Monday, January 19, 2009
Colgan Gains More CO Flying
Continental is purchasing the additional Q400 capacity at industry-standard, pass-through costs. The agreement extends 10 years to August 31, 2010 and puts the first new aircraft entering service at September 2010. The new CPA gives Continental the right to retain the aircraft once the CPA expires.
The order, valued at approximately US$432 million increases firm orders for Q400/Q400 NextGen aircraft to 346, with 219 delivered as of October 31, 2008. Orders for Q400 NextGen airliners account for 49 of the total.
Each aircraft will be operated for a period of 10 years under the CPA, under existing rates but with an escalator clause to cover the increase in the purchase price of the aircraft. At the same time, Colgan optioned an additional 15 Q400 delivery positions slated for Continental after delivery in 2013, subject to financing. Parent-company, Pinnacle Airlines Corp, also has 15 options for 2011 delivery which is may market to other U.S. airlines.
Pinnacle was able to obtain financing for up to 85 percent of the purchase price on each of the 15 new aircraft as well as for most pre-delivery payments. All cash payments that are required to be made to the manufacturer prior to the second quarter of 2010 will be financed subject to this financing commitment, said the company. In addition, PNCL expects to pursue lease financing to reduce its capital requirements associated with the acquisition of these aircraft.
"We are grateful for the confidence Continental Airlines places in our people and the Q400," said President and Chief Executive Officer of Pinnacle Airlines Corp Philip H. Trenary. "The Q400 is a perfect addition for Continental and a financially sound move for Colgan as we grow our fleet to compete in a cost-conscious environment."
In separate news, Pinnacle named named Brian T. Hunt to the new position of Vice President and General Counsel. Hunt joins Pinnacle after an 18-year career at ATA Airlines where he was senior vice president, general counsel and secretary. His previous experience includes private practice at Baker & Daniels, LLP and Riley Bennett & Egloff, LLP, both in Indianapolis. Hunt is a native of Cleveland, Ohio. He earned a Bachelor of Science in Criminal Justice from the University of Dayton and his law degree at Indiana University School of Law - Indianapolis.