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May 9, 2008 Pinnacle Income Drops Precipitously
Pinnacle Airlines Corp. reported first quarter 2008 net income and fully diluted earnings per share of $2.7 million, down dramatically from the year-ago period when it posted $9.4 million in first quarter net income. In addition, its earnings per share dropped from 38 cents in the year-ago period to 15 cents at the end of Q1. Consolidated operating income and operating margin were $6.7 million and 3.3 percent, respectively compared to $12.8 million and 7.1 percent, respectively in Q107.
As expected, the company cited the $5 million operating loss at subsidiary Colgan Air, almost completely caused by the fuel increases. Related Story Its average cost per gallon of fuel increased 54 percent compared to the first quarter of 2007, adding approximately $3.9 million in fuel costs. Colgan's financial performance is also affected by seasonal changes in demand, with unit revenue typically weaker in the first quarter. In addition, the operating performance of Pinnacle Airlines, Inc. was below incentive levels contained in Pinnacle's contract with Northwest. Pinnacle's completion factor, on-time performance, and customer complaints fell below the incentive standards forcing the company to record a $2.5 million performance-related reduction of revenue as an estimate of what it might owe to Northwest related to the first quarter of 2008. The ultimate amount owed to Northwest will not be determined until after June 30.
Pinnacle cited severe winter weather and an increase in the number of operational maintenance events for its performance. The company also estimated that Pinnacle's operating income was reduced by approximately $2 million because of lost revenue associated with cancelled flights and increased interrupted trip and passenger re-accommodation costs related to the higher level of cancelled and delayed flights. Jazz Net Down 14.2 Percent
Jazz reported net income down 14.3 percent to $30.3 million on operating revenue of $396.4 million, which was up 8.8 percent. It received $3.9 million in performance incentives which was up 25.8 percent. Controllable cost per available seat mile dropped 2.6 percent, despite rising fuel and maintenance costs. Jazz reported maintenance increases cost $2.1 million while pilot and maintenance training cost $500,000 and passenger inconvenience payments were $400,000. The company expects increased heavy maintenance costs and overtime will abate by the beginning of the third quarter. For a complete report see the next issue of Regional Aviation News.Daily News Archive
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- May 12, 2008
- May 5, 2008
- April 28, 2008
- April 21, 2008
- April 14, 2008
- April 7, 2008
- March 31, 2008
- March 24, 2008
- March 17, 2008
- March 10, 2008
- March 3, 2008
- February 25, 2008
- February 18, 2008
- February 11, 2008
- February 4, 2008
- January 28, 2008
- January 21, 2008
- January 14, 2008
- January 7, 2008
- December 17, 2007
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