PCL Pilot Leaders Attend Bankruptcy Hearing in Manhattan

The Pinnacle Airlines 1113 hearing began Tuesday in the U.S. Bankruptcy Court—Southern District of New York. More than 45 pilots attended the opening day of testimony, including members of the Pinnacle MEC who were joined by many Pinnacle line pilots and pilot representatives from ASA, Delta, American Eagle, and Republic.
Pinnacle Airlines filed for bankruptcy protection April 1, 2012 and, in May, presented the pilot group with a term sheet requesting $33.2 million in annual concessions.

After several weeks of negotiations followed by an eight week company-initiated negotiating hiatus, Pinnacle presented a second term sheet on August 16, which included a $59.6 million dollar demand—an increase of 80 percent from the initial ask.

At the start of the hearing, Judge Robert Gerber dispensed with opening remarks and provided both sides with a series of questions that he wanted addressed during the hearing. Judge Gerber reiterated his desire that both sides strive to reach an agreement on their own.

Pinnacle’s six witnesses testified on days one and two. During the cross examination of the company witnesses, ALPA’s counsel solicited testimony that the company’s consultants believed in May that the term sheet cost savings demanded in the May ask were adequate to provide Pinnacle with the relief needed to exit bankruptcy and be profitable going forward. Moreover, Delta representatives refused during testimony to provide data in support of the alleged cost gaps that drove Pinnacle to cease negotiations in June and return to the table in August with 80 percent greater demands.

ALPA witnesses, including Pinnacle MEC chairman Capt. Tom Wychor and Negotiating Committee chairman Capt. Paul Hallin, testified today and the testimonial phase of the hearing has concluded.

“A viable contract with the company must maintain the overall integrity of the four cornerstones upon which our current contract is built. These are wages, work rules, benefits and job protection,” said Wychor. “The company has proposed far more than what it will take to make Pinnacle competitive; they are proposing that we set new lows for the bottom of the industry. We would be the lowest paid pilots by a wide measure, and the company seeks to cap our pay scales at steps that are far below the industry norms.

“We were not part of the cause of the bankruptcy, but we understand that we need to be part of the solution,” Wychor said. “There are other regional carriers that have similar pilot costs which are not in bankruptcy. This bankruptcy is a result of gross mismanagement, not a result of employee compensation.”

Closing arguments are slated for Friday. Regular video updates can be viewed at http://pinnacle.alpa.org.