Global Aviation Files for Bankruptcy Again, Plans CutsJoe Schneider and Steven Church
Global Aviation Holdings Inc. filed for bankruptcy for the second time in less than two years, citing the U.S. military’s decision to curtail transportation of cargo.
Global Aviation, the biggest commercial provider of charter air services to the U.S. military, listed assets and liabilities of as much as $1 billion each in its Chapter 11 filing in bankruptcy court in Wilmington, Delaware.
The company, based in Peachtree City, Georgia, plans to cut its workforce by about 16 percent in the next three months, according to a statement today. Global Aviation, the parent of World Airways and North American Airlines, employs 1,200 people, according to its website.
After emerging from bankruptcy in February, Global Aviation “continued to encounter various financial and operational hurdles, including decreased demand for military cargo and passenger services resulting from government budget constraints,” the company said in court documents filed today.
When the company exited the previous bankruptcy, it gave stock to employees and other creditors in exchange for concessions. That reorganization eliminated $168 million in debt.
Chief Executive Officer John Graber said Global Aviation would impose job cuts on employees as it reduced the size of its fleet.
“We will support them as best we can in their transition,” he said in the statement.
Global Aviation said it plans to keep operating during the reorganization and has obtained financing from its lenders to support the operations.
The case is In re Global Aviation Holdings Inc. 13-bk-12945, U.S. Bankruptcy Court, District of Delaware (Wilmington).