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Pinnacle's CEO quits amid furor over raise

The embattled CEO of Pinnacle Airlines, under fire for accepting a six-figure pay raise less than two weeks before the company filed for bankruptcy, has resigned, effective June 1.

Sean E. Menke, who has headed the airline since last year, did not give any explanation for his move either in a news release issued by Pinnacle on Thursday morning or in a letter to employees.

Last Friday, a company spokesman defended Menke's raise in a letter to Western New York lawmakers. The spokesman said Menke and John G. Spanjers, the chief operating officer who now will succeed Menke as CEO, got six-figure raises because the company's board "saw fit to secure the long-term commitment of both Mr. Menke and Mr. Spanjers in the form of compensation adjustments."

Pinnacle owns Colgan Air, operator of Continental Connection Flight 3407, which crashed in Clarence Center in February 2009, killing 50 people. Lawsuits stemming from that crash have been stayed because of Pinnacle's bankruptcy.

Menke's resignation caps a troubling period for Pinnacle. Short on cash and locked into money-losing deals to operate flights on behalf of major airlines, the company declared bankruptcy April 1 and announced plans to scale back its operations.

Meanwhile, Pinnacle pilots have complained for weeks about delayed paychecks, which the company blames on problems implementing a new payroll system rather than its financial problems.

In his letter to employees, Menke said: "My decision to step down was not an easy one. But ultimately the June 1 timing should get us beyond important milestones in our Chapter 11 proceedings and keep Pinnacle on track to successfully restructure and emerge from this process."

Pinnacle said in its news release that Menke will work closely with Spanjers to ensure a smooth transition, which is not expected to affect the bankruptcy process.

"John brings a strong and proven track record of airline leadership," said Donald J. Breeding, chairman of Pinnacle. "Given his prior Chapter 11 experience, John is particularly well-suited to lead Pinnacle's ongoing turnaround efforts and has been actively involved in many of the key initiatives and negotiations during our restructuring process."

Spanjers was president of Mesaba Airlines when that company filed for bankruptcy in 2005. Pinnacle acquired Mesaba in 2010, and Spanjers has been Pinnacle's chief operating officer since last September.

The Buffalo News reported earlier this month that in March, Menke received a $250,000 pay increase, to $675,000, and Spanjers got a $125,000 raise, to $400,000.

email: jzremski@buffnews.com