Global Aviation Holdings, the parent company of North and World Airways, has filed for Chapter 11 protection, citing a need to restructure the company’s fleet and labor costs.
Peachtree City, Ga.-based Global says it reduced some of its debt obligations in the past year but “determined that a Chapter 11 reorganization provides the most effective and efficient means to restructure with minimal impact on the business.” A filing with the U.S. District Court for the Eastern District of New York was announced Feb. 5.
“[T]he 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,” says Chairman and CEO Robert Binns in a statement.
Services at all of Global’s divisions initially will be unaffected by the filing, he adds.
“Throughout this restructuring process, our customers, including the United States, 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,” Binns notes.
Few details are available, but according to the Aviation Week Intelligence Network, Global’s North American Airlines unit currently operates five-300ERs and four , while World Airways—which was founded in 1948 and has held government transport contracts since the Korean War—operates 12 MD-11s and two -400s. Global’s website also says the company has some DC-10s in its inventory.
The filing comes just days after North American COO Jeffrey Wehrenberg resigned, a decision that coincided with the appointment of Brian Gillman as Global’s general counsel. Gillman comes from Mesa Air Group, which exited its own Chapter 11 reorganization in 2011. Steven Harfst replaced Wehrenberg at North American on Feb. 1.
Global’s lead counsel for the court-protected restructuring is Kirkland & Ellis; Rothschild is the company’s financial adviser.