Pinnacle Airlines to relocate headquarters to Twin Cities airport

Pinnacle Airlines, a financially troubled regional carrier soon to be acquired by Delta Air Lines, will relocate its headquarters from Memphis, Tenn., to Minneapolis-St. Paul International Airport this spring, the airline and state officials said Thursday, Jan. 24.

By one estimate, the move could bring a couple hundred new jobs to the Twin Cities.

Minnesota wrested Pinnacle's headquarters away from Memphis in a year-long bidding war where everything from business conditions to economic incentives were weighed.

"Both Memphis and the State of Minnesota presented very strong cases. In the end, it was an economic decision," Pinnacle CEO John Spanjers said in a statement Thursday.

Gov. Mark Dayton released a statement saying he was pleased with Pinnacle's decision: "Pinnacle sees what we know to be true: Minnesota's highly skilled workforce and welcoming community make our state a great place to do business."

The details of the state's incentive package were not released by the administration or Pinnacle. There will be a court filing next week that will explain some of the details, Pinnacle spokesman Joe Williams said.

The relocation will allow Delta to consolidate Pinnacle's operations at Delta's regional airline headquarters at the Twin Cities airport once Pinnacle becomes part of Delta next month, Metropolitan Airports Commission CEO Jeff Hamel said.

"Bringing Pinnacle into the Twin Cities gives them a better synergy," Hamel said.

Delta's other regional partners include Mesaba Airlines, which Pinnacle acquired in 2010, SkyWest Airlines and Conair, which it runs out of Cincinnati, Hamel said. Both Pinnacle and Mesaba flew regional routes for the former Northwest Airlines, which Delta acquired in 2008.
Pinnacle, which listed assets of $1.54 billion against debts totaling $1.43 billion, has been approved to emerge from bankruptcy next month as a wholly owned subsidiary of Delta.

The headquarters relocation, tentatively scheduled for May, will bring jobs to the Twin Cities, but the exact number is unknown yet, Pinnacle's Williams said.

Pinnacle has about 500 employees at its current headquarters in downtown Memphis, Williams said. The company will offer some of those employees a chance to relocate, but it hasn't decided on the size of the staff at the new headquarters, he said.

In the Twin Cities, the airline will use about half of the 170,000 square feet it occupies in Memphis, Williams said.

Pinnacle also expects to reduce the size of its total workforce of 5,100 employees as part of its bankruptcy proceedings, Williams said. The company now has about 1,100 employees in Minnesota and most of them are pilots, flight attendants and airline maintenance workers, he said.

Hamel said he estimates the relocation could add "a couple hundred jobs" to the Twin Cities. These additions will not fill the void of several thousand jobs that disappeared when Delta took over Northwest Airlines, which was based in Eagan, and consolidated corporate functions in Atlanta, Hamel said.

The MAC, which runs the Twin Cities airport, offered Delta the chance to lease office space in the floors above a former Boeing 747 hanger that Northwest Airlines used. The Building C Tower, located off Interstate 494 and 34th Avenue, has 550,000 square feet available and the MAC will offer financing to Delta to make improvements, which is standard procedure for the airport, Hamel said.

Pinnacle began doing business as Northwest Airlink in Memphis and the Twin Cities in 1986 after Northwest Airlines bought the former Republic Airlines and Express 1, which was renamed Pinnacle, Williams said.

Reported by:  Twincities.com