Bankruptcy judge approves Pinnacle lease rejections on 19 turboprops

Washington DC
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A bankruptcy judge has approved a request by Pinnacle Airlines to reject leases on 19 turboprops as part of the carrier's financial recovery plan.

The order signed on 23 April by judge Robert Gerber requires the five leasing companies involved to retrieve the aircraft within 15 days or face storage fees.

The Memphis-based regional carrier filed for bankruptcy protection on 1 April. Pinnacle also requested approval from the court to receive a $74 million debtor-in-possession loan from Delta Air Lines.

Since then, two investors have criticised Delta's financing proposal, arguing the terms unfairly benefit Delta at the expense of Pinnacle's other creditors. A scheduled hearing to address questions about the loan has been postponed from 25 April to 16 May.

A major element of Pinnacle's financial recovery plan is to wind down turboprop flying. In addition to the 19 aircraft leases being rejected, Pinnacle has proposed giving back 28 Bombardier Q400s to the Economic Development Canada bank.

Of the 19 rejected aircraft leases, 16 are Saab 340Bs, and three are Q400s.

AeroCentury Leasing owns four of the Saab 340s (MSNs 340B-239, 340B-242, 340B-237, 340B-201).

Global Aircraft Leasing holds leases on two rejected Saab 340s (MSNs 340B-339, 340B-356).

Fairbrook Leasing owns eight of the Saab 340s (MSNs 340B-402, 340B-414, 340B-407, 340B-416, 340B-418, 340B-412, 340B-413, 340B-420).

Finally, Lambert Leasing possesses the leases for two more Saab 340s (MSNs 340B-321 and 340B-251).

Bombardier Capital is responsible for the leases on all three Q400s (MSNs 4033, 4351 and 4354).