Regional carrier Pinnacle Airlines missed a March 31, 2007 deadline for completing a contract agreement with its pilots. While the company says that it plans to continue negotiating with the pilots, the missed deadline has potential consequences beyond the labor contract -- specifically, the loss of 17 of its aircraft.According to a news release on MarketWire, Pinnacle was awarded 17 CRJ 200 aircraft in December 2006 by Northwest, its former parent. As a part of a service agreement with Northwest, Pinnacle was required to have reached an agreement with its pilots by March 31, 2007, else these aircraft could revert to Northwest. Fifteen of those17 aircraft were added into service during first quarter 2007.
The news release goes on to explain that, as a result of Northwest obtaining the right to remove the 17 aircraft, the size of Pinnacle's unsecured claim against Northwest will increase by $42.5 million. Receipt of this claim partially off-sets the loss of income associated with these 17 aircraft.
"Although I am extremely disappointed we have not reached an agreement, tremendous progress has been made and I appreciate the hard work of the Pilot's negotiating committee to move these discussions forward," said Philip H. Trenary, Pinnacle's President and Chief Executive Officer. "Reaching an agreement is important to all our stakeholders -- Pilots, other employee groups, investors -- and we will continue to work diligently to reach an agreement."
Pinnacle's flight attendants ratified a four-year contract with the airline in early March of this year.
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