ATW Daily News

Operational problems cost Pinnacle

Monday May 12, 2008

Pinnacle Airlines Corp. suffered a plunge in first-quarter profit to $2.7 million from $9.4 million in the year-ago quarter as rising fuel costs produced a $5 million operating loss at its Colgan Air subsidiary and severe weather and an increase in maintenance events resulted in its Pinnacle subsidiary failing to meet incentive levels contained in its Airline Services Agreement with Northwest Airlines.

The company recorded a $2.5 million reduction in revenue as a result of the latter event, while the difficulties themselves equaled an additional $2 million hit on its operating income.

Pinnacle reported a 13.8% year-over-year increase in revenue to $204.3 million against an 18.6% rise in expenses to $197.7 million. Operating profit sank to $6.7 million from the $12.8 million earned in the 2007 first quarter.

It flew 1.19 billion combined RPMs, up 12%, while capacity rose 8% to 1.67 billion ASMs. Load factor was up 2.7 points to 70.9%. Operating RASM increased 5% to 12.2 cents as unit cost grew 10% to 11.81 cents. It operated 189 aircraft at the conclusion of the period compared to 190 last year. It also flies as Delta Connection.

Pinnacle said its operating performance "improved significantly" in April but that it "may" record a "similar or smaller" revenue reduction depending on its second-quarter/six-month performance.

by Brian Straus

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