Posted on: 05 May 2011 by Mark Howells
Pinnacle Airlines Corporation (PNCL) has announced its financial results for the first quarter of 2011, including a net income of $0.1 million excluding special items.
Major winter storms had a negative impact on the results of the company’s operating subsidiaries, contributing to a $1.6 million year-over-year decline in net income, excluding special items.
This is the first period in which PNCL experienced the effects of the company’s new pilot contract with the Air Line Pilots Association that was entered into in February 2011, increasing pilot compensation and benefits costs by $2.1 million for the quarter.
First quarter 2011 results exclude revenue increases under the company’s contracts with Delta that it expects to begin receiving in mid-2012.
PNCL recorded $5.8 million ($3.1 million, net of related income taxes) of special charges for integration, severance, and contract implementation costs. Including these special items, the company’s net loss was $3.0 million. The company ended the quarter with cash and cash equivalents of $80 million.
"Winter storms throughout our system affected our operations during the first quarter, causing cancellations and delays for our customers," said Don Breeding, PNCL’s interim chief executive officer. "We also began moving forward with our integration plans during the quarter, which will ultimately lead to an operationally and financially stronger company for our customers, employees and shareholders.”
PNCL recorded consolidated operating revenue during the first quarter of 2011 of $298.2 million, an increase of $90.1 million over the same period in 2010, mainly attributable to the acquisition of Mesaba (which contributed additional revenue of $68.0 million) as well as growth from the company’s Colgan Air Q400 operations with United Airlines.
Pinnacle Airlines, Inc, reported 1Q11 operating income of $9.0 million, a decrease of $4.8 million from the first quarter of 2010.
Mesaba reported operating income of $1.1 million. Mesaba’s financial results were negatively affected by weather conditions during the quarter as well as the wind-down of Delta’s turboprop operations as structured under the capacity purchase agreement.
Colgan Air reported an operating income of $2.0 million, an improvement of $3.1 million over 1Q10. The improved operating results were, however, negatively impacted by an increase in pilot wages and a 32% year-over-year increase in the price per gallon of aircraft fuel.