Pinnacle Emerges from Bankruptcy, Now Owned by Delta
Memphis-based Pinnacle Airlines on Wednesday officially emerged from bankruptcy as a wholly owned regional subsidiary of Delta Air Lines. Under Chapter 11 protection for the past 13 months, the airline underwent an extensive restructuring that saw its fleet shrink from a peak of 291 airplanes to its present complement of 46 CRJ900s and 140 CRJ200s. In the process it closed its Colgan Air unit, ending its relationship with United Airlines and, ultimately, easing the transition to an ownership takeover by Delta.
“We have come a long way since April 1, 2012,” said new president and CEO Ryan Gumm. “Our employees and our airline have weathered difficult changes in order for us to emerge as a competitive regional airline. Our focus is now on becoming a single, cohesive airline, while reshaping our workforce and fleet.”
The centerpiece of the restructuring plan took the form of a new deal with Delta to lease another 40 dual-class Bombardier CRJ900s, an order for which it placed last December.
Plans call for Pinnacle to receive 14 of 40 regional jets this year, starting in September, and take the remaining 28 by the end of next year, giving it 81 in total. First, it plans to shed the remaining five of 16 CRJ900s it operated under a “legacy” contract with Delta from the fleet by May 5, leaving it with the 41 it acquired with its purchase of Mesaba Airlines in July 2010.
Pinnacle also plans to remove all of its 140 fifty-seat CRJ200s from operation “over the next two or three years” as part of Delta’s plan to shed all but 125 of the type from its entire regional network.
While the removal of the 140 CRJ200s will result in a loss of several hundred jobs at Pinnacle, management insisted it saw no other means to avoid a complete liquidation of the company. Now employing 4,900 people, Pinnacle at its peak—before its closure of Mesaba in early 2012 and the subsequent dissolution of Colgan—employed 8,000.
Planning to move its headquarters to the Building C tower at Minneapolis-St. Paul International Airport (MSP) by the end of this month, Pinnacle has begun filling about 250 corporate positions in Minnesota, along with MSP-based slots for mechanics, flight crew schedulers and “at least” 100 flight attendants. It now counts roughly 1,100 Minnesota-based employees, mostly pilots, flight attendants, aircraft technicians, trainers and support staff based at MSP.
With the emergence from bankruptcy, a new officer structure announced March 19 becomes effective. Along with Gumm’s appointment as president and CEO, Barry Wilbur becomes senior vice president and chief operating officer, Loren Neuenschwander becomes senior vice president and chief financial officer and Mike Becker becomes senior vice president and chief administrative officer.
The airline plans to move its headquarters from Memphis to the Minneapolis-St. Paul metroplex by the end of May.