Pinnacle launches cost reduction scheme

Washington DC
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US regional operator Pinnacle has initiated a cost reduction programme to reduce its short and long-term expenses and enhance its liquidity.

The company, which is parent to Pinnacle, Mesaba and Colgan, recorded a third quarter pre-tax loss of $5 million.

Pinnacle is in the midst of integrating seniority list for all three carriers after purchasing Mesaba from Delta in 2010.

At the end of the third quarter Pinnacle's long-term debt stood at $736 million and its stockholders equity was $112 million. The company has roughly $64 million maturities on its long-term debt and cash balances of approximately $82 million.

Company CEO Sean Menke said in a statement the company is "facing a convergence of events that, if left unaddressed, will make 2012 an extremely challenging year".

Pinnacle stated the cost reduction measures it is undertaking include seeking modifications to agreements with its US mainline partners, equipment lessors, debt holders, real property lessors and vendors.

"The company will also work with its pilots and other employees to reduce labour costs," said Pinnacle.