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VOL. 125 | NO. 214 | Wednesday, November 3, 2010

Flight Plan

Pinnacle prepares for challenging move

By Sarah Baker

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Maintenance controllers, crew schedulers and flight dispatchers share space in the large control center of Pinnacle Airlines Inc.
Photo: Lance Murphey

The decision to merge airlines and consolidate operations into one locale involves a detailed course of action, and it starts with the employees.

Because Pinnacle Airlines Corp. manages three airline subsidiaries and employs 7,700 workers – 1,500 in the Mid-South – technological issues will inevitably be in store when the company moves its headquarters from the airport area to Downtown.

But transferring equipment and systems won’t be the main logistical issue, said president and CEO Phil Trenary.

The real challenge will lie in bringing together all three carriers – Pinnacle Airlines Inc., Colgan Air Inc. and Mesaba Airlines – under one roof. But Pinnacle has a thorough approach in place: putting the power directly in its people’s hands, starting with transition teams.

“Airline mergers historically are very difficult, and a lot of times they don’t go as well as you would like from a people perspective,” Trenary said.

The airline asked for volunteers from all three airlines company-wide and across the country to come up with a business plan on how to transition from the current three carriers down to two, since the Colgan and Mesaba names will be merged under the Mesaba operating certificate.

Formerly based in Manassas, Va., Colgan moved to Memphis this summer. Now Pinnacle is working on relocating Mesaba from its home in Eagan, Minn., to Memphis.

“We have some contractual obligations with (Mesaba) – some functions we have to leave up there for a period of time, but long-term the goal will be to have it all here,” Trenary said.

Approximately 500 employees responded to Pinnacle’s transition invitation, forming teams representing each of the disciplines within the airlines, such as flight, in-flight, maintenance and information technology.

First, the team members went through a multi-day training course at the University of Memphis, where they were taught a condensed version of the Executive Master of Business Administration change management program.

Each group is now tasked with developing a business strategy on how to transition the carriers, including everything from the Federal Aviation Administration regulatory process to labor.

One of the main focal points is moving the company’s system operation controls – the two rooms devoted to landing the planes – to One Commerce Square.

“It takes into account all the different moving parts, and lets the people who actually have the day-to-day experience in doing this make the decisions on how we go about it,” Trenary said.

Part of the preparation involves a timeline – each group has until the end of November to submit its model. Senior management will then approve the plans and start the execution, which is set for early next year.

Delta Air Lines Inc. also implemented a rigid time frame when it announced its merger with Northwest Airlines Inc. in April 2008. The major parts of the integration were completed by January of this year.

“The purpose of our merger was to build an airline that can be profitable and successful in any economic cycle and is also diversified in almost every region of the world,” said Delta spokesman Kent Landers. “Our biggest focus was merging operations in a phased way so that the customers never saw the seams of the integration as much as possible.”

Although Pinnacle is moving away from the airport – what could be considered a curious move for an airline – the distance shouldn’t be a hindrance. It’s a smaller-scale version of what FedEx Express did when it established its world headquarters at Hacks Cross and Winchester roads.

Company officials said the convenience of getting to Memphis International Airport from anywhere in the city means moving Downtown keeps Pinnacle within the “aerotropolis” – the concept that the airport is the driving economic force for the region.

“We’re definitely in support of the aerotropolis,” Trenary said. “We’re one of the early supporters of it, and we will always be so.”

As part of the analysis that went into the relocation decision, Pinnacle will operate a shuttle between One Commerce Square and the airport so employees won’t have to worry about airport parking.

“One Commerce Square is just an extension of everything that we do at the airport,” Trenary said. “One of the benefits to moving into a vertical structure like One Commerce Square is it brings us all together, as opposed to being spread out like we are now – we’re in a more horizontal structure.”

Pinnacle also is working hard to ensure its new building is an indication of its people and its culture.

“When you step off the elevator on the fourth floor, which will be the reception floor, you’ll be able to get a good feel for what Pinnacle-Mesaba-Colgan is all about,” Trenary said. “We’re taking great lengths, making sure that really reflects that people and what our priorities are, and that will be tied directly to the training center. It’s just going to be a tremendous benefit overall for our people.”

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