Pinnacle’s bankruptcy underlies growing weakness of US regional carriers

Pinnacle Airlines' highly anticipated entrance into Chapter 11 bankruptcy protestion reflects challenges regional airlines in the US face in finding ways to achieve sustained profitability. Delta's decision to become Pinnacle's benefactor also shows the complexity of the intertwined relationships between regionals and their mainline partners that foster an unhealthy interdependency.

Pinnacle CEO Sean Menke has been flagging up the possibility of a formal restructuring of the company since late last year when the carrier embarked on an extensive cost-cutting scheme by attempting to gain concessions from employees, restructure supplier contracts and negotiate changes to some of the capacity purchase agreements it has with its major partners to make those deals profitable.