Global Aviation Holdings, parent of US-based World Airways and North American Airlines, filed for Chapter 11 bankruptcy protection this morning. In a statement about the move, the company said: “Global Aviation Holdings, Inc., the largest commercial provider of charter air services to the US Military and a major provider of worldwide commercial global passenger and cargo air transportation services, today announced that the Company and its subsidiaries, including its two operating airlines World Airways and North American Airlines, have filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. The Company has taken this action to strengthen its balance sheet and gain financial flexibility as it continues to realign its operations.”
This comes just days after the news that Evergreen Airlines International, another US carrier heavily dependent on military charter work, was widely reported to have notified employees that it would cease operations on 29 November. However, unlike Evergreen, which looks to be going out of business, Global Aviation Holdings says it intends to keep operating during the restructuring process. “We intend to use the reorganization process to help implement our plan to lower costs, stabilize our businesses, grow revenue and diversify our product lines.”
In conjunction with the reorganization, Global said it had obtained debtor-in-possession financing from its first lien lenders, and that “on Court approval, the new financing and cash generated from the Company’s ongoing operations will be used to support the business during the reorganization process.”
Global Aviation previously filed for Chapter 11 bankruptcy protection in 2012 to achieve “industry competitiveness.” It emerged from the bankruptcy in February this year, but in the words of CEO John Graber, “we were making great progress; however, the continued worldwide downturn in commercial freight markets coupled with the military’s decision to immediately curtail its cargo expansion flying has made it necessary for us to undertake this court-supervised reorganization.”
World Airways currently operates two 747-400BDSFs, three MD-11Fs, and three MD-11s in passenger configuration. World has a contract to operate two of the MD-11Fs on an ACMI basis for Nigeria-based Allied Air. North American Airlines operates five 767-300s, all in passenger configuration.
