Moves Airline Closer To Successful Restructuring In Chapter 11

Pinnacle Airlines has reached a tentative agreement with the Association of Flight Attendants-CWA (AFA), the legal representative of the Pinnacle Airlines Flight Attendant group. Pinnacle is seeking concessions from all of its employees in order to emerge successfully from Chapter 11 proceedings with a competitive cost structure. The two sides reached a tentative agreement on concessions that cover pay, retirement, work rules and benefits. The concessions would become effective when concessions are implemented for other labor groups and non-union employees. AFA members at the airline will now have the opportunity to vote on the tentative agreement in the coming days and, if ratified, will avoid the Section 1113 litigation process in bankruptcy court.

"We reached this agreement as a result of both sides sitting at the table to find a way to achieve the company's required cost savings. Pinnacle and the AFA worked together to find creative solutions to achieve the cost-reduction target while minimizing the impact on a flight attendant's W-2 wages. We appreciate the tireless effort put forth by AFA's negotiating team. We now leave it in the hands of the membership to ratify this agreement and avoid the Section 1113 process," said Barbara Setsvold, vice president of Inflight.

"We would like to thank the National Mediation Board and Director of Mediation Services Lawrence Gibbons for their assistance in helping the parties reach this voluntary agreement," said John Spanjers, president and CEO of Pinnacle Airlines Corp.

The tentative agreement also remains subject to required corporate approvals and review by the Bankruptcy Court.

AFA claimed success in reaching terms that preserved Flight Attendant job security and minimized the impact on wages and costs of health care benefits. "The AFA Pinnacle negotiating committee and our team of experts were able to counter virtually all of management's proposed cuts in order to protect our jobs and minimize the impact on Flight Attendants. said Terry French, AFA Pinnacle President.

French said that management aggressively tried to manipulate the bankruptcy code in order to impose across the board cuts that were not necessary. However, she said they were able to "focus on creative solutions that significantly reduced the obscene concessions management was attempting to impose."

Details of the tentative agreement will be sent to the nearly 1,400 flight attendants prior to the ratification vote. A voting schedule has not been established. Pinnacle Airlines, a Delta Connection carrier, filed for bankruptcy in April. In May, Pinnacle management requested $3.6 million in Flight Attendant cost reductions and in August, requested permission from the bankruptcy court to impose terms totaling $6.4 million.

FMI: www.pncl.com, www.afacwa.org