Pinnacle Airlines files for Chapter 11 bankruptcy protection

Pinnacle Airlines Inc., a regional carrier filed for bankruptcy protection late Sunday after facing the same financial problems of other airlines, high fuels costs and a decline in passengers.

Pinnacle Airlines, based in Memphis, Tennessee is a regional carrier that has contracts with Delta, United, Continental, and US Airways. In their bankruptcy filing, Pinnacle listed $1.42 million in debt and $1.54 million in assets.

Under the Chapter 11 filing, Pinnacle, which mostly operates in the East, will work to reduce some of its debts. Bankruptcy attorneys can recommend the steps a company can take to reduce their debts while they continue to conduct business.

Pinnacle will wind down flights for United and US Airways, but will continue to fly for Delta. They will also receive a $74.3 million debtor-in-possession loan from Delta.

The small airline will ask pilots and other union and non-union employees to help them reduce their debts. This may involve some loss in its 7,800 strong workforce, wage cuts and other concessions from unions.

Airlines have been especially troubled by higher fuels costs and Pinnacle will join the ranks of numerous airlines that have had to hire bankruptcy lawyers to help with their debt issues. Delta has previously gone through a restructuring. Just last November, American Airlines also declared Chapter 11 bankruptcy.

A financially troubled business may find they have no other alternative than to hire a bankruptcy attorney to help them reduce their debts and return to a better financial state.