Pilots for Pinnacle Airlines to begin voting on critical contract concessions
Jan 02, 2013 (Menafn - The Commercial Appeal - McClatchy-Tribune Information Services via COMTEX) --Pilots for bankrupt Pinnacle Airlines Inc. are scheduled to begin voting Friday on wage and benefit concessions that company officials say are key to Pinnacle's survival.
About 2,700 pilots represented by the Air Line Pilots Association (ALPA) would face 9 percent pay cuts, reduced vacation and other changes if they ratify the agreement endorsed by union leaders.
Pilots are Pinnacle's only unionized work group that hasn't agreed to concessions to keep the Memphis-based regional airline company afloat coming out of a Chapter 11 bankruptcy restructuring filed last April 1.
Depending on the outcome of the pilot vote, other issues will presumably come into play, such as whether Pinnacle will keep its corporate headquarters in Memphis or move to Minneapolis. Relocation has been under study by the company's board as a cost-cutting measure.
During voting that runs through Jan. 15, members of the pilot union also will be asked to ratify a second agreement with Pinnacle and Delta Air Lines that makes it easier for Pinnacle pilots to be hired by Delta.
The second agreement includes Delta's long-term commitment to pay Pinnacle to operate at least 81 76-seat regional jets as a Delta Connection carrier. Pinnacle currently operates 41 of the 76-seat regional jets that offer both coach and business class seating.
Pinnacle's 140 50-seat jets, currently the mainstay of its fleet, would be retired over the next two to three years as part of Delta's program to replace them with larger, more comfortable and fuel efficient 76-seaters.
Delta says its commitment is good only if the agreement is ratified by Pinnacle pilots by Jan. 15.
Before the bankruptcy, Pinnacle flew regional jets under agreements with Delta, United/Continental and US Airways. Delta provided debtor-in-possession financing to keep Pinnacle going during the bankruptcy and the Atlanta-based carrier would be Pinnacle's only mainline airline partner post-bankruptcy.
The voting opens as Pinnacle union leaders complete the first round of a series of road shows to explain proposed contract changes.
In emails to members, Pinnacle's ALPA chief Tom Wychor said, "As you review the (tentative agreement), you will find that there are provisions that reflect the dire situation in which we find ourselves, but you will also find that numerous provisions that are important to us remain unchanged."
Wychor said union leadership "is recommending the tentative agreement to the membership for ratification not only because it is the only viable alternative to a wind down of the airline that would have been accomplished within approximately one year, but also because it provides all of our pilots with a meaningful range of options that would not otherwise have been available."
The agreement among ALPA, Pinnacle and Delta also provides for furlough benefits packages that would help ease the impact on pilots of Pinnacle's net loss of 100 jets from its fleet over two or three years. Wychor said officials believe about 150 pilots would be furloughed during 2013.
Pinnacle pilot pay currently starts at about 24,000 a year and tops out at 95,000.
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