Pinnacle, pilots reach tentative agreement
Dec 18, 2012 (Menafn - The Commercial Appeal - McClatchy-Tribune Information Services via COMTEX) --Pinnacle Airlines Corp. and its pilot union said Monday they've reached a tentative labor deal that's crucial to the Memphis-based regional airline's survival.
The company said it struck the deal with the Air Line Pilots Association on cost reductions that cover pay, retirement, work rules and benefits.
Without a pilot labor agreement, it was doubtful Pinnacle could have successfully emerged from Chapter 11 bankruptcy, which it filed April 1.
If the deal is approved by union members and Bankruptcy Court, other issues that are still unresolved include 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.
Terms of the labor agreement were not announced. The company had previously sought nearly 60 million a year in concessions from pilots, but ALPA officials had called those cuts too draconian.
The company also said in a release that a separate agreement had been reached among Pinnacle, ALPA and Delta Air Lines that includes long-term career opportunities and addition of 40 76-seat, two-class regional jets to the Pinnacle fleet, establishing Pinnacle's long-term fleet plan at 81 of the CRJ-900 aircraft.
Pinnacle said it would ditch its 140 smaller regional jets, 50-seat CRJ-200s, over the next two to three years, while 76-seat jet deliveries are planned for the fall of 2013 through the end of 2014.
Delta last summer had announced plans to largely phase out its 50-seat fleet over the next few years, throwing a monkey wrench into Pinnacle's previously announced plan to move forward post-bankruptcy flying 140 50-seaters and 41 76-seaters as a Delta Connection carrier.
The 50-seat jets have fallen out of favor with the airline industry because they guzzle fuel and aren't popular among the traveling public. Delta likes the 76-seat regional jets because they are amenable to providing two-class service, business class and coach class.
"I want to thank ALPA and the negotiating teams for working exceptionally hard to accomplish this," said Pinnacle president and CEO John Spanjers. "Throughout this process, our goal was to reach a consensual agreement with ALPA and both sides worked diligently to achieve that goal."
Pilots were the 5,100-employee company's only remaining unionized work group that had not agreed to concessions to keep the company from going out of business.
Pinnacle said the agreement will be submitted to a vote of ALPA members in January, and it's also subject to approval and review by Bankruptcy Court. If approved, the changes would be implemented when similar reductions take effect for Pinnacle's other labor groups and non-union employees.
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