Another airline has filed Chapter 11. This time it is Pinnacle Airlines (NASDAQ: PNCL), a small U.S. carrier. The firm announced that it will continue to operate. Most airlines use the Chapter 11 process to shed debt, fire employees and reset deals with airplane manufacturers. Pinnacle in no exception. In a press release the airline said:
Pinnacle expects to accomplish several key initiatives during the restructuring process to help ensure that it returns to profitability and remains viable over the long term as the regional airline industry continues to contract and transform. These initiatives include restructuring its key operating agreements with Delta Air Lines, winding down its operations with United Airlines, completing the wind-down of its Essential Air Service (EAS) flying with US Airways, achieving cost savings from its workforce, identifying additional opportunities across the organization to reduce costs, and ensuring that it has the appropriate fleet, staffing levels and network to operate profitably on an ongoing basis.
This means most unions, banks and manufacturers that do business with Pinnacle will suffer. Other airlines may have to do the same as Pinnacle and AMR, which declared bankruptcy earlier, as fuel costs rise to unsustainable levels.
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