A hidden airline goes bankrupt

Pinnacle Airlines filed for bankruptcy protection today. The chances are you think it’s an airline you never fly. The chances are you’re wrong.

Pinnacle is what I have often called “a hidden airline.” It flies many routes for different major carriers, and the planes are gussied up to look like the big carriers. Quite often, the passengers don’t know the difference.

Pinnacle owns Colgan Air. Colgan was the operator of the Continental Express jet that crashed on approach to Buffalo several years ago, a crash that inaugurated a closer federal look at so-called “regional carriers.”

Pinnacle operates from Detroit, Minneapolis, and Memphis with a fleet of 124 50-seat jets, all of them painted to Delta colors. It also owns the former Mesaba Airlines.

A “regional carrier” entering bankruptcy is a different beast from a major airline going into bankruptcy. They — the majors — often have expensive labor contracts they’d like to shed.

The regionals? According to Glass Door, the first officer on Pinnacle makes between $20,000 and $40,000. A captain makes between $52,000 and $69,000. And a flight attendant earns $15,000 to $27,000 a year.

In February, Pinnacle invoked a 5 percent permanent pay cut for all pilots, in a desperate bid to avoid bankruptcy.

It obviously didn’t work.

Who makes out big in bankruptcy? The bosses. CEO Sean Menke’s pay was increased from $425,000 to $675,000, according to documents filed with the Securities and Exchange Commission . Executive vice president John Spanjers got a 45-percent pay increase — to $400,000.

“Quite simply, our current business model is not sustainable, as increasing operating expenses, liquidity constraints, business integration delays and difficulties associated with combining our operations have hindered our ability to maximize our growth potential,” Menke said in announcing today’s bankruptcy filing.

  • davidz

    Non sustainable means: There are only so many dollars floating around, and executive salaries cannot possibly be lowered, because the bosses are so very important to the existence and operations of the airline. There’s no more blood in this turnip, so let’s move on to the next industry to pillage.

    Never mind that flying commercially is a rather unpleasant experience these days and many people would rather drive 10 hours than fly for 2.

    Never mind that airlines are heavily subsidized in the first place. Do you think the corporations pay for all of those airport expansion projects? Or property taxes on the airports? Or for the air traffic control infrastructure?

    Those employed by the regional airlines get a raw deal, again. Poor pay to begin with, with only a hope to get hired by the major carriers and start to make a salary that’s worthwhile. In the meantime, the hours suck, the rules suck (only paid for in-air time in some cases, not the time spent on the ground) and now they’re working for a company in bankruptcy. Maybe they’ll get a final paycheck, maybe that’s just gone now.

  • Craig

    You do have to be impressed by his mastery of C-level double-speak, however…