Pinnacle Airlines Files For Chapter 11 Reorganization To Continue Implementing Turnaround Plan
MEMPHIS, Tenn., April 1, 2012 /PRNewswire/ -- Pinnacle Airlines Corp. (NASDAQ: PNCL) 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.
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."
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