Pinnacle now worried about Northwest---article

[General Lee]

Pinnacle Worries About Northwest Contract
Lisa LaMotta, 06.10.08, 6:45 PM ET

Peltan/charts.prophet.net/servlet/Charmbol=DAL&price.display=0&duration=5d&interval=5&frequency=0&width=162&height=120&service=fo
Delta Airlines is too busy worrying about fuel woes to play nice.
Delta has been running into a slew of trouble as it tries to consolidate. The legacy carrier has not only been cutting its own capacity, but trying to terminate contracts with its regional carriers; pushing those carriers to the brink of bankruptcy and beyond.
The Atlanta-based airline notified Pinnacle Airlines (nasdaq: PNCL - news - people ) on Tuesday that it would be terminating its contract as a Delta Air Lines (nyse: DAL - news - people ) affiliate due to an inability to meet minimum arrival time.
Shares of Pinnacle dropped 25.8%, or $1.54, to $4.44by the close of trading. Meanwhile, Delta was off 2.6%, or 16 cents, to $5.93. Neither Delta nor Pinnacle returned calls for comment.
The smaller carrier countered, saying Delta's termination of the contract is "wrongful" based on the notion that Delta establishes the company's operational scheduling and therefore is partly responsible for the airlines on-time performance.
"We are extremely surprised and disappointed that Delta is attempting to take this drastic and improper action," said Phil Trenary, Pinnacle's chief executive. "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 could face the same fate as its regional brethen.

The biggest problem for the smaller carrier may be what this terminated contract will mean for the contract Pinnacle has with its largest customer, Northwest Airlines. Delta is set to merge with Northwest pending regulatory approval and could the merge could bring cloudy skies for Pinnacle.
"At this time, we have no plans to change our relationship with Pinnacle as a Northwest Airlink partner," a Northwest spokeswoman told the Associated Press.
Earlier in the month, a Federal judge blocked the major carrier from ending a contract with Mesa Air Group (nasdaq: MESA - news - people )'s subsidiary Freedom Airlines. Delta notified Freedom Airlines of the termination of the 50-seat, 34 aircraft Delta Connection operating agreement due to operational performance at the end of March. The company told a Federal judge that it wouldn't be able to pay bondholders and would default on aircraft leases if the contract was canceled. (See: " Mesa + Delta = Big Mess")
Delta , which plans to merge with Northwest Airlines (nyse: NWA - news - people ), said it would cut 2,000 jobs through voluntary retirement and reduce its 2008 domestic capacity by 10% year over year. (See “ Delta, Northwest Fall From The Sky”)
Other regional airlines are having better luck. ExpressJet recently turned down a $3.50 per share offer from SkyWest when it retained a new seven-year agreement to provide regional service for Continental Airlines, guaranteeing stable income for the small carrier for the foreseeable future. ExpressJet will continue flying 205 jets for Continental. The legacy carrier said their new deal, which will take effect July 1, includes lower rates that are more competitive with other regional carriers.



You never know. There may be a plan out there to have a select few regionals fly for the "new Delta". MEM and CVG may be gone EVENTUALLY or downsized (more likely I bet), and Comair may be the second airline at DTW. It will get interesting, no doubt.


Bye Bye--General Lee

 

[Inconceivable]

There is nothing in this article that supports the headline.

Not a fan of any of the players involved, just being objective.

 

[Cpt Oveur]

Can anyone comment on Pinnacle's performance on the NWA side? Is it as bad as their Delta Connection flying?

 

[Lazy8]

Pinnacle's NW Airlink performace is great.

 

[EMB170Pilot]

time for the weak to die already

 

[Hobit]

time for the weak to die already

You mean Delta?

 

[Hollywood82]

Could, would NWA use the drunk and naked PNCL crew as a reason to terminate their contract? I believe NWA was mentioned in the news. I know it's far fetched, just curious if it's a possibility.

 

[Rook]

Could, would NWA use the drunk and naked PNCL crew as a reason to terminate their contract? I believe NWA was mentioned in the news. I know it's far fetched, just curious if it's a possibility.

Yeah pretty far-fetched

http://www.cnn.com/2007/US/04/15/pilot.cocaine/index.html

http://news.enquirer.com/apps/pbcs.dll/article?AID=/20080603/NEWS0107/306030125/1056/COL02

A lot worse has happened (re 3701).

 

[Hollywood82]

Yeah pretty far-fetched

http://www.cnn.com/2007/US/04/15/pilot.cocaine/index.html

http://news.enquirer.com/apps/pbcs.dll/article?AID=/20080603/NEWS0107/306030125/1056/COL02

A lot worse has happened (re 3701).

I guess your right, This is the first I ever heard of the NWA guy on coke.

 

[ReverseSensing]

You never know. There may be a plan out there to have a select few regionals fly for the "new Delta". MEM and CVG may be gone EVENTUALLY or downsized (more likely I bet), and Comair may be the second airline at DTW.

You've apparently forgotten your history. The whole reason Delta is using a whole portfolio of Connection carriers is so that if labor unrest results in work-to-rule or a strike, Delta will not have all their eggs in one basket...again.

I bet the combined Delta/Northwest will have have 8-10 regional "partners." And the strong regionals will strive to have as many mainline "partners" in their portfolios as possible, for the obvious reason that they have to be wary of their mainline "partners" playing fast and loose with their agreements, as is apparently happening to Pinnacle.

 

[flyf15]

If I worked for Pinnacle, I would be demanding to know from senior management over there what they plan on doing to ensure that Delta doesn't cancel their Northwest contract too once the merger is complete.

From what I've heard about Pinnacle, their management is totally incompetent and incapable of controlling their performance and if things work out good or bad for a given month is pure luck. Thats not how you run an airline, but it is how to make an airline go out of business. Its time for them to stop blaming their employees, weather, bad luck, etc and for them to realize they are the ones responsible for the airline and to take the blame.

You guys need new leadership. Competent leadership that can successfully run a business.

 

[Crash Pad]

Yeah "demand" that management learns to write a rock solid contract.

I asked a lawyer about this whole contract violation thing. They said... "make no mistake Delta has more money and better lawyers... they have a way to get out of all these contracts". None of us are safe. Hope for the best.

 

[airdog]

From Pininacle Web Site:

MEMPHIS, TN, May 08, 2008 (MARKET WIRE via COMTEX News Network) -- Pinnacle Airlines Corp. (NASDAQ: PNCL) ("the "Company") today reported first quarter 2008 net income and fully diluted earnings per share ("EPS") of $2.7 million and $0.15, respectively. The Company's net income and EPS were $9.4 million and $0.38, respectively, for the first quarter of 2007. They're making money!
The Company's financial performance for the quarter was negatively affected by two primary issues. First, Colgan Air, Inc. ("Colgan"), the Company's turboprop aircraft operating subsidiary, recorded an operating loss of approximately $5 million. The loss is almost entirely caused by recent significant increases in fuel costs affecting the entire airline industry. Colgan's average cost per gallon of fuel increased 54% as compared to the first quarter of 2007, adding approximately $3.9 million in fuel costs. Colgan's financial performance is also affected by seasonal changes in demand, with unit revenue typically weaker in the first quarter each year as compared to the second and third quarters.
Second, the operating performance of Pinnacle Airlines, Inc. ("Pinnacle"), the Company's regional jet operating subsidiary, was below incentive levels contained in Pinnacle's Airline Services Agreement ("ASA") with Northwest Airlines. Specifically, to obtain full payment for regional airline services provided under the ASA, Pinnacle is required to maintain certain levels of completed flights, on-time performance, mishandled baggage performance, and customer complaints over six month periods from January 1 to June 30 and July 1 to December 31 of each year. During the first quarter of 2008, Pinnacle's operating performance was affected by severe winter weather and by an increase in the number of operational maintenance events. As a result, Pinnacle's completion factor, on-time performance, and customer complaints fell below the incentive standards contained in the ASA. The Company recorded a $2.5 million performance-related reduction of revenue as an estimate of what it might owe to Northwest related to the first quarter of 2008. The ultimate amount that the Company will owe Northwest will not be determined until after the six month performance period ends on June 30, 2008. The Company has also estimated that Pinnacle's operating income was reduced by approximately $2 million because of lost revenue associated with cancelled flights and increased interrupted trip and passenger re-accommodation costs related to the higher level of cancelled and delayed flights. Pinnacle's operating performance is still well above minimum required standards in the ASA.
Pinnacle's operating performance has improved significantly during April 2008. Pinnacle may record a similar or smaller reduction of revenue during the second quarter of 2008, depending on Pinnacle's operating performance during the second quarter and the ultimate amount owed to Northwest for the six month performance period ending June 30, 2008. Whoops

 

[Smacktard]

If I worked for Pinnacle, I would be demanding to know from senior management over there...

I'm sure you'd show them!

 

[Smacktard]

Duplicate...

 

[Texx]

If I worked for Pinnacle, I would be demanding to know from senior management over there what they plan on doing to ensure that Delta doesn't cancel their Northwest contract too once the merger is complete.

From what I've heard about Pinnacle, their management is totally incompetent and incapable of controlling their performance and if things work out good or bad for a given month is pure luck. Thats not how you run an airline, but it is how to make an airline go out of business. Its time for them to stop blaming their employees, weather, bad luck, etc and for them to realize they are the ones responsible for the airline and to take the blame.

You guys need new leadership. Competent leadership that can successfully run a business.

That's a good one. You demanding from management.

 

[ohplease!]

I believe I remember the same issues with Pinnacle/NW from '07 &'06 as well....long history of ineptitude from Pinnacle....your days are numbered.

This is one of those RARE times I have to agree with GL. Once the merger is complete, Comair-Skywest-ASA-Shuttle-mesaba/compass look to be in pretty good shape. All others are in trouble.

 

[Draginass]

The real story is that the RJ is DEAD economically.

 

[~~~^~~~]

Which one?

Dragin - you can't be that simplistic. Just in the CRJ fleet one version has numbers that are 44% better than the other. Just as there is a difference between a DC9-30 and a MD90.

ALPA's been screwing up scope. Fuel prices will not buy back what mainline sold. Section 1 still matters.

 

[Superpilot92]

Which one?

Dragin - you can't be that simplistic. Just in the CRJ fleet one version has numbers that are 44% better than the other. Just as there is a difference between a DC9-30 and a MD90.

ALPA's been screwing up scope. Fuel prices will not buy back what mainline sold. Section 1 still matters.

I think it can be fair to say the CRJ100-200s. The 50 seater is on the way out the door. The only reason why the 50 seater is viable at XJT and CAL is because of the CAL scope language. CALs scope language is the best in the industry right now as far as legacy's go. No "jets" over 50 seats are allowed to be flown by anyone other than a CAL pilots. SCOPE is a huge issue and hopefully the joint contract will tighten the scope language at the new DAL. We'll see

 

[ChickenSled]

I believe I remember the same issues with Pinnacle/NW from '07 &'06 as well....long history of ineptitude from Pinnacle....your days are numbered.

This is one of those RARE times I have to agree with GL. Once the merger is complete, Comair-Skywest-ASA-Shuttle-mesaba/compass look to be in pretty good shape. All others are in trouble.

I could argue that ASA has a long history of ineptitude. Actually I don't need to argue, I can just use two words. (Joe Merchant)

As an Auburn Alum, I respectfully ask that you remove your Avatar. I think I can safely assume that with the intelligence you display here you are not an Alum, merely a fan.

P.S. I really enjoyed your "leave the keys to the 900's on the seat" comment in the other thread. Another fine display of your ignorance. May I ask a question, does it not hurt getting your neck to look all red like that?

 

[ohplease!]

I could argue that ASA has a long history of ineptitude. Actually I don't need to argue, I can just use two words. (Joe Merchant)

As an Auburn Alum, I respectfully ask that you remove your Avatar. I think I can safely assume that with the intelligence you display here you are not an Alum, merely a fan.

P.S. I really enjoyed your "leave the keys to the 900's on the seat" comment in the other thread. Another fine display of your ignorance. May I ask a question, does it not hurt getting your neck to look all red like that?

I could argue that any/all airlines Harv a long history of ineptitude in management (with the exception of Southwest and Virgin).

You know what happens when you assume, right? It makes an ASS (of) U (&) ME. You should never assume anything. simply because you graduated from a particular school does not necessarily give you any more claim to that school than a mere "fan".

The "key" comment was tounge in cheek. As you know (or should) there are no keys to those planes.

And finally; no it doesn't hurt a bit. I'm very proud to be a redneck southerner. You keep believing that southern rednecks are inferior to you, if thats what helps get you through the days.

War Eagle. bitch.

 

[lindsaya99]

Roll Tide!

 

[PCL_128]

I believe I remember the same issues with Pinnacle/NW from '07 &'06 as well....long history of ineptitude from Pinnacle....your days are numbered.

PCL could never dream of matching ASA's level of ineptitude. Has ASA ever gotten a flight out on time from the C concourse?

 

[TOOL CRIB]

PCL could never dream of matching ASA's level of ineptitude. Has ASA ever gotten a flight out on time from the C concourse?

I've been 100% on time for the past month now... usually 5-10 min early

 

[USCtrojan]

PCL could never dream of matching ASA's level of ineptitude. Has ASA ever gotten a flight out on time from the C concourse?

How ignorant can you be? Have you not paid any attention to what has been transpiring at ASA in the last 5 mo? It's rare to be late these days. Especially the fact we operate over 900 flights a day, our performance is OUTSTANDING. So much so it got the attention of DB, Delta's main man overseeing Connection (wrote a letter to all of ASA stating we have the attention of the Board because of our performance.) We are in the beginning stages of a complete overhaul. Delta is very happy with our product (which is why we are in MCO). My guess it will continue. You may want to get current on events at ASA before making general ignorant statements.

Trojan

 

[PCL_128]

How ignorant can you be? Have you not paid any attention to what has been transpiring at ASA in the last 5 mo? It's rare to be late these days. Especially the fact we operate over 900 flights a day, our performance is OUTSTANDING. So much so it got the attention of DB, Delta's main man overseeing Connection (wrote a letter to all of ASA stating we have the attention of the Board because of our performance.) We are in the beginning stages of a complete overhaul. Delta is very happy with our product (which is why we are in MCO). My guess it will continue. You may want to get current on events at ASA before making general ignorant statements.

Trojan

Yes, I know things have improved. The point, however, is that maybe some of your more arrogant pilots (ohplease!, for example) should think back to just a year ago and the many years prior to that when it was almost unheard of for a flight to depart on time out of ATL. The drooling over PCL's lost flying that I see some of the posters doing here is disgusting.

 

[ChickenSled]

You know what happens when you assume, right? It makes an ASS (of) U (&) ME. You should never assume anything. simply because you graduated from a particular school does not necessarily give you any more claim to that school than a mere "fan".

Actually it does. I get season tickets in section 30 row 4 for the low low price of $439 a season. Where do you sit? Seriously though, this is all in good fun, so PM me, there are probably a few weekends I can't make it this year, I'll sell them to you on the cheap.

The "key" comment was tounge in cheek. As you know (or should) there are no keys to those planes.

Actually, there is a key in the little bag where the CB collars are in behind your seat. I don't know where to stick it, but I know where I'd like to stick it.

And finally; no it doesn't hurt a bit. I'm very proud to be a redneck southerner. You keep believing that southern rednecks are inferior to you, if thats what helps get you through the days.

Son, I spit chawl bigger than your little nuts while I'm over raping the neighbors goats and tearing down his fence. You are a discredit to the redneck race. I'm not talking down to you, I'm screaming right at you through my enormous pile of beer cans, which I call Mt. Earnhart. Thats how I get through my days.

I bet you can't even play a banjo?

 

[ohplease!]

Actually it does. I get season tickets in section 30 row 4 for the low low price of $439 a season. Where do you sit? Seriously though, this is all in good fun, so PM me, there are probably a few weekends I can't make it this year, I'll sell them to you on the cheap.



Actually, there is a key in the little bag where the CB collars are in behind your seat. I don't know where to stick it, but I know where I'd like to stick it.



Son, I spit chawl bigger than your little nuts while I'm over raping the neighbors goats and tearing down his fence. You are a discredit to the redneck race. I'm not talking down to you, I'm screaming right at you through my enormous pile of beer cans, which I call Mt. Earnhart. Thats how I get through my days.

I bet you can't even play a banjo?

ooo! tough guy. How sexy....$439 wow. thats a great deal.....glad to see you're not paying much for those ********************ty seats. Man what a bad place to be...unless you like to watch the PK'er practice or read the names on the back of the jerseys. You can't even see the whole field from lower than row 15 or so.

 

[Tarzan]

Son, I spit chawl bigger than your little nuts while I'm over raping the neighbors goats and tearing down his fence. You are a discredit to the redneck race. I'm not talking down to you, I'm screaming right at you through my enormous pile of beer cans, which I call Mt. Earnhart. Thats how I get through my days.

I bet you can't even play a banjo?

Chickensled, beware the quote.

I know now we've achieved an all new low for FI. An argument over who's neck is redder. I wish the sig line could hold all of that stuff.

However, that there is damn funny. I don't care who ya are!