Move Streamlines The Regional Carrier's Operations And Costs

Pinnacle Airlines expects it will have emerged from bankruptcy by May 1, and when it does, it will be a unit of Delta Airlines.

Under the agreement, Pinnacle will phase out its smaller airplanes and nearly double the number of larger planes it flies for Delta. It will also cut the number of routes it flies for the legacy carrier, retaining only those that are most profitable.

In return, Delta will waive fees the regional carrier would normally have to pay to return the smaller airplanes to the larger airline.

Dow Jones Newswires reports that Delta will also place $2.25 million in a trust to pay Pinnacle's unsecured creditors and unions. That money will be distributed when the claims are finalized.

Pinnacle used the bankruptcy to negotiate new deals with its unions that led to deep concessions from the labor groups. While it had flown in the livery of several different airlines, it now has Delta as its only client.

Pinnacle filed for Chapter 11 Bankruptcy last April. It recently announced that it would be moving its headquarters from Memphis, TN to Minneapolis, MN.

FMI: www.mesaba.com