Pinnacle Airlines Corp reports 2008 full-year and Q4 results
Pinnacle Airlines Corporation has released its fourth quarter and full year 2008 results of operations, covering its subsidiaries Pinnacle Airlines Inc. and Colgan Air.
During the fourth quarter of 2008, the Company recorded consolidated operating revenue of $217.5 million, an increase of $16.4 million, or 8%, over the same period in 2007. The increase is primarily related to an increase of $31.1 million in revenue earned under the company's new DCA and CPA, partially offset by a decrease of $8.3 million in revenue earned under the company's CRJ200 Airline Services Agreement with Delta due to the return of 13 CRJ200s throughout 2008. Also partially offsetting this increase was a decrease in Colgan Air's pro-rate revenue of $6.4 million, related primarily to the retirement of aircraft and exit of unprofitable markets, as compared to the same period in 2007.
Pinnacle reported fourth quarter 2008 operating income and operating margin of $13.8 million and 9.0%, a decrease of $0.4 million and 0.4 points, respectively, from the fourth quarter of 2007. This decrease is primarily related to a decrease in flight crew productivity due to higher than planned levels of pilot and flight attendant staffing. Pinnacle also incurred certain ownership costs related to two CRJ900 aircraft that delivered in July 2008 but which did not enter permanent scheduled service under the DCA until January 2009.
In addition, Pinnacle experienced an increase in unreimbursed maintenance costs associated with its CRJ200 fleet. During the fourth quarter, unreimbursed maintenance costs increased at a greater rate than the inflation indexed revenue increases that Pinnacle received under the CRJ200 ASA. In addition, Pinnacle has undertaken several maintenance programs that are expected to increase the operating reliability of the fleet, decrease maintenance costs in future periods, or that are recommended by the engine manufacturer.
Colgan reported operating income and operating margin of $2.5 million and 4.0%, an increase of $7.3 million and 13.8 points, respectively, from the fourth quarter of 2007. The addition of Colgan's Q400 aircraft fleet contributed significantly to the improvement in operating income during the fourth quarter. In addition, Colgan's revenue per available seat mile within its pro-rate operations increased by 22% from the same period in the prior year due to increases in Essential Air Service subsidies, the elimination of lower unit revenue markets, and a general increase in fares as compared to the fourth quarter of 2007.
During the full year 2008, the Corporation recorded consolidated operating revenue of $864.8 million, an increase of $77.4 million, or 10%, over 2007. In 2008, Pinnacle achieved operating income and an operating margin of $53.5 million and 8.7%, a decrease of $3.9 million and 1.0 point, respectively, from 2007.