Northwest Asks Pinnacle to Park Some Jets

EAGAN, Minn. – Northwest Airlines Corp. has told its Memphis, Tenn.-based regional carrier Pinnacle Airlines Inc. to ground 15 of the 139 small jets it leases from Northwest.

The jets will be taken out of service Oct. 31, Northwest announced Monday, in a move two analysts said could foreshadow the shrinkage or elimination of Northwest’s Memphis hub. Northwest is trying to emerge from Chapter 11 bankruptcy.

Last week, Northwest told its other regional carrier, Mesaba, which is also based in Eagan, that it will be taking back 35 of its 69-seat regional jets. Northwest plans to return the planes to leasing companies. About half the flying Mesaba has done for Northwest has been with those planes.

Northwest said Monday it does not “anticipate any material change to its core hub structure,” but it will be a smaller airline. It has said it will reduce its flying by 4 percent to 5 percent in coming months. The airline said its schedules are still under review and isn’t detailing its long-range plans for Mesaba and Pinnacle.

Mesaba and Pinnacle rely on Northwest for all or virtually all of their revenue. They have no planes of their own, leasing them from Northwest.

Douglas Abbey, a partner in the Washington, D.C.-based aviation company the Velocity Group, expects Northwest to use bankruptcy to renegotiate its services with Pinnacle and Mesaba, much as other major bankrupt carriers have done with their regional carriers.

He said Memphis could be dropped altogether as a Northwest hub.

“It’s certainly being considered,” Abbey said. “It’s substantially smaller than Detroit or Minneapolis-St. Paul (Northwest’s other hubs). And it’s smaller than most other airline hubs. It’s always been marginal, and it’s the most susceptible to cut because it’s a relatively poor local market.”

Calyon Securities analyst Ray Neidl wrote in a research note Monday that “There is no explanation of why Northwest wants to reduce the (Pinnacle) flying, but we suspect that (Northwest) will severely shrink the marginal Memphis hub.”