July 11--Memphis-based Pinnacle Airlines Corp. will become a Delta-only regional carrier Sept. 5, three months ahead of schedule.
Pinnacle reported in a regulatory filing Tuesday it's hastening the end of flying for United Airlines by its Colgan Inc. subsidiary at United's request.
While some analysts expected Colgan to be a casualty of Pinnacle's Chapter 11 bankruptcy reorganization, the impact on Colgan employees in Memphis and elsewhere was unclear. The subsidiary was relocated to Memphis from Manassas, Va., three years ago and has about 90 supporting employees in Memphis and other locations.
Colgan also had a contract to fly for US Airways but those flights ended June 14.
The parent company bought Colgan in 2007 and Eagan, Minn.,-based Mesaba in June 2010 and reorganized them into two operating companies, Pinnacle Airlines Inc. and Colgan. The company blamed unplanned difficulties of integrating workforces as a factor in its bankruptcy filing April 1.
President and CEO John Spanjers said in a memo to employees that Colgan flew its last flights for United at George Bush Intercontinental Airport in Houston last week and set the new timetable for winding down 19 remaining flight lines at Washington Dulles and Newark airports.
"We will continue to provide information to all employees impacted by this process," Spanjers said. "This includes operations employees at (Dulles), (Newark) and our Albany (ALB) maintenance base, as well as Colgan's support employees at our headquarters."
"I know this process is difficult. However, this wind down is a necessary step in our efforts to create a viable business plan for Pinnacle," Spanjers said.
As Pinnacle prepares to move forward with Delta Air Lines as its only customer, company officials have sounded a warning that substantial labor concessions are vital to continued survival.
Delta has set in motion a plan to park many of the 50-seat regional jets that were supposed to be the mainstay of Pinnacle's fleet coming out of bankruptcy. That points to Pinnacle having to adjust its fleet to include more of the larger, two-class regional jets that Delta plans to employ.
"Based upon my reading of the bankruptcy documents, it looks as though Pinnacle will be the surviving entity," said analyst Helane Becker of Dahlman Rose & Co. "I have the sense, although not 100 percent certain, Colgan will be liquidated."
Pinnacle spokesman Joe Williams said some of Colgan's supporting employees might move into other parts of airline operations.
"It's too soon to know how many will be directly impacted as we move through our broader restructuring plan."
Colgan, founded in Northern Virginia in 1965 by Charles J. Colgan, was the operator of Continental Connection Flight 3407, which killed 50 outside Buffalo, N.Y. on Feb. 12, 2009.
Copyright 2012 - The Commercial Appeal, Memphis, Tenn.
