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Thread: Judge rejects Pinnacle 1113 Motion

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    Registered User Grimreaper's Avatar
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    Judge rejects Pinnacle 1113 Motion


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    This is Pinnacle management perspective on the Bankruptcy Court Judge denying the airline's 1113 motion. It is interesting that Pinnacle management did not state that it would fix the three "very limited exceptions" that are "relatively easy to fix" and re-submit a revised 1113 motion. It is painful to read Pinnacle CEO Spanjers' clumsy attempt to spin this legal defeat into a positive development using all the usual management catch phrases.

    http://finance.yahoo.com/news/court-...015100751.html

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    Registered User Divine Wind's Avatar
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    Wasn't Pinnacle the airline our concessionary contract was attempting to low ball?

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    Registered User Grimreaper's Avatar
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    An excerpt from the Supplemental Declaration of Daniel M. Kasper, Senior Consultant for Compass Lexicon in Support of American Eagle?s 1113 Motion to Reject the Eagle Dispatcher?s CBA (Docket 5336)

    ?It is my understanding that AMR Eagle?s 1113 ?asks? with regard to each of its work groups (including its dispatchers) are based on a costing analysis conducted by Bain & Company (?Bain?). It is also my understanding that in conducting its cost gap analysis, Bain focused primarily on two of AMR Eagle?s competitors, Republic and Pinnacle, and that the data used to conduct the benchmarking analysis did not take account of any data or industry developments that occurred after March 2012.?

    Kasper also testified, under seal, in the Pinnacle Airlines 1113 Motion to reject the Pinnacle pilot?s CBA.

    What is not explained by Mr. Kasper is why Bain & Company ?focused? on Republic and Pinnacle.

    Using the Regional Airline Association?s data the regional airlines are ranked as follows.
    Aircraft deployed:
    1. ExpressJet 405
    2. Skywest 312
    3. Eagle 245
    4. Pinnacle 163
    5. Republic 86

    Enplanements by Corporate Groupings:
    1. Skywest/ExpressJet/Atlantic Southeast 55000
    2. Republic/Chautauqua/Shuttle/Lynx 21000
    3. Pinnacle/Mesaba/Colgan 20000
    4. Eagle/Executive 20000
    5. Mesa 8000
    Why Skywest and ExpressJet were omitted by Bain & Company in its ?cost gap analysis? should be answered by ALPA?
    ALPA joined with Eagle management to retain Bain & Company so ALPA has the information.

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    Registered User ardvark's Avatar
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    alpa and the mec are bought by the company.
    when the mec was asked for the numbers they never supplied the analysis that was done. theyhidd like scared children behind the famous NDA.

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    Registered User Divine Wind's Avatar
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    Quote Originally Posted by ardvark View Post
    alpa and the mec are bought by the company.
    Not disagreeing that certain members of the MEC are kissing certain corporate asses to further their own ends, but let's not forget that each member of the MEC was voted into office by the pilots of their respective LEC. You can't say the MEC was "bought by the company" without leveling the same accusation at each and every pilot who either voted those reps into office, voted for the TA or didn't vote at all.

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    Registered User Grimreaper's Avatar
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    Below are additional excerpts from the Daniel Kasper's declaration, the consultant retained by both American Eagle Airlines and Pinnacle Airlines, to support the "1113 Motions to Reject the Collective Bargaining Agreements" filed by both airlines. It is obvious that regional airline managements, with the assistance of consultants such as Bain & Company and Compass Lexicon (Kasper's organization), are colluding in "downward-spiral pattern bargaining" with the objective of diminishing the pay rates, work rules and benefits for ALL regional airlines' organized labor. The direct (and anticipated and known advantage to regional airline managements) consequence, of this "downward-spiral pattern bargaining" by management, is that the regional airline pilots have been set up to negotiate against each other, in the "race-to-the-bottom", if the pilots want to keep their jobs. Even with a looming pilot shortage, airline managements have devised a method to force unionized pilots (Pinnacle and Eagle), represented by the same union (ALPA), to effectively negotiate against each other. Do not be surprised if Eagle management, before exiting bankruptcy or "divestiture", demands further concessions because of revised "savings" at other bankrupt regional airlines. Do not be surprised if another regional airline declares bankruptcy to continue the "downward-spiral pattern bargaining". Managements are demanding 6-8 year duration concessionary agreements, this is the duration that airline analysts believe will be required to "correct" the pilot shortage.

    Kasper stated:
    "6. As described below, because both Pinnacle and Republic have taken steps to
    reduce their costs (including their labor costs) and because AMR Eagle?s 1113
    asks are based on estimated ?cost gaps? that do not reflect the recently announced
    savings by these carriers, the Company?s 1113 asks understate AMR Eagle?s
    going-forward cost disadvantage versus Pinnacle and Republic. Put differently, if
    AMR Eagle?s asks were adjusted to reflect recent cost savings at Pinnacle and
    Republic, the size of the asks would need to be increased.
    9. As noted above, the details of Pinnacle?s cost savings were not known at the time
    Bain conducted its cost benchmarking exercise versus Pinnacle. Therefore, Bain?s
    estimate of AMR Eagle?s cost gap vis-?-vis Pinnacle (upon which AMR Eagle?s
    ask is based) understates AMR Eagle?s going-forward cost disadvantage.
    11. Pinnacle is not the only regional carrier that has achieved substantial cost savings
    since I filed my initial Eagle declaration on September 7. On October 31, 2012,
    Republic Airways Holdings announced that it had reached agreements with key
    stakeholders that achieved $45 million in annualized cash flow improvements from its 50-seat RJ subsidiary, Chautauqua.14 Moreover, Republic has stated it is
    seeking an additional $15 million in annualized cost savings in order to reach its
    restructuring goal.
    12. Chautauqua currently operates 15 44-seat ERJ-140 RJs as ?American Connection?
    regional flights on behalf of American. Substantially lowering its cost structure
    will enable Chautauqua to compete more effectively at the lower rates now being
    paid for small RJ lift. This will put additional downward pressure on the rates for
    small RJ lift and leave Chautauqua well positioned to gain a greater share of
    American?s small RJ lift at the expense of American Eagle, which currently
    provides the bulk of American?s small RJ lift.
    14. In sum, both Pinnacle and Republic have taken steps to reduce their costs
    (including their labor costs) and because AMR Eagle?s 1113 asks were based on
    estimated ?cost gaps? with these carriers that did not reflect recently announced
    savings, the Company?s 1113 asks understate AMR Eagle?s going-forward cost
    disadvantage versus Pinnacle and Republic."

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    Pretty much spells out that they're going after our flying.

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    It's dog eat dog world. It doesn't mean we have to be avid players in a race to the bottom.

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    What are the 3 item's that need to be fixed?

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    AMR bound not to get another ask

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