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.
