Combined Organization 'Well Positioned To Be A Major
Competitive Player For The Long Term'
While some of the large legacy
carriers look for ways to join forces ... Pinnacle Airlines
Corporation announced Thursday that it has acquired Mesaba
Aviation, Inc. from Delta Air Lines for $62 million.
Previously a wholly owned subsidiary of Delta, Mesaba operates a
fleet of 92 regional aircraft as a Delta Connection carrier, and is
one of the largest operators of Bombardier CRJ-900 aircraft in the
world. The acquisition enhances the Company's position as one of
the nation's pre-eminent independent regional airline
"This transaction brings together very strong and very similar
organizations," said Phil Trenary, the Company's President and
Chief Executive Officer. "Together, we will be even stronger, well
positioned to be a major competitive player for the long term."
Trenary added, "Even as long-time competitors, Pinnacle and
Mesaba have always had tremendous respect for one another. We have
comparable values and goals, built around safety, respect for our
people, customer service and operational excellence. We have very
similar fleets of regional jets and turboprops, and we fly
complementary routes with schedules that are already integrated as
part of Delta Connection."
Founded in 1944, Mesaba is the
longest-flying regional airline in the United States. It will
remain headquartered in Eagan, MN, under its current management
team. "Pinnacle is no longer a competitor but a partner that shares
our common goal of success and offers growth opportunities with
other major carriers," said Mesaba President John Spanjers.
Pinnacle Airlines, the company's regional jet operating
subsidiary, also operates as a Delta Connection carrier. In
addition, the Company's Colgan Air subsidiary operates turboprop
regional service for Continental Airlines, United Air Lines and US
Airways, minimizing the Company's dependence on any single
The total fleet consists of 202 regional jets -- 57 76-passenger
Bombardier CRJ-900 and 145 50-passenger Bombardier CRJ-200 -- and
80 turboprops, consisting of 14 74-passenger Bombardier Q400 and 66
34-passenger Saab SF340. The Company also has 15 firm orders for
new Q400 NextGen aircraft, with deliveries starting in August, and
purchase options for an additional 30.
Under the terms of the transaction, the Company and Delta
established a new, 12-year capacity purchase agreement effective
July 1, 2010, for the operation of Mesaba's CRJ-900 fleet. This new
CRJ-900 agreement is structured similarly to Pinnacle's existing
agreements with Delta, providing for targeted levels of performance
and profitability. Mesaba will continue to sublease its fleet of
CRJ-900 aircraft from Delta for the 12-year term of the related
capacity purchase agreement.
Mesaba's CRJ-200 operations will be governed under Pinnacle's
current Airline Services Agreement with Delta, which runs through
2017. In addition, the Company and Delta entered into a separate,
short-term capacity purchase agreement providing for the operation
of Mesaba's Saab 340B+ fleet until they are removed from Delta
Connection service in late 2011 under Delta's previously announced
"We have further solidified our future with Delta, which has
previously signaled its desire to work with a smaller number of
strong regional partners," said Trenary. "We also have additional
opportunities to grow with the 'right' product offering -- a full
spectrum of regional jets and turboprops. As we grow, our emphasis
will be on expanding our existing fleets of CRJ-900 and Q400
aircraft, the most cost-effective and fuel-efficient aircraft types
within their respective classes -- and what our airline partners
With total employment of approximately 7,700, Pinnacle will
continue to operate three subsidiaries -- Pinnacle Airlines, Inc.,
Colgan Air, Inc. and Mesaba Aviation, Inc.
"Over the longer term, we anticipate that we can enhance
efficiency and growth opportunities for our airlines and our people
by reorganizing around two operating airlines," said Trenary. "Our
intent is to combine the regional jets under Pinnacle Airlines and
the turboprops under Mesaba Aviation. However, there are many
complex issues to be addressed, and this will take time."
"As the industry continues to consolidate at both the major and
regional carrier levels, we have solidly established ourselves as a
strong, independent regional airline corporation," said Trenary.
"We are well positioned to succeed and grow, which will provide
growth in jobs, growth opportunities for our people and increased
value for our shareholders."