Uploaded by FinancialNewsOnline
on Apr 2, 2012
Major airline holding company Pinnacle Airlines announced today they they are filing for Chapter 11 bankruptcy protection.
The $1 billion company, which files under names such as Continental Express and Delta Connection, is hoping to use the filing to continue implementing a turnaround plan aimed at addressing its operational and financial challenges. It plans to restructure its operating agreements with Delta Air Lines and wind down its operations with United Airlines.
Sean Menke, President and CEO of Pinnacle, said, "We intend to use the Chapter 11 process to reset our financial and operational structure in order to position Pinnacle for viability over the long term. Quite simply, our current business model is not sustainable, as increasing operating expenses, liquidity constraints, business integration delays and difficulties associated with combining our operations have hindered our ability to maximize our growth potential. Following a lengthy review process, and with the assistance of independent financial, industry and legal advisors, our Board of Directors determined that a court-supervised restructuring is the only feasible course of action to implement our turnaround plan."
Pinnacle also said in its press release that it asks its pilots and other employees, both union and non-union, to help cut costs. This will most likely mean some of its 7,800 employees will lose their jobs.
The $1 billion company, which files under names such as Continental Express and Delta Connection, is hoping to use the filing to continue implementing a turnaround plan aimed at addressing its operational and financial challenges. It plans to restructure its operating agreements with Delta Air Lines and wind down its operations with United Airlines.
Sean Menke, President and CEO of Pinnacle, said, "We intend to use the Chapter 11 process to reset our financial and operational structure in order to position Pinnacle for viability over the long term. Quite simply, our current business model is not sustainable, as increasing operating expenses, liquidity constraints, business integration delays and difficulties associated with combining our operations have hindered our ability to maximize our growth potential. Following a lengthy review process, and with the assistance of independent financial, industry and legal advisors, our Board of Directors determined that a court-supervised restructuring is the only feasible course of action to implement our turnaround plan."
Pinnacle also said in its press release that it asks its pilots and other employees, both union and non-union, to help cut costs. This will most likely mean some of its 7,800 employees will lose their jobs.
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