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.
(Logo: http://photos.prnewswire.com/prnh/20110112/CL29411LOGO
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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."
In conjunction with the filing, Pinnacle has received a
commitment for secured super-priority debtor-in-possession
financing ("DIP Financing") from Delta Air Lines, Inc. in the
amount of $74.3 million. Following
Court approval, $44.3 million will be
used by Pinnacle to repay a secured promissory note held by Delta.
The remaining $30 million in DIP
financing, combined with cash generated by Pinnacle's ongoing
operations, will be available to help ensure that Pinnacle has
sufficient liquidity to meet its operational and restructuring
needs.
Pinnacle has filed a series of customary motions with the Court
seeking to ensure the continuation of normal operations, including
requesting Court approval to continue to pay employee wages,
salaries and benefits without interruption and to pay suppliers for
fuel and other goods and services provided after the filing
date.
Pinnacle noted that it previously filed withdrawal notices with
the U.S. Department of Transportation (DOT) for all of the
Essential Air Service (EAS) markets currently served by Colgan Air,
a Pinnacle subsidiary. Pinnacle has asked the DOT to establish an
accelerated process to identify replacement carriers for the EAS
markets it serves, which are currently served by Saab 340
aircraft.
The remaining Saab 340 fleet that Colgan operates for United
Express will be wound down over the next several months, with these
operations projected to end by Aug. 1,
2012. Similarly, Colgan's Q400 aircraft operations
will be wound down by Nov. 30,
2012.
More information about Pinnacle's restructuring is available
online at www.pinnaclerestructuring.com. Court filings and claims
information are available at
http://dm.epiq11.com/PinnacleAirlines.
Davis Polk & Wardwell LLP and
Akin Gump Strauss Hauer & Feld LLP are serving as the company's
legal advisors in the restructuring. Barclays Capital and Seabury
Group LLC are serving as financial advisors.
About Pinnacle Airlines Corp.
Pinnacle Airlines Corp. (NASDAQ: PNCL), a $1 billion airline holding company with 8,000
employees, is the parent company of Pinnacle Airlines, Inc. and
Colgan Air, Inc. Flying as Delta Connection, United Express and US
Airways Express, Pinnacle Airlines Corp. operating subsidiaries
operate 199 regional jets and 62 turboprops on more than 1,540
daily flights to 188 cities and towns in the United States, Canada, Mexico and Belize. Corporate offices are located in
Memphis, Tenn., and hub operations
are located at nine major U.S. airports. Visit www.pncl.com for
more information.
Forward-Looking Information
This press release contains "forward-looking statements." These
statements are based on management's current expectations and
assumptions, and as such involve a number of risks, uncertainties
and other factors that could cause actual results to differ
materially from those that the Company now anticipates -- both in
connection with the Chapter 11 filings the Company is announcing
today and the Company's business and financial prospects.
Statements of management's expectations, including its desire to
successfully restructure in order to return the Company to long
term viability and financial strength, to compete effectively in
the marketplace, to cut costs and to restore profitability, are
based on current assumptions and expectations. No assurance can be
made that these events will come to fruition. Readers are referred
to the documents filed by the Company with the Securities and
Exchange Commission, which further identify the important risk
factors which could cause actual results to differ materially from
the forward-looking statements in this release. The Company
disclaims any obligation to update any forward-looking
statements.
Contacts
Media:
Joe Williams
Pinnacle Airlines Corp.
901-346-6162
mediarelations@pncl.com
Michael Freitag / Nick Lamplough
Joele Frank, Wilkinson Brimmer
Katcher
212-355-4449
Investors:
Ron Kay
901-344-5705
investorrelations@pncl.com
SOURCE Pinnacle Airlines Corp.