace those losseswith more 76-seat aircraft, we must reduce our cost structure even morethan originally planned in order to be competitive.It’s important to understand this isn’t just a Delta issue. It’s safe toassume that if competing regional airlines in the Delta network are morecost-effective than Pinnacle, they’re also in a better position to goafter future flying contracts with United, US Airways or any of the othermainline carriers.Our ability to reduce costs is ultimately about our future. Every mainlinecarrier has made it clear that the ever-shrinking pie of new flyingcontracts will be awarded based on which regional provider can offer themost competitive costs. This is evident with Delta in its recent awardingof aircraft growth to GoJet and Compass. From our discussions with Deltawe now know that our current 76-seat cost structure would not allow us toeffectively compete with GoJet or Compass for future growth opportunities.These new developments are the reason we are temporarily suspending labornegotiations while we take time to assess the impact of our recentdiscussions with Delta. Once we reformulate our business plan and identifythe level of additional concessions needed to make it work, we’llcommunicate those details with all parties and return promptly todiscussions with our unions.Like before, all employees – union and non-union, management andnon-management - will participate in the cost savings ultimatelyimplemented. It’s too early to know exactly how our proposed pay andbenefit reductions may change, so I encourage everyone to please let uscomplete our work and not speculate. As soon as we have those details wewill communicate them.I know this isn’t welcome news, but I’d prefer to have this informationnow and deal with it today rather than try to address it after Pinnacleand our labor unions have already completed the hard work of modifying ourlabor contracts.My goal is to provide a secure future for Pinnacle and I firmly believethis is possible. But to be successful we need to have a cost structurethat allows us to compete for growth – specifically with 2-class regionaljets – and currently that is not the case. I’ll keep you updated as webetter understand what needs to be done.John

So they want us to fly larger airplanes for less money?? This is absolutely ridiculous, I was all for working with the company before... But not anymore

and the race to the bottom continues.

That sounds nice

Dear John Spanjers,

NUTS!

Sincerely,

Me

Mainline is single handedly destroying this industry. Pretty soon Delta Airlines will be made up of several different regional carriers flying heavys for $80 an hour. This business is so dysfunctional. What a joke.

I'd hope mainline destroys the regionals. :D

There aren't any "heavy" 76 seaters. :cool:

Most of us that drive the 50 seater affectioniately refer the to 900(76 seater) heavy metal.

Nope. Burn it down.