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### May 29, 2012 

### VIA E-MAIL RobertA. Letteney Deputy Assistant Secretary for

Aviation and International Affairs DepartmentofTransportation 1200NewJerseyAve., S.E. Washington, DC 20590 Kenneth P. Quinn tel 202.663.8898 kenneth.quinn@pillsburylaw.com



### Re: 

### PinnacleAirlinesCorp.'sEssentialAirServiceProgram CJ 

### DearMr. Letteney: On behalf of our client, Pinnacle Airlines Corp. ("Pinnacle") and its affiliates including Colgan Air, Inc. ("'Colgan"), 1 

### we are writing in response to the Department of Transportation's ('"Department") Order 2012-5-192 

### (the ·'Order'') purporting to extend the Essential Air Service (''EAS'') obligations ofColgan at Presque Isle, Maine, and Plattsburgh, New York, for an additional 30 days, through the earlier of July 6, 2012, or when full replacement service begins. As the Order states, Peninsula Airways ('"PenAir'') has announced its plans to inaugurate service beginning onJune 14, 2012, from Boston to Presque Isle and Plattsburgh.

2 Pillsbury serves as counsel to Pinnacle and its affiliates (collectively, the "Debtors") in connection with

certain regulatory matters related to their cases under chapter II oftitle II ofthe United States Code (the "Bankruptcy Code") tiled in the United States Bankruptcy Court for the Southern District ofNew York (the "Bankruptcy Court") on April I, 2012. andjointly administered under the caption In re Pinnacle Airlines Corp
.. etal, CaseNo. 12-11343 (REG). Dockets OST-2000-8012 and OST-2003-14783 (May 23, 2012).

www.pillsburylaw.com 403519524v1**CO~FrDENTlAL** TREATMENT REQliESTED THIS DOCUMENT CONTAINS TRADE SECRETS AND CONFIDENTIAL COMMERCIAL OR FINANCIAL INFORMATION EXEMPT FROM DISCLOSURE LINDER THE FREEDOM OF INFORMATION ACT. 5 U.S.C.**~** 552{8)(4). IT IS SUBMITTED VOLUNTARILY FOR THE SOLE PURPOSE OF ALLOWING EVALUATION BY THE U.S. GOVERNMENT.

### Mr. RobertA. Letteney May 29,2012 Page2

PenAir has published its schedule and is selling tickets for these routes.3 

### To maintain continuity ofservice, Colgan has agreed to provide service to Presque Isle and Plattsburgh until June 14, 2012. Although we do not believe it was the Department's intention to extend Colgan's obligation to provide EAS beyond June 14. 2012, we wish to make clear that Colgan has no obligationto continue providing EAS beyond the agreedJune 14 date. Simply put, the operational extension component in paragraph I ofthe Order is null and void to the extent it does intend to impose obligations on Colgan to continue to provide EAS beyond June 14, 2012. As explained in my letter of May 9, 2012, the automatic stay became effective immediately upon the Debtors' filing for reliefunder the Bankruptcy Code on April I, 2012 (the ''Petition Date"). The automatic stay applies to "all entities,'' including the Department and bars any attempt to extend Colgan's obligations under its EAS service contracts. Because the Order purports to extend Colgan·s obligations past the date set forth in the last order issued prior to the Petition Date, the Order is a violation ofthe automatic stay and, therefore, is null and void ab initio.+ Ifnecessary, the Debtors will moveto enforce the stay and seekappropriate relieffrom the Bankruptcy Courtfor such violations. In addition, the Department may only require carriers to continue providing EAS service "[i]f, atthe endofthe notice period
...the Secretary has not found another aircarrier
.•. .''5 

### Because the Department**h~s** 

### selected PenAir to provide EAS to Presque Isle and Plattsburgh as ofJune 14, 2012 and because PenAir has already published schedules and is

3 See, e.g., PenAir Home Page, http://www.penair.com. + See, e.g, II U.S.C. § 362(a)(3) (the automatic stay prohibits, interalia, any "actto ... exercise control over

property ofthe estate"); see also In re Enron Corp., 300 B.R. 201,212 (Bankr. S.D.N.Y. 2003) (holding that letters demanding performance ofprepetition obligations violate the automatic stay); In re Best Payphones, Inc., 279 B.R. 92, 93 (Bankr. S.D.N.Y. 2002) (holding that the issuance ofa decision in an administrative proceeding "violated the automatic stay, and was void ab initio"). For the same reasons, the Department's ordersextendingEAS issued andthe Department's May 2, 2012 letterissued after April I, 2012, including its order with respect to the Presque Isle and Plattsburgh routes dated May I, 2012 (Order 2012-5-1), are also null and void. 5 49 U.S.C. §41734(b).
www.pillsburyfaw.com 403519524v1**CONFIDE~TIAL** TREATMENT REQllESTED THIS DOCUMENT CONTAINS TRADE SECRETS AND CONFIDENTIAL COMMERCIAL OR FINANCIAL INFORMATION EXEMPT FROM DISCLOSURE UNDER THE FREEDOM OF INFORMATION ACT, 5 U.S.C.**~** 552(B)(4). IT IS SUBMIHEDVOLUNTARILY FOR THE SOLE PURPOSE OF ALLOWING EVALUATION BY THE U.S. GOVERNMENT.Mr. RobertA. Letteney May29,2012 Page 3

selling tickets, the Department was not empowered to issue the Order requiring Colgan to continue EAS serviceto these communitiesafterthis date.6 Colgan wishes to reassure the Department that, consistent with its representations over the past several months, it will provide EAS to Presque Isle and Plattsburgh until June 14, 2012, when PenAir is scheduled to begin replacement service. Colgan will also maintain the documentation required, as described in paragraph 2 of the Order. However, Colgan cannot and will not provide EAS to Presque Isle and Plattsburgh beyond June 14, 2012, as continued service would pose an impossible logistical and financial burden which would threaten the Debtors' reorganization. Thank 

### you for your consideration. As always, we remain available to answer any . questions. Sincerely,

Kenneth P. Quinn

cc: (viaemail) Brian T. Hunt Philip Reed AliciaM. Simmons Dennis DeVany James Dann John Spanjers MarshallS. Huebner

6 See id.

www.pillsburylaw.com CONFIDENTIALTREATME:'IIT REQlESTED 403519524v1

THIS DOCUMENT CONTAINS TRADE SECRETS AND CONFIDENTIAL COMMERCIAL OR FINANCIAL**I~**FORMATION EXEMPT FROM DISCLOSURE UNDER THE FREEDOM OF INFORMATION ACL 5 U.S.C.**~** 552(8}(4}. IT IS SUBMITTED VOLUNTARILY FOR THE SOLE PURPOSE OF ALLOWING EVALUATION BY THE U.S. GOVERNMENT.