Pinnacle Files for Bankruptcy

[Mesabi Miner]

Mechanics report that "lots of engine changes" on the Q400s are being performed. And we all know why "lots of engine changes" occur.

MM

 

[25or6to4]

the Q returns really caught me off guard. I was expecting a SAAB wind down. but not this.
I heard they're starting a new Macon-Albany-Toronto service.

 

[i fly boxes]

can someone explain the engine change thing to me? I mean the plane comes with engines when you buy it, so unless they fail or time out why would they change them. Our Q's are pretty new. How long is the engine life on a Q 400?
Im ignorant about all this

Also about the q lease returns - We were leasing one or two while the planes were going through modifications for first class. Now that that is on hold is this just returning those planes? Also we had sold 2 q's and leased them back, could those be the ones as well? Im throwing out suggestions before everyone thinks they are all getting parked.

 

[Indy319FA]

can someone explain the engine change thing to me? I mean the plane comes with engines when you buy it, so unless they fail or time out why would they change them. Our Q's are pretty new. How long is the engine life on a Q 400?
Im ignorant about all this

Also about the q lease returns - We were leasing one or two while the planes were going through modifications for first class. Now that that is on hold is this just returning those planes? Also we had sold 2 q's and leased them back, could those be the ones as well? Im throwing out suggestions before everyone thinks they are all getting parked.

Engines get changed and swapped out. Usually when leases are cancelled in bankruptcy the aircraft will go to company maintenance and all the MELs are fixed and depending on the lessors demands the original engines will be placed back on the aircraft. Most will want the original engines. In a CH 11 all of this is usually done by company maintenance then the aircraft is flown back to the lessor or to storage. If the company shuts down in bankruptcy then the aircraft are usually flown to a contract maintenance facility to have this work performed.

 

[bri5150]

Engines get changed and swapped out. Usually when leases are cancelled in bankruptcy the aircraft will go to company maintenance and all the MELs are fixed and depending on the lessors demands the original engines will be placed back on the aircraft. Most will want the original engines. In a CH 11 all of this is usually done by company maintenance then the aircraft is flown back to the lessor or to storage. If the company shuts down in bankruptcy then the aircraft are usually flown to a contract maintenance facility to have this work performed.

Bankruptcy has nothing to do with it. The planes need to returned with original engines. All the Mesaba Saabs went through the same thing and we weren't in bankruptcy.

 

[Indy319FA]

Bankruptcy has nothing to do with it. The planes need to returned with original engines. All the Mesaba Saabs went through the same thing and we weren't in bankruptcy.

Never said lease returns only occur in bankruptcy. What I said was lessors generally want original engines on the aircraft and this is usually done by the company before aircraft are returned depending on the conditions of the bankrutpcy. In the Fly I debacle, most were returned with original engines but a few were not and some had to be performed by outside MX when the company shut down. All depends on the conditions of the company.

 

[WMUSIGPI]

Yup same thing happened when the Avros got parked several years ago. That was a LOT of engine swapping.

 

[suupah]

Pncl ch 11

http://finance.yahoo.com/news/pinnacle-airlines-files-chapter-11-030000890.html

 

[SiuDude]

And not an April fool's joke either.

 

[On Your Six]

From the above article:

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.


That's not good. Delta did give $74 million for DIP financing, though. Although, according to the bottom article, this is what it will be used for:


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.



I don't get it. They get $74 million from Delta, and $44 million of that is used to repay a secured promissory note held by Delta?




Godspeed!


The OYSter

 

[suupah]

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.
More information about Pinnacle's restructuring is available online at www.pinnaclerestructuring.com. Court filings and claims information are available at http://dm.epiq11.com/PinnacleAirlines.
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 - News), 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 www.pncl.com 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.

 

[DoinTime]

Here comes about 800 furloughs.

 

[suupah]

From the above article:

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.


That's not good. Delta did give $74 million for DIP financing, though. Although, according to the bottom article, this is what it will be used for:


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,




Godspeed!


The OYSter

how much you want to bet many 50 seaters will be shed. This was all engineered!

 

[piav8r]

So what happens in the case of a catastrophic engine failure or engine damage???? Just say $hit guess you don't get the original engine back???

 

[DoinTime]

how much you want to bet many 50 seaters will be shed. This was all engineered!

Ok. Maybe 1500 furloughs.

 

[goahead]

Nah not at 9E, gonna shred all the contracts and become the lowest cost regional and take GoJet head on for all the regional flying, resulting in furloughs everywhere else.

 

[silver02ex]

Here comes about 800 furloughs.

Lots of FO's will jump ship by the time all the Q's and Saab are gone, so I doubt it will be that many.

 

[79%N1]

Nah not at 9E, gonna shred all the contracts and become the lowest cost regional and take GoJet head on for all the regional flying, resulting in furloughs everywhere else.

Probably this.....^^^^^^^^^^^

 

[Flyer1015]

Saabs all gone, Qs all gone by November, and according to a Pinnacle update memo/FAQ, the ATL original CRJ-900s are gone starting Jan 2013.

 

[suupah]

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.

this from the memo to cjc employees