Pinnacle Airlines Reaches Comprehensive Agreements To Provide a Viable Cost
Structure and Path Out of Chapter 11
Long-Term Business Plan Provides for Pinnacle to Operate 81 Two-Class Regional
Jets for Delta Air Lines
MEMPHIS, Tenn., Jan. 3, 2013
MEMPHIS, Tenn., Jan. 3, 2013 /PRNewswire/ --Pinnacle Airlines Corp. (OTC:
PNCLQ) announced today that it and its wholly owned subsidiaries have entered
into comprehensive agreements that, among other things, provide a path forward
for the Company to emerge from bankruptcy with a competitive cost structure
and a viable long-term business plan. Under Pinnacle's new business plan, the
Company will transition its fleet to operate a fleet of 81 fuel-efficient,
two-class regional jets for Delta Air Lines Inc.
The comprehensive agreements among Pinnacle, Delta, the Air Line Pilots
Association, International (ALPA) and the Official Committee of Unsecured
Creditors (Creditors' Committee) in Pinnacle's Chapter 11 cases include:
oAn amendment to the Company's existing debtor-in-possession credit
facility, to provide Pinnacle with $30 million of additional liquidity to
support its continued operation through emergence from Chapter 11 and an
additional $22 million to fund certain required payments to Pinnacle's
pilots under a Bridge Agreement and related employer taxes. The amendment
would also extend the maturity date for the credit facility from April 1
to May 15, 2013.
oAmendments to the existing operating agreements with Delta that form the
basis of the new business plan. Pinnacle will receive Delta Connection's
next 40 CRJ-900 aircraft awarded, setting Pinnacle's long-term fleet plan
at 81 CRJ-900 aircraft. The 40 additional CRJ-900 aircraft deliveries are
planned to begin in the fall of 2013 and are expected to be completed by
year-end 2014. Pinnacle's 140 CRJ-200 aircraft will be removed from
operation over the next two to three years.
oA Bridge Agreement that provides transitional payments, furlough benefits
and specified career opportunities at Delta to Pinnacle's pilots in
conjunction with the recently negotiated letter of agreement between
Pinnacle and ALPA.
oA letter of agreement to amend Pinnacle's collective bargaining agreement
with the ALPA pilots. This letter of agreement and the Bridge Agreement
are subject to ratification by the ALPA membership by Jan. 15, 2013.
oA restructuring support agreement among Pinnacle, Delta and the Creditors'
Committee setting forth certain principal terms for a plan of
reorganization to emerge from Chapter 11. The reorganization plan will
provide for Delta or an affiliate to acquire the equity in the reorganized
Pinnacle Airlines Corp. after it emerges from bankruptcy. Pinnacle must
file a plan of reorganization acceptable to Delta and the Creditors'
Committee by Feb. 15, 2013.
Pinnacle filed motions with the Bankruptcy Court seeking approval of the
various components of the comprehensive agreements. All of the components of
the comprehensive agreements are interdependent and are subject, among other
things, to Court approval.
"The agreements we have reached represent a significant milestone in
Pinnacle's restructuring and provide a clear and achievable path toward
emergence from Chapter 11," said John Spanjers, president and CEO of Pinnacle
Airlines Corp. "Pinnacle will be well positioned to emerge from the bankruptcy
process with a viable business plan that provides meaningful opportunities for
our employees. We are confident that Delta will continue to be a strong
partner and we look forward to working closely together to provide outstanding
service and operating a safe, reliable airline. We also thank our partners,
employees and other stakeholders who have helped us achieve this significant
progress in our reorganization."
Additional information about the comprehensive agreements is available in the
motions filed with the Bankruptcy Court, as well as in a Form 8-K filed by
Pinnacle with the Securities and Exchange Commission.
About Pinnacle Airlines Corp.
Pinnacle Airlines Corp. (OTC: PNCLQ), an airline holding company with 5,100
employees, is the parent company of Pinnacle Airlines, Inc. Flying as Delta
Connection, Pinnacle Airlines, Inc. operates 191 regional jets on 1,000 daily
flights more than 100 cities in the United States and Canada. Corporate
offices are located in Memphis, Tenn., and hub operations are located in
Atlanta, Cincinnati, Detroit, Memphis, Minneapolis and New York. Visit
www.pncl.comfor more information.
Pinnacle Airlines Corp.
Michael Freitag / Nick Lamplough
Joele Frank, Wilkinson Brimmer Katcher
SOURCE Pinnacle Airlines Corp.
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