Bankruptcy would allow the regional airline to break its Memphis lease and head north.
Hoping to land a new airline tenant, the Metropolitan Airports Commission (MAC) has approached Memphis-based Pinnacle Airlines about the possibility of moving its corporate headquarters to Minnesota.
Pinnacle, which filed for Chapter 11 bankruptcy in April, operates as a regional carrier for Delta Air Lines. Pinnacle bought Mesaba Airlines in July 2010 and later closed that company's Eagan headquarters. Pinnacle's bankruptcy filing gives the airline an opportunity to renegotiate existing contracts.
"We had a phone conversation with leadership at Pinnacle to express our interest in seeing them move here," Patrick Hogan, director of public affairs and marketing for the Airports Commission, said in an interview.
The MAC is no stranger to the airline bankruptcy process after witnessing it firsthand several times, including with its largest former tenant, Northwest Airlines.
Pinnacle's current headquarters is in the One Commerce Square building in downtown Memphis. The company moved there in October 2010 after it got below-market office rates and other incentives including free employee parking to move there.
In a statement e-mailed to the Star Tribune, Joe Williams, manager of corporate communications for Pinnacle, said: "We're examining every aspect of our business to find opportunities to reduce costs -- this includes partner contracts, vendor contracts and other areas of the business including facility carrying costs. We currently don't have plans to move but every opportunity to reduce costs will be considered."
There is ample space available at Minneapolis-St. Paul International Airport. Hogan said there are two empty hangers at MSP, one of which was built for Mesaba Airlines, as well as office space in building C, located just off 34th Av. and Interstate 494.
"We think there are a lot of good reasons for Pinnacle to consider relocating to the Twin Cities," Hogan said. "It could be a total turnkey operation for them to move their headquarters here."
The MAC's overture to Pinnacle has set off a bit of posturing by competing economic development agencies.
"It's our policy to not comment on project activity," said Amy Daniels, vice president of communications at the Greater Memphis Chamber. But she added: "We want Pinnacle to stay in Memphis."
Paul Morris, president of the Downtown Memphis Commission, helped attract Pinnacle to Memphis in 2010. His organization and the city of Memphis provided $5 million of a total $20 million public/private investment to refurbish the One Commerce Square building into prime Class A real estate. The investment allowed new building owners to provide Pinnacle and other tenants with below-market rates to move downtown.
"I'd be very surprised and disappointed if Pinnacle was seriously considering moving its headquarters," said Morris, who understands how the development game works.
"I don't blame them for trying,'' Morris said of the Metropolitan Airports Commission. "That's what we try to do."
Pinnacle will be obligated to look at available options but Morris said he's not overly concerned.
"We've given them such a good deal that we don't think they have an incentive to leave," he said. "Its really expensive and distracting to move an airline's headquarters. I've got no reason to think Pinnacle would move their headquarters to Minnesota."
John Spanjers, the former head of Mesaba Airlines, was promoted to president and CEO of Pinnacle, a move that became official on Friday.
"We know him well," Hogan said.
Pinnacle has 7,400 employees with approximately 1,500 in Memphis and approximately 1,200 in Minnesota including pilots, flight attendants and maintenance workers based at Minneapolis-St. Paul International Airport and about 50 employees at its training facility in Eagan.
Staff writer Wendy Lee contributed to this report Patrick Kennedy • 612-673-7926