UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    Form 10-K

[X]       Annual  report  pursuant  to  Section  13 or 15(d)  of the  Securities
          Exchange Act of 1934 For the fiscal year ended  December 31, 2003

                                       or

[ ]       Transition  report  pursuant to Section 13 or 15(d) of the  Securities
          Exchange  Act  of  1934  For  the  transition  period   from__________
          to__________

                        Commission File Number 001-31898
                             PINNACLE AIRLINES CORP.
             (Exact name of registrant as specified in its charter)

           Delaware                                             03-0376558
  (State or other jurisdiction                               (I.R.S. Employer
of incorporation or organization)                           Identification No.)

    1689 Nonconnah Blvd, Suite 111
          Memphis, Tennessee                                      38132
(Address of principal executive offices)                        (Zip Code)



                                  901-348-4100
              (Registrant's telephone number, including area code)
           Securities registered pursuant to Section 12(b) of the Act:

     Title of each class:             Name of each exchange on which registered:
     --------------------             ------------------------------------------
Common Stock, $.01 par value                     Nasdaq National Market

        Securities registered pursuant to section 12 (g) of the Act: None


     Indicate  by check  mark  whether  registrant  (1) has  filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.

        Yes [ X ]                                                  No [ ]


     Indicate by check mark if disclosure of delinquent  filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrants  knowledge,  in definitive  proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). Yes [ ] No [ x ]

     The aggregate market value of the voting and non-voting common equity stock
held by non-affiliates of the registrant was $0.0 as of June 30, 2003.

    As of March 8, 2004, 21,892,060 shares of common stock were outstanding.

                       Documents Incorporated by Reference

     Certain  information called for by Part III of Form 10-K is incorporated by
reference to the Proxy  Statement for our 2004 Annual Meeting of Stockholders to
be filed with the Commission within 120 days after December 31, 2003.

<PAGE>

                                Table of Contents


Part I ........................................................................4

  Item 1.  Business .......................................................... 4
            Our Company ...................................................... 4
            Our Airline Services Agreement with Northwest .................... 4
            Our Employees .................................................... 9
            Maintenance of Aircraft ......................................... 10
            Training ........................................................ 10
            Safety and Security ............................................. 11
            Insurance ....................................................... 11
            Regulations ..................................................... 11
            Markets and Routes .............................................. 12
            Risk Factors Affecting Our Business ............................. 13

  Item 2.  Properties ....................................................... 19
            Flight Equipment ................................................ 19
            Facilities ...................................................... 19

  Item 3.  Legal Proceedings ................................................ 20
            Environmental Matters ........................................... 20
            Regulatory Matters .............................................. 20

  Item 4.  Submission of Matters to a Vote of Security Holders .............. 20


Part II ..................................................................... 21

  Item 5.  Market for Registrant's Common Equity and Related Stockholder
           Matters .......................................................... 21

  Item 6.  Selected Financial Data .......................................... 22

  Item 7.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations ........................................ 24
            Overview ........................................................ 24
            Basis of Presentation ........................................... 26
            Revenues ........................................................ 27
            Operating Expenses .............................................. 28
            Certain Statistical Information ................................. 29
            Results of Operations ........................................... 30
            Liquidity and Capital Resources ................................. 32
            Critical Accounting Policies .................................... 34
            Forward Looking Statements ...................................... 35

  Item 7A.  Quantitative and Qualitative Disclosure About Market Risk ....... 36

  Item 8.   Financial Statements and Supplementary Data ..................... 37

  Item 9.   Changes in and Disagreements With Accountants on Accounting
            and Financial Disclosure ........................................ 61
  Item 9A.  Controls and Procedures ......................................... 61


                                       2
<PAGE>

Part III .................................................................... 62


  Item 10.  Directors and Executive Officers of the Registrant .............. 62

  Item 11.  Executive Compensation .......................................... 62

  Item 12.  Security Ownership of Certain Beneficial Owners and Management
            and Related Stockholder Matters ................................. 62

  Item 13.  Certain Relationships and Related Transactions .................. 62

  Item 14.  Principal Accountant Fees and Services .......................... 62



Part IV ..................................................................... 63


  Item 15.  Exhibits, Financial Statement Schedules, and Reports
            on Form 8-K ..................................................... 63

  SIGNATURES ................................................................ 69



                                       3
<PAGE>


                                     Part I

Item 1.  Business

     Pinnacle Airlines Corp. and its wholly owned subsidiary, Pinnacle Airlines,
Inc. (which operates as "Northwest  Airlink"),  are collectively  referred to in
this report as the "Company", "we" and "us" except as otherwise noted. Northwest
Airlines  Corporation  and its  subsidiaries  are  collectively  referred  to as
"Northwest."

Our Company

     We operate an all-regional jet fleet providing regional airline capacity to
Northwest  and are one of the fastest  growing  regional  airlines in the United
States based on year-over-year growth in available seat miles flown. In the year
ended  December 31, 2003, we had a 56.2%  increase in available seat miles flown
over the same  period  in 2002.  We  provide  Northwest  with  regional  airline
capacity as a Northwest Airlink carrier at its domestic hub airports in Detroit,
Minneapolis/St. Paul and Memphis. We operate a jet fleet of 76 Canadair Regional
Jet ("CRJ") aircraft and offer scheduled  passenger  service with  approximately
490 daily departures to 81 cities in 29 states and two Canadian provinces. As of
December 31, 2002, we offered  service with 51 CRJ aircraft  with  approximately
334 daily departures to 62 cities in 26 states and two Canadian provinces.

     Pinnacle Airlines Corp. was incorporated in Delaware on January 10, 2002 to
be the holding company of Pinnacle  Airlines,  Inc.,  which was  incorporated in
Georgia in 1985. Northwest acquired Pinnacle Airlines, Inc. in April 1997. Since
the  acquisition,  we have provided  regional  airline  service  exclusively  to
Northwest.  During  the time that  Northwest  was our  majority  owner,  we were
operated  as a business  unit of  Northwest  without  regard to our  stand-alone
profitability. Our operations were designed to increase overall Northwest system
revenues rather than to maximize our stand-alone profitability.

     During  2003,  Northwest  transferred  19,400,000  shares,  or  89%  of our
outstanding  common stock, to the Northwest  Airlines  Pension Plan for Contract
Employees,  the  Northwest  Airlines  Pension Plan for Pilot  Employees  and the
Northwest  Airlines  Pension  Plan for  Salaried  Employees  (collectively,  the
"Northwest   Airlines   Pension  Plan.").   Northwest   retained  the  remaining
outstanding  shares of our common  stock and one share of our Series A preferred
stock.

     On  November  25,  2003,  we  completed  an initial  public  offering  (the
"Offering") of our common stock, par value $.01 per share. In the Offering,  the
Northwest  Airlines Pension Plans sold all of our shares that it received during
2003. We did not receive any proceeds from the Offering.

Our Airline Services Agreement with Northwest

     We provide regional airline services to Northwest under an Airline Services
Agreement ("ASA"), which we entered into with Northwest effective March 1, 2002.
The terms of the ASA are  materially  different from the terms of our historical
arrangement with Northwest. The initial agreement provided for a term from March
1, 2002,  through February 29, 2012 and would have increased the Company's fleet
to 95 regional  jets by December 31, 2004.  During 2003, we entered into certain
amendments with Northwest  regarding the ASA that, among other things,  extended
the term of the agreement through December 31, 2017, provided for an increase in
the size of our fleet to 129  regional  jets by December  31,  2005,  eliminated
incentive payments based on certain performance  criteria and lowered our target
operating  margin from 14% to 10% effective  December 1, 2003. At the end of its
term,  the ASA  automatically  extends for additional  five-year  periods at the
option of Northwest.


                                       4
<PAGE>

Item 1. Business

Our Airlines Services Agreement (continued)

     Our ASA with Northwest provides for the following payments:

     Reimbursement  payments: We receive monthly reimbursements for all expenses
relating  to:  passenger   aircraft  fuel;  basic  aircraft  rentals;   aviation
liability,  war risk and  hull  insurance;  third-party  deicing  services;  CRJ
third-party  engine  and  airframe  maintenance;  hub and  maintenance  facility
rentals; passenger security costs; ground handling in cities where Northwest has
ground handling  operations;  Detroit landing fees and property taxes.  Since we
are reimbursed by Northwest for the actual expenses incurred for these items, we
have no financial risk associated with cost fluctuations.

     Payments  based on pre-set rates:  We are entitled to receive  semi-monthly
payments  for each  block  hour and cycle we  operate  and a monthly  fixed cost
payment  based on the size of our fleet.  The term "block  hours"  refers to the
elapsed time between an aircraft  leaving a gate and arriving at a gate, and the
term "cycles" refers to an aircraft's departure and corresponding arrival. These
payments are designed to cover all of our expenses  incurred with respect to the
ASA that are not covered by the reimbursement payments. The substantial majority
of these expenses  relate to labor costs,  ground handling costs in cities where
Northwest does not have ground handling operations, landing fees in cities other
than Detroit, overhead and depreciation.

     Margin payments:  We receive a monthly margin payment based on the revenues
described  above  calculated to achieve a target  operating  margin.  The target
operating  margin for the ten months ended  December  31,  2002,  and the eleven
months ended  November 30, 2003 was 14%. In  conjunction  with the Offering,  we
amended the ASA to lower our target operating margin to 10%,  effective December
1, 2003.  Under the amended ASA, our target  operating margin will be reset to a
market-based  percentage in 2008, but the reset target  operating margin will be
no lower than 8% and no higher than 12%.

     Under  the ASA,  we  operate  flights  on behalf  of  Northwest.  Northwest
controls our scheduling,  pricing, reservations,  ticketing and seat inventories
and is entitled to all revenues associated with the operation of our aircraft.

     Through  2007,  if our actual  costs that are intended to be covered by the
revenues we receive based on pre-set rates deviate from the expected  costs used
in developing  those pre-set rates,  and as a result our annual operating margin
is below the 9% floor or above the 11% ceiling for each year  through  2005,  or
below  the 8% floor or above  the 12%  ceiling  for 2006 and  2007,  a  year-end
adjustment  in the form of a payment by Northwest or by the Company will be made
to adjust our operating  margin to the floor or ceiling.  Specified  amounts are
excluded when determining whether our annual operating margin is below the floor
or above the ceiling.

     Beginning  in 2008,  Northwest  will not  guarantee  our minimum  operating
margin,  although we will still be subject to a margin ceiling above the revised
target-operating margin.

     If our actual operating margin for any year beginning with 2008 exceeds the
revised target operating margin by up to five percentage  points, we will make a
year-end  adjustment  payment  to  Northwest  in an amount  equal to half of the
excess.  In addition,  should our actual  operating  margin  exceed the targeted
operating margin by more than five percentage  points, we will pay Northwest all
of the excess above five percent.  If  necessary,  we will record an amount each
quarter to reflect our right to receive or our  obligation to pay this operating
margin  adjustment  payment and any net payment will be made  annually.  For the
years ended  December 31, 2002 and 2003,  no margin  adjustments  were  required
pursuant to the terms of the ASA.


                                       5
<PAGE>

Item 1. Business


Our Airlines Services Agreement (continued)

     The ASA and the other  agreements  we have entered  into with  Northwest to
provide us with various ongoing services were made in the context of our being a
subsidiary  of  Northwest  and were  negotiated  in the  overall  context of the
initial  contribution  of shares to the Northwest  Airlines  Pension Plans. As a
result of Northwest's  control of us when these agreements were negotiated,  the
prices and other terms under these agreements may be different from the terms we
might have obtained in arm's-length negotiations with unaffiliated third parties
for similar services. Some of these terms may be more favorable to us than those
we would  have been  able to obtain  otherwise.  When we need to  replace  these
agreements,  we will be  negotiating  with  Northwest  or  third  parties  on an
arm's-length basis, and we may not be able to do so on as favorable terms.

     These agreements generally contain  cross-termination  provisions such that
termination of the ASA will trigger a termination under the relevant  agreement.
In addition,  these agreements generally provide that they will terminate upon a
change of  control of our  company  or our  affiliates.  Other  Agreements  with
Northwest in the notes to our consolidated  financial  statements,  in Item 8 of
this Form 10-K includes a summary of the terms contained in our other agreements
with Northwest.

     Scope of Agreement

     The ASA  covers all of our  existing  fleet,  as well as the 53  additional
regional jets scheduled to become part of our fleet by December 31, 2005. We are
scheduled to receive 38 CRJs in 2004 and 15 CRJs in 2005.  Northwest is entitled
to change the timing of the  deliveries  of the  remaining 53 aircraft by either
delaying or accelerating  the delivery of any aircraft but has agreed to deliver
a total of 129 CRJs by December 31, 2005,  subject to  Northwest  receiving  the
aircraft from Bombardier, the manufacturer of the CRJ, by that time. In addition
to  those 53  regional  jets,  at its  option  Northwest  may also add up to 175
additional  regional  jets to our fleet to be  operated by us under the terms of
the ASA. However,  once we have more than 129 regional jets,  Northwest also has
the right to reduce the number of  regional  jets to as few as 129,  or fewer in
the event of a strike. Northwest is also responsible for scheduling all aircraft
covered by the ASA.

     Code-Sharing and Marketing

     Our ASA with Northwest  requires us to use its two-letter flight designator
code (NW) to identify our flights in the computerized  reservation  systems,  to
paint our aircraft  with its colors and/or logos and to market and advertise our
status as being a part of the Northwest  route system.  The agreement also gives
us a non-exclusive  license to fly under the Northwest  Airlink name.  Under the
ASA, passengers on our aircraft participate in WorldPerks,  Northwest's frequent
flyer program. We do not pay fees with respect to these services.

     Aircraft Financing

     We lease all of our regional  jets from  Northwest at a fixed  monthly rate
under the ASA. We also  sublease  our spare  engines from  Northwest.  The fixed
monthly rental rates on our regional jets include certain fleet management costs
of  Northwest  and are not  representative  of the rates  paid by  Northwest  to
third-party lessors.  Under the ASA, our aircraft rental expenses are reimbursed
in full by Northwest.

     Northwest has obtained long-term financing  commitments from Bombardier for
all of the  additional  regional  jets that it has agreed to provide to us under
the ASA,  eliminating the need for us to obtain  financing with respect to these
aircraft.


                                       6
<PAGE>

Item 1. Business


Our Airlines Services Agreement (continued)

     Airport Facilities and Ground Handling

     Northwest  grants  us the  right  to use  facilities  that it  leases  from
authorities  at various  airports.  In addition,  at a number of airports  where
Northwest  operates,  we do not maintain our own ground  support  equipment  and
personnel and instead  obtain ground  handling  services from  Northwest.  These
services  include gate access,  aircraft  loading and  unloading  and  passenger
enplaning and deplaning  services.  Under the ASA and our facilities  agreements
with  Northwest,  we will be entitled to use  Northwest's  facilities and obtain
ground  handling  services to fulfill our  obligations  under the ASA but not to
service other carriers or operate  flights under our own flight  designator code
without the approval of Northwest. Northwest will be responsible for all capital
and  start-up  costs at its hub airports  and at any other  facilities  where it
elects to provide ground handling services to us. We will be responsible for any
capital and start-up costs,  excluding jetbridge  expenses,  associated with any
facilities  at other  airports  at  which we  perform  our own  ground  handling
functions.

     At any  airport  at which we  provide  our own  ground  handling  services,
subject to some exceptions, Northwest can require us at any time, including upon
cessation of operating scheduled flights on behalf of Northwest, to use our best
efforts to assign or sublease the ground handling facilities to Northwest or its
designee.

     Furthermore, Northwest can require us, at any time, to transfer, subject to
applicable  laws,  to  Northwest or its designee at no charge any of our airport
takeoff or landing slots,  route authorities or other regulatory  authorizations
used for our scheduled flights under the ASA.

     Establishing New Operations

     The  ASA  provides  that we  cannot  use  any of our  officers,  employees,
facilities,  equipment  or aircraft  that are used to provide  regional  airline
services to Northwest in any new operations without the prior written consent of
Northwest  except as  follows:  (1) our  officers  may  engage in  planning  and
coordinating  such activities,  and (2) the following  operational and corporate
functions of Pinnacle Airlines, Inc. may also be used to support new operations:
(a) information  services  personnel,  equipment and other  infrastructure;  (b)
systems  operation control  management,  personnel  (excluding  dispatchers) and
infrastructure,  including but not limited to,  facilities and computer systems;
and  (c)  corporate  functions   specifically  defined  as  those  traditionally
performed  by the tax,  treasury,  internal  audit,  purchasing,  and  corporate
education (excluding pilot training performed via simulators) departments.  As a
result,  in order to provide  regional  airline  services  to  another  airline,
Pinnacle  Airlines Corp.  would have to establish new  operations  that would be
largely  independent  of Pinnacle  Airlines,  Inc.'s  operations and could incur
significant  incremental costs in the process.  Additionally,  Pinnacle Airlines
Corp.  or a  subsidiary  other than  Pinnacle  Airlines,  Inc.  may only provide
airline  services to other major airlines using aircraft  certificated as having
(1) less  than 60 seats  and (2) a  maximum  gross  takeoff  weight of less than
70,000 pounds (or such greater seat or weight limits as may be established under
Northwest's collective bargaining agreement with its pilots).

     Further,  in the event we provide airline  services to other  airlines,  we
have agreed to negotiate in good faith with Northwest an adjustment to our fixed
cost reimbursements under the ASA to account for resulting efficiencies.  During
the  term of our  ASA,  our  arrangement  with  Northwest  restricts  us and our
affiliates from flying under our or another  carrier's flight designator code to
or from  Northwest's  domestic hub airports  without  Northwest's  prior written
consent. Hub airports are defined as airports to which Northwest,  together with
its subsidiaries  and Northwest  Airlink  carriers  operating under  Northwest's
designator  code,  operate an average of more than 50 departures  per day during
any Northwest schedule period.


                                       7
<PAGE>

Item 1. Business


Our Airlines Services Agreement (continued)

     Northwest's Ability to Use Other Regional Airlines

     The ASA does not prohibit  Northwest from competing,  or from entering into
agreements with other airlines that would compete with routes we serve.  Because
our  license  from  Northwest  to use  the  Northwest  Airlink  name  and  other
trademarks is  non-exclusive,  Northwest is not prohibited  from  permitting any
other  regional  airline to operate under the Northwest  Airlink name, as Mesaba
Airlines does currently.

     Labor Disruption

     If, as a result of a strike affecting our employees, we do not operate more
than 50% of our  aircraft  for more  than  seven  consecutive  days or we do not
operate more than 25% of our aircraft for more than 21 consecutive  days,  other
than  as a  result  of (1) an  Federal  Aviation  Administration  ("FAA")  order
grounding  all  commercial  flights or all air  carriers or grounding a specific
aircraft  type of all  carriers,  (2) a  scheduling  action by  Northwest or (3)
Northwest's  inability to perform its obligations under the ASA as a result of a
strike by Northwest  employees,  the ASA provides that  Northwest  will have the
right to: o terminate the ASA, which would immediately  terminate the leases and
subleases  for all of our CRJs;  and o prior to electing to  terminate  the ASA,
immediately  terminate  the  subleases  for 79 of our  CRJs,  and if the  strike
continues  for more than 45 days,  terminate the subleases for all but 50 of our
CRJs.

     Term and Termination of Agreement; Remedies for Breach

     The initial term of the agreement expires on December 31, 2017,  subject to
renewal automatically for successive five-year renewal periods, unless Northwest
gives us at least two years' advance  notice of non-renewal  prior to the end of
any term.  Northwest may terminate the agreement at any time for cause, which is
defined as:

   - our failure to make any payment  under any aircraft  lease or  sublease;
   - an event of default by us of any term of any aircraft lease or sublease;
   - an event of default under any of our other  agreements with  Northwest;
   - our failure to make payments under our promissory note to Northwest;
   - our failure to maintain required  insurance  coverages;
   - our  failure  to  comply  with  Northwest's inspection requirements;
   - our failure to operate  more than 50% of our  aircraft  for more than seven
     consecutive  days or our failure to operate  more than 25% of our  aircraft
     for more than 21 consecutive days, other than as a result of:
     1)   an FAA order  grounding all commercial  flights or all air carriers or
          grounding a specific aircraft type of all carriers,
     2)   a scheduling  action by Northwest  or
     3)   Northwest's  inability  to perform its  obligations  under the airline
          services agreement as a result of a strike by Northwest employees;
   - suspension  or  revocation of our authority to operate as an airline by the
     FAA or DOT;
   - a change of  control of our  company  or our  affiliates,
   - operation  by Pinnacle  Airlines,  Inc. or an  affiliate of (1) an aircraft
     type which causes Northwest to violate its collective  bargaining agreement
     with its pilots or (2) an  aircraft  certificated  as having (A) 60 or more
     seats or (B) a maximum  gross  takeoff  weight of 70,000 pounds or more (or
     such greater seat or weight limits as may be established  under Northwest's
     collective bargaining agreement with its pilots); and
   - any replacement of the chief executive  officer of either Pinnacle Airlines
     Corp. or Pinnacle Airlines, Inc. that is not approved by Northwest.


                                       8
<PAGE>

Item 1. Business


Our Airlines Services Agreement (continued)

     Term and Termination of Agreement; Remedies for Breach (continued)

     Northwest may also  terminate the agreement at any time upon our bankruptcy
or for any breach of the agreement by us that continues uncured for more than 30
days  after we  receive  notice of the  breach;  provided  that in the case of a
non-monetary  default,  Northwest may not terminate the agreement if the default
would take more than 30 days to cure and we are  diligently  attempting  to cure
the  default.  In  addition,  Northwest  and we are  both  entitled  to  seek an
injunction and specific performance for a breach of the agreement.

     Treatment of Assets upon Termination

     If  Northwest  terminates  the ASA for  cause,  it will  have the  right to
terminate our leases or subleases  for aircraft  covered by the agreement at the
time of  termination  and to take  possession  of these  aircraft.  We currently
sublease all of our regional jets from Northwest,  and we currently lease all of
our turboprops from third parties.  Other Agreements with Northwest in the notes
to our consolidated  financial statements in Item 8 of this Form 10-K includes a
summary of the terms of our turboprop lease agreements. If the ASA is terminated
by Northwest for cause, we would lose access to all of our regional jets and, as
a result, our business,  operations and ability to generate future revenue would
be materially adversely affected.

     In addition,  in the case of any other  termination  of the ASA,  Northwest
will have the right to require us (1) to  terminate  all leases,  subleases  and
agreements  it has with us, (2) to assign,  or use our best efforts to assign to
it, subject to some exceptions,  any leases with third parties for facilities at
airports  to which we fly  scheduled  flights  on its  behalf and (3) to sell or
assign to it facilities  and inventory  then owned or leased by us in connection
with the services we provide to  Northwest  for an amount equal to the lesser of
fair market value or depreciated book value of those assets.

     Indemnification

     In general,  we have agreed to indemnify Northwest and Northwest has agreed
to  indemnify  us for any  damages  caused  by any  breaches  of our  respective
obligations under the agreement or caused by our respective  actions or inaction
under the ASA.

Our Employees

     As of December  31, 2003,  we had  approximately  2,250  active  employees,
including 650 pilots,  370 flight  attendants  (of whom 90 are  part-time),  680
customer service personnel (of whom 430 are part-time),  350 mechanics and other
maintenance personnel, 60 dispatchers/crew resource personnel and 140 management
and support personnel. The part-time employees work varying amounts of time, but
typically  are  half-time  or less  employees.  As is  customary  in the airline
industry, we also use third parties to provide ground-handling personnel in some
stations.  Currently,  Northwest and Mesaba Airlines provide a majority of these
ground handling services.

     Labor  costs  are a  significant  component  of  airline  expenses  and can
substantially  impact  our  results.  We believe  we have  generally  good labor
relations and high labor  productivity.  Approximately  76% of our employees are
represented by unions.


                                       9
<PAGE>

Item 1. Business


Our Employees (continued)

     The following table reflects our principal collective bargaining agreements
and their respective amendable dates as of December 31, 2003:

<TABLE>
<S>  <C>                <C>                    <C>                                      <C>

      Employee Group     Number of Employees           Representing Union                 Contract Amendable Date
     ------------------ ---------------------- --------------------------------------   ---------------------------
     Pilots                      650              Air Line Pilots Association                   4/30/2005

     Flight Attendants           370           Paper, Allied-Industrial,Chemical and            7/31/2006
                                               and Energy Workers International Union

     Customer Service            680           Paper, Allied-Industrial, Chemical and       Initial Contract is
                                               Energy Workers International Union         Currently in Negotiation

</TABLE>


Maintenance of Aircraft

     Using  a  combination  of  FAA-certified  maintenance  vendors  and our own
personnel  and  facilities,   we  maintain  our  aircraft  on  a  scheduled  and
"as-needed" basis. We perform preventive maintenance and inspect our engines and
airframes in accordance with our FAA-approved  preventive  maintenance  policies
and procedures.

     The maintenance performed on our aircraft can be divided into three general
categories: line maintenance, heavy maintenance checks, and engine and component
overhaul  and repair.  Line  maintenance  consists  of routine  daily and weekly
scheduled  maintenance  checks on our  aircraft,  including  pre-flight,  daily,
weekly  and  overnight  checks  and any  diagnostic  and  routine  repairs.  Our
technicians and third-party  vendors perform all of our line  maintenance on the
CRJs.

     We contract  with an  affiliate of  Bombardier,  the CRJ  manufacturer,  to
perform certain routine maintenance checks on the CRJs for us. These maintenance
checks are  regularly  performed  on a  scheduled  basis that is approved by the
manufacturer and the FAA.

     Component  overhaul and repair  involves  sending  parts,  such as engines,
landing gear and avionics to a third-party,  FAA-approved  maintenance  facility
for repair or  overhaul.  We have a time and  materials  contract  with  General
Electric on our CRJ engines.  We are also party to maintenance  agreements  with
various other vendors covering avionics, auxiliary power units and brakes.

     The  average age of the  regional  jets in our fleet is  approximately  1.7
years. As we continue to receive new CRJs from Northwest pursuant to the ASA, we
will continue to have a young fleet. In general, the CRJ aircraft do not require
their first heavy maintenance checks until they have flown  approximately  8,000
hours.  Our first scheduled heavy airframe  structural  inspection was September
2003.  Since Northwest is required to reimburse us for and pay a margin on these
maintenance  expenses  for our CRJs under the ASA,  we expect that the profit we
derive from  maintenance  will be minimal while our fleet is young and will grow
as the aircraft age.

Training

     We perform the vast  majority of  training of our flight  personnel  in our
Corporate  Education  Center in Memphis,  Tennessee  and the Memphis,  Tennessee
simulator   center   operated  by   FlightSafety   International.   FlightSafety
International provides some overflow training at various other simulator centers
throughout  the U.S. at our  request.  The Memphis  simulator  center  currently
includes two CRJ full-motion  simulators.  Under our agreement with FlightSafety
International with regard to the Memphis simulator center, we have first call on
all of the  simulator  time  available  in the  Memphis  center.  We expect that
essentially  our  entire  simulator  needs  will  be met by the  Memphis  center
throughout the delivery stream of the committed  aircraft.  Instructors  used in
the Memphis center are typically either professional instructors or trained line
pilot instructors.


                                       10
<PAGE>

Item 1. Business


Training (continued)

     We provide in-house and outside training for our maintenance  personnel and
take advantage of manufacturers'  training  programs offered,  particularly when
acquiring new aircraft.

     Professional  instructors conduct training of mechanics,  flight attendants
and customer service personnel in the Corporate Education Center.

Safety and Security

     We have taken numerous measures, as required by regulatory authorities,  to
increase  both the  safety and  security  of our  operations  in the wake of the
terrorist attacks of September 11, 2001.

         For  example,  we  have  implemented  various  security   enhancements,
         including:
         -implementation of a system-wide positive bag match program;
         -reinforcement of all cockpit doors; and
         -implementation   of  strict  in-flight   cockpit  access   procedures,
          including the removal of all cockpit  access keys from within the main
          cabin.

Insurance

     We currently  maintain insurance  policies for: aviation  liability,  which
covers public liability, passenger liability, hangar keepers' liability, baggage
and cargo liability and property  damage;  war risk, which covers losses arising
from acts of war, terrorism or confiscation;  hull insurance,  which covers loss
or damage to our flight equipment;  and workers' compensation insurance. The ASA
requires that we maintain specified levels of these types of policies.

     Our aviation  liability,  war risk and hull insurance  coverage is obtained
through a combined placement with Northwest. Under the ASA, our cost of aviation
liability,  war risk and hull  insurance  will be  capped at the lower of actual
cost and  amounts  based on the  value of our fleet  and the  number of  revenue
passengers we carry.  Northwest  will  reimburse us and pay us a margin on these
costs. As a result,  our operating margin would not be adversely affected if our
insurance costs for these items increased.

     We  were  given  the  option  under  the  Air  Transportation   Safety  and
Stabilization  Act,  signed into law on September 22, 2001, to purchase  certain
third-party war risk liability  insurance from the U.S. government on an interim
basis at rates that are more  favorable  than those  available  from the private
market. We have purchased this insurance from the FAA as provided under the Act.

Regulations

     We operate  under an air  carrier  certificate  issued by the FAA and under
commuter air carrier  authorization  issued by the Department of  Transportation
("DOT").  This authorization may be altered,  amended,  modified or suspended by
the DOT if it determines that we are no longer fit to continue  operations.  The
FAA may suspend our revoke our air carrier certificate if we fail to comply with
the terms and conditions of our certificate. The DOT has established regulations
affecting the  operations  and service of the airlines in many areas,  including
consumer protection,  non-discrimination  against disabled  passengers,  minimum
insurance  levels and others.  Failure to comply with FAA or DOT regulations can
result in civil  penalties,  revocation  of our  right to  operate  or  criminal
sanctions. In addition, we operate in certain Essential Air Service markets, and
our  ability  to  terminate  service  in those  markets is subject to review and
approval  of the DOT.  FAA  regulations  are  primarily  in the  areas of flight
operations,   maintenance,  ground  facilities,   security,   transportation  of
hazardous  materials and other technical matters.  The FAA requires each airline
to obtain an  operating  certificate  authorizing  the  airline  to  operate  at
specific  airports using specified  equipment.  Under FAA  regulations,  we have
established,  and the FAA has approved,  a maintenance  program for each type of
aircraft  operated  by us that  provides  for the ongoing  maintenance  of these
aircraft, ranging from frequent routine inspections to major overhauls.


                                       11
<PAGE>

Item 1. Business


Regulations (continued)

     The  Transportation  Security  Administration  ("TSA") now regulates  civil
aviation security under the Aviation and Transportation  Security Act. Since the
events of September 11, 2001,  Congress has mandated and the TSA has implemented
numerous  security  procedures  that have  imposed  and will  continue to impose
additional  compliance  responsibilities  and costs on airlines.  The DOT allows
local  airport  authorities  to implement  procedures  designed to abate special
noise  problems,  provided such  procedures do not  unreasonably  interfere with
interstate or foreign commerce or the national  transportation  system.  Certain
airports, including the major airports at Boston, Washington, D.C., Chicago, Los
Angeles,  San  Diego,  Orange  County  (California)  and  San  Francisco,   have
established  airport  restrictions  to limit noise,  including  restrictions  on
aircraft types to be used and limits on the number of hourly or daily operations
or the time of such  operations.  In some  instances,  these  restrictions  have
caused  curtailments  in services or  increases  in  operating  costs,  and such
restrictions  could limit our ability to  commence or expand our  operations  at
affected airports.  Local authorities at other airports are considering adopting
similar noise regulations.

Markets and Routes

     As of December 31, 2003, we operated 76 CRJs serving 81 cities in 29 states
and two Canadian  provinces out of Northwest's  three hubs and our route network
spanned  the entire  eastern  half of the United  States.  We fly as far west as
Bismarck,  North Dakota, as far east as Bangor, Maine, as far north as Winnipeg,
Manitoba and as far south as San Antonio, Texas.



                                       12
<PAGE>

Item 1. Business


Risk Factors Affecting Our Business

     Risks Relating to our Airline Services Agreement ("ASA") with Northwest

     If our ASA with Northwest is terminated, we could lose our only significant
source of revenue and  earnings,  our regional jet fleet,  access to our airport
facilities, and the services Northwest provides to us.

     We generate substantially all of our revenues under our ASA with Northwest.
As a result, if the agreement is terminated,  we will have no significant source
of revenue or earnings unless we are able to enter into satisfactory  substitute
arrangements.  The current term of the agreement expires on December 31, 2017. A
further  discussion of our ASA is included in  "Business--Our  Airline  Services
Agreement."

     If  Northwest  terminates  the ASA for  cause,  it will  have the  right to
terminate our leases and subleases with it for the regional jet aircraft covered
by the agreement and take immediate  possession of these aircraft.  We currently
sublease  all of our  regional  jets from  Northwest.  We would also likely lose
access to all of the airport facilities (including  maintenance  facilities) and
services  provided  by  Northwest  that we are  dependent  on,  such as aircraft
dispatch and ground handling services.

     Reduced  utilization  levels of our aircraft under the ASA would reduce our
revenues and earnings.

     Under the ASA, a portion of our revenues from Northwest is derived from our
actual flights.  A portion of the compensation that we receive from Northwest is
based on block hours,  cycles and reimbursable  expenses that we incur only when
we fly. As a result,  if Northwest  reduces the  utilization  of our fleet,  our
revenues  and  profits  would  decrease.  Northwest  is solely  responsible  for
scheduling  our  flights,  but the ASA does not  require  Northwest  to meet any
minimum utilization levels for our aircraft.

     Our ASA may cause us to earn lower operating margins than we have targeted,
or to  experience  losses,  if some of our future costs are higher than expected
and may  limit our  ability  to  benefit  from  improved  market  conditions  or
increased operational efficiency. In addition, our target operating margin under
the ASA could be reduced beginning in 2008, and our operating margin will not be
subject to any guaranteed floor.

     The payments we will receive from Northwest  under our ASA based on pre-set
rates for  block  hours,  cycles  and  fixed  costs are not based on the  actual
expenses  we will incur in our  operations.  However,  the rates on which  these
payments  are based were  determined  in a manner  intended  to cover all of our
expenses in respect of the ASA that are not directly  reimbursed  by  Northwest.
The ASA also provides that we will earn an operating margin ranging from a floor
of 9% to a ceiling of 11%, with a target  operating  margin of 10%, for 2004 and
2005 and an  operating  margin  ranging  from a floor of 8% to a ceiling of 12%,
with a target  operating  margin of 10%, for 2006 and 2007. Our operating margin
could be less than the target  operating  margin for those periods if our actual
costs that are  intended  to be covered by the  pre-set  rates  described  above
deviate from the expected costs used in developing  those pre-set  rates.  While
the capacity purchase business model and targeted operating margins reflected in
our ASA with Northwest reduce our financial risk and exposure to fluctuations in
many of our variable costs,  they also limit our potential to experience  higher
earnings  growth  from  improved  market  conditions  or  increased  operational
efficiency.

     The rates we will receive for our  services  under the ASA will be reset in
2008 based on our  historical and expected  operating  costs.  In addition,  the
target  operating  margin will be reset to a market-based  percentage,  provided
that it will be no lower than 8% and no higher than 12%. In addition,  beginning
in 2008,  Northwest  will not guarantee us a minimum  operating  margin.  If the
target  operating  margin is set to  achieve  less than a 10%  target  operating
margin,  our  revenues and earnings  will  decrease  beginning in 2008 unless we
increase the level of regional airline services we provide.


                                       13
<PAGE>

Item 1. Business


Risks Relating to our ASA with Northwest (continued)

     The ASA and other  agreements we entered into with  Northwest were not made
on an arm's-length  basis and may not be  representative of future agreements we
may enter into.

     The ASA and the other  contractual  agreements  we have with  Northwest  to
provide us with various ongoing services were made in the context of our being a
subsidiary of Northwest Airlines  Corporation and were negotiated in the overall
context of the  contribution of shares to the Northwest  Airlines Pension Plans.
As a  result  of  Northwest  Airlines  Corporation's  control  of us when  these
agreements were  negotiated,  the prices and other terms under these  agreements
may be  different  from  the  terms  we  might  have  obtained  in  arm's-length
negotiations with unaffiliated third parties for similar services. Some of these
terms  may be more  favorable  to us than we  would  have  been  able to  obtain
otherwise.  When we need to replace these agreements or add additional aircraft,
we will be negotiating with Northwest or third parties on an arm's-length basis,
and may not be able to  replace  these  agreements  or  acquire  aircraft  on as
favorable terms, or at all.

     We are dependent on the services that Northwest provides to us.

     We currently use Northwest's systems,  facilities and services to support a
significant  portion of our  operations,  including our  information  technology
support, dispatching, fuel purchasing, some ground handling services and some of
our insurance coverage.  If Northwest  terminates our ASA and no longer provides
these  services  to us,  we may not be able to  replace  them with  services  of
comparable  quality or on terms and  conditions as favorable as those we receive
from Northwest, or at all.

     A strike at Northwest could prevent us from operating.

     If Northwest  experiences a strike that causes it to cease  operations,  we
could be forced  to cease or  significantly  reduce  our  operations.  Northwest
provides us with a number of services that we need in order to operate,  such as
information  technology support,  dispatching and ground handling.  If Northwest
were to cease  operations,  it may not be able to provide these  services to us.
Since our revenues and  operating  profits are  dependent on our level of flight
operations, a strike at Northwest could adversely affect our financial condition
during the strike.  Northwest  has  experienced  strikes by its employees in the
past. On August 28, 1998,  Northwest ceased its flight operations as a result of
a  strike  by  its  pilots  represented  by the  Air  Line  Pilots  Association,
International ("ALPA"). The cessation of flight operations lasted 18 days and we
ceased our own operations  during that period.  Northwest's  current  collective
bargaining  agreements  with its pilots  and its  employees  represented  by the
International  Association  of Machinists and Aerospace  Workers  ("IAM") became
amendable during 2003.  Northwest is currently engaged in negotiations with ALPA
and IAM  pursuant to the U.S.  Railway  Labor Act.  Northwest  could  experience
strikes that require it and us to cease operations again in the future.

     Northwest  may decide not to grow our fleet beyond 129 CRJs or to use other
regional  airlines,  which could limit  Northwest's  utilization of our fleet or
limit our growth.

     The ASA does not  guarantee  the  growth  of our  fleet  beyond  129  CRJs.
Northwest is permitted  under the ASA to add an additional 175 CRJs to our fleet
on the same  economic  terms as the first 129 aircraft;  however,  Northwest may
instead  choose  to  offer to lease or  sublease  any  additional  CRJs to us on
economic terms and with financing commitments that are less favorable to us than
those contained in the ASA. In the future, we may also agree to modifications to
the ASA  that  reduce  certain  benefits  to us in order  to  obtain  additional
aircraft from Northwest.  The ASA does not prohibit  Northwest from  contracting
with other regional  airlines to fly any aircraft,  including  regional jets and
turboprops,  in any  market.  Northwest  may  decide,  rather  than  leasing  or
subleasing any additional CRJ aircraft to us, that it will lease or sublease the
additional aircraft to another regional carrier, such as Mesaba Airlines,  which
would have a material adverse effect on our ability to grow.


                                       14
<PAGE>

Item 1. Business


Risks Relating to our ASA with Northwest (continued)

     There are constraints on our ability to establish new operations to provide
airline services to major airlines other than Northwest.

     The  ASA  provides  that we  cannot  use  any of our  officers,  employees,
facilities,  equipment  or aircraft  that are used to provide  regional  airline
services to  Northwest  in any such new  operations  without  the prior  written
consent of Northwest with a few exceptions. Pursuant to the terms of the ASA, in
order to provide regional airline services to another airline, Pinnacle Airlines
Corp.  would have to establish new operations that would be largely  independent
of Pinnacle Airlines,  Inc.'s operations and could incur significant incremental
costs in the process.  Additionally,  Pinnacle  Airlines  Corp.  or a subsidiary
other than Pinnacle  Airlines,  Inc. may only provide airline  services to other
major airlines using aircraft  certificated as having (1) less than 60 seats and
(2) a maximum gross  takeoff  weight of less than 70,000 pounds (or such greater
seat  or  weight  limits  as may be  established  under  Northwest's  collective
bargaining agreement with its pilots).

     Risks Relating to our Industry

     Increased competition in the airline industry could reduce Northwest's need
to utilize our services and limit Northwest's  desire to expand its relationship
with us.

     The airline industry is highly  competitive.  Northwest competes with other
major carriers as well as low fare airlines on its routes,  including the routes
we fly.  Some of  these  airlines  are  larger  and have  significantly  greater
financial and other  resources than Northwest.  Competitors  could rapidly enter
markets we serve for Northwest and quickly  discount  fares,  which could lessen
the economic benefit of our regional jet operations to Northwest.

     Increased  competition in the regional jet industry could affect our growth
opportunities.

     Aside from the  restrictions  under our ASA with Northwest,  our ability to
provide  regional air service to other major U.S. airline networks is limited by
existing  relationships  that all of the major airlines have with other regional
operators.  Additionally, some of the major airlines are subject to scope clause
restrictions  under their collective  bargaining  agreements with employees that
restrict their ability to add new regional jet capacity.

     In addition,  new  competitors  may enter the regional jet industry and our
existing competitors may expand their regional jet fleet. Capacity growth by our
competitors  in the  regional  jet market  would lead to  significantly  greater
competition  and may result in lower rates of return in our  industry.  Further,
many of the major airlines are focused on reducing costs,  which may also result
in lower operating margins in our industry.





                                       15
<PAGE>

Item 1. Business


Risks Relating to our Industry (continued)

     We may be  affected  by  factors  beyond  our  control,  including  weather
conditions,  increased  security  measures  and U.S.  and world  conditions  and
events.

     Like other airlines,  we are subject to delays caused by factors beyond our
control, such as aircraft congestion at airports, adverse weather conditions and
increased  security  measures.  During  periods of fog,  storms or other adverse
weather conditions or air traffic control problems,  flights may be cancelled or
significantly  delayed.  To the extent  that we reduce the number of our flights
for these  reasons,  our revenues,  and hence our profits,  will be reduced.  We
believe that other  material risks and  uncertainties  that could affect us, and
could affect whether Northwest provides us with additional  aircraft or utilizes
our fleet,  include  the  future  level of air travel  demand,  our future  load
factors  and  yields,  the  airline  pricing  environment,  increased  costs for
security,  the price and availability of jet fuel, the possibility of additional
terrorist  attacks  or the fear of such  attacks,  concerns  about  communicable
disease  outbreaks,  labor  negotiations both at other carriers and us, capacity
decisions  of other  carriers,  the general  economic  condition of the U.S. and
other  regions of the world,  armed  conflicts and civil  disturbances,  foreign
currency exchange rate fluctuations, inflation and other factors.

     Many  aspects  of our  operations  are  subject to  increasingly  stringent
federal,  state and local laws. Future regulatory  developments  could adversely
affect operations and increase operating costs in the airline industry.  Changes
in government  regulation imposing  additional  requirements and restrictions on
our operations  could increase our operating  costs and result in service delays
and disruptions.

     Airlines are subject to extensive  regulatory and legal requirements,  both
domestically and internationally, that involves significant compliance costs. In
the last  several  years,  Congress  has passed  laws,  and the DOT and FAA have
issued  regulations  relating to the  operation of airlines  that have  required
significant expenditures.  In addition to increased costs, the security measures
required to be implemented under the Aviation Security Act as well as additional
security  measures issued by the FAA have resulted in a longer check-in  process
for passengers and caused delays and disruptions in airline  service,  which has
led to customer frustration and reduced demand for air travel.


     Additional laws, regulations, taxes and airport rates and charges have been
proposed from time to time that could significantly increase the cost of airline
operations or reduce the demand for air travel. If adopted, these measures could
have the effect of raising ticket prices, reducing revenue and increasing costs,
which could result in Northwest scheduling fewer flights for our company.  These
and other laws or regulations enacted in the future may harm our business.

     Aviation insurance is a critical safeguard of our financial  condition.  It
might become difficult to obtain adequate  insurance at a reasonable rate in the
future.

     We  believe  that our  insurance  policies  are of types  customary  in the
industry and in amounts we believe are  adequate to protect us against  material
loss. It is possible, however, that the amount of insurance we carry will not be
sufficient to protect us from material loss.

     Some aviation  insurance  could become  unavailable  or available  only for
reduced  amounts of  coverage,  which would result in our failing to comply with
the levels of  insurance  coverage  required by the ASA,  our other  contractual
agreements or applicable government regulations. Additionally, war risk coverage
or other  insurance  might cease to be available to our vendors or might only be
available for reduced amounts of coverage.


                                       16
<PAGE>

Item 1. Business


     Risks Relating to Our Company

     We may experience  difficulty  finding,  training and retaining  employees,
which may interfere with our expansion plans.

     Our business is labor-intensive. We require large numbers of pilots, flight
attendants,  mechanics and other personnel. We anticipate that our rapid growth,
including  the addition of 38 aircraft to our fleet in 2004,  will require us to
locate,  hire,  train and retain a significant  number of new employees over the
next several years. If we are unable to hire and retain qualified employees at a
reasonable cost, we may be unable to complete our expansion  plans,  which could
adversely affect our operating results and our financial condition.

     Strikes or labor  disputes  with our  employees  may  adversely  affect our
ability to conduct  our  business  and could  result in the  termination  of the
airline services  agreement or in significant  reductions in the benefits of the
agreement to us.

     If we are unable to reach  agreement  with any of our unionized work groups
on the terms of their  collective  bargaining  agreements,  we may be subject to
work interruptions or stoppages. Work stoppages may adversely affect our ability
to conduct our operations and fulfill our  obligations  under the ASA. Under the
ASA,  adverse  consequences  could  result  from a  strike  or a work  stoppage,
including possible termination of the ASA.

     Increases in our labor costs, which constitute a substantial portion of our
total operating costs, may directly impact our earnings.

     Labor costs  constitute a  significant  percentage  of our total  operating
costs.  Under the terms of our ASA, an increase in our labor costs over standard
industry  wages could result in a material  reduction in our  earnings.  Any new
collective  bargaining  agreements  entered into by other regional  carriers may
also result in higher  industry  wages and increased  pressure on our company to
increase the wages and benefits of our employees.

     We are highly leveraged, which could hurt our ability to meet our strategic
goals.

     As of December 31, 2003, we had a stockholders' deficiency of $48.4 million
and our debt  accounted for 151.7% of our total  capitalization.  As of December
31, 2003, we had  maturities  of our long-term  debt of $12 million in each year
from 2004 through 2008, and $72 million in 2009,  all of which are  attributable
to our note payable to Northwest. Our high degree of leverage could:

       -  limit our ability to obtain  additional  financing to support  capital
          expansion plans and for working capital and other purposes;
       -  divert  substantial  cash flow from our operations and expansion plans
          in order to service our debt;
       -  limit our  flexibility in planning for, or reacting to, changes in our
          business and the industry in which we compete; and
       -  place  us at a  possible  competitive  disadvantage  compared  to less
          leveraged  competitors  and  competitors  that have  better  access to
          capital resources.

     Our revolving  credit facility with Northwest  contains  covenants that may
limit our operations.

     Our $50 million revolving credit facility with Northwest  contains a number
of  restrictive  covenants  applicable  to  us,  including  limitations  on  the
incurrence of debt, liens, the making of distributions  and other  transactions.
Until this facility is eliminated or replaced,  the effect of these covenants is
to  preclude  us from  providing  airline  services  to other  airlines  without
obtaining the consent of Northwest.  This facility expires December 31, 2005. If
not  replaced  at that  time,  our  continuing  operations  could  be  adversely
affected.


                                       17
<PAGE>

Item 1. Business


Risks Relating to Our Company (continued)

     Our quarterly results of operations will fluctuate.

     The payments we will receive  under the ASA are designed to provide us with
a target operating margin on an annual basis.  However,  our quarterly operating
margin  could  differ  from the target  margin  based on a variety  of  factors,
including the timing of capital  expenditures and changes in operating expenses,
such as personnel and maintenance costs over the course of a fiscal year.

     Due   to   these   factors,    our   quarterly    operating   results   and
quarter-to-quarter  comparisons  of  our  operating  results  may  not  be  good
indicators of our annual financial performance. In addition, it is possible that
in any  quarter  our  operating  results  could be  below  the  expectations  of
investors and any published reports or analyses.

     We may be unable to obtain all of the aircraft,  engines,  parts or related
maintenance and support services we require from Bombardier or General Electric,
which could have a material adverse impact on our business.

     We are  dependent  on  Bombardier  as the sole  manufacturer  of all of our
regional  jets.  Any  significant  disruption or delay in the expected  delivery
schedule of our regional jet fleet would affect our overall operations and could
have a  material  adverse  impact on our  operating  results  and our  financial
condition. Our operations could also be materially and adversely affected by the
failure  or  inability  of  Bombardier  to provide  sufficient  parts or related
maintenance and support  services to us on a timely basis or the interruption of
our flight  operations as a result of unscheduled or  unanticipated  maintenance
requirements  for our  aircraft.  In addition,  the  issuance of FAA  directives
restricting or prohibiting  the use of Bombardier  aircraft types operated by us
would have a material adverse effect on our business and operations.

     We are also dependent on General Electric as the manufacturer of engines on
our aircraft. General Electric also provides parts, repair and overhaul services
and other types of support services on our engines.  The failure or inability of
General  Electric to provide  sufficient  parts or related support services on a
timely or  economically  reasonable  basis,  or the  interruption  of our flight
operations as a result of unscheduled or unanticipated  maintenance requirements
for our aircraft, could materially adversely affect our operations.


     Website

     Our website address is www.nwairlink.com.  All of our filings with the U.S.
Securities and Exchange  Commission ("SEC") are available free of charge through
our website on the same day, or as soon as reasonable  practicable after we file
them with, or furnish them to, the SEC.  Printed  copies of our annual Form 10-K
may be  obtained  by  submitting  a request at our  website.  Our  website  also
contains our Code of Conduct,  which  contains the code of business  conduct and
ethics applicable to all of our directors and employees.



                                       18
<PAGE>

Item 2.  Properties


Flight Equipment

     As shown in the following table, our operating  aircraft fleet consisted of
76 regional jets at December 31, 2003.

<TABLE>
<S>                                   <C>                      <C>

           Aircraft Type                Number of Aircraft       Standard Seating Configuration
------------------------------------  -----------------------  ------------------------------------

Canadair Regional Jet 200                       35                             50
Canadair Regional Jet 440                       41                             44
                                      -----------------------
                                                76
                                      =======================

</TABLE>

     In their standard  configurations,  CRJ200s are  certificated  as having 50
seats,  while CRJ440s are certificated as having 44 seats. Our CRJ aircraft have
an average age of 1.7 years. The 76 CRJ aircraft are, and the additional 53 CRJs
that  Northwest  has agreed to provide to us under the terms of the ASA will be,
covered by operating leases expiring upon the termination of our ASA.

Facilities

     We have the following significant dedicated facilities:


<TABLE>
<S>         <C>                  <C>                                 <C>                <C>

                 Location                   Description               Square Footage     Lease Expiration Date
            -------------------- ----------------------------------- -----------------  -------------------------
            Memphis, TN              Corporate Headquarters and           34,000              August 2004
                                     Corporate Education Center
            Memphis, TN           Hangar and Maintenance Facility         41,000             December 2016
            Knoxville, TN         Hangar and Maintenance Facility         55,000         Termination of the ASA
            South Bend, IN        Hangar and Maintenance Facility         30,000         Termination of the ASA
            Ft. Wayne, IN         Hangar and Maintenance Facility         18,000             December 2004
            Detroit, MI                   Parts warehouse                  6,000             February 2005
            Minneapolis, MN                 Office space                   2,150             December 2004
</TABLE>

     Also, in connection with the ASA, we entered into facilities use agreements
under which we have the right to use Northwest terminal gates, parking positions
and operations space at the Detroit, Minneapolis/St.  Paul and Memphis airports.
These agreements are coterminous with the ASA.


                                       19
<PAGE>

Item 3.  Legal Proceedings


     We are a defendant in various  lawsuits  arising in the ordinary  course of
our  business.  While the outcome of these  lawsuits and  proceedings  cannot be
predicted with certainty, it is the opinion of our management,  based on current
information and legal advice, that the ultimate  disposition of these suits will
not have a  material  adverse  effect  on our  financial  position,  results  of
operations or cash flows.

Environmental Matters

     We  are  subject  to  regulation  under  various   environmental  laws  and
regulations,  which are  administered  by numerous  state and federal  agencies,
including  the  Clean  Air  Act,  the  Clean  Water  Act and  the  Comprehensive
Environmental  Response,  Compensation  and  Liability Act of 1980. In addition,
many state and local governments have adopted environmental laws and regulations
to which our  operations  are  subject.  We are and may from time to time become
involved  in  environmental   matters,   including  the   investigation   and/or
remediation of environmental conditions at properties used or previously used by
us. We are not, however,  currently subject to any environmental  cleanup orders
imposed by regulatory  authorities,  nor do we have any active investigations or
remediations at this time.

Regulatory Matters

     We are subject to regulation  under various laws and regulation,  which are
administered by numerous state and federal  agencies,  including the FAA and the
DOT. We are involved in various  matters with these agencies during the ordinary
course of our business.  While the outcome of these matters  cannot be predicted
with  certainty,  it  is  the  opinion  of  our  management,  based  on  current
information and past experience,  that the ultimate disposition of these matters
will not have a material  adverse effect on our financial  position,  results of
operations or cash flows.

Item 4.  Submission of Matters to a Vote of Security Holders

None.


                                       20
<PAGE>

Part II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

     Our common stock trades on the NASDAQ  Exchange.  The table below shows the
high and low  sales  prices  for our  common  stock as  reported  on the  NASDAQ
Exchange beginning November 25, 2003, the date following the pricing date of our
initial  public  offering  on which  trading of our  common  stock on the NASDAQ
Exchange commenced.
                                                         High           Low
                                                         ----           ---
     Fourth Quarter (beginning November 25, 2003)...... $14.05         $11.08

     As of March 1, 2004, there were  approximately six holders of record of our
common stock.

     We have paid no cash  dividends  on our  common  stock and have no  current
intention of doing so.

     Our Certificate of  Incorporation  provides that no shares of capital stock
may be  voted  by or at the  direction  of  persons  who are not  United  States
citizens  unless such shares are  registered  on a separate  stock  record.  Our
Bylaws further  provide that no shares will be registered on such separate stock
record if the amount so registered would exceed United States foreign  ownership
restrictions.  United States law currently  limits to 25% the voting power in us
(or any other  U.S.  airline)  of  persons  who are not  citizens  of the United
States.

2003 Stock Incentive Plan

     We adopted the  Pinnacle  Airlines  Corp.  2003 Stock  Incentive  Plan (the
"Plan") effective November 21, 2003. The Plan permits the grant of non-qualified
stock options,  incentive stock options,  stock appreciation rights,  restricted
stock and other  stock-based  awards  to  employees  or  directors  of  Pinnacle
Airlines Corp. or our affiliates.  A maximum of 1,152,000 shares of common stock
may be subject to awards under the Plan.  The maximum number of shares of common
stock for which options and stock  appreciation  rights may be granted  during a
calendar year to any participant will be 500,000. The number of shares issued or
reserved pursuant to the Plan (or pursuant to outstanding  awards) is subject to
adjustment on account of mergers, consolidations, reorganizations, stock splits,
stock dividends and other dilutive changes in the common stock. Shares of common
stock covered by awards that expire,  terminate or lapse will again be available
for grant under the Plan.


<TABLE>
<S>                            <C>                          <C>                    <C>

                               Number of securities to be     Weighted-average                 Number of securities
                                issued upon exercise of      exercise price of           remaining available for future
                                 outstanding options,       outstanding options,     issuance under equity compensation plans
                                 warrants and rights        warrants and rights    (excluding securities reflected in column (a))
Plan Category                            (a)                       (b)                                  (c)
----------------------------   --------------------------   --------------------   ---------------------------------------------

Equity compensation plans
approved by security holders           858,200                    $14.00                              294,000

Equity compensation plans
not approved by security
holders                                   --                        --                                   --

                               --------------------------   --------------------   --------------------------------------------
Total                                  858,200                    $14.00                              294,000
                               ==========================   ====================   ============================================
</TABLE>



                                       21
<PAGE>

Item 6.  Selected Financial Data

     You  should  read  this  selected  condensed  consolidated  financial  data
together with the audited  consolidated  financial  statements and related notes
contained  in  Item  8,  "Management's  Discussion  and  Analysis  of  Financial
Condition  and  Results of  Operations"  contained  in Item 7 and "Risk  Factors
Affecting our Business" in Item 1 of this Form 10-K.

     Like  other  air  carriers,   we  disclose  information  regarding  revenue
passengers, revenue passenger miles, available seat miles, passenger load factor
and revenue per  available  seat mile in "Other  Data." While this data is often
used to assess the  financial  performance  of a major  carrier,  for a regional
carrier such as Pinnacle  Airlines,  Inc.  operating  under a capacity  purchase
agreement,  this data is not directly relevant to our revenues or profitability.
However,  it is  provided  to  indicate  the size and  scope of our  operations.


<TABLE>
<S>                                                <C>           <C>          <C>           <C>          <C>


                                                                          Year ended December 31,
                                                   --------------------------------------------------------------------
                                                       2003          2002         2001          2000         1999
                                                   ------------  -----------  ------------  -----------  --------------
Statement of Operations Data                                      (in thousands, except per share data)

Total operating revenues                            $ 456,770     $  331,568   $  202,050    $ 131,923    $  105,407
Total operating expenses                              392,601        283,912      185,077      117,362        98,920
Operating income                                       64,169         47,656       16,973       14,561         6,487
Non operating income (expense)                         (6,770)         2,672        6,094           67          (323)
Net income                                             35,067         30,785       14,246        9,262         3,663
Basic and diluted net income per share              $    1.60     $     1.41   $     0.65    $    0.42    $     0.17
Shares used in computing basic and diluted net
  income per share                                     21,892         21,892       21,892       21,892        21,892

</TABLE>


<TABLE>
<S>                                                <C>           <C>          <C>           <C>          <C>

                                                                            As of December 31,
                                                   --------------------------------------------------------------------
Balance Sheet Data:                                    2003          2002         2001          2000         1999
                                                   ------------  -----------  ------------  -----------  --------------
                                                                             (in thousands)

Cash and cash equivalents                             $31,523         $4,580       $1,891       $8,232       $10,865
Property and equipment                                 34,286         26,631       32,785       24,072        10,366
Total assets                                          127,970        143,284       92,250       64,156        50,731
Lines of credit                                        10,000          4,245        4,245          -             -
Long-term debt, including current maturities          132,000            -             -           122           350
Stockholders' equity (deficiency)                     (48,382)        82,051       55,651       41,405        32,143

</TABLE>



                                       22
<PAGE>

Item 6.  Selected Financial Data


<TABLE>
<S>                                                         <C>             <C>           <C>           <C>           <C>

                                                                                    Year ended December 31,
                                                            -----------------------------------------------------------------------
                                                                  2003          2002          2001          2000         1999
                                                            --------------  ------------- ------------  ------------  -------------

Other Data:
Revenue passengers (in thousands)                                 4,540          2,938         2,031         1,378         1,147
Revenue passenger miles (in thousands) (1)                    1,797,631      1,091,181       673,395       404,404       318,920
Available seat miles (in thousands) (2)                       2,678,000      1,714,151     1,153,620       687,059       535,218
Passenger load factor (3)                                          67.1%          63.7%         58.4%         58.9%         59.6%
Operating revenue per available seat mile (in cents)              17.06          19.34         17.51         19.20         19.69
Operating costs per available seat mile (in cents)                14.66          16.56         16.04         17.08         18.48
Block hours
      CRJs                                                      210,646        124,889        58,584        10,889           -
      Turboprops (4)                                               -            26,509        66,145        87,913        85,109
Cycles
      CRJs                                                      146,898         85,478        41,238         8,321           -
      Turboprops (4)                                               -            20,262        47,570        66,881        68,106
Average daily utilization (block hours)
      CRJs                                                         8.83           8.47          8.22          9.31           -
      Turboprops (4)                                               -              4.81          7.54          8.29          7.52
Average length of aircraft flight (miles)                           384            353           318           262           238
Number of operating aircraft (end of period)
      CRJs                                                           76             51            30             9           -
      Turboprops (4)                                               -                -             24            28            31

-----------------------------------------------------------------------------------------------------------------------------------
(1) Revenue passenger miles represents the number of miles flown by revenue passengers.
(2) Available seat miles represents the number of seats available for passengers multiplied by the
    number of miles the seats are flown.
(3) Passenger load factor equals revenue passenger miles divided by available seat miles.
(4) As of December 31, 2002 all Saab turboprop aircraft were removed from our operating fleet.

</TABLE>




                                       23
<PAGE>

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations


Overview

     Where we are . . .

     We provide  Northwest with regional airline capacity as a Northwest Airlink
carrier at its  domestic  hub  airports  in  Detroit,  Minneapolis/St.  Paul and
Memphis. We operate a jet fleet of 76 Canadair Regional Jet ("CRJ") aircraft and
offer scheduled  passenger service with approximately 490 daily departures to 81
cities in 29 states and two Canadian provinces.  For the year ended December 31,
2003,  we reported  annual net income of $35.1  million,  or $1.60 a share.  Net
income increased $4.3 million,  or 13.9%, over 2002 net income of $30.8 million,
or $1.41 a share.  Annual operating  revenue in 2003 reached $456.8 million,  up
37.8% from the prior year,  yielding operating income of $64.2 million, up 34.7%
from the prior year. In 2003,  our available  seat miles flown  increased  56.2%
over 2002. We operate in one business  segment  consisting of scheduled  airline
passenger service

     We operate  for  Northwest  according  to the terms of an airline  services
agreement ("ASA"),  which we entered into effective March 1, 2002. Our passenger
revenue consists of (i) reimbursement  payments for certain  operating  expenses
incurred in providing  regional  airline capacity to Northwest and (ii) payments
based on pre-set  rates for fixed  costs,  completed  block hours and  completed
cycles.  We also receive  margin  payments on these items  intended to achieve a
target  operating  margin.  The term "block  hours"  refers to the elapsed  time
between an aircraft leaving a gate and arriving at a gate, and the term "cycles"
refers to an aircraft's  take-off and landing. A more detailed discussion of our
ASA can be found in this  Form 10-K  under  Item 1  "Business--Airline  Services
Agreement."

     The following is a list of certain significant developments in our business
during  2003.  Item  8,  "Consolidated   Financial  Statements"  and  "Notes  to
Consolidated  Financial  Statements" contain a more detailed discussion of these
and other events during 2003.

     -   Airline  Services  Agreement  ("ASA") with Northwest:  We completed our
         first full year of  operations  under the ASA. We entered  into certain
         amendments in 2003 that,  among other things,  extended the term of the
         agreement  through  December 31, 2017,  eliminated  incentive  payments
         based on certain  performance  criteria,  lowered our target  operating
         margin from 14% to 10% effective  December 1, 2003, and provided for an
         increase in the size of our fleet to 129 regional  jets by December 31,
         2005.

     -   Change in our Fleet of Aircraft: Our fleet of aircraft consisted solely
         of CRJs. We added 25 CRJs to our fleet during 2003, which represents an
         increase of 49%. We are currently  scheduled to receive 38 CRJs in 2004
         and  15  CRJs  in  2005,   representing   increases  of  50%  and  13%,
         respectively, in the size of our fleet.

     -   Settlement  of accounts with  Northwest:  We received a cash payment of
         $15.4  million and issued a dividend of $15.5  million to  Northwest in
         settlement of all trade balances payable to, or due from,  Northwest as
         of December 31, 2002.

     -   Note  Payable  to  Northwest  and Line of  Credit:  We  issued a $200.0
         million note payable to Northwest as a dividend and we obtained a $50.0
         million revolving credit facility ("Revolver") from Northwest.

     -   Initial public offering and change in ownership: Northwest ceased to be
         our majority owner as they transferred 19,400,000 shares, or 89% of our
         outstanding  common stock, to the Northwest  Airlines Pension Plans. On
         November  25, 2003,  we  completed  our initial  public  offering  (the
         "Offering") and the Northwest Airlines Pensions Plans sold their shares
         of our common  stock.  We did not receive any of the proceeds  from the
         Offering.


                                       24
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations


Where we are . . (continued).

     Northwest  Capital  Contribution:  In  connection  with  the  Offering,  we
received a capital  contribution of $50.0 million from Northwest,  which we used
to reduce the outstanding principal balance on our note payable to Northwest.

     Where we're going . . .

     Operating a fleet of  all-regional  jet  aircraft  with strong  operational
performance  and  cost  efficiency  is  crucial  to our  growth.  Northwest  has
indicated  its  commitment  to  regional  jets as part of its core  strategy  by
placing  firm orders on 129 CRJs,  all of which have been  committed  to us, and
acquiring  options for an additional 175 CRJs. We believe that continued  strong
operational  performance  and cost  efficiency  are  necessary for us to be well
positioned to compete for the  additional 175 CRJ aircraft that Northwest has on
option, which have not yet been exercised or committed to any regional airline.

     Another element of our growth strategy is to seek  opportunities to provide
regional   airline  service  to  other  major   carriers.   Subject  to  certain
restrictions,  our ASA allows us to  establish  separate  operations  to provide
airline  services  to  other  major  carriers.  We  intend  to  actively  pursue
opportunities  with other major  airlines that are interested in entering into a
business  relationship  with a high  quality,  cost-efficient  regional  airline
partner.

     We are committed to communication, personal development and respect for all
of our People.  We intend to  continue  to work with our People to achieve  high
levels of operating performance and customer service at the lowest possible cost
consistent with achieving our service objectives. Our Corporate Education Center
will be  instrumental  in  training  and  developing  our  People to meet  these
objectives.

     We  currently  are the only  operator  of  44-seat  and  50-seat  CRJs as a
code-share partner of Northwest.  Mesaba Airlines, in which Northwest owns a 28%
equity interest,  also operates as a regional  code-share  partner of Northwest,
operating  out of the same  three hub  airports  from which we  operate.  Mesaba
Airlines  operates Saab 340 turboprop  aircraft and 69-seat AVRO regional  jets.
Additionally,  Northwest  code-shares  with  other  regional  airlines  in other
regions of the United States,  operating  various types of aircraft.  We have no
assurance that Northwest will not expand those relationships in competition with
us, or that  Northwest  will not  establish  relationships  with other  regional
carriers,  including awarding them future deliveries of the 175 CRJs on which it
has option.



                                       25
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations


Basis of Presentation

     The historical  financial  information  does not reflect what our financial
position,  results of  operations  and cash flows  would have been had we been a
stand-alone entity during the periods presented. During the time that it was our
majority owner,  Northwest  operated us as a business unit of Northwest  without
regard  to our  stand-alone  profitability.  Our  operations  were  designed  to
increase  overall   Northwest  system  revenues  rather  than  to  maximize  our
stand-alone  profitability.  Under our previous capacity  purchase  arrangements
Northwest  retained  the  ability to adjust the  revenues  and  margins we would
receive under those arrangements. In contrast to the prior arrangements, the ASA
establishes the compensation  structure for our services  throughout the term of
the  agreement  in a manner  designed to better  align our revenues and earnings
with our underlying cost drivers, such as block hours and cycles.

     Our statements of operations for the years ending  December 31, 2003,  2002
and 2001 can be compared as follows:


<TABLE>
<S>                                               <C>         <C>          <C>          <C>          <C>

                                                               Increase/                 Increase/
                                                              (Decrease)                (Decrease)
                                                     2003      2002-2003      2002       2001-2002      2001
                                                  ----------- ------------ ------------ ------------ -----------
Operating revenues:
  Passenger                                       $  450,611                $  325,386                $ 198,271
  Other                                                6,159                     6,182                    3,779
                                                  -----------              ------------              -----------
Total operating revenues                             456,770      37.8%        331,568     64.1%        202,050


Operating expenses:
  Salaries, wages and benefits                        83,316      20.6%         69,086     21.4%         56,915
  Aircraft fuel and taxes                             55,007      62.1%         33,932     50.2%         22,588
  Aircraft maintenance, materials and repairs         14,116       6.3%         13,276    (35.7%)        20,661
  Aircraft rentals                                   136,273      56.6%         87,016    114.2%         40,628
  Other rentals and landing fees                      29,255      28.2%         22,818    166.9%          8,548
  Ground handling services                            44,622      90.5%         23,422    336.0%          5,372
  Depreciation and amortization                        2,912     (52.6%)         6,141     36.3%          4,505
  Government reimbursements                           (1,114)       -              -         -              -
  Other                                               28,214       0.0%         28,221      9.1%         25,860
                                                  -----------              ------------              -----------
Total operating expenses                             392,601      38.3%        283,912     53.4%        185,077
                                                  -----------              ------------              -----------

Operating income                                      64,169      34.7%         47,656    180.8%         16,973
Nonoperating income (expense)                         (6,770)   (353.4%)         2,672    (56.2%)         6,094
                                                  -----------              ------------              -----------

Income before income taxes                            57,399      14.0%         50,328    118.2%         23,067
Income tax expense                                    22,332      14.3%         19,543    121.6%          8,821
                                                  -----------              ------------              -----------
Net income                                        $   35,067      13.9%     $   30,785    116.1%      $  14,246
                                                  ===========              ============              ===========

</TABLE>




                                       26
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations


Revenues

     In our  historical  statements  of  income,  passenger  revenues  have been
derived from our capacity  purchase  arrangements with Northwest and since March
1, 2002 have been derived under our ASA. Other revenues have primarily consisted
of ground handling  services that we provide to Northwest and Mesaba Airlines at
some  airports and cargo fees,  which were  eliminated  when we entered the ASA.
Ground handling  revenues  accounted for less than 2% of our total revenues.  We
will continue to account for our ground handling services in other revenues.

     The number of aircraft we operate will continue to have the largest  effect
on the growth in our passenger revenue. A significant portion of the payments we
receive  from  Northwest  are based on the  actual  operation  of our  aircraft.
Northwest is solely  responsible  for scheduling  flights,  and the ASA does not
require Northwest to meet any minimum  utilization  levels for our aircraft.  As
noted  in the  discussion  of our  ASA,  we  receive  reimbursement  of  certain
operating  expenses  necessary to provide regional airline capacity to Northwest
and payments based on pre-set rates for fixed costs,  completed  block hours and
completed  cycles.  We also  receive  margin  payments  on these items which are
intended to achieve a target  operating  margin.  Our operating  results are not
affected by any  seasonality  trends  historically  associated  with the airline
industry.

     The following is a summary of our passenger revenue by type, which includes
margin,  for the year ending December 31, 2003, which was our first full year of
operations under an ASA (in thousands):

<TABLE>
<S>                                                        <C>
Reimbursement payments                                      $ 296,257

Payments based on pre-set rates                               154,354
                                                           -----------
Total passenger revenue                                     $ 450,611
                                                           ===========
</TABLE>

The  following  summarizes  our  2003  passenger  revenue  associated  with  the
reimbursement of operating expenses incurred under the ASA:

<TABLE>
<S>                                             <C>             <C>             <C>


                                                        Year Ending December 31, 2003
                                                -----------------------------------------------


                                                  Reimbursed     Unreimbursed       Total
                                                --------------- --------------- ---------------
                                                                 (in thousands)
Operating expenses:

  Salaries, wages and benefits                  $         -     $      83,316   $      83,316

  Aircraft fuel and taxes                              54,731             276          55,007

  Aircraft maintenance, materials and repairs           6,548           7,568          14,116

  Aircraft rentals                                    136,273             -           136,273

  Other rentals and landing fees                       16,512          12,743          29,255

  Ground handling services                             33,223          11,399          44,622

  Depreciation and amortization                           -             2,912           2,912

  Government reimbursements                            (1,000)           (114)         (1,114)

  Other                                                 9,600          18,614          28,214
                                                --------------- --------------- ---------------
                                                 $    255,887   $     136,714   $     392,601
                                                                =============== ===============

  Margin on expense reimbursements                     40,370

                                                ---------------
  Passenger revenue from expense reimbursements  $    296,257
                                                ===============
</TABLE>


                                       27
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations


Operating Expenses

     Our  operating  expenses  include  costs  relating to wages,  salaries  and
benefits,  aircraft rent and maintenance,  fuel, hub facility and other rentals,
ground handling services,  passenger liability, war risk and hull insurance. Our
operating expenses are as set forth above.

     Salaries,  wages and benefits.  This expense  includes  employee  salaries,
wages and benefits,  as well as employee  incentives  and payroll  taxes.  These
expenses will fluctuate,  based primarily on our level of operations and changes
in wage rates for contract and non-contract  employees.  Under the ASA, employee
bonuses  and  incentives  exceeding  levels  specified  in the ASA and  employee
salaries  exceeding  standard  industry wages will be excluded when  determining
whether our annual  operating  margin is below the applicable floor or above the
applicable ceiling.

     Aircraft fuel and taxes.  This expense  includes the cost of aircraft fuel,
associated  fuel taxes and  into-plane  fees.  Under the ASA, our passenger fuel
expense  will be the lower of the  actual  cost or $0.78 per  gallon and will be
reimbursed in full by Northwest; any excess over $0.78 is borne by Northwest and
does not yield a margin to us.

     Aircraft maintenance,  materials and repairs.  Maintenance-related expenses
include  all  facilities,  parts,  materials,  tooling  and  spares  and  use of
auxiliary  power  required  to maintain  our  aircraft.  Third-party  engine and
airframe heavy  maintenance  provided by General Electric and Bombardier for our
CRJ aircraft will be reimbursed in full by Northwest  under the ASA. The average
age of our CRJ  aircraft  is 1.7  years and will  continue  to be low as we take
delivery of additional new aircraft.  We expect that many parts and  maintenance
requirements  associated with the CRJs will be covered under the  manufacturers'
warranties  during the first few years of operation  and,  therefore,  our total
maintenance costs will be relatively low. Our maintenance costs will increase as
our fleet ages and these warranties expire.

     Other rentals and landing  fees.  This expense is comprised of landing fees
paid to  airport  authorities,  as well as  rental  fees  paid for  airport  and
maintenance facilities.

     Aircraft  rentals.  All of our CRJ aircraft are  operated  under  long-term
leases with Northwest.  Our Saab aircraft, which were removed from our operating
fleet as of December 31, 2002, were leased from third parties. Under the ASA, we
will lease or sublease all of our future  deliveries of aircraft from Northwest.
Our lease  payments  associated  with CRJ  aircraft  deliveries  are fixed.  The
monthly  rental  rates on our CRJs include  certain  fleet  management  costs of
Northwest  and  are  not  representative  of the  rates  paid  by  Northwest  to
third-party  lessors.  Northwest  reimburses our aircraft rental expense in full
pursuant to the terms of our ASA.

     Ground handling  services.  This expense  includes ground handling fees and
deicing services provided at certain  airports.  Northwest has agreed to provide
ground handling  services to us at a fixed price at some non-hub  airports where
Northwest  has station  operations.  Certain of these costs are  included in the
block hour and cycle rates that we will receive from Northwest.

     Other.  This expense  primarily  includes  insurance costs and recruitment,
property  taxes  and  training  expenses.  Under the ASA,  our cost of  aviation
liability,  war risk and hull insurance and property taxes will be reimbursed by
Northwest.







                                       28
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations


Certain Statistical Information

     Information with respect to our operating  expenses per available seat mile
is as follows:

<TABLE>
<S>                                                              <C>         <C>         <C>         <C>          <C>

                                                                                   Year ended December 31,
                                                                 -----------------------------------------------------------
                                                                    2003        2002        2001        2000        1999
                                                                 ----------  ----------  ----------  -----------  ----------
Operating expenses per available seat mile (in cents):

    Salaries, wages and benefits                                      3.11        4.03        4.93        5.67        5.75

    Aircraft fuel and taxes                                           2.05        1.98        1.96        1.83        1.79

    Aircraft maintenance, materials and repairs                       0.53        0.77        1.79        2.68        3.66

    Aircraft rentals                                                  5.09        5.08        3.52        3.19        3.45

    Other rentals and landing fees                                    1.09        1.33        0.74        0.82        0.95

    Ground handling services                                          1.67        1.37        0.47        0.16        0.14

    Depreciation and amortization                                     0.11        0.36        0.39        0.48        0.56

    Government reimbursement                                         (0.04)         -           -           -           -

    Other                                                             1.05        1.64        2.24        2.25        2.19
                                                                 ----------  ----------  ----------  -----------  ----------
        Total Operating Expenses                                     14.66       16.56       16.04       17.08       18.49
                                                                 ==========  ==========  ==========  ===========  ==========

</TABLE>

     Under the Airline  Stabilization  Act that was enacted following the events
of  September  11,  2001,  we received a total of $5.6  million in  compensation
payments,  which is  included  in  non-operating  income  (expense)  in our 2001
statement of income.

     During 2002, the Department of Transportation enacted legislation requiring
the  strengthening  of cockpit  doors.  We have  modified  our cockpit  doors as
required by this legislation, and, in December 2002, we received a reimbursement
payment of $0.7 million for costs incurred  complying with this legislation.  In
September  2003,  we  received  an  additional  payment of $0.5  million.  These
reimbursements  offset substantially all of our direct costs associated with the
modifications required by this legislation.




                                       29
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations


Results of Operations

     2003 Compared to 2002

     An increase in operating  revenue of $125.2 million was primarily caused by
the addition of 25 CRJ aircraft and provisions of our ASA with Northwest,  which
became  effective March 2002 and was in place for all of 2003. This increase was
partially  offset by the decrease in revenue  from the removal of Saab  aircraft
from our  fleet.  CRJ  block  hours and  cycles  increased  by 68.7% and  71.9%,
respectively,  which accounted for increased  revenue of $12.8 million and $10.4
million,  respectively.  As previously noted, our ASA was amended at the time of
our  public  offering  to reduce  our target  operating  margin  from 14% to 10%
effective  December 1, 2003.  This  reduction in target margin  lowered our 2003
passenger revenue and operating income by $2.0 million.

     Revenue  associated with expense  reimbursements  increased by 61.4%, which
accounted for increased  revenue of $112.7 million.  The margin  associated with
block hours,  cycles,  and expense  reimbursements  accounted  for the remaining
increase  in  operating  revenue  in 2003,  which  was  partially  offset by the
elimination of performance  incentives in 2003. Performance incentives accounted
for  approximately  $3.5 million of  passenger  revenue  during 2002.  Passenger
revenue per CRJ block hour for the years ending  December 31, 2003 and 2002 were
$2,139 and $2,286  respectively,  which  represents a decrease of  approximately
6.4%.

     Operating  Expenses.  The  increase in operating  expenses  during 2003 was
primarily  due to the  increase  in the size of our  aircraft  fleet.  Operating
expenses for the year ended  December 31, 2003  included  significant  increases
related to the growth of our fleet, including higher wages and benefits,  ground
handling services,  hub fees, fuel costs, landing fees and aircraft rentals. The
increase in operating expenses was partially offset by a decrease in expense for
aircraft  maintenance,  depreciation and the refund of previously paid passenger
screening  costs.  The increases in wages and benefits,  ground  handling,  fuel
costs,  landing fees and aircraft  rentals were primarily due to the increase in
our CRJ fleet,  while hub facility fees  increased  pursuant to the terms of the
ASA.  Operating expense per available seat mile decreased by 11.5% or 1.91 cents
per mile.  This  decrease is due  primarily to the removal of Saab aircraft from
our fleet, which have fewer seats than the CRJ aircraft..

     Salaries, wages and benefits increased primarily due to the increase in the
number of CRJ pilots,  flight attendants and mechanics and wage rate and benefit
increases.  The number of pilots,  flight attendants and mechanics  increased by
11%, 42% and 11%, respectively.

     Aircraft fuel and tax expense  increased  primarily due to increased  block
hours and the higher burn rate associated with jet equipment.

     Aircraft maintenance,  materials and repairs increased primarily due to the
increase in the size of our fleet and  reflects the fact that our CRJs are still
covered by the manufacturers' warranties.

     Aircraft rental expense increased primarily due to 25 additional leased CRJ
aircraft  and higher CRJ rental  rates under the ASAs.  The increase in aircraft
rental expense was partially  offset by the decrease in rent associated with our
leased Saab aircraft, which were removed from our fleet prior to 2003.

     Other  rentals  and  landing  fees  increased  primarily  due  to  capacity
increases and increased hub facility fees as provided by the terms of our ASA.

     Ground  handling  services  increased  primarily  due to  increased  flying
associated with the growth of the CRJ fleet.




                                       30
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations


Results of Operations (continued)

     2003 Compared to 2002 (continued)

     Depreciation and amortization  expense decreased primarily due to increased
depreciation of  approximately  $2.4 million during 2002 on our flight equipment
to coincide with the removal of the Saab  aircraft from our fleet.  The decrease
was partially offset by the increased depreciation on aircraft spares, tools and
equipment for the CRJ aircraft.

     Other expenses decreased  primarily due to an increase in property taxes of
$1.1  million,  which was more  than  offset by a  decrease  in other  expenses,
primarily passenger liability insurance.

     2002 Compared to 2001

     An increase in operating  revenue of $129.5 million was primarily caused by
the addition of 21 CRJ aircraft and entering the ASA with  Northwest,  offset by
the reduction of 24 Saab aircraft from our operating fleet.

     Operating  Revenues.  Operating  revenue  increased  primarily  due  to the
increased  flying of CRJs and entering the ASA with Northwest in March 2002. The
increase in operating  revenue during 2002 was partially  offset by the decrease
in revenue from the transition of the Saab aircraft out of our active fleet. CRJ
block  hours and cycles  increased  by 113.2% and  107.3%,  respectively,  which
accounted for increased revenue of $8.5 million and $9.0 million,  respectively.
The  remaining  revenue  increase is primarily  due to revenue  associated  with
expense   reimbursements  and  margin  of  $124.1  million  and  $33.0  million,
respectively.  CRJ passenger revenue per CRJ block hour increased from $1,904 to
$2,286, or 20.1%, while our Saab passenger revenue per Saab block hour increased
from $1,310 to $1,503, or 14.7%.

     Operating  Expenses.  Operating  expenses  increased  primarily  due to the
increase in the size of our aircraft  fleet and entering the ASA with  Northwest
in March 2002.  The year ended December 31, 2002 included  significant  expenses
related to the growth of our fleet, including higher wages and benefits,  ground
handling  and  deicing  expenses,  hub fees,  fuel costs and  aircraft  rentals.
Operating expense per available seat mile increased by 0.52 cents, or 3.2%. This
increase was primarily due to an increase in expense per available  seat mile of
1.56 cents and 0.90 cents for  aircraft  rentals and ground  handling  expenses,
respectively. The increases in aircraft rental and ground handling expenses were
due to the increase in our CRJ fleet, while hub facility fees increased pursuant
to the terms of the ASA. The increase in operating expenses was partially offset
by a decrease  in expense per  available  seat mile of 0.90 cents and 1.02 cents
for salaries, wages and benefits and aircraft maintenance, respectively.

     Salaries, wages and benefits increased primarily due to the increase in the
number of CRJ pilots,  flight attendants and mechanics and wage rate and benefit
increases.

     Aircraft fuel and tax expense  increased  primarily due to increased  block
hours and the higher burn rate associated with jet equipment.

     Aircraft maintenance,  materials and repairs decreased primarily due to the
reduction  in the size of our  Saab  fleet.  In  addition,  maintenance  expense
reflects  the  fact  that  our  CRJs are  still  covered  by the  manufacturers'
warranties.

     Other  rentals  and  landing  fees  increased  primarily  due  to  capacity
increases and increased hub fees pursuant to our March 2002 ASA with Northwest.

     Aircraft rental expense increased primarily due to 21 additional leased CRJ
aircraft  and higher CRJ rental  rates under the March 2002 ASA. The increase in
aircraft  rental  expense was  partially  offset by the removal of Saab aircraft
from our fleet, which was completed by the end of 2002.



                                       31
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations


Results of Operations (continued)

     2002 Compared to 2001 (continued)

     Ground  handling  services  increased  primarily  due to  increased  flying
associated with the growth of the CRJ fleet and the higher rates provided for in
the ASA for ground handling services at airports serviced by Northwest,

     Depreciation   and   amortization   expense   increased  due  to  increased
depreciation  on our flight  equipment to coincide  with the removal of the Saab
aircraft from our fleet.  Additionally,  depreciation  increased with additional
aircraft spares, tools and equipment for the CRJ aircraft, offset by a reduction
in  amortization  of goodwill  expense of $0.7  million  due to the  adoption of
Statement of Financial Accounting Standards No. 142.

     Other  expenses  increased  primarily  due  to  an  increase  in  passenger
liability and hull  insurance of $3.1 million and an increase in property  taxes
of $0.8 million, offset by a decrease in all other expenses of $1.5 million.

Liquidity and Capital Resources

     As of December 31, 2003, we had $31.5 million in cash and cash equivalents.
Net cash  provided by operating  activities  was $50.1  million  during the year
ended  December 31, 2003,  due primarily to cash provided by net income of $35.1
million and  depreciation of $2.9 million,  and changes in operating  assets and
liabilities  of  $10.1  million.  As  noted  in our  discussion  of  significant
developments  during 2003, we settled all trade balances with  Northwest  during
January 2003,  from which we received a cash payment of $15.4 million and issued
a dividend of $15.5 million to Northwest.

     Debt and lease obligations.  The following chart details our debt and lease
obligations  on a pro forma basis at December 31, 2003.  In addition,  operating
lease  information  includes  scheduled  deliveries  of  aircraft  under the ASA
through  December  2005 at the basic  aircraft  rental rate provided in the ASA.
Under our ASA, amounts relating to operating leases will be directly  reimbursed
by Northwest.

<TABLE>
<S>                                      <C>            <C>            <C>            <C>          <C>

                                                                  Payments Due by Period
                                                                      (in thousands)
                                         ------------------------------------------------------------------------
                                             Total       Less than 1     2-3 years     4-5 years   After 5 years
                                                             year
                                         ------------   ------------   -------------  -----------  --------------
Contractual Obligations:
Line of credit (1)                        $   10,000     $       -       $   10,000   $      -     $        -
Long term debt                               132,000         12,000          24,000       24,000          72,000
Operating leases (2)                       3,757,290        206,766         540,673      548,131       2,461,720
                                         ------------   ------------   -------------  -----------  --------------
  Total contractual cash obligations      $3,899,290       $218,766        $574,673     $572,131      $2,533,720
                                         ============   ============   =============  ===========  ==============

(1)  Borrowings  outstanding as of December 31, 2003, under our revolving credit
     facility with Northwest, which expires December 31, 2005.

(2)  As of December  31, 2003,  our  obligations  relating to operating  leases,
     excluding  future  scheduled  deliveries  of  aircraft  under  the  airline
     services agreement, were as follows (in thousands):

                                                         Less than 1
                                             Total           year        1-3 years     4-5 years   After 5 years
                                         ------------   ------------   -------------  -----------  --------------
                                          $2,275,109       $163,558        $326,001     $325,531      $1,460,019

</TABLE>




                                       32
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations


Results of Operations (continued)

     Liquidity and Capital Resources (continued)

     Borrowings  under the Revolver from  Northwest will bear interest at a rate
equal to the higher of the prime rate  published  by JPMorgan  Chase or the most
recent  overnight  funds rate offered to JPMorgan Chase plus 1.0% per annum.  We
are required to use our best  efforts to obtain a  replacement  credit  facility
with a third party lender at the earliest time  possible.  The revolving  credit
facility  contains a number of  restrictive  covenants  applicable  to Pinnacle,
including  limitations  on the  incurrence  of debt and  liens,  the  making  of
distributions and other transactions.  The term of our revolving credit facility
extends through December 2005.

     The current terms of our note payable to  Northwest,  which were amended at
the time of the Offering,  requires quarterly principal payments of $3.0 million
through  September 2009 with the remaining  principal balance due December 2009.
The note payable also requires  monthly payments to the extent that our cash and
cash equivalents balance exceeds $50.0 million. The note accrues interest at the
rate of 3.4%, which is payable quarterly

     Operating  activities.  Net cash provided by operating activities was $0.05
million in the year ended  December 31, 2002,  due primarily to cash provided by
net income of $30.8  million  and  depreciation  of $6.1  million,  offset by an
increase in net  receivables of $40.6 million  primarily due to a change in cash
management  policy  implemented by Northwest  following  September 11, 2001. Net
cash used in operating  activities  was $8.6 million in the year ended  December
31,  2001,  due  primarily to cash  provided by net income of $14.2  million and
depreciation  and  amortization  of $4.5  million,  offset by an increase in net
receivables  of $34.7 million  primarily  due to the 2001 change in  Northwest's
cash management policy.

     Investing  activities.  Investing activities consisted primarily of rotable
(renewable)  parts purchases of $9.1 million,  $4.4 million and $8.0 million for
the years ended December 31, 2003,  2002 and 2001,  respectively.  The remaining
balance  of  investing   activities  consisted  primarily  of  ground  equipment
purchases related to the new CRJ aircraft.

     Financing activities.  Cash used in financing activities for the year ended
December 31, 2003 totaled $12.2 million. We made principal payments to Northwest
on our note  payable in the amount of $18.0  million  during 2003 and received a
$50.0  million  capital  contribution  from  Northwest in  conjunction  with our
Offering,  which  we  applied  to our  note  payable.  During  2003,  we had net
borrowings  of  approximately  $5.8  million  under  our lines of  credit.  Cash
provided by financing  activities  for the year ended  December 31, 2002 totaled
$7.2 million and consisted primarily of the utilization of manufacturer  credits
extended to Northwest for purchase of CRJ aircraft parts from that manufacturer.
Cash  provided by  financing  activities  for 2001 totaled  approximately  $15.2
million  and  consisted  primarily  of  the  utilization  of  $11.1  million  of
manufacturer  credits  extended to Northwest  and $4.2 million of proceeds  from
borrowings  under a line of credit with a bank. This amount was partially offset
by payment of $0.1 million of  long-term  debt  obligations.  As of December 31,
2003, we had a $40.0 million of available  borrowings under our revolving credit
facility  with  Northwest  and  $0.9  million  of  standby   letters  of  credit
outstanding.  As of December 31, 2003, our borrowings  under the credit facility
had an interest rate of 5.0%.

     Capital  commitments.  We  expect  capital  expenditures  for  2004  to  be
approximately  $16.0  million,  primarily  relating to CRJ aircraft  rotable and
expendable parts and tooling, software application and automation infrastructure
projects and  maintenance and ground  equipment.  We are expecting to fund these
expenditures with cash flows generated from our operations.

     Off-Balance Sheet Arrangements.  None of our operating leases are reflected
on our balance sheet.  We are  responsible  for all  maintenance,  insurance and
other costs associated with operating these aircraft;  however, we have not made
any  residual  value  or  other  guarantees  to our  lessors.  We have no  other
off-balance sheet arrangements.




                                       33
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations


Critical Accounting Policies

     General. Our discussion and analysis of our financial condition and results
of operations is based upon our financial  statements,  which have been prepared
in  accordance  with  accounting  principles  generally  accepted  in the United
States.  The  preparation  of these  financial  statements  requires  us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses.  We have  identified  the  accounting  policies  below as
critical  to our  business  operations  and an  understanding  of our results of
operations.  On an  on-going  basis,  we  evaluate  our  estimates.  We base our
estimates on historical  experience  and on various other  assumptions  that are
believed to be reasonable under the circumstances, the results of which form the
basis for making  judgments about the carrying values of assets and liabilities.
For all of these policies,  we caution that future events rarely develop exactly
as forecasted, and the best estimates routinely require judgment. The discussion
below is not intended to be a comprehensive list of our accounting policies. For
a detailed discussion on the application of these and other accounting policies,
see Item 8 "Financial Statements and Supplementary Data -- Notes to Consolidated
Financial Statements -- Note 2".

     Revenue  recognition.  We recognize our  passenger  revenue as services are
provided pursuant to the terms of our ASA with Northwest, as discussed in Item 1
"Our  Airline  Services  Agreement."  Revenue  recognition  involves  the use of
estimates and assumptions,  including estimates of revisions to revenue over the
course of a fiscal year to reflect the operating margins provided for in the ASA
and estimates of certain expense reimbursements.  Previous estimates of revenues
earned from Northwest have been consistent with amounts ultimately realized.

     Maintenance.  We record  maintenance and repair costs for our equipment and
for our leased equipment as the costs are incurred.  When parts and equipment on
the aircraft become unserviceable or are due for scheduled maintenance, they are
removed and replaced with serviceable parts from inventory. The parts in need of
repair are sent to repair  vendors,  and a  liability  for that  repair  cost is
recognized  in that  calendar  month.  In the  event  that an  actual  quote  is
received,  the accrual will be based on the quote.  Typically,  repair costs are
initially  estimated  based on the  historical  cost of a like  repair  for that
specific  part.  The  initial  estimate  is  replaced by a quote from the repair
vendor after they inspect the part and  determine  what the actual cost will be.
The accrual is adjusted  accordingly.  Accruals are carried until the invoice is
received,  approved and paid.  Previous estimates of repair costs have proven to
be materially consistent with amounts ultimately paid.

     Certain  maintenance costs are covered by power-by-the hour contracts.  The
power-by-the-hour contracts dictate the method by which we pay a vendor based on
our actual level of operations in exchange for vendor coverage on specific parts
and  equipment on our  aircraft  when those parts and  equipment  are in need of
repair or  replacement.  Individual  contracts  are of varying terms and payment
procedures  and  typically  require  a monthly  payment  based  upon a  specific
operating statistic incurred.  Accordingly, such payment amounts are expensed as
incurred. On average, power-by-the-hour arrangements represent approximately 50%
of our  maintenance,  materials and repair  costs.  These  contracts  reduce the
subjectivity of maintenance  repair accruals and increase the  predictability of
maintenance expense.

     Spare  parts.  Non-renewable  spare  parts  and  maintenance  supplies  are
recorded  as  inventory  when  they are  purchased  and we  charge  the costs to
operations as this inventory is used. An allowance for  obsolescence is provided
over the remaining estimated useful life of the related aircraft equipment,  for
spare parts  expected to be on hand at the date the  aircraft  are retired  from
service,  plus  allowances for spare parts  currently  identified as obsolete or
excess. We will continue to analyze the  reasonableness of these estimates as we
gain more experience with our CRJ fleet.

     Property and equipment.  We record  property and  equipment,  which include
rotable spare parts, at our cost. We depreciate  these assets to their estimated
residual  values based on our estimate of the useful lives or the lease terms of
the aircraft, as appropriate.  We will continue to analyze the reasonableness of
these estimates as we gain more experience with our CRJ fleet.


                                       34
<PAGE>

Item 7. Mangement's Discussion and Analysis of Financial Condition and Results
        of Operations


Critical Accounting Policies (continued)

     In addition, we have made certain other estimates that, while not involving
the same degree of  judgment,  are  important  to  understanding  our  financial
statements. We continually evaluate our accounting policies and the estimates we
use to prepare our consolidated  financial  statements.  Our estimates as of the
date  of the  financial  statements  reflect  our  best  judgment  after  giving
consideration  to all  currently  available  facts and  circumstances.  As such,
actual  results may differ  significantly  from these  estimates and may require
adjustment in the future,  as additional  facts become known or as circumstances
change. Management has discussed the development and selection of these critical
accounting estimates with the audit committee of our board of directors, and the
audit committee has reviewed the disclosures presented above relating to them.

Forward Looking Statements

     Statements in this Form 10-K report (or otherwise made by Pinnacle Airlines
or on Pinnacle  Airline's  behalf)  contain various  forward-looking  statements
within the meaning of Section 27A of the Securities Act of 1933, as amended,  or
the  Securities  Act, and Section 21E of the Securities Act of 1934, as amended,
or the Exchange Act, which  represent our  management's  beliefs and assumptions
concerning  future  events.   When  used  in  this  document  and  in  documents
incorporated  by  reference,   forward-looking   statements   include,   without
limitation,   statements  regarding  financial  forecasts  or  projections,  our
expectations, beliefs, intentions or future strategies that are signified by the
words "expects", "anticipates", "intends", "believes" or similar language. These
forward-looking  statements are subject to risks,  uncertainties and assumptions
that could cause our actual  results and the timing of certain  events to differ
materially  from  those  expressed  in  the  forward-looking   statements.   All
forward-looking  statements  included  in this  report are based on  information
available  to us on the date of this  report.  It is  routine  for our  internal
projections  and  expectations to change as the year or each quarter in the year
progress,  and  therefore  it should be  clearly  understood  that the  internal
projections,  beliefs and assumptions  upon which we base our  expectations  may
change prior to the end of each quarter or the year. Although these expectations
may change, we may not inform you if they do. Our policy is generally to provide
our expectations only once per quarter, and not to update that information until
the next quarter.

     You should  understand  that many important  factors,  in addition to those
discussed  in this  report,  could cause our results to differ  materially  from
those expressed in the forward-looking statements. Some of the potential factors
that could affect our results are  described in Item 1 "Business - Risk Factors"
and in this item under  "Overview."  In light of these risks and  uncertainties,
and others not described in this report, the forward-looking events discussed in
this report might not occur,  might occur at a different  time, or might be of a
different magnitude than presently anticipated.






                                       35
<PAGE>

Item 7A.  Quantitative and Qualitative Disclosure About Market Risk

     We are not  subject  to any  significant  degree  to market  risks  such as
commodity price risk (e.g., aircraft fuel prices) and interest rate risk.

     Aircraft  fuel.  Under the ASA,  Northwest  bears the economic  risk of our
passenger  aircraft fuel price  fluctuations as our future  passenger fuel costs
are reimbursed by Northwest and capped at $0.78 per gallon.

     Interest  rates.  All of our CRJs are operated  under  long-term  operating
leases with  Northwest.  Our Saab aircraft,  which are being subleased to Mesaba
Airlines,  are leased from a third party. We also anticipate  leasing all of our
future deliveries of aircraft. Under the ASA, the lease payments associated with
aircraft  deliveries  are fixed.  We do not hold  long-term  interest  sensitive
assets and, therefore,  we are not exposed to interest rate fluctuations for our
assets.  The note payable we issued to Northwest bears interest at a fixed rate,
but loans under our revolving  credit facility bear interest at a floating rate.
We do not  purchase  or hold any  derivative  financial  instruments  to protect
against the effects of changes in interest rates.






                                       36
<PAGE>

Item 8.  Financial Statements and Supplementary Data




Report of Independent Auditor .............................................. 38

Consolidated Statements of Income .......................................... 39
         for the Years Ended December 31, 2003, 2002 and 2001

Consolidated Balance Sheets ................................................ 40
         as of December 31, 2003 and 2002

Consolidated Statements of Stockholders' Equity (Deficiency) ............... 42
         for the Years Ended December 31, 2003, 2002 and 2001

Consolidated Statements of Cash Flows ...................................... 43
         for the Years Ended December 31, 2003, 2002 and 2001

Notes to Consolidated Financial Statements ................................. 44









                                       37
<PAGE>


                         Report of Independent Auditors


Board of Directors
Pinnacle Airlines Corp.

     We have audited the  accompanying  consolidated  balance sheets of Pinnacle
Airlines Corp. (the "Company") as of December 31, 2003 and 2002, and the related
consolidated  statements of income,  stockholders'  equity (deficiency) and cash
flows for each of the three years in the period ended  December 31, 2003.  These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

     We conducted our audits in accordance  with  auditing  standards  generally
accepted in the United States.  Those standards require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.  An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

     In our opinion,  the financial statements referred to above present fairly,
in all material respects,  the consolidated financial position of the Company at
December 31, 2003 and 2002, and the  consolidated  results of its operations and
its cash flows for the three years in the period ended  December  31,  2003,  in
conformity with accounting principles generally accepted in the United States.

     As discussed in Note 2 to the  consolidated  financial  statements in 2002,
the Company adopted Statement of Financial Standards No. 142.




/s/ Ernst & Young LLP

January 21, 2004
Memphis, Tennessee





                                       38
<PAGE>

                             Pinnacle Airlines Corp.

                        Consolidated Statements of Income

                      (in thousands, except per share data)


<TABLE>
<S>                                                               <C>           <C>            <C>

                                                                            Year Ended December 31,
                                                                  ----------------------------------------
                                                                      2003          2002           2001
                                                                  ------------  ------------   -----------
Operating revenues:
  Passenger                                                       $  450,611        325,386       198,271
  Other                                                                6,159          6,182         3,779
                                                                  ------------  ------------   -----------
Total operating revenues                                             456,770        331,568       202,050

Operating expenses:
  Salaries, wages and benefits                                        83,316         69,086        56,915
  Aircraft fuel and taxes                                             55,007         33,932        22,588
  Aircraft maintenance, materials and repairs                         14,116         13,276        20,661
  Aircraft rentals                                                   136,273         87,016        40,628
  Other rentals and landing fees                                      29,255         22,818         8,548
  Ground handling services                                            44,622         23,422         5,372
  Depreciation and amortization                                        2,912          6,141         4,505
  Government reimbursements                                           (1,114)          -               -
  Other                                                               28,214         28,221        25,860
                                                                  ------------  ------------   -----------
Total operating expenses                                             392,601        283,912       185,077
                                                                  ------------  ------------   -----------

Operating income                                                      64,169         47,656        16,973

Nonoperating income (expense)
  Airline Stabilization Act funds                                       -              -            5,591
  Interest income                                                        230          3,001           559
  Interest expense                                                    (7,387)          (409)         (443)
  Miscellaneous income, net                                              387             80           387
                                                                  ------------  ------------   -----------
Total nonoperating income                                             (6,770)         2,672         6,094
                                                                  ------------  ------------   -----------

Income before income taxes                                            57,399         50,328        23,067
Income tax expense                                                    22,332         19,543         8,821
                                                                  ------------  ------------   -----------
Net income                                                        $   35,067    $    30,785    $   14,246
                                                                  ============  ============   ===========
Basic and diluted net income per share                            $     1.60    $      1.41    $     0.65
                                                                  ============  ============   ===========
Shares used in computing basic and diluted net income per share       21,892         21,892        21,892
                                                                  ============  ============   ===========
</TABLE>


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.



                                       39
<PAGE>

                             Pinnacle Airlines Corp.

                           Consolidated Balance Sheets

                        (in thousands, except share data)


<TABLE>
<S>                                                                        <C>               <C>

                                                                                     December 31,
                                                                           ------------------------------
                                                                                2003             2002
                                                                           -------------     ------------
Assets
Current assets:
  Cash and cash equivalents                                                $    31,523       $   4,580
  Receivables, principally from Northwest, net of allowances
     of $146 and $536 at December 31, 2003 and 2002, respectively               17,307          64,818
  Spare parts and supplies, net of allowances
    of $2,606 and $2,603 at December 31, 2003 and 2002, respectively             3,773           2,822
  Prepaid expenses and other assets                                              6,810          14,592
  Deferred income taxes                                                          2,549           2,494
                                                                           -------------     ------------
      Total current assets                                                      61,962          89,306


Property and equipment:
  Aircraft and rotable spares                                                   32,779          24,281
  Other property and equipment                                                  14,081          12,679
  Office furniture and fixtures                                                  1,258           1,288
                                                                           -------------     ------------
                                                                                48,118          38,248
  Less accumulated depreciation                                                (13,832)        (11,617)
                                                                           -------------     ------------
  Net property and equipment                                                    34,286          26,631

  Deposits with Northwest                                                       13,300           8,925

  Cost in excess of net assets acquired, net                                    18,422          18,422

                                                                           -------------     ------------
  Total assets                                                             $   127,970       $ 143,284
                                                                           =============     ============
</TABLE>



The  accompanying  notes are an integral  part of these  consolidated  financial
statements.



                                       40
<PAGE>

                             Pinnacle Airlines Corp.

                           Consolidated Balance Sheets

                        (in thousands, except share data)


<TABLE>
<S>                                                                               <C>             <C>

                                                                                          December 31,
                                                                                  ----------------------------
                                                                                      2003            2002
                                                                                  ------------    ------------
Liabilities and stockholders' equity (deficiency)
Current liabilities:
   Accounts payable                                                               $    9,798      $   12,672
   Accrued expenses                                                                   11,622          11,082
   Line of credit                                                                     10,000           4,245
   Income taxes payable to Northwest                                                    -             26,843
   Income taxes payable                                                                5,596             816
   Current portion of deferred credits                                                   217             180
   Current portion of note payable to Northwest                                       12,000             -
                                                                                  ------------    ------------
      Total current liabilities                                                       49,233          55,838

Deferred credits                                                                         719             936
Deferred income taxes                                                                  6,400           4,459
Note payable to Northwest                                                            120,000             -

Commitments and contingencies

Stockholders' equity (deficiency):
  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, issued and outstanding                                                   -               -
  Series common stock, par value $0.01 per share; 5,000,000 shares
    authorized; no shares issued                                                         -               -
  Common stock, $0.01 par value:
    Authorized shares--40,000,000
    Issued and outstanding shares--21,892,060                                            219             219
  Additional paid-in capital                                                          84,973          34,973
  Retained earnings (deficit)                                                       (133,574)         46,859
                                                                                  ------------    ------------
      Total stockholders' equity (deficiency)                                        (48,382)         82,051
                                                                                  ------------    ------------
      Total liabilities and stockholders' equity (deficiency)                     $  127,970      $  143,284
                                                                                  ============    ============
</TABLE>


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.



                                       41
<PAGE>

                             Pinnacle Airlines Corp.

          Consolidated Statements of Stockholders' Equity (Deficiency)

                      (in thousands, expect per share data)


<TABLE>
<S>                                                     <C>            <C>             <C>             <C>

                                                                         Additional      Retained
                                                           Common         Paid-In        Earnings
                                                           Stock          Capital       (Deficiency)       Total
                                                        -------------- --------------  --------------  ------------
Balance, December 31, 2000                               $     219      $    34,973     $     6,213     $   41,405

  Net Income                                                   -               -             14,246         14,246
                                                        -------------- --------------  --------------  ------------

Balance, December 31, 2001                                     219           34,973          20,459         55,651

  Dividend to Northwest of spare parts and engines
    ($0.20 per share)                                          -               -             (4,385)        (4,385)

  Net income                                                   -               -             30,785         30,785
                                                        -------------- --------------  --------------  ------------

Balance, December 31, 2002                                     219           34,973          46,859         82,051

  Contribution of capital by Northwest                         -             50,000             -           50,000

  Dividend to Northwest ($9.84 per share)                      -               -           (215,500)      (215,500)

  Net income                                                   -               -             35,067         35,067
                                                        -------------- --------------  --------------  ------------
Balance, December 31, 2003                               $     219      $    84,973     $  (133,574)    $  (48,382)
                                                        ============== ==============  ==============  ============

</TABLE>


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.


                                       42
<PAGE>

                             Pinnacle Airlines Corp.

                      Consolidated Statements of Cash Flows

                                 (in thousands)
<TABLE>
<S>                                                                <C>           <C>          <C>

                                                                          Years Ended December 31,
                                                                   -------------------------------------
                                                                        2003         2002        2001
                                                                   -----------   -----------  ----------
Operating activities
  Net income                                                       $   35,067    $  30,785    $  14,246
  Adjustments to reconcile net income to cash provided by
    (used in) operating activities:
      Depreciation and amortization                                     2,912        6,141        4,505
      Loss on disposal of equipment and rotable spares                    225           43          397
      Deferred income taxes                                             1,885        1,019        1,135
      Provision for spare parts and supplies obsolescence                 106          623          453
      Reduction of deferred credits                                      (180)        (145)        (114)
      Changes in operating assets and liabilities:
        Receivables                                                     5,168      (40,622)     (34,742)
        Spare parts and supplies                                         (954)        (172)        (756)
        Prepaid expenses and other assets                               3,407      (18,394)      (3,593)
        Accounts payable and accrued expenses                          (2,334)       3,278        2,364
        Income taxes payable                                            4,780       17,398        7,471
                                                                   -----------   -----------  ----------
          Cash provided by (used in) operating activities              50,082          (46)      (8,634)

Investing activities
  Purchases of property and equipment                                 (10,894)      (4,415)     (12,886)
                                                                   -----------   -----------  ----------
          Cash used in investing activities                           (10,894)      (4,415)     (12,886)

Financing activities
  Payments on long-term debt                                          (18,000)           -         (122)
  Advances from Northwest for manufacturer credits                          -        7,150       11,056
  (Repayments) borrowings on line of credit with bank                  (4,245)           -        4,245
  Net borrowings under line of credit with Northwest                   10,000            -            -
                                                                   -----------   -----------  ----------
          Cash (used in) provided by financing activities             (12,245)       7,150       15,179
                                                                   -----------   -----------  ----------

Net increase (decrease) in cash and cash equivalents                   26,943        2,689       (6,341)

Cash and cash equivalents at beginning of year                          4,580        1,891        8,232
                                                                   -----------   -----------  ----------
Cash and cash equivalents at end of year                           $   31,523    $   4,580    $   1,891
                                                                   ===========   ===========  ==========
Supplemental disclosure of cash flow information
  Interest paid                                                     $   6,345     $    357     $    339

  Income tax payments                                               $  15,553     $  1,024     $    315

Other non-cash transactions

  Dividend to Northwest of spare parts and engines                  $    -        $  4,385     $   -

  Note payable issued to Northwest as a dividend                    $ 200,000     $    -       $   -

  Settlement of accounts with Northwest as a dividend (Note 7)      $  15,500     $    -       $   -

  Capital contribution from Northwest applied to note payable       $  50,000     $    -       $   -

</TABLE>


The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

                                       43
<PAGE>

Item 8. Financial Statements and Supplementary Data

                   Notes to Consolidated Financial Statements
                (all amounts in thousands, except per share data)

1.  Description of Business

     Pinnacle Airlines Corp. (the "Company"),  operates through its wholly owned
subsidiary, Pinnacle Airlines, Inc., as a regional airline that provides airline
capacity to Northwest  Airlines,  Inc.  ("Northwest"),  a wholly owned  indirect
subsidiary  of  Northwest  Airlines  Corporation.  The  Company  operates  as  a
Northwest  Airlink  carrier at  Northwest's  domestic  hub  airports in Detroit,
Minneapolis/St. Paul and Memphis. The Company currently operates an all-regional
jet fleet of 76 Canadair  Regional  Jet ("CRJ")  aircraft  and offers  scheduled
passenger  service with  approximately  490 daily  departures to 81 cities in 29
states and two Canadian provinces.  As of December 31, 2002, the Company offered
service with 51 CRJ  aircraft  with  approximately  334 daily  departures  to 62
cities in 26 states and two Canadian provinces.

     Pinnacle Airlines Corp. was incorporated in Delaware on January 10, 2002 to
be the holding company of Pinnacle Airlines, Inc., which is a predecessor to the
Company and was  incorporated in Georgia in 1985.  Pinnacle  Airlines,  Inc. was
acquired in April 1997 by Northwest Airlines Corporation. Since the acquisition,
Pinnacle  Airlines Inc. has provided  regional  airline  service  exclusively to
Northwest.  During the time that it was the majority owner,  Northwest  operated
the Company as a business unit of Northwest  without  regard to its  stand-alone
profitability.  The  Company's  operations  were  designed to  increase  overall
Northwest system revenues rather than to maximize its stand-alone profitability.
The  historical  financial  information  does not  reflect  what  our  financial
position,  results of operations  and cash flows would have been had the Company
been a stand-alone entity during the periods presented.

2.  Significant Accounting Policies

Principles of Consolidation

     The accompanying  consolidated  financial  statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America and include the accounts of Pinnacle Airlines Corp. and its wholly-owned
subsidiary,  Pinnacle Airlines,  Inc., as if Pinnacle Airlines Corp. existed for
all periods  presented.  All intercompany  transactions  have been eliminated in
consolidation.

Cash and Cash Equivalents

     Cash equivalents consist of short-term,  highly liquid  investments,  which
are readily convertible into cash and have initial maturities of three months or
less.

Revenue Recognition

     Passenger and other  revenues are  recognized as earned when the service is
provided.  The Company grants trade credit to certain  approved  customers.  The
Company performs a monthly analysis of outstanding  trade  receivables to assess
the  likelihood of  collection.  For balances  where the Company does not expect
full payment of amounts owed, the Company will record an allowance to adjust the
trade receivable to the Company's best estimate of the amount it will ultimately
collect.  At December  31, 2003 and 2002,  the Company had recorded an allowance
for doubtful accounts of approximately $146 and $536, respectively.

Concentration of Credit Risk

     Substantially  all  of  the  Company's  revenues  have  been  derived  from
Northwest in the past and will continue to be derived from  Northwest  under the
operating  agreement  discussed  in Note  3.  As a  result,  the  Company  has a
significant  concentration  of its accounts  receivable  with  Northwest with no
collateral.


                                       44
<PAGE>

Item 8. Financial Statements and Supplementary Data

                   Notes to Consolidated Financial Statements
               (all amounts in thousands, except per share data)

2.  Significant Accounting Policies (continued)

Property and Equipment

     Property and equipment,  consisting primarily of flight equipment and other
property, are stated at cost. Expenditures for major renewals, modifications and
improvements are capitalized when such costs are determined to extend the useful
life of the asset.  Property and equipment are depreciated to estimated residual
values using the  straight-line  method over the  estimated  useful lives of the
assets,  which generally range from seven to fifteen years for flight  equipment
and three to ten years for other property and equipment.  Depreciation of flight
equipment is determined by allocating the cost, net of estimated residual value,
over the remaining lease terms of related aircraft.

     Long-lived   assets  are  reviewed  for  impairment   whenever   events  or
circumstances  indicate that the carrying amount may not be recoverable.  If the
sum of the  expected  future  undiscounted  cash flows is less than the carrying
amount of the asset, a loss is recognized  for the  difference  between the fair
value  and  carrying  value  of the  asset.  There  were  no  impairment  losses
recognized during the three years ended December 31, 2003.

Spare Parts and Supplies

     Spare  parts and  supplies  consist  of  expendable  parts and  maintenance
supplies  related  to flight  equipment,  which are  carried  at cost  using the
first-in,  first-out  (FIFO)  method.  Spare parts and  supplies are recorded as
inventory  when  purchased  and  charged to expense as used.  An  allowance  for
obsolescence is provided over the remaining estimated useful life of the related
aircraft  equipment,  for  spare  parts  expected  to be on hand at the date the
aircraft are retired from service,  plus  allowances  for spare parts  currently
identified  as  obsolete or excess.  These  allowances  are based on  management
estimates, which are subject to change.

Maintenance

     The  Company  operates  under a  Federal  Aviation  Administration-approved
continuous inspection and maintenance program.  Maintenance and repair costs for
owned  and  leased  flight   equipment,   including  the  overhaul  of  aircraft
components,  are  charged  to  operating  expense  as  incurred,  except for the
maintenance  costs  covered by  power-by-the-hour  agreement  which are expenses
based on specific operational events. On average, power-by-the-hour arrangements
represent approximately 50% of our maintenance, materials and repair costs.

Manufacturer Credits

     The Company purchases from Northwest certain  manufacturer credits that are
used by the Company to acquire  flight  equipment,  spare parts and supplies and
maintenance services.  Under its operating agreement with Northwest, the Company
may  decline to  purchase  credits  that it does not plan to utilize  within 180
days.  Available  manufacturer credits of $3,645 and $4,835 at December 31, 2003
and 2002, respectively, are included in prepaid expenses and other assets.

     For the years ended December 31, 2003, 2002, and 2001, the Company obtained
manufacturer  credits  from  Northwest  in the  amount of  $8,935,  $7,150,  and
$11,056, respectively.

Aircraft Deposits

     The Company  pays to  Northwest a deposit of $175,000  with the delivery of
each CRJ. As provided in the aircraft  lease  agreement  between the Company and
Northwest,  the deposits may be refunded to the Company upon the  expiration  of
the operating  agreement between the Company and Northwest,  or they may be used
in  settlement  of the final rent payment due to  Northwest.  These are shown as
deposits with Northwest in the Company's consolidated balance sheet.





                                       45
<PAGE>

Item 8. Financial Statements and Supplementary Data

                   Notes to Consolidated Financial Statements
               (all amounts in thousands, except per share data)


2.  Significant Accounting Policies (continued)

Income Taxes

     The Company  accounts for income taxes under the  liability  method,  which
requires that deferred  taxes be recorded at the statutory  rate to be in effect
when the taxes are paid.  Deferred  income taxes are provided for the tax effect
of temporary differences in the recognition of income and expenses for financial
reporting and income tax reporting.

Earnings Per Share

     The Company  accounts for earnings per share in accordance  with  Financial
Accounting  Standards Board ("FASB") Statement of Financial  Accounting Standard
("SFAS") No. 128,  "Earnings per Share." Basic earnings per common share ("Basic
EPS")  excludes  dilution  and is computed by dividing  net income  available to
common  stockholders by the weighted average number of common shares outstanding
during  the  periods  presented.  Diluted  earnings  per share  ("Diluted  EPS")
reflects  the  potential  dilution  that  could  occur  if  securities  or other
obligations  to issue common stock were exercised or converted into common stock
or resulted in the  issuance of common stock that then shared in the earnings of
the Company.  For all periods  presented,  the weighted average number of common
shares outstanding used in our basic and diluted earnings per share was 21,892.

Stock Options

     The Company accounts for stock-based compensation using the intrinsic value
method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" and related interpretations ("APB 25"). Under APB 25,
if the exercise price of the Company's  employee stock options equals the market
price of the underlying stock on the date of the grant, no compensation  expense
is  recognized.  Since the  Company's  stock  options have all been granted with
exercise prices at fair value, no compensation expense has been recognized under
APB 25.

     The initial  grant of the employee  stock options to purchase the Company's
common stock  occurred in November  2003. The following  table  illustrates  the
effect on net income and income per share  assuming the  compensation  costs for
the Company's stock option and purchase plans had been determined using the fair
value method,  prorated over the vesting periods, at the grant dates as required
under SFAS No. 123, "Accounting for Stock-Based Compensation" for the year ended
December 31, 2003:

<TABLE>
<S>                                                                 <C>

Net income                                                           $   35,067

Pro forma stock-based compensation expense, net of tax                      121
                                                                    ------------
Pro forma net income                                                 $   34,946
                                                                    ============

Pro forma net income per common share--basic and diluted             $     1.59
                                                                    ============

</TABLE>


     See Note 14, Stock Based Compensation,  for the assumptions used to compute
the pro forma amounts above. The pro forma effect on net income per share is not
necessarily representative of the pro forma effects in future years.




                                       46
<PAGE>

Item 8. Financial Statements and Supplementary Data

                   Notes to Consolidated Financial Statements
               (all amounts in thousands, except per share data)

2.  Significant Accounting Policies (continued)

Cost in Excess of Net Assets Acquired

     In connection with the Northwest acquisition of the Company, cost in excess
of net assets acquired ("Goodwill") was recorded in the amount of $22,449.

     Effective  January 1, 2002, the Company  adopted the provisions of SFAS No.
141,  "Business  Combinations,"  and No.  142,  "Goodwill  and Other  Intangible
Assets." Under SFAS No. 142, goodwill  amortization ceases when the new standard
is adopted. The new rules also require an initial goodwill impairment assessment
in the year of adoption and annual  impairment tests  thereafter.  In performing
the January 1, 2002,  transitional impairment test of its existing goodwill, the
Company  compared  its carrying  value to its  estimated  fair value,  which was
determined  using a discounted cash flow analysis of projected  future earnings.
Based on this  analysis and  following the guidance of SFAS No. 142, the Company
concluded that its goodwill was not impaired. For purposes of this standard, the
Company  determined  that  it  operates  in one  reporting  unit  consisting  of
scheduled  airline  passenger  service.  Each October,  the Company performs the
annual  impairment test. In conducting the test for 2003, the Company  concluded
that its  goodwill  is not  impaired.  Other than  goodwill,  the Company has no
identifiable intangible assets.

     Before  January 1, 2002,  goodwill was being  amortized over a period of 30
years by the  straight-line  method.  Effective January 1, 2002, we discontinued
amortization of goodwill,  which resulted in reduced  expense of  approximately,
$447,   net  of  income   taxes,   annually.   Had  the   Company   applied  the
non-amortization  provisions  of SFAS No. 142 in 2001,  pro forma net income and
basic and diluted earnings per share would have been $14,696 and $0.67.

Financial Instruments

     Fair values of cash equivalents,  receivables,  other assets,  and accounts
payable  approximate  their carrying  amounts due to the short period of time to
maturity.

     The Company invests cash nightly in a repurchase agreement with a bank. The
funds are used to purchase a fractional  interest in an  obligation  of the U.S.
Government or its agencies (the "Purchased Securities").  The following day, the
bank  repurchases  the Purchased  Securities  from the Company and the funds and
interest are deposited  into the  Company's  account.  The overnight  investment
balance was $403 and $6,115 at December 31, 2003 and 2002, respectively.

Deferred Credits

     To assist the Company with the  refurbishment of its airline fleet, in 1998
a lessor  provided the Company  with funds  totaling  $4,275.  Portions of these
funds  were used for  aircraft  refurbishment.  The  Company is  amortizing  the
remaining balance over the terms of the related leases.

Frequent Flyer Program

     The Company participates in Northwest's  WorldPerks frequent flyer program,
in which  passengers  may use  mileage  accumulated  in that  program  to obtain
discounted  or free  trips  that  might  include a flight  segment on one of the
Company's flights.  However,  Northwest is responsible for the administration of
WorldPerks and the Company has no incremental  cost and receives no revenue from
Northwest  associated  with  travel  awards  redeemed  on the  Company's  flight
segments.



                                       47
<PAGE>

Item 8. Financial Statements and Supplementary Data

                   Notes to Consolidated Financial Statements
               (all amounts in thousands, except per share data)

2.  Significant Accounting Policies (continued)

Segment Reporting

     The Company has adopted  SFAS No.  131,  "Disclosure  About  Segments of an
Enterprise and Related Information." This statement requires disclosures related
to the  components  of a company for which  separate  financial  information  is
available that is evaluated  regularly by the Company's chief operating decision
maker in deciding how to allocate  resources and in assessing  performance.  The
Company  operates  in one  business  segment  consisting  of  scheduled  airline
passenger service.

Comprehensive Income

     The Company  has no  adjustments  to net income to arrive at  comprehensive
income.

Significant Concentration

     One supplier  manufactures  the Company's  CRJ aircraft.  One supplier also
manufactures the engines used on the CRJ aircraft.  These suppliers also provide
the Company with parts,  repair and other support  services for the CRJ aircraft
and its engines.

Reclassification

     Certain  prior year  amounts have been  reclassified  to conform to current
year classifications.

Use of Estimates

     The preparation of our consolidated  financial  statements requires the use
of estimates  and  assumptions  that affect the  reported  amounts of assets and
liabilities, the reported amounts of revenues and expenses and the disclosure of
contingent  liabilities.  Management  makes its best  estimate  of the  ultimate
outcome  for these  items  based on  historical  trends  and  other  information
available when the financial  statements are prepared.  Changes in estimates are
recognized in accordance  with the accounting  rules for the estimate,  which is
typically  in  the  period  when  the  new  information   becomes  available  to
management.

3. Change in Ownership and Public Offering

     On January 15, 2003,  Northwest  transferred all of the outstanding  common
stock of Pinnacle  Airlines,  Inc. to Pinnacle  Airlines  Corp., in exchange for
21,892 shares of the Pinnacle Airlines Corp. common stock, which constitutes all
of its outstanding  common stock,  and one share of Series A preferred stock. In
January 2003 and September 2003,  Northwest  contributed 2,828 shares and 16,572
shares,  respectively,  of Pinnacle Airlines Corp. common stock to the Northwest
Airlines  Pension Plan for Contract  Employees,  the Northwest  Airlines Pension
Plan for Pilot  Employees and the Northwest  Airlines  Pension Plan for Salaried
Employees (collectively, the "Northwest Airlines Pension Plan.")

     The Series A preferred stock has a stated value and liquidation  preference
of $100. The Series A preferred  stock gives  Northwest the right to appoint two
directors to the Company's  board of directors.  No dividends are payable to the
shareholder  of the  Series  A  preferred  stock,  and it is  redeemable  by the
Company, at its option, for an amount equal to the liquidation preference,  only
upon or following the occurrence of certain events,  including the sale or other
disposition of the Series A preferred  stock or the termination or expiration of
the airline services agreement between the Company and Northwest.

     On November 25, 2003, the Company completed an initial public offering (the
"Offering") of its common stock, par value $.01 per share. In the Offering,  the
Northwest  Airlines Pension Plans sold the 19,400 shares that it received during
2003. The Company did not receive any proceeds from the Offering.



                                       48
<PAGE>

Item 8. Financial Statements and Supplementary Data

                   Notes to Consolidated Financial Statements
               (all amounts in thousands, except per share data)


4.  Airline Services Agreement

     The Company  and  Northwest  operate  under an Airline  Services  Agreement
("ASA"),  pursuant to which the Company  provides  regional  airline services to
Northwest.  The Company and Northwest  entered the ASA effective  March 1, 2002,
and its  terms  were  materially  different  from the  terms  of the  historical
arrangement  between the Company and Northwest.  The initial agreement  provided
for a term  from  March 1,  2002,  through  February  29,  2012 and  would  have
increased the Company's  fleet to 95 regional jets by December 31, 2004.  During
2003, the Company and Northwest entered into certain amendments to the ASA that,
among other  things,  extended the term of the  agreement  through  December 31,
2017,  eliminated  incentive  payments  based on certain  performance  criteria,
lowered the Company's target operating margin from 14% to 10% effective December
1, 2003, and provided for an increase in the size of the Company's  fleet to 129
regional jets by December 31, 2005.

     Under the ASA, the Company receives the following payments from Northwest:

     Reimbursement payments. The Company receives monthly reimbursements for all
expenses relating to: passenger aircraft fuel; basic aircraft rentals;  aviation
liability,  war risk and  hull  insurance;  third-party  deicing  services;  CRJ
third-party  engine  and  airframe  maintenance;  hub and  maintenance  facility
rentals; passenger security costs; ground handling in cities where Northwest has
ground handling  operations;  Detroit landing fees and property taxes. Since the
Company is reimbursed by Northwest  for the actual  expenses  incurred for these
items, the Company has no financial risk associated with cost fluctuations.

         Payments  based on pre-set  rates.  The  Company is entitled to receive
semi-monthly  payments  for each block hour and cycle it operates  and a monthly
fixed cost payment based on the size of its fleet.  These  payments are designed
to cover all of the Company's expenses incurred with respect to the ASA that are
not covered by the  reimbursement  payments.  The substantial  majority of these
expenses relate to labor costs,  ground handling costs in cities where Northwest
does not have ground  handling  operations,  landing  fees in cities  other than
Detroit, overhead and depreciation.

     Margin payments. The Company receives a monthly margin payment based on the
revenues  described above calculated to achieve a target operating  margin.  The
target  operating  margin for the ten months ended  December  31, 2002,  and the
eleven  months ended  November 30, 2003 was 14%.  Following  the  Offering,  the
Company and Northwest  amended the ASA to lower the Company's  target  operating
margin to 10%,  effective December 1, 2003. Under the amended ASA, the Company's
target operating margin will be reset to a market-based  percentage in 2008, but
the reset  target  operating  margin will be no lower than 8% and no higher than
12%.

     The  portion  of any  margin  payments  attributable  to the  reimbursement
payments will always be equal to the targeted  operating margin for the relevant
period.  However, since the payments based on pre-set rates are not based on the
actual  expenses  incurred,  if the Company's  expenses are not covered by these
payments,  its actual  operating  margin could differ from its target  operating
margin.

     Through 2007, if the Company's actual costs that are intended to be covered
by the revenues the Company  receives  based on pre-set  rates  deviate from the
expected  costs used in  developing  those  pre-set  rates,  and as a result its
annual  operating margin is below the 9% floor or above the 11% ceiling for each
year through  2005,  or below the 8% floor or above the 12% ceiling for 2006 and
2007,  a year-end  adjustment  in the form of a payment by  Northwest  or by the
Company will be made to adjust the  Company's  operating  margin to the floor or
ceiling.  Specified amounts are excluded when determining  whether the Company's
annual operating margin is below the floor or above the ceiling.

     Beginning  in 2008,  Northwest  will not  guarantee  the  Company a minimum
operating margin, although the Company will still be subject to a margin ceiling
above the revised target-operating margin.



                                       49
<PAGE>

Item 8. Financial Statements and Supplementary Data

                   Notes to Consolidated Financial Statements
               (all amounts in thousands, except per share data)

4.  Airline Services Agreement (continued)

     If the Company's  actual  operating margin for any year beginning with 2008
exceeds the revised target operating margin by up to five percentage points, the
Company will make a year-end  adjustment payment to Northwest in an amount equal
to half of the excess. In addition, should the Company's actual operating margin
exceed the targeted  operating margin by more than five percentage  points,  the
Company will pay Northwest  all of the excess above five percent.  If necessary,
the Company will record an amount each quarter to reflect the Company's right to
receive or the Company's  obligation  to pay this  operating  margin  adjustment
payment, and any net payment will be made annually. For the years ended December
31, 2002 and 2003, no margin  adjustments were required pursuant to the terms of
the ASA.

5.  Other Agreements with Northwest

     In connection  with the services  provided to Northwest  under the ASA, the
Company and  Northwest  have also  entered into several  other  agreements  with
Northwest,  including  agreements  necessary for the Company to provide regional
airline  services to  Northwest.  Unless  otherwise  stated,  the terms of these
agreements  generally  will  continue  so long as the  ASA is in  effect.  These
agreements generally contain cross-termination  provisions such that termination
of the ASA will trigger a termination under the relevant agreement. In addition,
these  agreements  generally  provide that they will  terminate upon a change of
control of the Company or its affiliates. The following is a summary description
of these agreements.

     Aircraft and Spare Engine  Lease  Agreements.  The Company has entered into
aircraft lease and sublease agreements and spare engine sublease agreements with
Northwest  with respect to all of the  aircraft  and spare  engines it leases or
subleases from Northwest.  These agreements  terminate on December 31, 2017, the
expiration date of the ASA.

     Manufacturer Benefits Agreement. The manufacturer benefits agreement allows
the Company to take advantage of provisions  related to guaranties,  warranties,
inventory  support,  product  support  and  maintenance  services  contained  in
agreements  Northwest has with  Bombardier and General  Electric with respect to
aircraft and engines in our fleet.

     Sublease  and  Facilities  Use  Agreements.  The Company  has entered  into
facility  sublease  agreements  with  Northwest for certain  hangar and aircraft
maintenance,   as  well  as  facilities  use  agreements  relating  to  terminal
facilities at  Northwest's  domestic hubs.  These  agreements are subject to the
terms of  master  leases  under  which  Northwest  leases  the  facilities  from
third-party  lessors.  These  agreements  will  expire  on  the  earlier  of the
expiration of Northwest's lease for the property and the termination of the ASA.

     Preferential Pilot Hiring Agreement.  The Company entered into an agreement
with  Northwest  under  which the  Company  agreed to hire  pilots who have been
furloughed by Northwest on a  preferential  basis,  subject to the normal hiring
procedures  and  requirements  of the  Company.  Beginning  in January  2003 and
continuing  through  December 2017, no less than 75% of new pilot hires in a new
hire class at the Company will be filled by furloughed Northwest pilots provided
that the Company need not hire more than 15 furloughed  Northwest pilots per new
hire class.  Northwest  may recall  pilots hired under this  agreement  after 18
months of service at the Company;  however,  the Company may limit the number of
pilots recalled to service with Northwest to five per month.

     Information  Technology Support  Agreement.  The Company has entered into a
service  agreement with Northwest  under which  Northwest  provides  information
technology services and support for its operations,  including access to various
Northwest  operational  systems  that are  necessary  for the Company to provide
regional airline service to Northwest.




                                       50
<PAGE>

Item 8. Financial Statements and Supplementary Data

                   Notes to Consolidated Financial Statements
               (all amounts in thousands, except per share data)

5.  Other Agreements with Northwest (continued)

     Family  Assistance  Services  Agreement.  The Company  has entered  into an
agreement with Northwest with respect to the  responsibilities  of each party in
jointly responding to an emergency and providing assistance to the victims of an
accident  and their family  members,  as well as all  necessary  training to the
Company's employees on an ongoing basis.

     Ground  Handling  Agreement.  The Company and Northwest have entered into a
ground  handling  agreement  whereby the Company  will  provide  certain  ground
handling functions to another regional airline that provides airline capacity to
Northwest. Such services will be provided at certain locations that are operated
by the Company  through the term of the  agreement,  which expires  December 31,
2017. Upon  expiration,  the agreement is  automatically  renewed for successive
five-year periods unless terminated by the Company or Northwest  pursuant to the
terms of the  agreement.  The  initial  payment  rate  for  these  functions  is
effective  through  December 31, 2003. On January 1, 2004,  and each  succeeding
January 1, the ground  handling  payment  rate will be adjusted for certain cost
increases as defined in the agreement.  For the years ending  December 31, 2003,
2002 and 2001, the Company recorded revenue of approximately  $6,010, $5,918 and
$2,491,  respectively,  for providing these services, which is included in other
operating revenue in the accompanying statements of income.

     Sublease of Saab Aircraft.  The Company  transferred 11 Saab  turboprops to
Mesaba Airlines ("Mesaba"),  another regional carrier of Northwest, during 2002.
The Company entered into an aircraft sublease agreement with Mesaba with respect
to these Saab  aircraft and two engines that it leases from third  parties.  The
term  of the  sublease  will  continue  for  the  remainder  of the  term of the
Company's  sublease  with the  third-party  sublessors,  subject to its right to
terminate  the  sublease  in the event of default by  Mesaba.  Amounts  due from
Mesaba under its sublease agreement with the Company are consistent with amounts
paid by the Company to third party lessors.

6.  Summary of Passenger Revenue

     As  discussed  in Note 4,  the  Company's  passenger  revenue  consists  of
reimbursement payments for certain operating expenses, payments based on pre-set
rates for fixed costs,  completed block hours and completed cycles.  The Company
also  receives  margin  payments  on these  items to achieve a target  operating
margin. The Company's passenger revenues by aircraft type are as follows:

<TABLE>
<S>                                      <C>                <C>             <C>

                                                    Years Ending December 31,
                                         -----------------------------------------------
                                              2003               2002           2001
                                         --------------     ------------    ------------

Regional jets (CRJs)                      $   450,611        $  285,505      $  111,586
Turboprops                                       -               39,881          86,685
                                         --------------     ------------    ------------
Total passenger revenue                   $   450,611        $  325,386      $  198,271
                                         ==============     ============    ============

</TABLE>

     The following  schedules  summarize  passenger  revenue for the year ending
December 31, 2003,  which as discussed in Note 4, was the  Company's  first full
year  of  operations  under  an ASA.  As the  terms  of the  ASA are  materially
different from the terms of the historical  arrangement  between the Company and
Northwest,  comparable  information  for the years ending  December 31, 2002 and
2001 is not available.

     The  Company's  passenger  revenue  by  type,  including  margin,  for 2003
consisted of the following:

<TABLE>
<S>                                                        <C>


Reimbursement payments                                      $ 296,257

Payments based on pre-set rates                               154,354
                                                           -----------
Total passenger revenue                                     $ 450,611
                                                           ===========
</TABLE>


                                       51
<PAGE>

Item 8. Financial Statements and Supplementary Data

                   Notes to Consolidated Financial Statements
               (all amounts in thousands, except per share data)

6.  Summary of Passenger Revenue (continued)

     According  to the terms of the ASA, the Company is  reimbursed  for certain
operating  expenses  incurred in providing  airline  capacity to Northwest.  The
following is a summary of the Company's operating expenses and passenger revenue
from reimbursement payments during 2003:

<TABLE>
<S>                                                 <C>             <C>             <C>

                                                            Year Ending December 31, 2003
                                                    -----------------------------------------------

                                                      Reimbursed     Unreimbursed       Total
                                                    --------------- --------------- ---------------
                                                                (in thousands)
Operating expenses:

  Salaries, wages and benefits                        $     -         $   83,316      $   83,316

  Aircraft fuel and taxes                                54,731              276          55,007

  Aircraft maintenance, materials and repairs             6,548            7,568          14,116

  Aircraft rentals                                      136,273              -           136,273

  Other rentals and landing fees                         16,512           12,743          29,255

  Ground handling services                               33,223           11,399          44,622

  Depreciation and amortization                             -              2,912           2,912

  Government reimbursements                              (1,000)            (114)         (1,114)

  Other                                                   9,600           18,614          28,214
                                                    --------------- --------------- ---------------
                                                      $ 255,887       $  136,714      $  392,601
                                                                    =============== ===============

  Margin on expense reimbursements                       40,370
                                                    ---------------
  Passenger revenue from expense reimbursements       $ 296,257
                                                    ===============
</TABLE>

7.  Note Payable and Dividends to Northwest

     Effective  January 1, 2003, the Company settled all balances payable to, or
due from,  Northwest as of December 31, 2002. This  transaction  resulted in the
elimination  of all balances  between the Company and Northwest and the issuance
of a $15,500  dividend to  Northwest.  The  balance  was settled  through a cash
payment to the Company of $15,446.

     A summary of balances settled with Northwest is as follows:

<TABLE>
<S>                                                              <C>

Net receivables due from Northwest                               $  59,632

Less:  Income taxes payable to Northwest                            26,843
       Net deferred taxes payable to Northwest                       1,843
       Dividend to Northwest                                        15,500
                                                                --------------
Cash payment to the Company                                      $  15,446
                                                                ==============
</TABLE>


                                       52
<PAGE>

Item 8. Financial Statements and Supplementary Data

                   Notes to Consolidated Financial Statements
               (all amounts in thousands, except per share data)

7.  Note Payable and Dividends to Northwest (continued)

     On  January  14,  2003,  the  Company  issued a  $200,000  note  payable to
Northwest as a dividend.  The note payable required quarterly principal payments
of $5,000 beginning in March 2003 and continuing through December 2009. The note
payable also required monthly payments to the extent that the Company's cash and
cash equivalents balance exceeds $40,000.  The note accrues interest at the rate
of 3.4%,  which is payable  quarterly.  In the event that the  Company  does not
satisfy its obligations  under the note,  Northwest has the right to set off any
such  amounts  against its  payment  obligations  to the Company  under the ASA.
Should  Northwest  terminate  the ASA prior to December  2009,  all  outstanding
principal and interest would become immediately due and payable to Northwest.

     Immediately  following the Offering,  Northwest made a capital contribution
to the Company in the amount of $50,000. The contribution of capital was used by
the Company to reduce the outstanding principal balance on the note payable. The
Company  and  Northwest  subsequently  amended  the note  payable to reflect the
outstanding  principal  balance  of  $135,000.  Also,  the  quarterly  principal
payments were lowered to $3,000,  or to the extent that the  Company's  cash and
cash equivalents balance exceeds $50,000. No other significant changes were made
to the terms of the note payable.

8.  Lines of Credit

     In January 2003, the Company retired the $4,245 balance  outstanding  under
the line of credit with a bank as of December 31, 2002.

     In  January  2003,  the  Company   obtained  a  Revolving  Credit  Facility
("Revolver") from Northwest, which allows for borrowings up to $50,000. The term
of the Revolver extends through December 31, 2005. The Revolver accrues interest
at the rate of 1% plus a margin  that is equal to the higher of the most  recent
prime rate offered by JP Morgan Chase Bank, or the most recent overnight federal
funds  rate  offered to JP Morgan  Chase  Bank plus .5%.  Under the terms of the
Revolver,  the Company must  continue to operate  under the ASA and is prevented
from issuing or declaring dividends or incurring any additional debt without the
approval of Northwest. The interest rate at December 31, 2003 was 5.0%.

9.  Leases

     The Company  leases all of its  aircraft  and certain  aircraft  equipment,
buildings and office equipment under noncancelable  operating leases that expire
in various  years  through  2017.  The Company  subleases  its CRJ aircraft from
Northwest  under  operating  leases that expire  December  31,  2017.  The lease
agreements contain certain  requirements of the Company regarding the payment of
taxes on the aircraft, acceptable use of the aircraft, the level of insurance to
be maintained,  the maintenance  procedures to be performed and the condition of
the  aircraft  upon its return to  Northwest.  The monthly  lease rates  include
certain fleet  management costs of Northwest and are not  representative  of the
rates  paid by  Northwest  to  third-party  lessors.  Northwest  reimburses  the
company's aircraft rental expense in full under the ASA.

     Certain  aircraft and  equipment are leased under  noncancelable  operating
leases  expiring in various  years through 2009. As discussed in Note 5, 11 Saab
340  aircraft  are being  subleased  to another  regional  airline  carrier that
provides airline capacity to Northwest.



                                       53
<PAGE>

Item 8. Financial Statements and Supplementary Data

                   Notes to Consolidated Financial Statements
               (all amounts in thousands, except per share data)

9.  Leases (continued)

     The  following  is a summary  of the  Company's  fleet of  active  aircraft
providing scheduled passenger service:

<TABLE>
<S>                 <C>                                 <C>             <C>              <C>

                                                                   Fleet Size as of December 31,
                                                        ------------------------------------------------

      Aircraft        Standard Seating Configuration         2003            2002             2001
  ----------------- ----------------------------------- --------------- ---------------- ---------------

  CRJ 200                           50                        35              33               30
  CRJ 440                           44                        41              18               --
  Saab 340                          33                        --              --               24
                                                        --------------- ---------------- ---------------
                                                              76              51               54
                                                        =============== ================ ===============

</TABLE>

     The following  summarizes  approximate  minimum future rental payments,  by
year and in the aggregate,  required under  noncancelable  operating leases with
initial or remaining lease terms in excess of one year as of December 31, 2003:

<TABLE>
<S>                                                    <C>                 <C>

                                                                 Operating Leases
                                                       --------------------------------------
                                                           Aircraft           Non-aircraft
                                                       ------------------  ------------------
2004                                                    $    167,256         $     4,058
2005                                                         167,256               3,533
2006                                                         167,065               3,429
2007                                                         161,995               3,250
2008                                                         160,992               3,081
Thereafter                                                 1,436,458              23,619
                                                       ------------------  ------------------
                                                           2,261,022              40,970
Sublease rental income                                       (26,622)               (261)
                                                       ------------------  ------------------
Total minimum operating lease payments                  $  2,234,400         $    40,709
                                                       ==================  ==================
</TABLE>

     Rental  expense  for  operating  leases  for the years  ended  December  31
consisted of the following:

<TABLE>
<S>                                      <C>               <C>                <C>

                                               2003              2002               2001
                                         ----------------- ------------------ -----------------
Gross rental expense                      $     160,723     $      106,548      $     45,104
Sublease rental income                           (8,181)            (5,831)                -
                                         ----------------- ------------------ -----------------
Net rental expense                        $     152,542     $      100,717      $     45,104
                                         ================= ================== =================
</TABLE>

     The above minimum  future  rentals and total rental  expense do not include
landing fees which amounted to approximately $12,986,  $9,117 and $4,072 for the
years ended December 31, 2003, 2002 and 2001, respectively.



                                       54
<PAGE>

Item 8. Financial Statements and Supplementary Data

                   Notes to Consolidated Financial Statements
               (all amounts in thousands, except per share data)

10. Accrued Expenses

     Accrued expenses consisted of the following as of December 31:

<TABLE>
<S>                            <C>                <C>

                                      2003              2002
                               -----------------  ----------------
Aircraft rents                   $       290        $       350
Compensation                           4,397              4,143
Taxes other than income                4,678              4,382
Insurance costs                        1,848              1,529
Other                                    409                678
                               -----------------  ----------------
                                 $    11,622        $    11,082
                               =================  ================
</TABLE>

11. Employee Benefit Plan

     The  Company  maintains  a  401(k)  Plan  (the  "Plan")  for  all  eligible
employees,  which is administered by officers of the Company.  Participants  can
make tax deferred contributions of up to 16% of their annual salary. The Company
match is based on the following graduated scale:

     Years of Service Company Match

     Through 5 years                              25% of first 5%
     6-9 years                                    40% of first 6%
     10-12 years                                  60% of first 7%
     13 years and more                            70% of first 7%

     The  plan was  amended  effective  March  1,  2002,  to  allow  all  flight
attendants and non-union employees to be immediately  eligible to participate in
the  plan  and to  immediately  vest in the  Company's  matching  contributions.
Additionally,  the  Company  matching  contribution  has  increased  to  100% of
eligible  employee  contributions up to 3% of their annual salary and 67% on the
next  3%  of  eligible  employee   contributions.   The  Company  made  matching
contributions  of  approximately  $1,253,  $710  and $407  for the  years  ended
December 31, 2003, 2002 and 2001, respectively.

     The Plan also contains a profit sharing  provision  allowing the Company to
make  discretionary  contributions  to the  Plan  for the  benefit  of all  plan
participants.  For the three years ended  December 31, 2003, the Company made no
discretionary contributions to the Plan.

12. Other Expenses

     Other expenses consisted of the following for the years ended December 31:

<TABLE>
<S>                                  <C>                <C>                <C>

                                           2003               2002               2001
                                     -----------------  -----------------  ------------------
Passenger liability insurance          $     2,427         $    4,317        $     1,866
Hull insurance                               1,150              1,189                579
Property and other taxes                     5,635              4,657              3,820
Other                                       19,002             18,058             19,595
                                     -----------------  -----------------  ------------------
                                      $     28,214         $   28,221        $    25,860
                                     =================  =================  ==================
</TABLE>


                                       55
<PAGE>

Item 8. Financial Statements and Supplementary Data

                   Notes to Consolidated Financial Statements
               (all amounts in thousands, except per share data)

13. Income Taxes

     As  discussed  in Note 4,  Northwest's  majority  ownership  of the Company
ceased with its  contribution  of stock to the Northwest  Airlines  Pension Plan
during September 2003 and the Company  prospectively  separated from Northwest's
consolidated federal and state tax group. Prior to this change in ownership, the
Company and Northwest  operated under a tax sharing  agreement whereby Northwest
was responsible for the payment of all U.S. federal income taxes,  unitary state
income  taxes and  foreign  income  taxes with  respect to the  Company  for all
periods  the Company was part of the  Northwest  Consolidated  Group and for any
audit  adjustments to such taxes. As a member of the Northwest  consolidated tax
group, the Company's operating results were included in the consolidated federal
income tax return of Northwest,  and in certain states, the consolidated  income
tax return for Northwest also included the Company's results.  While a member of
the Northwest  consolidated  tax group, the Company provided for income taxes as
if it were a separate stand-alone entity.

     Through the date of the change in majority ownership,  the Company has paid
Northwest  for all income taxes  expected to be  ultimately  paid by  Northwest,
which have been shown in the accompanying balance sheets as current income taxes
payable to, or due from, Northwest.

     The  significant  components  of the  Company's  deferred  tax  assets  and
liabilities as of December 31 are as follows:

<TABLE>
<S>                                              <C>                <C>

                                                            December 31,
                                                 -----------------------------------
                                                      2003               2002
                                                 --------------     ----------------
Deferred tax assets:
  Asset valuation reserves                        $     1,136         $    1,163
  Vacation Pay                                            692                549
  Other accruals                                          721                782
                                                 --------------     ----------------
  Total deferred tax assets                             2,549              2,494

  Deferred tax liabilities:
    Tax over book depreciation                         (6,400)            (4,459)
                                                 --------------     ----------------
  Net deferred tax asset (liability)              $    (3,851)        $   (1,965)
                                                 ==============     ================
</TABLE>

     For  financial  reporting  purposes,  the  provision for income tax expense
includes the following components for the years ended December 31:

<TABLE>
<S>                            <C>                <C>                <C>

                                     2003               2002               2001
                               ------------------ ------------------ ------------------
    Current:
      Federal                   $      17,293      $      16,107      $       6,912
      State                             3,154              2,417                260
                               ------------------ ------------------ ------------------
                                       20,447             18,524              7,172
    Deferred:
      Federal                           1,454                909              1,183
      State                               431                110                466
                               ------------------ ------------------ ------------------
                                        1,885              1,019              1,649
                               ------------------ ------------------ ------------------
                                $      22,332             19,543              8,821
                               ================== ================== ==================
</TABLE>

                                       56
<PAGE>

Item 8. Financial Statements and Supplementary Data

                   Notes to Consolidated Financial Statements
               (all amounts in thousands, except per share data)

13. Income Taxes (continued)

     The following is a reconciliation  of the provision for income taxes at the
applicable  federal statutory income tax rate to the reported income tax expense
for the years ended December 31:

<TABLE>
<S>                                               <C>           <C>            <C>

                                                     2003           2002          2001
                                                  ------------  -------------  ------------
    Income tax expense at statutory rate           $   20,090    $   17,615     $   8,073
    State income taxes, net of federal taxes            2,239         1,817           310
    Goodwill amortization                                   -             -           255
    Other                                                   3           111           183
                                                  ------------  -------------  ------------
    Income tax expense                             $   22,332    $   19,543     $   8,821
                                                  ============  =============  ============
</TABLE>

14. Stock-Based Compensation

     In connection  with the Offering  discussed in Note 3, the Company  adopted
the 2003 Stock  Incentive  Plan (the  "Plan").  The plan permits the granting of
non-qualified stock options, incentive stock options, stock appreciation rights,
restricted stock and other  stock-based  awards to employees or directors of the
Company.  A maximum  of 1,152  shares of common  stock may be  subject to awards
under the plan.

     At the time of the Offering,  the Company awarded options for 858 shares at
the  Offering  price of $14.  These  options  vest  over  four  years in  annual
increments of 25% and will expire ten years after the grant date.  The following
table provides certain information with respect to the Company's stock options:

<TABLE>
<S>                                                  <C>                 <C>

                                                                          Weighted Average
                                                       Stock Options       Exercise Price
                                                     ------------------- -------------------
    Outstanding at December 31, 2002                         -                      -
    Granted                                                 858                $  14.00
    Exercised                                                -                      -
    Forfeited                                                -                      -
                                                     ------------------- -------------------
    Outstanding at December 31, 2003                        858                $  14.00
                                                     =================== ===================
</TABLE>

     As of December 31, 2003,  the  remaining  contractual  life of  outstanding
options was 9.9 years.

     Pro forma  information  regarding  net income and income per share has been
determined as if the Company had  accounted  for its employee  stock options and
purchase  rights  under the fair value method of SFAS No. 123. The fair value of
the options  granted  during 2003 was  estimated  at the date of grant using the
Black-Scholes  options  pricing model with the following  assumptions  for 2003:
risk-free interest rate of 3.5% dividend yield of 0.0%,  expected  volatility of
Pinnacle stock of 65.0% and expected life of the option of 6.0 years.  The grant
date fair value of the stock options granted in 2003 was $8.65 per option.

     The  Black-Scholes   option  valuation  model  was  developed  for  use  in
estimating the fair value of traded options,  which have no vesting restrictions
and are fully  transferable.  In addition,  option  valuation models require the
input of highly  subjective  assumptions  including  the  expected  stock  price
volatility.  Because the Company's  employee  stock options and purchase  rights
have characteristics  significantly  different from those of traded options, and
because changes in the subjective  input  assumptions can materially  affect the
fair value estimate,  the existing models do not necessarily  provide a reliable
single  measure of the fair value of our  employee  stock  options and  purchase
rights.



                                       57
<PAGE>

Item 8. Financial Statements and Supplementary Data

                   Notes to Consolidated Financial Statements
               (all amounts in thousands, except per share data)

15.  Related Party Transactions

     Northwest  is a related  party of the Company.  As  previously  noted,  the
Company  generates  substantially all of its revenue from its ASA with Northwest
under which the Company uses the "NW"  two-letter  designator code in displaying
its schedules on all flights in the automated airline  reservation  systems used
throughout  the  industry.  Under  this  agreement,  the  Company  uses the name
"Northwest  Airlink."  Northwest  leases the Company all of its  regional  jets,
provides  certain  borrowings to the Company and is the owner of 2,492 shares of
the Company's common stock and the Company's Series A preferred stock.

<TABLE>
<S>                                                 <C>               <C>               <C>

                                                                  Years Ending December 31,
                                                    ------------------------------------------------------
                                                          2003              2002              2001
                                                    ----------------- ----------------- ------------------
      Revenue:

      Passenger revenue                                $  450,611         $ 325,386         $  198,271

      Expenses:

      Aircraft fuel and taxes                              53,909            27,247             14,186
      Aircraft rentals                                    136,283            79,260             25,601
      Other rentals and landing fees                       11,250             9,063                 15
      Ground handling services                             32,069            14,584                925
      Other                                                   275               344              1,135
      Interest expense                                      7,176              -                   -
      Interest income                                         -              (2,937)              (105)

</TABLE>

     Net  amounts  due from  Northwest  as of  December  31,  2003 and 2002 were
$16,187 and $59,632,  respectively,  and are included in accounts  receivable in
the Company's consolidated balance sheets.

16.  Contingencies

     Approximately  76%  of  the  Company's  workforce  are  members  of  unions
representing  pilots,   flight  attendants  and  customer  service  agents.  The
collective  bargaining  agreements for the pilots and flight  attendants  become
amendable  on April 30,  2005,  and July 31,  2006,  respectively.  The  initial
contract for customer  service agents is currently in  negotiation.  The Railway
Labor  Act,  which  governs  labor  relations  for unions  representing  airline
employees,  contains  detailed  provisions  that must be  exhausted  before work
stoppage can occur once a collective bargaining agreement becomes amendable.

     The  Company is a defendant  in various  lawsuits  arising in the  ordinary
course of business.  While the outcome of these lawsuits and proceedings  cannot
be predicted with certainty, it is the opinion of the Company's management based
on current  information and legal advice that the ultimate  disposition of these
suits will not have a material adverse effect on the financial position, results
of operations or cash flows.



                                       58
<PAGE>

Item 8. Financial Statements and Supplementary Data

                   Notes to Consolidated Financial Statements
               (all amounts in thousands, except per share data)

17.  Quarterly Financial Data (Unaudited)

     Unaudited  summarized  financial  data by  quarter  for 2003 and 2002 is as
follows:

<TABLE>
<S>                                                <C>               <C>               <C>               <C>

                                                       March 31          June 30         September 30      December 31
                                                   ----------------- ----------------- ----------------- -----------------
            2003
            ----
            Operating Revenue                       $     100,562      $    109,449     $     119,665      $    127,095
            Operating Income                               14,339            15,697            16,571            17,562
            Net Income                                      8,024             8,499             8,738             9,807
            Basic and Diluted Income per Share               0.37              0.39              0.40              0.45

            2002                                       March 31          June 30         September 30      December 31
            ----                                   ----------------- ----------------- ----------------- -----------------
            Operating Revenue                       $      66,343      $     82,552     $      87,385      $     95,288
            Operating Income                                6,556            12,374            12,142            16,584
            Net Income                                      4,258             8,004             7,829            10,694
            Basic and Diluted Income per Share               0.19              0.37              0.36              0.49
</TABLE>

     Basic and diluted  income per share for all periods  presented was computed
using the total  number of common  stock  shares  outstanding,  which was 21,892
shares.

18.  Recently Issued Accounting Standards

     In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations,  effective  for fiscal years  beginning  after June 15, 2002.  This
statement   addresses  the  accounting  for  obligations   associated  with  the
retirement of long-lived  assets and the associated asset retirement  costs. The
Company adopted this statement  effective  January 1, 2003 and it did not have a
material effect on our financial position or results of operations.

     FASB   Interpretation  No.  45,   Guarantor's   Accounting  and  Disclosure
Requirements for Guarantees,  Including  Indirect  Guarantees of Indebtedness of
Others,  ("FIN 45"),  significantly  changed current  practice in the accounting
for, and disclosure of, guarantees. FIN 45 required a guarantor to recognize, at
the inception of a guarantee,  a liability for the fair value of the  obligation
undertaken  in issuing  the  guarantee.  FIN 45 also  expanded  the  disclosures
required  to  be  made  by a  guarantor  about  its  obligations  under  certain
guarantees that it has issued. FIN 45 disclosure requirements were effective for
financial  statements  of interim or annual  periods  ending after  December 15,
2002,  while the initial  recognition  and initial  measurement  provisions were
applicable  on a  prospective  basis to  guarantees  issued  or  modified  after
December 31, 2002. The Company adopted FIN 45 effective  January 1, 2003,  which
did not have a  material  impact  on our  results  of  operations  or  financial
position.

     In  December  2002,  the FASB issued No. 148,  Accounting  for  Stock-Based
Compensation--Transition  and Disclosure.  This statement  amended SFAS No. 123,
Accounting  for  Stock-Based   Compensation  to  provide  alternate  methods  of
transition  for a voluntary  change to the fair value based method of accounting
for stock-based employee compensation.  In addition,  this statement amended the
disclosure  requirements of Statement 123 to require prominent disclosures about
the method of accounting for stock-based employee compensation and the effect of
the method used on reported results. The Company adopted this statement in 2003,
which did not have a material  impact on our results of  operations or financial
position.



                                       59
<PAGE>

Item 8. Financial Statements and Supplementary Data

                   Notes to Consolidated Financial Statements
               (all amounts in thousands, except per share data)

18.  Recently Issued Accounting Standards (continued)

     In January 2003, the FASB issued  Interpretation  No. 46,  Consolidation of
Variable Interest  Entities,  ("FIN 46"). FIN 46 was issued to improve financial
reporting by companies involved with variable interest entities.  Until now, one
company  generally has included  another  entity in its  consolidated  financial
statements  only if it controlled the entity through  voting  interests.  FIN 46
changed that by requiring a variable  interest  entity to be  consolidated  by a
company if that  company  was subject to a majority of the risk of loss from the
variable interest  entity's  activities or entitled to receive a majority of the
entity's  residual  returns or both. The  consolidation  requirements  of FIN 46
applied  immediately  to variable  interest  entities  created after January 31,
2003.  The  consolidation  requirements  applied to older  entities in the first
fiscal year or interim  period  beginning  after March 15, 2004.  Certain of the
disclosure requirements applied to all financial statements issued after January
31, 2003,  regardless of when the variable interest entity was established.  The
adoption  of this  statement  did not have a material  impact on our  results of
operations or financial  position as we do not have activities with any entities
that would fall under this interpretation.

     In May 2003, the FASB issued SFAS No. 150, Accounting for Certain Financial
Instruments with  Characteristics  of both Liabilities and Equity.  SFAS No. 150
establishes  standards  for  how  an  issuer  classifies  and  measures  certain
financial  instruments with characteristics of both liabilities and equity. SFAS
No. 150 is effective for financial  instruments  entered into or modified  after
May 31, 2003,  and  otherwise is effective at the beginning of the first interim
period  beginning after June 15, 2003. The adoption of SFAS No. 150 did not have
a material impact on the Company's consolidated results of operations, financial
position, or cash flows.

19. Significant Event

     On September 11, 2001,  terrorists hijacked and intentionally  crashed four
commercial aircraft operated by two U.S. air carriers,  causing substantial loss
of life and  property.  While these  aircraft were neither owned nor operated by
the Company, these events had an immediate and severe impact on the U.S. airline
industry's  passenger  traffic  and  yields.  As a result of these  events,  the
Company reduced its scheduled capacity by approximately 20% on an available seat
mile basis and recorded a pre-tax  charge of $118 for employee  severance  costs
related to the  reduction  in  capacity.  In  addition,  the downturn in revenue
required the Company to review its  long-lived  assets for possible  impairment.
Based on the current  operations,  the Company  determined  that its  long-lived
assets and goodwill  were not  impaired.  The Company  recorded  other income of
$5,591 in December 31, 2001, related to expected  financial  assistance from the
U.S.  Government under the Airline  Stabilization  Act. As of December 31, 2002,
the  Company had  received  $4,785 of the  expected  financial  assistance.  The
remaining $806 was received during 2003.



                                       60
<PAGE>

Item 9.  Changes in and Disagreements With Accountants on Accounting and
         Financial Disclosure

     There were no  changes in or  disagreements  on any  matters of  accounting
principles  or financial  statement  disclosure  between us and our  independent
auditors.

Item 9A.  Controls and Procedures

(a)     Evaluation  of  disclosure  controls  and  procedures.  Based  on  their
        evaluation of our disclosure controls and procedures as of a date within
        90 days of the filing of this report,  the Chief  Executive  Officer and
        Chief Financial  Officer of Pinnacle  Airlines Corp. have concluded that
        the disclosure controls and procedures are effective.

(b)     Changes in internal controls.  There were no significant  changes in our
        internal  controls or in other factors that could  significantly  affect
        these controls subsequent to the date of their evaluation.




                                       61
<PAGE>

                                    Part III

Item 10.  Directors and Executive Officers of the Registrant

Item 11.  Executive Compensation

Item 12.  Security Ownership of Certain Beneficial Owners and Management and
          Related Stockholder Matters

Item 13.  Certain Relationships and Related Transactions

Item 14.  Principal Accountant Fees and Services

The  information  required by Items 10 through 14 is  incorporated  by reference
from the definitive  proxy statement for our 2004 annual meeting of stockholders
to be filed within 120 days of December 31, 2003.





                                       62
<PAGE>

                                     Part IV

Item 15.  Exhibits, Financial Statement Schedules, and Reports on Form 8-K


(a)  Financial Statements

     1.   The following  financial  statements  are included in Part II, Item 8.
          Financial Statements and Supplementary Data:

          Report of Independent Auditors on:

          i)   Consolidated  Statements of Income for the Years Ending  December
               31, 2003, 2002 and 2001

          ii)  Consolidated Balance Sheets as of December 31, 2003 and 2002

          iii) Consolidated  Statements  of  Cash  Flows  for the  Years  Ending
               December 31, 2003, 2002 and 2001

          iv)  Consolidated  Statements of Stockholders' Equity (Deficiency) for
               the Years Ending December 31, 2003, 2002 and 2001

          v)   Notes to Consolidated Financial Statements

2.   Schedule  II--Valuation  and  Qualifying  Accounts.  Report of  independent
     auditors included in Item 15(d).

     All other financial  statement schedules are not required under the related
instructions or are inapplicable and therefore have been omitted.


                                       63
<PAGE>

3.  Index of Exhibits

The following exhibits are filed as part of this Form 10-K.

Exhibit
Number      Description
-------     -----------
3.1*        Amended and Restated Certificate of Incorporation of the registrant
3.1.1*      Second Amended and Restated Certificate of Incorporation of the
            registrant
3.2*        Certificate of Designations for Series A preferred stock of the
            registrant
3.3*        Bylaws of the registrant
3.3.1*      Amended and Restated Bylaws, dated January 14, 2003, of the
            registrant
4.1*        Specimen Stock Certificate
4.2*        Rights Agreement between the registrant and EquiServe Trust Company,
            N.A., as Rights Agent
10.2*       Sublease Agreement between Pinnacle Airlines, Inc. and Northwest
            Airlines, Inc.
10.2.1*     First Amendment to Sublease Agreement between Pinnacle Airlines,
            Inc. and Northwest Airlines, Inc.
10.3*       Engine Lease Agreement between Pinnacle Airlines, Inc. and Northwest
            Airlines, Inc.
10.3.1*     First Amendment to Engine Lease Agreement between Pinnacle Airlines,
            Inc. and Northwest Airlines, Inc.
10.4*       Promissory Note issued by Pinnacle Airlines, Inc. to Northwest
            Airlines, Inc.
10.5*       Guarantee of Promissory Note issued by registrant to Northwest
            Airlines, Inc.
10.6*       Revolving Credit Facility dated as of January 14, 2003 between
            Pinnacle Airlines, Inc. and Northwest Airlines, Inc.
10.6.1*     First  Amendment  dated as of February 5, 2003 to  Revolving  Credit
            Facility  dated as of January 14, 2003  between Pinnacle Airlines,
            Inc. and Northwest Airlines, Inc.
10.6.2*     Second  Amendment to Revolving  Credit  Facility  dated as of
            January 14, 2003 between  Pinnacle  Airlines,  Inc. and Northwest
            Airlines, Inc.
10.7*       Guaranty dated as of January 14, 2003 issued by registrant to
            Northwest Airlines, Inc.
10.8*       Pinnacle Airlines Corp. 2003 Stock Incentive Plan
10.9*       Non-Qualified Stock Option Agreement for options granted under the
            Pinnacle Airlines Corp. 2003 Stock Incentive Plan
10.10*      Pinnacle Airlines, Inc. Annual Management Bonus Plan
10.11*      Amended and Restated Sublease  Agreement dated as of January 14,
            2003 between Pinnacle  Airlines,  Inc. and Northwest Airlines, Inc.
            (SBN Facilities)
10.12*      Sublease  Agreement dated as of August 1, 2002 between  Pinnacle
            Airlines,  Inc. and Northwest  Airlines,  Inc. (TYS Facilities)
10.13*      Amended and Restated  Facilities Use Agreement  between Pinnacle
            Airlines,  Inc. and Northwest  Airlines,  Inc. (DTW Facilities)
10.14*      Amended and Restated  Facilities Use Agreement  between Pinnacle
            Airlines,  Inc. and Northwest  Airlines,  Inc. (MEM Facilities)
10.15*      Amended and Restated  Facilities Use Agreement between Pinnacle
            Airlines,  Inc. and Northwest  Airlines,  Inc. (MSP Facilities)
10.16+      Management Compensation Agreement dated as of January 14, 2003
            between Pinnacle Airlines, Inc. and Philip H. Trenary
10.17*      Management Compensation Agreement dated as of January 14, 2003
            between Pinnacle Airlines, Inc. and Curtis E. Sawyer
10.18*      Lease Guaranty issued by the registrant to Northwest Airlines, Inc.
10.19*      Sublease Guaranty issued by the registrant to Northwest Airlines,
            Inc.
10.20*      Airline  Services  Agreement dated as of March 1, 2002 among the
            registrant, Pinnacle Airlines, Inc. and Northwest Airlines, Inc.
10.21*      Airline Services Agreement dated as of January 14, 2003 among the
            registrant,  Pinnacle Airlines,  Inc. and Northwest Airlines, Inc.


                                       64
<PAGE>

Exhibit
Number      Description
-------     -----------
10.21.1*    Amendment No. 1 dated as of September 11, 2003 to the Airline
            Services Agreement dated as of January 14, 2003 among the
            registrant, Pinnacle Airlines, Inc. and Northwest Airlines, Inc.
10.21.2*    Amendment  No. 2 to the  Airline Services Agreement dated as of
            January 14,  2003 among the  registrant,  Pinnacle Airlines, Inc.
            and Northwest Airlines, Inc.
10.22*      Amended and Restated Ground Handling Agreement between Pinnacle
            Airlines, Inc. and Northwest Airlines, Inc.
10.23*      Amended and Restated  Information Technology Services Agreement
            between Pinnacle Airlines, Inc. and Northwest Airlines, Inc.
10.24*      Amended and Restated Family Assistance Services Agreement between
            Pinnacle Airlines, Inc. and Northwest Airlines, Inc.
10.25*      Amended and Restated Manufacturer Benefits Agreement between
            Pinnacle Airlines, Inc. and Northwest Airlines, Inc.
10.26*      Form of Amended and Restated  Preferential  Hiring Agreement between
            Pinnacle Airlines, Inc. and Northwest Airlines, Inc.
21.1*       List of Subsidiaries
31.1        Certification of Chief Executive Officer
31.2        Certification of Chief Financial Officer
32          Certifications of CEO and CFO

*           Incorporated by reference to the Company's Registration Statement
            Form S-1 (Registration No. 333-83359), as amended

+           Management contract or compensatory plan or arrangement








                                       65
<PAGE>


(b) Reports on Form 8-k during the fourth quarter of 2003

         None.

















                                       66
<PAGE>

(d)  Schedule II--Valuation and Qualifying Accounts

                         REPORT OF INDEPENDENT AUDITORS

     We have audited the consolidated  financial statements of Pinnacle Airlines
Corp.  (the  "Company")  as of December  31, 2003 and 2002,  and for each of the
three years in the period ended  December  31, 2003,  and have issued our report
thereon  dated  January 21, 2004  (included  elsewhere  in this Form 10-K).  Our
audits also included the financial  statement  schedule  listed in Item 15(a) of
this Form 10-K. This schedule is the responsibility of the Company's management.
Our responsibility is to express an opinion based on our audits.

     In our opinion,  the financial  statement  schedule referred to above, when
considered  in  relation  to the basic  financial  statements  taken as a whole,
presents fairly in all material respects the information set forth therein.


                                                          /s/ Ernst & Young LLP

Memphis, Tennessee
January 21, 2004






                                       67
<PAGE>

(d)  Schedule II--Valuation and Qualifying Accounts (in thousands)

<TABLE>
<S>         <C>                                                                <C>

                                                                                      Allowance For
                                                                               Obsolescence of Spare Parts
                                                                               ---------------------------
            Balance, December 31, 2000                                          $          1,527
                         Additions charged to expense                                        453
                         Deductions from reserve                                              -
                                                                               ---------------------------
            Balance, December 31, 2001                                                     1,980

                         Additions charged to expense                                        686
                         Deductions from reserve                                             (63)
                                                                               ---------------------------
            Balance, December 31, 2002                                                     2,603

                         Additions charged to expense                                        106
                         Deductions from reserve                                            (103)
                                                                               ---------------------------
            Balance, December 31, 2003                                          $          2,606
                                                                               ===========================


                                                                                    Allowance for
                                                                                 Doubtful Receivables
                                                                               ---------------------------
            Balance, December 31, 2000                                          $            216

                         Additions charged to expense                                         94
                         Deductions from reserve                                               -
                                                                               ---------------------------
            Balance, December 31, 2001                                                       310

                         Additions charged to expense                                        226
                         Deductions from reserve                                               -
                                                                               ---------------------------
            Balance, December 31, 2002                                                       536
                         Additions charged to expense                                          -
                         Deductions from reserve                                            (390)
                                                                               ---------------------------
            Balance, December 31, 2003                                          $            146
                                                                               ===========================
</TABLE>


                                       68

<PAGE>

SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934,  Pinnacle Airlines Corp. has duly caused this report to be
signed on its behalf by the  undersigned,  thereunto duly  authorized.

                                      Pinnacle Airlines Corp.
                                      -----------------------
                                      (Registrant)


Date:    March 9, 2004                By:  /s/ Philip H. Trenary
                                          -------------------------------------
                                      Name: Philip H. Trenary
                                      Title: President, Chief Executive Officer


     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities indicated on March 9, 2004.


Signature                                       Title
/s/ Philip H. Trenary
-----------------------        President, Chief Executive Officer and Director
Philip H. Trenary                     (Principal Executive Officer)

/s/ Curtis E. Sawyer
-----------------------        Vice President and Chief Financial Officer
Curtis E. Sawyer                      (Principal Accounting Officer)

/s/ Stephen E. Gorman
-----------------------                  Chairman, Director
Stephen E. Gorman

/s/ Donald J. Breeding
-----------------------                       Director
Donald J. Breeding

/s/ J. Timothy Griffin
-----------------------                       Director
J. Timothy Griffin

/s/ Robert A. Peiser
-----------------------                       Director
Robert A. Peiser

/s/ Thomas S. Schreier, Jr.
---------------------------                   Director
Thomas S. Schreier, Jr.

/s/ R. Philip Shannon
-----------------------                       Director
R. Philip Shannon

/s/ Nicholas R. Tomassetti
--------------------------                    Director
Nicholas R. Tomassetti


                                       69
<PAGE>

Exhibit 31.1      Certification of Chief Executive Officer

I, Philip H. Trenary, certify that:

1.       I have reviewed  this annual  report on Form 10-K of Pinnacle  Airlines
         Corp.;

2.       Based  on my  knowledge,  this  report  does  not  contain  any  untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances  under which
         such  statements  were made, not misleading  with respect to the period
         covered by this report;

3.       Based on my knowledge,  the financial  statements,  and other financial
         information  included in this  report,  fairly  present in all material
         respects the financial condition,  results of operations and cash flows
         of the registrant as of, and for, the periods presented in this report;

4.       The  registrant's  other  certifying  officer and I are responsible for
         establishing  and  maintaining  disclosure  controls and procedures (as
         defined in Exchange Act Rules  13a-15(e)  and  15d-15(e))  and internal
         control  over  financial  reporting  (as defined in Exchange  Act Rules
         13a-15(f) and 15d-15(f), for the registrant and have:

         a.    Designed such disclosure controls and procedures,  or caused such
               disclosure  controls  and  procedures  to be  designed  under our
               supervision,  to ensure that material information relating to the
               registrant,  including  its  consolidated  subsidiaries,  is made
               known to us by others within those entities,  particularly during
               the period in which this report is being prepared;

         b.    Evaluated  the  effectiveness  of  the  registrant's   disclosure
               controls  and   procedures  and  presented  in  this  report  our
               conclusions  about the  effectiveness of the disclosure  controls
               and  procedures,  as of the  end of the  period  covered  by this
               report based on such evaluation; and

         c.    Disclosed in this report any change in the registrant's  internal
               control  over  financial   reporting  that  occurred  during  the
               registrant's  most  recent  fiscal  quarter  that has  materially
               affected  or  is  reasonably  likely  to  materially  affect  the
               registrant's internal control over financial reporting; and

5.       The registrant's other certifying  officer and I have disclosed,  based
         on our most  recent  evaluation  of  internal  control  over  financial
         reporting,  to the registrant's auditors and the audit committee of the
         registrant's  board of directors (or persons  performing the equivalent
         functions):

         a.    All  significant  deficiencies  and  material  weaknesses  in the
               design or operation of internal control over financial  reporting
               which are reasonably  likely to adversely affect the registrant's
               ability  to  record,  process,  summarize  and  report  financial
               information; and

         b.    Any fraud,  whether or not material,  that involves management or
               other employees who have a significant  role in the  registrant's
               internal controls over financial reporting.


         Date: March 9, 2004              /s/ Philip. H. Trenary
                                          ------------------------
                                          Philip H. Trenary
                                          President and Chief Executive Officer




                                       70
<PAGE>

Exhibit 31.2      Certification of Chief Financial Officer

I, Curtis E. Sawyer, certify that:

1.   I have reviewed this annual report on Form 10-K of Pinnacle Airlines Corp.;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and 15d-15(e))  and internal  control over
     financial  reporting  (as  defined  in  Exchange  Act Rules  13a-15(f)  and
     15d-15(f), for the registrant and have:

     a.   Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b.   Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     c.   Disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most  recent  fiscal  quarter  that  has  materially  affected  or  is
          reasonably  likely to  materially  affect  the  registrant's  internal
          control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed,  based on our
most recent  evaluation of internal  control over  financial  reporting,  to the
registrant's  auditors  and the audit  committee  of the  registrant's  board of
directors (or persons performing the equivalent functions):

     a.   All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     b.   Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls over financial reporting.

     Date: March 9, 2004             /s/ Curtis E. Sawyer
                                     ----------------------
                                     Curtis E. Sawyer
                                     Vice President and Chief Financial Officer





                                       71
<PAGE>

Exhibit 32     Certification  of Chief  Executive  Officer  and Chief  Financial
               Officer Pursuant to 18 U.S.C. 1350

Each of the  undersigned,  Philip H.  Trenary and Curtis E.  Sawyer,  certifies,
pursuant to 18 U.S.C. Section 1350, that (1) this annual report on Form 10-K for
the year ended  December 31, 2003 of Pinnacle  Airlines  Corp.  (the  "Company")
fully complies with the requirements of section 13(a) of the Securities Exchange
Act of 1934 and (2) the information  contained in the report fairly presents, in
all material respects,  the financial  condition and result of operations of the
Company.




March 9, 2004
                                      /s/ Philip H. Trenary
                                     ----------------------------------
                                     Philip H. Trenary
                                     President and Chief Executive Officer

                                      /s/ Curtis E. Sawyer
                                     ----------------------------------
                                     Curtis E. Sawyer
                                     Vice President and Chief Financial Officer






                                       72