JOEFRIDAY2
Well-Known Member
I just read the bankruptcy document. It was filed on April 1, 2012 at 23:18:04 Eastern Standard Time.
The voluntary petition is not complete as of yet and only contains a list of the 50 largest unsecured creditors. The airline will have a couple of weeks to fill in the missing pieces.
The top three debts are listed as contracts with United Air Lines, Fairbrook Leasing, Inc and Siemens Financial Services, Inc. There is not an amount listed for these top three unsecured creditors. They are listed as unliquidated.
The first debt listed with an amount is to Standard Aero at $3,753,156.88 (Aircraft Maintenance Parts and Services)
Creditors 5 and 6 are for Crew Hotel Charges of $3,693,857.13 and $3,344.025.48
Of interest is creditor 24 who is former Chief Executive Philip H Trenary and creditor 28 who is former COO Douglas Shockey. Amounts are not listed.
I won't list the next 44, but they are for landing fees, property taxes, aircraft parts, etc.
According to the filing, Pinnacle Airlines Corp is the 100% owner of the bankrupt Pinnacle Airlines, Inc.
The documents were all signed by John Spanjers, who has the title of, "Authorized Officer."
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Personal thoughts here.
1. The voluntary petition is not complete because it does not list all of the creditors. This might indicate the bankruptcy filing was rushed to prevent a creditor(s) from taking action.
2. The voluntary petition was filed on a Sunday evening at 11:18 PM. This also might indicate that the bankruptcy was filed to stop a creditor(s) from doing something that Pinnacle Airlines, Inc. did not want to happen. While it is not unheard of for emergency bankruptcy filings to happen over a weekend, as a general rule they are not filed over the weekend (when the court is closed) without a good reason.
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More personal thoughts.
I don't know the exact number, but we believe Pinnacle carries up to 50% of Delta's domestic passengers. This filing will have a big effect on Delta and that is probably the reason they are willing to provide 70+ million in DIP financing for Pinnacle to continue operating. From Delta's perspective, if they lose 50% of their domestic feed, they will lose a lot more than 70 million in lost revenue.
It is my belief that this problem was originally caused by the prior management not hiring enough pilots at a time when passenger loads were increasing. This created a crew shortage at Pinnacle that finally blew up in February 2010 resulting in hundreds of flights being cancelled and Delta passengers being stranded. This caused Delta to reduce service to cities served by Pinnacle in an effort to "right size" Pinnacle to the actual number of pilots on Pinnacles payroll. This caused the long time CEO to suddenly resign. This then resulted in a reduction of revenue to Pinnacle of over 20% which then put them in an unprofitable business.
Remember the mainline carriers outsourced to the regionals to save money. This regional has now hit the wall. If Delta wants to keep Pinnacle feeding their passengers, they will have to get out their checkbook. That is probably their only choice for the near future. After that, Delta will probably need to fly many of the routes.
Joe
The voluntary petition is not complete as of yet and only contains a list of the 50 largest unsecured creditors. The airline will have a couple of weeks to fill in the missing pieces.
The top three debts are listed as contracts with United Air Lines, Fairbrook Leasing, Inc and Siemens Financial Services, Inc. There is not an amount listed for these top three unsecured creditors. They are listed as unliquidated.
The first debt listed with an amount is to Standard Aero at $3,753,156.88 (Aircraft Maintenance Parts and Services)
Creditors 5 and 6 are for Crew Hotel Charges of $3,693,857.13 and $3,344.025.48
Of interest is creditor 24 who is former Chief Executive Philip H Trenary and creditor 28 who is former COO Douglas Shockey. Amounts are not listed.
I won't list the next 44, but they are for landing fees, property taxes, aircraft parts, etc.
According to the filing, Pinnacle Airlines Corp is the 100% owner of the bankrupt Pinnacle Airlines, Inc.
The documents were all signed by John Spanjers, who has the title of, "Authorized Officer."
------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Personal thoughts here.
1. The voluntary petition is not complete because it does not list all of the creditors. This might indicate the bankruptcy filing was rushed to prevent a creditor(s) from taking action.
2. The voluntary petition was filed on a Sunday evening at 11:18 PM. This also might indicate that the bankruptcy was filed to stop a creditor(s) from doing something that Pinnacle Airlines, Inc. did not want to happen. While it is not unheard of for emergency bankruptcy filings to happen over a weekend, as a general rule they are not filed over the weekend (when the court is closed) without a good reason.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------
More personal thoughts.
I don't know the exact number, but we believe Pinnacle carries up to 50% of Delta's domestic passengers. This filing will have a big effect on Delta and that is probably the reason they are willing to provide 70+ million in DIP financing for Pinnacle to continue operating. From Delta's perspective, if they lose 50% of their domestic feed, they will lose a lot more than 70 million in lost revenue.
It is my belief that this problem was originally caused by the prior management not hiring enough pilots at a time when passenger loads were increasing. This created a crew shortage at Pinnacle that finally blew up in February 2010 resulting in hundreds of flights being cancelled and Delta passengers being stranded. This caused Delta to reduce service to cities served by Pinnacle in an effort to "right size" Pinnacle to the actual number of pilots on Pinnacles payroll. This caused the long time CEO to suddenly resign. This then resulted in a reduction of revenue to Pinnacle of over 20% which then put them in an unprofitable business.
Remember the mainline carriers outsourced to the regionals to save money. This regional has now hit the wall. If Delta wants to keep Pinnacle feeding their passengers, they will have to get out their checkbook. That is probably their only choice for the near future. After that, Delta will probably need to fly many of the routes.
Joe
