Bankruptcy again for PTC’s World Airways
Global Aviation Holdings, Inc., including its two operating air lines World Airways and North American Airlines, all headquartered in Peachtree City, has announced it has filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code.
It’s the second time this year the company has been under a Chapter 11 umbrella. It emerged from the earlier filing this past February.
The company plans to lay off 16 percent of its more than 1,200 employees over the next 90 days, though it intends to continue to operate during the reorganization, according to a news release issued by Global.
Of the 161 employees who will be laid off, 38 are Georgia residents, a company spokesperson said Tuesday afternoon. The headquarters building is at 101 World Drive, off North Peachtree Parkway.
GAL is the largest commercial provider of charter air services to the U.S. military and a major provider of worldwide commercial global passenger and cargo air transportation services, according to the company.
Company leaders cited a recent decision by the U.S. military to “immediately curtail” cargo flights.
GAL has taken this action to strengthen its balance sheet and gain financial flexibility as it continues to realign its operations to align its cost structure with the realities of market demand, company officials said.
The company will trim its aircraft fleet along with personnel, according to Chief Executive Officer John Graber.
“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,” Graber said. “We have taken a number of steps to improve our operations over the past few months and 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. We believe that this reorganization will enable us to reduce our debt and implement operational changes, while maintaining our commitment to safety, compliance and reliable customer service.”
Graber said the company will support the laid-off employees as best it can.
“We appreciate the ongoing dedication of our employees, whose hard work is critical to our success and the future of our company,” Graber said. “Regrettably, as a result of a necessary reduced fleet size and as a part of this reorganization, jobs will be impacted. We are committed to treating those who are affected with the respect and dignity they deserve.”
In conjunction with its reorganization, the company has obtained debtor-in-possession (DIP) financing from its first lien lenders. 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.
The company has filed various motions with the court in support of its reorganization, including requesting authorization to continue paying employee wages and providing healthcare and other benefits. The company has also asked for authority to continue existing customer programs and intends to pay vendors for goods and services provided after the filing date of Nov. 12.
The company has established a toll-free restructuring information hotline for interested parties, at 877-726-6511 in North America or internationally at 424-236-7251. Additional information is available on the company’s website at www.glah.com. Court filings and other documents related to the reorganization proceedings are available on a separate website administered by the company’s claims agent, KCC, at www.kccllc.net/GLAH.
Global Aviation Holdings Inc. is the parent company of North American Airlines and World Airways. North American Airlines, founded in 1989, operates passenger charter flights using B767-300ER aircraft. World Airways, founded in 1948, operates cargo and passenger charter flights using B747-400 and MD-11 aircraft.