Global Aviation Holdings has filed petitions for bankruptcy protection, just months after emerging from the earlier reorganisation process.
The company, along with subsidiaries, including its two operating airlines World Airways and North American Airlines, has filed voluntary petitions for relief under Chapter 11 of the US Bankruptcy Code in the US Bankruptcy Court for the District of Delaware.
It comes as Global Aviation aims to strengthen its balance sheet and secure financial flexibility as it continues to restructure its operations.
The air charter provider expects to continue its operations during the reorganisation process.
As part of the planned reorganisation, the company is planning to bring its cost structure in line with the current market demand, and expects to cut its workforce accordingly by around 16% in the next 90 days.
Global Aviation Holdings chief executive officer John Graber said that the company intends to use the reorganisation process to help implement its plan to lower costs and stabilise its businesses.
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By GlobalData"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 reorganisation," Graber said.
"We believe that this reorganisation will enable us to reduce our debt and implement operational changes, while maintaining our commitment to safety, compliance and reliable customer service."
Along with its reorganisation, the company has obtained debtor-in-possession (DIP) financing from its first lien lenders, which will support the business during restructuring.
Global Aviation has filed various motions with the court in support of its reorganisation, including requesting authorisation to continue paying employee wages, as well as providing health care and other benefits.
The company also requested for rights to continue existing customer programmes and aims to pay vendors for goods and services offered after the filing date of 12 November 2013.
