Global Aviation Holdings files for bankruptcy
World Airways’ parent company, Global Aviation Holdings, filed for Chapter 11 bankruptcy on February 5. Both Global, which is the biggest provider of charter flights for the U.S. military, and World Airways will continue scheduled flight operations, World Airways spokesman Steve Forsyth told Air Cargo World exclusively.
“The important factor is that both airlines will operate as usual through the reorganization process, so customers will continue to be served as they were before,” Forsyth wrote in an email.
According to a press release, Global’s board of directors determined that Chapter 11 bankruptcy provided the company with the “most efficient and effective means to restructure.”
Global CEO Robert Binns elaborated on the decision. “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,” Binns said in a statement.
Sean Frick, vice president of planning and development at Global Aviation Holdings, recently discussed World Airways’ freighter fleet with Air Cargo World for its March cover story on aircraft leasing. Currently, he said, World Airways operates nine MD-11 freighters on an ACMI basis.
Although Frick admitted that his company’s aircraft business tends to be lower-utilization, he said the charter business has served World well. “We’ve found that the operating lease tends to work well for us because it reduces the amount of capital expenditure a company has to put in place,” he stated.
For example, he said, World Airways has worked with leasing companies to perform freighter conversions, which is a very capital-intensive process. “But in the end, we’re able to have an even flow of cash outflows in the form of rents for converted freighters,” Frick told Air Cargo World.
He declined to comment on World Airways’ current status.