Pinnacle Airlines Corp. (
Q4 2010 Earnings Conference Call
February 17, 2011, 3:00 pm ET
Brian Hunt – VP, Chief Compliance Officer, General Counsel, Assistant Secretary
Phil Trenary – President and CEO
Peter Hunt – CFO and VP
Steven Li – Raymond James
Helane Becker – Dahlman Rose
Bob McAdoo – Avondale Partners
Previous Statements by PNCL
» Pinnacle Airlines Management Discusses Q3 2010 Results - Earnings Call Transcript
» Pinnacle Airlines Corp. Q2 2010 Earnings Call Transcript
» Pinnacle Airlines Corp. Q1 2010 Earnings Call Transcript
» Pinnacle Airlines Corp. Q4 2009 Earnings Call Transcript
Good day, ladies and Gentlemen. And welcome to the Fourth Quarter 2010 Pinnacle Airlines Corp. Earnings Conference Call. My name is Alicia, and I'll be your operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions)
As a reminder, this conference is being recorded for replay purpose. Today’s host will be Phil Trenary, President and Chief Executive Officer of Pinnacle Airlines Corp.
Before we begin, I would like to turn the call over to Brian Hunt, Vice President, General Counsel. Please proceed.
Thank you, Alicia. Good afternoon, everyone. And welcome to the fourth quarter 2010 earnings conference call of Pinnacle Airlines Corp. On behalf of the more than 7500 Pinnacle employees, I would like to thank you for your interest in our company.
This call is being presented live over the internet via webcast from our website www.pncl.com. It will also be available on our site for 30 days after this call.
Our presentation will contain various forward-looking statements that are based on management’s beliefs as well as assumptions made by and information currently available to management. Although, we believe that the expectations reflected in such statements are reasonable, we can give no assurance that such expectations will prove to have been correct.
Such statements are subject to certain risks, uncertainties and assumptions, including those set forth in our filings with the Securities and Exchange Commission. These filings are available to investors at our website or online from the Commission. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove erroneous, actual results may vary materially from the results that were anticipated or projected.
The company does not intend to update these forward-looking statements before its next required filing with the SEC.
I will now turn the call over to Phil Trenary, our President and Chief Executive Officer.
Thanks, Brian and good afternoon, everyone. And welcome to the fourth quarter call of Pinnacle. I will start out with some very good news and everyone on the call will be the first ones to actually hear it.
We'll have our release going out a bit later this afternoon but our pilots at all three carriers, Pinnacle, Mesaba and Colgan have ratified the tentative agreement that we agreed on. So we expect to sign that agreement later today and as indeed very good news. It lets us have a five-year industry standard contract; it's a very competitive contract and will help out tremendously as we focus on integration plan going into 2011.
In the fourth quarter we did have some early deliveries on the Q400, Peter is going to discuss the negative impact that had here in just a minute. We now have 22 aircraft on a certificate with the remaining eight firm that remain to be delivered and it's important to remember that this is a very strong part of our strategy going forward. We believe this aircraft is going to remain in high demand and will be a big part of Mesaba going forward.
We did have some difficult winter weather and continued to have in the first quarter. I've been doing this 27 years and this is by far the most difficult three-month stretch we've had. The weather is actually giving us a little break now but the last part of December, January and into the early part of February did provide some challenges for us.
It's important to remember that Pinnacle has a very complex network, by far the most complex of all of the Delta Connection carriers and we have a lot of concentration in the Northeast, the Detroit hub tying up to LaGuardia, Kennedy, to a less degree Indianapolis, all this ties together. So we have a network that can be severely impacted when you have unusual weather pattern like we've had.
Mesaba continued to perform very well and continues to be accretive for shareholders. It's doing as well as we thought it would do and perhaps a little bit better. One of the things that was completed in the fourth quarter was a work of our takeoff teams and if you remember the takeoff teams are the groups we put together to actually develop the foundation for the integration plan to bring the three carriers into two, where we’ll wind up with all of the jet aircraft at Pinnacle Airlines and all of the turboprop aircraft at Mesaba Airlines.
We had nearly 600 employees participate in this, any time you have an integration, in this case we have a transfer of assets at one carrier, a merger of two other carriers, it's very important to get it right, both from an operations standpoint and from a cultural standpoint. We actually took their work and turned that into the integration plan. That integration has been submitted to the FAA.
By doing that you'll start to see some synergies in 2011 and we don't expect to see the carriers fully integrated until early to mid 2012. I think the best way to look at it with the – bringing the three carriers together, once the integration plan is complete, the two remaining carriers will be more profitable than the three independent carriers today and that's if we did nothing at all.