Pinnacle Airlines has reached an agreement with its unsecured creditors committee, the Air Line Pilots Association (ALPA) and Delta Air Lines to emerge from bankruptcy.
The Memphis-based regional airline reached agreements that include an amendment to its debtor-in-possession (DIP) credit facility to give the airline $30 million of additional liquidity and another $22 million to satisfy payments under a bridge agreement and related taxes for pilots. Pinnacle says that the bridge funds cover transitional payments, furlough benefits and career opportunities.
The maturity date for the credit facility was extended to 15 May 2013 from 1 April.
Pinnacle announced it had reached a tentative agreement with pilots on 17 December, which is subject to ratification by 15 January and accepted by the bankruptcy court. Pilot voting on that agreement is set to start on 4 January, Pinnacle says.
Under that agreement, Pinnacle set its long-term fleet plan at 81 Bombardier CRJ900 aircraft, with 40 new aircraft scheduled to enter its fleet between the third quarter of 2013 and the end of 2014. It plans to remove the Bombardier CRJ200 aircraft in its fleet "over the next two to three years".
In a hotline message from Pinnacle' ALPA master executive council to pilots on 17 December, the union told pilots that it did not anticipate any of the CRJ200s leaving the fleet before June 2013. It also told pilots that it expected furloughs in the first quarter of 2013, but the number would likely be less than 200 pilots. It told the pilots that it expected to need extra pilots throughout 2013 to support the large number of pilots training for the incoming CRJ900 aircraft and the transition away from turboprop flying.
Pinnacle presently operates 54 CRJ900s for Delta, 41 of which came into the fleet when it acquired Mesaba in 2010. It is removing 13 owned CRJ900s from its fleet early this year under lease as part of its restructuring plan.
Pinnacle filed for bankruptcy on 1 April 2012 and has until 15 February to submit a reorganisation plan to the bankruptcy court that is acceptable to Delta. This is beyond a previous extension that Pinnacle and Delta agreed to on 27 December, which had set 31 January as the deadline for the reorganisation plan.