Colgan Parent Airline Files Chapter 11
Pinnacle Airlines Corp., the parent company of Colgan Air, announced over the weekend that it has filed for relief under Chapter 11. "Our current business model is not sustainable," said CEO Sean Menke. "Increasing operating expenses, liquidity constraints, business integration delays and difficulties associated with combining our operations have hindered our ability to maximize our growth potential." As part of the reorganization plan, Colgan Air will stop operating its Saab 340 and Bombardier Q400 fleet by the end of the year.
To return to profitability, the company said it plans to restructure key operating agreements with Delta Air Lines, wind down its operations with United Airlines, and cease its Essential Air Service flying with US Airways. "Our objective is to emerge from this process as a stronger, more focused company, with a revised business model, a substantially improved cost structure and operating agreements that will position us for profitable growth in the future," Menke said.