PTC’s World Airways parent company files for Chapter 11 bankruptcy

PTC’s World Airways parent company files for Chapter 11 bankruptcy

Flights will continue without interuption, says Global Aviation Holdings Inc., the parent company of World Airways, Inc., North American Airlines, Inc. and other subsidiaries, while the parent undergoes reorganization in Chapter 11 bankruptcy, according to a press release Feb. 5 on PRNewswire.

The company — with world headquarters in Peachtree City — said it had too many airplanes, its labor costs were too high and it lacked the money to continue operating at its current size.

“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,” the new replease said.

“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.

“To achieve a cost and debt structure that is industry competitive and continue to provide outstanding service to its customers, [Global] 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. During the restructuring, the company and its subsidiaries will continue to operate as normal, without interruption.

“Global has filed motions ... 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,” the news release said.

“Such motions are standard and the company anticipates receiving approval from the court within the next several days,” The release said. “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.

“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. We are committed to working as quickly and efficiently as possible to appropriately restructure Global so that it can emerge from Chapter 11 as a strong company, well-positioned to compete effectively in the marketplace,” continued Binns.

Global, through its subsidiaries World Airways and North American Airlines, is the largest provider of military transport services through the Air Mobility Command. World Airways was founded in 1948, and received its first government contract to provide supplemental airlift to the U.S. military in 1951 during the Korean conflict.

North American, founded in 1989, also flies for the U.S. military, as well as international and domestic charter services to a broad customer base that includes major U.S. corporations, domestic and international airlines, presidential campaigns, the White House press corps, entertainers and production companies.

peachy
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AJC article

What about the AJC article that says North American will move from JFK to Peachtree City? Could that provide us with a small boon? Just saying!

sparerib
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NA

They only have a hand full of NA still at JFK

Roadrunner
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I hate to see this

Having gone through this myself at that 'other' airline, I know it really hurts the employees who can least afford it the most. That said, I would be interested to know what unions exist at Global/World and how willing they were prior to bankruptcy to make the necessary concessions to keep Global profitable. Don't get me wrong, senior management rarely looks out for the rank & file more than themselves, but if that 'other' bankrupt airline was any example, with both management & unions looking out for their own the rest of the folks in the middle get hammered. Trust me, I've been there. Good luck to the Global employees, you will survive this.

sparerib
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Union

the only ones union are the flight crews and dispatch, looks like most of the ones cut were there over 6-10 years and gave no one the right to bump a junior employee.

smoke20
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James 5:1

James 5
Warning to Rich Oppressors
1 Now listen, you rich people, weep and wail because of the misery that is coming on you. 2 Your wealth has rotted, and moths have eaten your clothes. 3 Your gold and silver are corroded. Their corrosion will testify against you and eat your flesh like fire. You have hoarded wealth in the last days. 4 Look! The wages you failed to pay the workers who mowed your fields are crying out against you. The cries of the harvesters have reached the ears of the Lord Almighty. 5 You have lived on earth in luxury and self-indulgence. You have fattened yourselves in the day of slaughter.[a] 6 You have condemned and murdered the innocent one, who was not opposing you.

sparerib
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Wrong ones laid off!!

It's a shame that the ones that are getting laid off are the ones
that worked the 12 hour days, weekends, holidays and nights. The ones
that pushed the company into bankruptcy are still there drawing the big
bonus checks and driving the nice new cars with their 3 vacation homes

wildcat
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Hope everything turns out

I am sorry to read this. World Airways has always been a wonderful link between the local Girl Scout troops and our soldiers. Year after year they provided us with an opportunity to show our appreciation to our troops. They even helped my troop at the last minute this fall when several boxes we shipped to Iraq were sent back (the post office had already pulled out)and we didn't know what to with the junk food and razors. I called World Airways and they took the boxes and sent them to Afghanistan. And they did it for free, which is good, because it cost an arm and a leg to ship the boxes to Iraq! Again, I hate to read that this has happened and hope that it all works out for the company.

Cyclist
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World Airways and the peace divdend

Since the US is out of Iraq and soon to be out of Afghanistan and more bases after that, the need for additional military "lift" is diminished. So this is not a big shock.

The other air carrier under the umbrella - North American Airlines - is strictly a charter. Might see a couple of their B757's flying around the GOP contenders - well, which ever one has the cash.

yellowjax1212
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So Soon?

Didn't Global just acquire World Airways last year?
How do you plan so poorly? Or is this just more abuse of the bankruptcy laws to shed debt and leave the suppliers (who in good faith did business with them)in a shambles and often forces them into bankruptcy themselves?