Pinnacle Airlines path from Chapter 11 may run through Delta Air
Pinnacle Airlines Corp won bankruptcy court approval on Wednesday for agreements that it said pave the way for the regional carrier to emerge from Chapter 11 as a unit of Delta Air Lines .
U.S. Bankruptcy Court Judge Robert Gerber signed an order that allows Pinnacle to form a restructuring accord with Delta. The carrier's reorganization plan, which will allow Delta to acquire equity in Pinnacle after Pinnacle emerges from bankruptcy, must be filed by February 15.
Pinnacle's new business plan calls for it to operate 81 two-class regional jets for Atlanta-based Delta.
The Memphis, Tennessee, regional carrier filed for Chapter 11 in April 2012, pressured by debt and high fuel prices. At the time of the filing, Pinnacle said it would rework contracts with Delta and end the flying it had done for United Airlines and US Airways Group .
The judge also approved an amendment to Pinnacle's debtor-in-possession credit facility that provides $30 million of additional liquidity for continued operation and an additional $22 million to pay pilots. A new labor pact with Pinnacle's pilots was also approved.
The case is Pinnacle Airlines Corp, Case No. 12-11343, U.S. Bankruptcy Court, Southern District of New York.
Without the agreements, Pinnacle would face "significant risk" of having to cease operations by February, the carrier said in its motion.
(Reporting by Karen Jacobs; Editing by M.D. Golan)