Hopefully the upper management is sent packing quickly
PEACHTREE CITY, Ga., Feb. 5, 2012 /PRNewswire via COMTEX/ -- Global Aviation Holdings Inc., the parent company of World Airways, Inc., North American Airlines, Inc. and other subsidiaries, today announced that to achieve a cost and debt structure that is industry competitive and continue to provide outstanding service to its customers, it has commenced a financial restructuring through the voluntary filing of petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code in the United States District Court for the Eastern District of New York (the "Court"). During the restructuring, the Company and its subsidiaries will continue to operate as normal, without interruption.
The Company's Board of Directors determined that a Chapter 11 reorganization provides the most effective and efficient means to restructure with minimal impact on the business, and is in the best interest of the Company, its stakeholders and customers. "Although the Company has worked closely with its lessors, bondholders and other creditors and constituents over the past year, which led to the reduction of certain obligations, the Company needs to complete its comprehensive restructuring due to having too large a fleet, labor costs that exceed industry standards given the current global economic environment, and the necessity to align the capital structure with the size of the Company," said Robert Binns, Chairman and Chief Executive Officer of Global.
Global has filed motions today with the Court seeking interim relief that will ensure the Company's ability to continue all of its normal operations, including the ability to provide employee wages, healthcare coverage, vacation, and other benefits without interruption; honor customer programs; and pay vendors and suppliers for post-petition goods and services. Such motions are standard and the Company anticipates receiving approval from the Court within the next several days. Vendor and supplier invoices incurred prior to the commencement of the Company's Chapter 11 case that have not been paid will be resolved through the Company's Plan of Reorganization, which requires Court approval and has yet to be submitted.
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The way I see it, you can either work for a living or you can fly airplanes. Me, I'd rather fly.
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If upper management is sent packing, it will be with golden parachutes in tact, no doubt. The people that will feel the biggest effects of this will be the front line employees, unfortunately. Meanwhile, the management will be recycled to the next airline.
Best of luck to the employees of World and North American!! I sincerely hope you all come out of this on your feet.
Last edited by RJtrashPilot; 02-05-2012 at 07:45 PM.
757200ER - I've thought this for a while but do you have any hard evidence on your numbers? For instance NAA down to just 767's and World dumping down to just cargo MD-11's and 747's? Or just rumor right now?
I heard they sacked the COO's at both WOA and NAA a few weeks ago?
This is sad for both employee groups. I remember when the ATA/GAL/WOA thing was annouced in early 2007. It didn't sound like a good business plan. WOA essentially bought themselves for $335 million. The 2007 shareholders made out big time. Now the employees are left holding a sack of sh*t.
Parent of World Airways and North American Airlines, Pentagon’s Biggest Air Transport Contractor, Files for Bankruptcy
FEBRUARY 5TH, 2012 • BY MATT MOLNAR
Global Aviation Holdings, owner of charter carriers World Airways and North American Airlines, filed for Chapter 11 bankruptcy protection Sunday evening. Global says operations will continue without interruption.
North American may ground some of its planes, like this Boeing 757 (N755NA), says the company. (Photo by Mario Craig)
While World and North American operate charters for a variety of customers, the US military’s withdrawal of troops from Iraq and drawdown of personnel in Afghanistan have likely put a heavy damper on Global’s revenues. World and North American’s largest single customer is the US Air Force Air Mobility Command, which transports troops and cargo to and from military bases around the world. Combined, World and North American are the largest providers of military transport services. The company has also been hurt by rising fuel costs and increased competition in the cargo market.
In the bankruptcy filing, Peachtree, Georgia-based Global listed $589.8 million in assets and $493.2 million in debt as of Dec. 31, according to a Bloomberg report.
Global said in a statement that operations would continue uninterrupted and employees would continue to be paid. Vendors with invoices issued prior to the filing will have to wait out the bankruptcy process, but future invoices will be paid as normal.
North American operates three Boeing 757 and five Boeing 767 aircraft, all in passenger configuration. World flies eight McDonnell Douglas MD-11 freighters, seven MD-11s in passenger configuration and four Boeing 747-400 freighters. All planes at both airlines are leased from a variety of sources.
Global Chairman and CEO Robert Binns said that while the company had made efforts to reduce expenses for the past year, “the Company needs to complete its comprehensive restructuring due to having too large a fleet, labor costs that exceed industry standards given the current global economic environment, and the necessity to align the capital structure with the size of the Company.”
“Throughout this restructuring process, our customers, including the United States Department of Defense, can continue to depend on us to provide the same safe, high quality service they know and have come to expect from us,” said continued Binns.
Global is represented by Kirkland & Ellis LLP and its financial advisor is Rothschild.
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Parent of World & North American Is Bankrupt
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