Pinnacle Airlines Reports Second Quarter 2006 Financial Results

Pinnacle Airlines Corp. (NASDAQ: PNCL) ("Pinnacle" or the "Company") today reported second quarter 2006 earnings per fully diluted share ("EPS") of $0.54. Operating income and net income were $19.5 million and $11.9 million, respectively. For the six months ended June 30, 2006, Pinnacle reported EPS of $1.15. Operating income and net income were $41.0 million and $25.2 million, respectively.

Operating income during the second quarter was negatively affected by a one-time, noncash charge of $1.4 million related to the previously unrecorded obligation for Pilot post-retirement health care benefits. Pinnacle provides a benefit for its Pilots which enables them to continue coverage under the Company's health care plan after reaching the mandatory retirement age of 60 and prior to their eligibility for Medicare coverage. This charge negatively affected second quarter EPS by $0.04. The amounts were not material for any prior period. In addition, Pinnacle recorded a pre-tax charge of $1.4 million during the second quarter related to a change in estimate in its provision for sublease losses associated with the return of eleven Saab 340 aircraft from Mesaba Aviation, Inc., which also reduced second quarter EPS by $0.04. Pinnacle's second quarter 2006 EPS would have been $0.62 without these two nonrecurring items, as compared to second quarter 2005 EPS of $0.63.

EPS for the six months ended June 30, 2006 was $1.15. During the first quarter of 2005, the Company recorded a pre-tax gain of $18.0 million ($11.3 million net of related income taxes) associated with the repurchase of its note payable to Northwest Airlines. This gain increased EPS for the six months ended June 30, 2005 by $0.51. Excluding this gain, EPS for the six months ended June 30, 2005 was $1.18. EPS for the six months ended June 30, 2006 excluding the charges related to the pilot post-retirement liability and bankruptcy provisions was $1.23, a 4% increase over the same period in 2005, excluding the aforementioned gain.

For the three months ended June 30, 2006, Pinnacle recorded operating revenue of $204.5 million, a decrease of $8.4 million, or 4%, over the same period in 2005. Pinnacle completed 103,471 block hours and 63,053 cycles, decreases of 6% and 2%, respectively, over the same periods in 2005. The decrease in revenue, block hours and cycles was attributable to the decrease in fleet size after Northwest removed 15 aircraft from our CRJ fleet in November 2005. During the second quarter 2005, Pinnacle accepted deliveries of 14 aircraft and had an average fleet size of 131 aircraft, as opposed to the second quarter 2006 in which it maintained a fleet size of 124 throughout the quarter.

For the six months ended June 30, 2006, Pinnacle recorded operating revenue of $411.6 million, an increase of $4.0 million, or 1%, over the same period in 2005. For the six months ended June 30, 2006, Pinnacle completed 206,068 block hours and 124,318 cycles, a decrease of 2% and an increase of 3%, respectively, over the same periods in 2005. While block hours decreased due to the decrease in fleet size, cycles increased due to a decrease in the average length of Pinnacle's flights.

Pinnacle's operating margin for the three months ended June 30, 2006 was 9.5%. Excluding the aforementioned charges related to the pilot post-retirement liability and the bankruptcies of Northwest and Mesaba, Pinnacle's margin for the quarter was 10.9%, as compared to an operating margin of 10.7% for the three months ended June 30, 2005. This margin increase was primarily attributable to annual rate increases under the Company's airline services agreement with Northwest that were greater than Pinnacle's year-over-year unit cost increase. In addition, there was a reduction in costs related to services provided by outside vendors.

Pinnacle repaid in full the $17.0 million drawn under its revolving credit facility upon its expiration in June 2006. Pinnacle ended the quarter with cash and short-term investments totaling $78.2 million. Management believes that the Company's current liquidity is adequate, and the Company does not have immediate plans to seek a replacement credit facility.

A time frame for discussions to resolve the status of Pinnacle's contractual relationship with Northwest has still not been set, although Northwest has indicated that they expect such discussions will begin soon. Pinnacle also continues to negotiate with the Airline Pilots Association ("ALPA") to amend the collective bargaining agreement between the Company and ALPA, and believes that successful conclusion of this negotiation is necessary to complete discussions with Northwest.

"I want to thank our People for another successful quarter," said Phil Trenary, Pinnacle's President and Chief Executive Officer. "We have continued to exceed our already high standards, and our strong operating performance will help us retain Northwest Airlines as a Customer. Satisfactory conclusion of discussions with both Northwest and the negotiating committee representing our Pilots remains our top priority."

Non-GAAP Disclosures

This release and certain tables accompanying this release include certain financial information not prepared in accordance with generally accepted accounting principles ("GAAP"), regarding operating income, net income and EPS for the three and six months ended June 30, 2006 excluding the losses associated with the bankruptcy filings of Northwest and Mesaba, the nonrecurring charge related to the pilot post-retirement liability and the nonrecurring gain on repurchase of the note payable with Northwest. Pinnacle believes that this information is useful to investors as it indicates more clearly Pinnacle's comparative year-to-year results. None of this information should be considered a substitute for any measures prepared in accordance with GAAP. Pinnacle has included its reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measures in the accompanying schedules.

About Pinnacle

Pinnacle Airlines Corp. operates through its wholly owned subsidiary, Pinnacle Airlines, Inc., as a regional airline that provides airline capacity to Northwest Airlines, Inc. Pinnacle operates as a Northwest Airlink carrier at Northwest's domestic hub airports in Detroit, Minneapolis/St. Paul and Memphis and the focus city of Indianapolis. Pinnacle currently operates an all-jet fleet of 124 Canadair Regional Jets and offers scheduled passenger service with 709 daily departures to 113 cities in 37 states and six Canadian provinces. Pinnacle Airlines maintains its headquarters in Memphis, Tennessee, and employs approximately 3,570 People.

Forward-Looking Statements

This press release contains various forward-looking statements that are based on management's beliefs, as well as assumptions made by and information currently available to management. Although Pinnacle believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Such statements are subject to certain risks, uncertainties and assumptions, including those set forth in our filings with the Securities and Exchange Commission, which are available to investors at our web-site or online from the Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove erroneous, actual results may vary materially from results that were anticipated or projected. Pinnacle does not intend to update these forward-looking statements before its next required filing with the Securities and Exchange Commission.


                      Pinnacle Airlines Corp.
       Condensed Consolidated Statements of Operations (Unaudited)
              (in thousands, except per share data)

                                                       Three Months Ended
                                                            June 30,
                                                      --------------------
                                                        2006       2005
                                                      ---------  ---------

Operating revenues
  Regional airline services                           $ 202,811  $ 210,958
  Other                                                   1,703      1,941
                                                      ---------  ---------

Total operating revenues                                204,514    212,899

Operating expenses
  Salaries, wages and benefits                           35,593     33,027
  Aircraft fuel                                          27,211     28,643
  Aircraft maintenance, materials and repairs             7,996      8,835
  Aircraft rentals                                       66,031     69,589
  Other rentals and landing fees                         11,223     11,062
  Ground handling services                               21,765     23,125
  Depreciation                                              967      1,016
  Other                                                  12,885     14,821
  Provision for losses associated with bankruptcy
   filings of Northwest and Mesaba                        1,348          -
                                                      ---------  ---------
Total operating expenses                                185,019    190,118
                                                      ---------  ---------

Operating income                                         19,495     22,781

Operating income as a percentage of operating
 revenues                                                   9.5%      10.7%

Nonoperating income (expense)
  Interest expense                                       (1,452)    (1,069)
  Interest income                                           645        261
  Miscellaneous income, net                                  23          -
                                                      ---------  ---------
Total nonoperating expense                                 (784)      (808)
                                                      ---------  ---------

Income before income taxes                               18,711     21,973
Income tax expense                                        6,820      8,177
                                                      ---------  ---------
Net income                                            $  11,891  $  13,796
                                                      =========  =========

Basic and diluted earnings per share                  $    0.54  $    0.63
                                                      =========  =========

Shares used in computing basic earnings per share        21,945     21,908
                                                      =========  =========
Shares used in computing diluted earnings per share      21,984     21,932
                                                      =========  =========



                    Pinnacle Airlines Corp.
       Condensed Consolidated Statements of Income (Unaudited)
             (in thousands, except per share data)

                                                        Six Months Ended
                                                            June 30,
                                                      --------------------
                                                        2006       2005
                                                      ---------  ---------
Operating revenues
  Regional airline services                           $ 407,816  $ 403,709
  Other                                                   3,787      3,922
                                                      ---------  ---------
Total operating revenues                                411,603    407,631

Operating expenses
  Salaries, wages and benefits                           70,020     64,509
  Aircraft fuel                                          53,912     54,105
  Aircraft maintenance, materials and repairs            18,258     16,073
  Aircraft rentals                                      132,062    132,895
  Other rentals and landing fees                         22,474     21,204
  Ground handling services                               44,124     45,789
  Depreciation                                            1,929      1,978
  Other                                                  26,435     28,226
  Provision for losses associated with bankruptcy
   filings of Northwest and Mesaba                        1,365          -
                                                      ---------  ---------
Total operating expenses                                370,579    364,779
                                                      ---------  ---------
Operating income                                         41,024     42,852

Operating income as a percentage of operating
 revenues                                                  10.0%      10.5%

Nonoperating income (expense)
  Interest expense                                       (2,952)    (2,157)
  Interest income                                         1,149        417
  Miscellaneous income, net                                  51          -
  Gain on extinguishment of debt                              -     18,000
                                                      ---------  ---------
Total nonoperating income (expense)                      (1,752)    16,260
                                                      ---------  ---------

Income before income taxes                               39,272     59,112
Income tax expense                                       14,085     21,984
                                                      ---------  ---------
Net income                                            $  25,187  $  37,128
                                                      =========  =========

Basic and diluted earnings per share                  $    1.15  $    1.69
                                                      =========  =========

Shares used in computing basic earnings per share        21,945     21,908
                                                      =========  =========
Shares used in computing diluted earnings per share      21,979     21,930
                                                      =========  =========



                       Pinnacle Airlines Corp.
                 Condensed Consolidated Balance Sheets
                    (in thousands, except share data)


                                                      June 30, December 31,
                                                        2006       2005
                                                     --------- -----------
                                                    (Unaudited)
Assets

Current assets

Cash and cash equivalents                             $  32,790  $  31,567

Short-term investments                                   45,450     44,160

Receivables, net of allowance                            29,968     30,190

Spare parts and supplies, net                             6,847      6,368

Prepaid expenses and other assets                        11,349      5,623

Deferred income taxes, net of allowance                   9,781      9,146
                                                      ---------  ---------
    Total current assets                                136,185    127,054

Property and equipment
  Aircraft and rotable spares                            39,050     39,362
  Other property and equipment                           20,586     19,209
  Office furniture and fixtures                           2,018      2,002
                                                      ---------  ---------
                                                         61,654     60,573
  Less accumulated depreciation                         (19,922)   (18,038)
                                                      ---------  ---------
Net property and equipment                               41,732     42,535

Other assets, primarily aircraft deposits                22,010     22,155

Debt issuance costs, net                                  4,088      4,198

Contractual rights under airline services agreement,
 net                                                     13,834     14,435

Goodwill, net                                            18,422     18,422
                                                      ---------  ---------
Total assets                                          $ 236,271  $ 228,799
                                                      =========  =========



                     Pinnacle Airlines Corp.
              Condensed Consolidated Balance Sheets
                 (in thousands, except share data)


                                              June 30,        December 31,
                                                 2006              2005
                                              ---------         ---------
                                            (Unaudited)

Liabilities and stockholders’ equity

Current liabilities

  Accounts payable                  $          14,662    $          12,945

  Accrued expenses                             25,066               25,158

  Line of credit with First
   Tennessee                                        -               17,000

  Income taxes payable                         14,231               17,756

  Other current liabilities                     6,818                7,161
                                    -----------------    -----------------
     Total current liabilities                 60,777               80,020

Deferred income taxes                           7,736                7,426

Other liabilities                               2,677                1,735

Senior convertible notes                      121,000              121,000

Commitments and contingencies

Stockholders’ equity

  Preferred stock, par value $0.01
   per share; 1,000,000 shares
   authorized, no shares issued                     -                    -

  Series A preferred stock,
   stated value $100 per share;
   one share authorized and
   issued                                           -                    -

  Series common stock, par value
   $0.01 per share; 5,000,000
   shares authorized; no
   shares issued                                    -                    -

Common stock, $0.01 par value;
 40,000,000 shares authorized,
 22,080,585 and 21,945,260 shares
 issued, respectively                             221                  219

Additional paid-in capital                     85,824               85,550

Accumulated deficit                           (41,964)             (67,151)
                                    -----------------    -----------------
     Total stockholders’
      equity                                   44,081               18,618
                                    -----------------    -----------------
     Total liabilities and
      stockholders’ equity          $         236,271    $         228,799
                                    =================    =================



                     Pinnacle Airlines Corp.
    Condensed Consolidated Statements of Cash Flows (Unaudited)
                         (in thousands)

                                                         Six Months Ended
                                                             June 30,
                                                        ------------------
                                                          2006      2005
                                                        --------  --------

Cash provided by operating activities                   $ 21,101  $ 31,689

Cash used in investing activities                         (2,878)   (9,604)

Cash (used in) provided by financing activities          (17,000)    9,490
                                                        --------  --------

Net increase in cash and cash equivalents                  1,223    31,575

Cash and cash equivalents at beginning of period          31,567    34,912
                                                        --------  --------

Cash and cash equivalents at end of period              $ 32,790  $ 66,487
                                                        ========  ========



                       Pinnacle Airlines Corp.
          Reconciliation of Non-GAAP Disclosures (Unaudited)

                                            Three Months Ended June 30,
                                        ----------------------------------
                                                                % Increase
                                           2006        2005     (Decrease)
                                        ----------------------------------
                                      (in thousands, except per share data)
Operating Income:
Operating income in accordance with
 GAAP                                   $   19,495  $   22,781        (14%)
  Add: Pilot post-retirement liability       1,377           -        100%
  Add: Provision for losses associated
   with Northwest and Mesaba
   bankruptcy filings                        1,348           -        100%
                                        ----------  ----------  -----------
Non-GAAP operating income               $   22,220  $   22,781         (2%)

                                        ==========  ==========  ===========
Operating Margin:
Operating margin in accordance with
 GAAP                                          9.5%       10.7%  (1.2) pts.
  Add: Pilot post-retirement liability         0.7%        0.0%    0.7 pts.
  Add: Provision for losses associated
   with Northwest and Mesaba
   bankruptcy filings                          0.7%        0.0%    0.7 pts.
                                        ----------  ----------  -----------
Non-GAAP operating margin                     10.9%       10.7%    0.2 pts.
                                        ==========  ==========  ===========

Net Income:
Net income in accordance with GAAP      $   11,891  $   13,796        (14%)
  Add:  Pilot post-retirement
   liability, net of related tax               883           -        100%
  Add:  Provision for losses
   associated with Northwest and
   Mesaba bankruptcy filings, net
   of related tax                              785           -        100%
                                        ----------  ----------  -----------
Non-GAAP net income                     $   13,559  $   13,796         (2%)
                                        ==========  ==========  ===========

Basic and Diluted EPS:
Basic and diluted EPS in accordance
 with GAAP                              $     0.54  $     0.63        (14%)
  Add: Pilot post-retirement liability,
   net of related tax                         0.04           -        100%
  Add: Provision for losses associated
   with Northwest and Mesaba
   bankruptcy filings, net of
   related tax                                0.04           -        100%
                                        ----------  ----------  -----------
Non-GAAP basic and diluted EPS          $     0.62  $     0.63         (2%)
                                        ==========  ==========  ===========


                         Pinnacle Airlines Corp.
           Reconciliation of Non-GAAP Disclosures (Unaudited)

                                             Six Months Ended June 30,
                                        ----------------------------------
                                                                % Increase
                                           2006        2005     (Decrease)
                                        ----------------------------------
                                      (in thousands, except per share data)

Operating Income:
Operating income in accordance with
 GAAP                                   $   41,024  $   42,852        (4%)
  Add: Pilot post-retirement liability       1,377           -       100%
  Add: Provision for losses associated
   with Northwest and Mesaba bankruptcy
   filings                                   1,365           -       100%
                                        ----------  ----------  ----------
Non-GAAP operating income               $   43,766  $   42,852         2%
                                        ==========  ==========  ==========

Operating Margin:
Operating margin in accordance with
 GAAP                                         10.0%       10.5% (0.5) pts.
  Add: Pilot post-retirement liability         0.3%        0.0%   0.3 pts.
  Add: Provision for losses associated
   with Northwest and Mesaba bankruptcy
   filings                                     0.3%        0.0%   0.3 pts.
                                        ----------  ----------  ----------
Non-GAAP operating margin                     10.6%       10.5%   0.1 pts.
                                        ==========  ==========  ==========

Net Income:
Net income in accordance with GAAP      $   25,187  $   37,128       (32%)
  Add:  Pilot post-retirement liability,
   net of related tax                          883           -       100%
  Add:  Provision for losses associated
   with Northwest and Mesaba bankruptcy
   filings, net of related tax                 866           -       100%
  Deduct:  Gain on repurchase of debt,
   net of related tax                            -     (11,302)      100%
                                        ----------  ----------  ----------
Non-GAAP net income                     $   26,936  $   25,826         4%
                                        ==========  ==========  ==========

Basic and Diluted EPS:
Basic and diluted EPS in accordance
 with GAAP                              $     1.15  $     1.69       (32%)
  Add:  Pilot post-retirement liability,
   net of related tax                         0.04           -       100%
  Add:  Provision for losses associated
   with Northwest and Mesaba bankruptcy
   filings, net of related tax                0.04           -       100%
  Deduct: Gain on repurchase of debt,
   net of related tax                            -       (0.51)      100%
                                        ----------  ----------  ----------
Non-GAAP basic and diluted EPS          $     1.23  $     1.18         4%
                                        ==========  ==========  ==========



                       Pinnacle Airlines Corp.
                   Operating Statistics (Unaudited)

                                             Three Months Ended June 30,
                                           -------------------------------
                                             2006       2005       Change
                                           ---------  ---------  ---------
Other Data:
Revenue passengers (in thousands)              2,340      2,111        11 %
Revenue passenger miles (in
 thousands) (1)                            1,111,012  1,086,890         2 %
Available seat miles (in thousands)        1,371,539  1,482,481        (8)%
Passenger load factor (2)                       81.0%      73.3%    7.7pts.
Operating revenue per available seat mile
 (in cents)                                    14.91      14.36         4 %
Operating costs per available seat mile
 (in cents)                                    13.49      12.82         5 %
Operating revenue per block hour           $   1,977  $   1,930         2 %
Operating costs per block hour             $   1,788  $   1,724         4 %
Block hours                                  103,471    110,301        (6)%
Cycles                                        63,053     63,998        (2)%
Average daily utilization (block hours)         9.17       9.26        (1)%
Average stage length (miles)                     467        504        (7)%
Number of operating aircraft (end of
 period)                                         124        137       (10)%
Employees (end of period)                      3,567      3,564         0 %
                                           ---------  ---------  ---------


                                              Six Months Ended June 30,
                                           -------------------------------
                                             2006       2005       Change
                                           ---------  ---------  ---------
Other Data:
Revenue passengers (in thousands)              4,355      3,780        15 %
Revenue passenger miles (in
 thousands)(1)                             2,082,817  1,904,552         9 %
Available seat miles (in thousands)        2,713,207  2,770,981        (2)%
Passenger load factor (2)                       76.8%      68.7%    8.1pts.
Operating revenue per available seat mile
 (in cents)                                    15.17      14.71         3 %
Operating costs per available seat mile
 (in cents)                                    13.66      13.16         4 %
Operating revenue per block hour           $   1,997  $   1,937         3 %
Operating costs per block hour             $   1,798  $   1,733         4 %
Block hours                                  206,068    210,444        (2)%
Cycles                                       124,318    121,094         3 %
Average daily utilization (block hours)         9.18       9.29        (1)%
Average stage length (miles)                     470        498        (6)%
Number of operating aircraft (end of
 period)                                         124        137       (10)%
Employees (end of period)                      3,567      3,564       0 %
                                           ---------  ---------  ---------

(1) Revenue passenger miles represents the number of miles flown by revenue
    passengers.
(2) Passenger load factor equals revenue passenger miles divided by
    available seat miles.


For further information, please contact:
Philip Reed
Vice President of Marketing
(901) 348-4257
www.nwairlink.com

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