Pinnacle Files for Bankruptcy

[Whataboutbob]

Not yet. Several items menke mentioned were very important - and overlooked by most pilots-

-Delta was the only entity that would provide DIP financing
-Delta swapped 43 mil of secured debt from the mesaba transaction for DIP debt. Why? Delta is listed as a creditor that has supplied 73 mil in DIP financing but it only resulted in 30 mil net cash to PCL.
-Menke stated the price for that was all the Delta contracts are now 'in play'. Translated that means that not only is the contract for the 16 PCL owned 900's gone but in addition the contracts for the remaining 42 900's and the all the 200's have been modified
-Menke stated those contracts may be extended to 2022 provided certian cost reductions are met

Anyone care to guess what those cost reductions are? Anyone that has been around long enough to be familiar with R Anderson and his whipsaw tactics knows what is coming next.

The 74 airplanes announced so far are just the start of this. Unless the remainder of the PCL pilots are willing to agree to big consessions you will see even more AC leave your property.

Someone predicted that in a year PCL will be the size of CMR. I think he's wrong - by a year. It will take two years.

It is part of Delta's strategy to keep all regional pilots at year one pay.

I would agree with you. Anyone that thinks the CRJ200 will scave through this bankruptcy untouched is out to lunch. It might not be as big of # as the 76 announced so far but it could also be more. Time will tell.

There will be a huge whipsaw game played out in this bankruptcy. Has United even officially announced they are cutting ties with Pinnacle?? All the press release stuff I've seen is coming from Pinnacle's end saying its over and winding down. Menke will come to labor and say if we can get to this price point, United will let us keep flying the Q400 for them and as a bonus Delta will let us keep the CRJ900. But unfortunately they want 100 CRJ200's parked. I'm not smart enough to figure out the end game. Who knows. But if Menke wanted 5% from the pilots before bankruptcy I would guess they are now going to ask for 10% in hopes of getting the 5%??

 

[bri5150]

A la Mesaba bankruptcy, fight in court to allow 10% and when judge allows that negotiate for 5% so we can vote between the lesser of 2 evils.

 

[sinkrate]

A la Mesaba bankruptcy, fight in court to allow 10% and when judge allows that negotiate for 5% so we can vote between the lesser of 2 evils.

This time I don't think Delta will be interested in saving the day and buying us for an IPO/spin off. My guess is there will be a much bigger emphasis on paycuts this time around.

 

[Kaman]

The rapid unionization of Colgan, JCBA, Integrated seniority list and compressed realignment were all done in short-order. And while I appreciate their zeal and motivation. Our equally niave and inexperirnced ALPA representatives were drawn down the current road to ruin by a very shrewd Delta board of directors. This has been in the works for a long time, and wouldn't be surprised if PNCL Corp. didn"t cook the books in order to get it past our astute ALPA financial experts. Careful what you as ask for...we got it alright plus interest...

 

[bri5150]

Those "niave and inexperienced" ALPA representatives you talk about got me $13k in my 401k and snapback wages during the last bankruptcy. And that $13k was on the very low end of what most Mesaba pilots got at the time. Many guys actually came out ahead wagewise from the last bankruptcy.

 

[CRJ puppy]

also general, you are wrong, pinnacle owns those 16 900's. for now anyways

Actually, they are "owned" by the lessor.

 

[JustaNumber]

Awww- the pilot solidarity myth angle... a classic opening, but futile. There is no such thing as pilot solidarity.

Agreed. Therefore, mainline jobs will continue to disappear, as the regionals get cheaper and cheaper and cheaper...

 

[IbeFlyenhye]

Here is another good article. Not entirely accurate, but good.

http://crankyflier.com/2012/04/03/pinnacle-files-for-bankruptcy-protection-you-shouldnt-care/

 

[Whataboutbob]

Those "niave and inexperienced" ALPA representatives you talk about got me $13k in my 401k and snapback wages during the last bankruptcy. And that $13k was on the very low end of what most Mesaba pilots got at the time. Many guys actually came out ahead wagewise from the last bankruptcy.

During the Mesaba bankruptcy in 05' most of the low cost carriers and most of the regionals were hiring. The only regional airline furloughing was Mesaba. So you had most guys who wanted out had the opportunity to leave at all levels "Captains going to Southwest, Airtran..." "F.O's going to Skywest..... Thats one thing that will be different this time. You won't have as many Captains leaving from the top of the list as you probably did back in 2005'. I think those First Officers that want to gamble on a latter move will have the opportunity to take a job at another regional while Pinnacle goes through bankruptcy. My memory of some of the biggest winners in that bankruptcy were Captains waiting for class dates for Southwest that got $20-25k deposited into their 401ks right before leaving to greener pastures. Hopefully once management gets what they want ALPA will make sure the pilots leave bankruptcy with some kickers for our contributions.

I agree with you bri5150 that our ALPA reps did a great job in the last bankruptcy. This may be Sean Menke's second airline bankruptcy as CEO but guess what, its not Tom Wychor's first rodeo either. I'm glad he is at the helm of our local ALPA branch for this bankruptcy. Seans got some tuff competition

 

[bri5150]

Yup. This one is different in a lot of ways. I am just sick of peoe spouting off about things they have no idea what they are talking about. Calling our current union reps naive and inexperienced is just a joke.

 

[Flyer1015]

Those "niave and inexperienced" ALPA representatives you talk about got me $13k in my 401k and snapback wages during the last bankruptcy. And that $13k was on the very low end of what most Mesaba pilots got at the time. Many guys actually came out ahead wagewise from the last bankruptcy.

That was Wychor and gang, not JH and gang. Total opposites. And besides, your bankruptcy of 2005 was during a time the aviation industry had a positive outlook in terms of lots of hiring, at the majors and regionals. The economy, cost of oil, all external factors were favorable. Today, it's literally the opposite for every single external factor. I wouldn't count on this bankruptcy to look anything like your last bankruptcy.

This may be Sean Menke's second airline bankruptcy as CEO but guess what, its not Tom Wychor's first rodeo either. I'm glad he is at the helm of our local ALPA branch for this bankruptcy. Seans got some tuff competition

No, Menke doesn't have any competition. Delta will tell Menke what to do, and the bankruptcy court will allow it. You don't think they file for motion 1113 to void the JCBA in bankruptcy? It's already done at Eagle (the initial filing).

 

[Dumb Pilot]

So sorry this is happening, I met some great guys and gals on my time at PCL and made some very good friends there, all the best in this tough times.

 

[doug_or]

I would rather drink my own piss than get a free drink or wing from you.

Well then. Two PBRs for the lovebirds at table eight.

 

[DoinTime]

Actually, they are "owned" by the lessor.

All three of you are wrong. They are "owned" by PNCL with a lien from the mortgage holder. They are not on lease. If PNCL defaults on the loans, then the mortgage holder may repossess them.

 

[Whataboutbob]

That was Wychor and gang, not JH and gang. Total opposites. And besides, your bankruptcy of 2005 was during a time the aviation industry had a positive outlook in terms of lots of hiring, at the majors and regionals. The economy, cost of oil, all external factors were favorable. Today, it's literally the opposite for every single external factor. I wouldn't count on this bankruptcy to look anything like your last bankruptcy.


No, Menke doesn't have any competition. Delta will tell Menke what to do, and the bankruptcy court will allow it. You don't think they file for motion 1113 to void the JCBA in bankruptcy? It's already done at Eagle (the initial filing).

I agree that the bankruptcy laws favor the companies position and they will plead their case to the judge that they need this and that in order to stay in business. You are right the judge will probably allow it since his job is basically to give them what ever relief they need to keep the doors open and the lights on. But I think the union has some cards in their play book as well. It's going to get ugly and the company probably will file a motion to void contracts but they have to bargain in good faith before that. And filing the motion doesn't mean there actually going to use that card. Actually imposing their own terms and voiding contacts is a pretty serious move that even the boldest CEO's have to carefully consider. Neither side wants it to come to that I don't think. It will end up being a show down until the last minute. Maybe the judge will let us walk if Menke imposes terms on us. Who knows how this will all go down. But statistacally in bankruptcy the chips are in the companies favor. I think part of shrinking us down is you end up with the most senior part of the work force still hanging on who are more likely to vote through the payouts to live and fight another day....is it only day 3 of this mess. Feels like a week already.

 

[suupah]

All three of you are wrong. They are "owned" by PNCL with a lien from the mortgage holder. They are not on lease. If PNCL defaults on the loans, then the mortgage holder may repossess them.

ARe we not there yet?

 

[rbav8r]

Tell me how a CEO can run a company into bankrupcy and get a pay raise from $425,000 to $675,000 and then ask the Pilots to take a 9% pay cut when first year pilots are only making $1950 a month - before taxes. Many words come to mind and integrity is not one of them.

 

[WMUSIGPI]

It was not resolved when Mesaba went through the first time,and I am not sure if it ever has been. IF the company does use the 1113c to void the contract and impose terms there is the posibility of immediate release under the railway labor act for self help (strike).

 

[suupah]

It was not resolved when Mesaba went through the first time,and I am not sure if it ever has been. IF the company does use the 1113c to void the contract and impose terms there is the posibility of immediate release under the railway labor act for self help (strike).

that would be awesome! btw did you put that avatar up during the xj bnkrptcy? my gawd i've been at this too long.

 

[Abernathy]

Tell me how a CEO can run a company into bankrupcy and get a pay raise from $425,000 to $675,000 and then ask the Pilots to take a 9% pay cut when first year pilots are only making $1950 a month - before taxes. Many words come to mind and integrity is not one of them.

Menke didn't "run" the airline into bankruptcy. It was already on its way there before your current CEO got there. Trenary and Co. negotiated idiotic rates with your mainline partners and got you where you are today. If you should be ticked with anyone, it should be your former management team. I don't really see how he had a choice. If the airline lost money every time a Q400 left the gate, I don't see how that would have lasted much longer.

As far as how the CEO can get a raise when the company files for Ch.11, I'd imagine it having to do with the fact that very few airline executives are going to go through managing a bankrupt airline making much less, especially one who just went through it with Frontier. Sucks, but that's just how it works.

The whole regional model needs to change otherwise this is going to start happening to all the regional airlines, one by one. The bidding wars and race to the bottom is destroying the industry. The only thing that will fix it is much tighter regulations and something to level out the playing field like minimum wages for pilots based on equipment types. If we're going to be bound by the RLA, then there needs to be better protection for the airline workers. Everytime the price of fuel farts, someone's going bankrupt.

This industry needs heavy regulation.