Pinnacle to relocate to Delta's space at Minneapolis-St Paul

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Financially troubled regional carrier Pinnacle Airlines will relocate its headquarters to Minneapolis-St Paul airport from downtown Memphis, moving into space leased by its future parent Delta Air Lines.

Pinnacle, which filed for bankruptcy protection in April 2012, says the decision was made following "an exhaustive evaluation of the most cost-effective option" as it emerges from chapter 11. It tentatively plans to complete the move by May.

The carrier announced earlier this month it would emerge from bankruptcy as a Delta subsidiary, ultimately operating a fleet of Bombardier CRJ900s. Its future headquarters will be located on vacant space now leased by Delta at Minneapolis-St Paul airport property.

Pinnacle said it had also evaluated staying on in its current location in Memphis.

"We had the responsibility to explore every aspect of our business to find opportunities to reduce costs, including evaluating our property leases, to find the most economical options for Pinnacle," says John Spanjers, Pinnacle's chief executive. "Our analysis covered everything from the available labour pool and operational alignment to economic incentives. Both Memphis and the State of Minnesota presented very strong cases. In the end, it was an economic decision."

The move will enable Pinnacle to continue towards its emergence from bankruptcy, adds Spanjers.

Pinnacle now occupies 170,000 square feet of space in downtown Memphis, which is home to about 500 employees.

The airline had said in June last year that it was considering a move to Minneapolis-St Paul airport. The airport said then it had contacted Pinnacle to discuss the use of its vacant space, which include offices renovated by Delta for $10 million.

The airport was Pinnacle subsidiary Mesaba Airlines' former headquarters before it was acquired by Pinnacle's holding company from Delta in 2008.

Pinnacle had moved into its Memphis headquarters in 2011, following a $10 million incentive package offered by the city to move downtown from its former location near the airport.