January 16, 2013

Pinnacle Airlines comprehensive agreements approved by Bankruptcy Court

Pinnacle Airlines Corp. reported that the comprehensive agreements it reached with Delta, the Air Line Pilots Association, International (ALPA) and the Official Committee of Unsecured Creditors (Creditors’ Committee) in Pinnacle’s Chapter 11 cases, have been approved by the Bankruptcy Court overseeing Pinnacle’s cases. The agreements together provide a path for the Company to emerge from bankruptcy with a competitive cost structure and a viable long-term business plan. Under Pinnacle’s new business plan, the Company will transition to operating a fleet of 81 fuel-efficient, two-class regional jets for Delta.The comprehensive agreements include:

An amendment to the Company’s existing debtor-in-possession credit facility to provide Pinnacle with $30m of additional liquidity to support its continued operation through emergence from Chapter 11 and an additional $22m to fund certain required payments to Pinnacle’s pilots under a Bridge Agreement and related employer taxes. The amendment would also extend the maturity date for the credit facility from April 1 to May 15, 2013.
Amendments to the existing operating agreements with Delta that form the basis of the new business plan. Pinnacle will receive Delta Connection’s next 40 CRJ-900 aircraft awarded, setting Pinnacle’s long-term fleet plan at 81 CRJ-900 aircraft. The 40 additional CRJ-900 aircraft deliveries are planned to begin in the fall of 2013 and are expected to be completed by year-end 2014. Pinnacle’s 140 CRJ-200 aircraft will be removed from operation over the next two to three years.
A new collective bargaining agreement with Pinnacle’s pilots, as well as a bridge agreement that provides transitional payments, furlough benefits and specified career opportunities at Delta to Pinnacle’s pilots.
A restructuring support agreement among Pinnacle, Delta and the Creditors’ Committee setting forth certain principal terms for a plan of reorganization to emerge from Chapter 11.



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