(Memphis) - Pinnacle Airlines pulling out of Memphis didn't come as a shock to city leaders, but it didn't take away the sting of the airline's announcement Thursday.
“It’s very disappointing and heartbreaking. We spent a lot of time and effort to recruit them to downtown Memphis,” Downtown Memphis Commission President Paul Morris said.
The city lobbied for the airline to move to downtown 2 years ago. Morris said while the city gave Pinnacle free parking, and the building owner gave them a discounted rate on its office space, this move all comes down to the bottom line.
Morris said it’s cheaper for Pinnacle to operate in Minneapolis than in Memphis.
“Delta has cut back their operations in Memphis obviously many many fewer flights, so Pinnacle is flying very little out of Memphis, so their operation alignment doesn`t make sense for them to be where they don`t originate flights,” Morris said.
Morris added that Pinnacle, which is basically owned by Delta now after it went through a bankruptcy, was hurt by the sky-high airline fares that Memphians know about all too well.
“They`re expenses have to do with bringing their employees pilots flight attendants into their headquarter city for training each year and it’s very expensive to fly into Memphis as we know,” he said.
So Pinnacle which employs 500 people at its Memphis headquarters will now move to vacant space leased by Delta Air Lines on Minneapolis-St. Paul International Airport property. An expected move date is May 2013.
“We had the responsibility to explore every aspect of our business to find opportunities to reduce costs, including evaluating our property leases, to find the most economical options for Pinnacle,” said John Spanjers, president and CEO of Pinnacle Airlines. “Our analysis covered everything from the available labor pool and operational alignment to economic incentives. Both Memphis and the State of Minnesota presented very strong cases. In the end, it was an economic decision.”
At a news conference Memphis Mayor A C Wharton said he was upset to hear the news.
"Obviously we're disheartened, but it does not in any degree deter our determination to restore downtown to a vibrant, bustling area,” he said.
He added that there is a silver lining in all this.
"We have an asset now that we didn’t have before,” he said.
That asset is 13 floors of a renovated office building overlooking the river and parking. He said the city is already searching for a new company to make One Commerce Square its home.
One Commerce Square already houses the local offices for Electrolux and the Great American Steamboat Company.