Pinnacle Airlines Jumps on Morgan Report

However, Pinnacle Airlines' long-term contract with Northwest may also be a curse, limiting its future growth. As Greene points out, Pinnacle isn't scheduled to receive new planes from Northwest after 2005, and a clause in its contract with Northwest would limit its ability to fly planes with more than 59 seats for other carriers. With regional players using 90-seat jets to fuel growth, Pinnacle could be shut out as the regional market expands to fill in gaps in airline service nationwide.

"Northwest is the sole supplier of regional jets to Pinnacle, which subleases the jets from Northwest," said Greene. "Were Northwest to face liquidity issues in the future, it could have negative implications for Pinnacle's earnings, cash flow, ability to continue operating and, therefore, stock price."

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