Company Says World Airways, North American Airlines Will
Continue To Operate Without Interruption
Global Aviation Holdings Inc., the parent company of World
Airways, Inc., North American Airlines, Inc. and other
subsidiaries, say that to achieve a cost and debt structure that is
industry competitive and continue to provide outstanding service to
its customers, it has commenced a financial restructuring through
the voluntary filing of petitions to reorganize under Chapter 11 of
the U.S. Bankruptcy Code in the United States District Court for
the Eastern District of New York (the "Court"). During the
restructuring, the Company and its subsidiaries will continue to
operate as normal, without interruption.
The Company's Board of Directors determined that a Chapter 11
reorganization provides the most effective and efficient means to
restructure with minimal impact on the business, and is in the best
interest of the Company, its stakeholders and customers. "Although
the Company has worked closely with its lessors, bondholders and
other creditors and constituents over the past year, which led to
the reduction of certain obligations, 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," said Robert Binns,
Chairman and Chief Executive Officer of Global.
Global has filed motions with the Court seeking interim relief
that will ensure the Company's ability to continue all of its
normal operations, including the ability to provide employee wages,
healthcare coverage, vacation, and other benefits without
interruption; honor customer programs; and pay vendors and
suppliers for post-petition goods and services. Such motions are
standard and the Company anticipates receiving approval from the
Court within the next several days. Vendor and supplier invoices
incurred prior to the commencement of the Company's Chapter 11 case
that have not been paid will be resolved through the Company's Plan
of Reorganization, which requires Court approval and has yet to be
submitted.
"Throughout this restructuring process, our customers, including
the United States Department of Defense, 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,"
continued Binns.
Global, through its subsidiaries World Airways and North
American Airlines, provides military transport services through the
Air Mobility Command. World Airways was founded in 1948, and
received its first government contract to provide supplemental
airlift to the U.S. military in 1951 during the Korean conflict.
North American, founded in 1989, also flies for the U.S. military,
as well as international and domestic charter services to a broad
customer base that includes major U.S. corporations, domestic and
international airlines, presidential campaigns, the White House
press corps, entertainers and production companies.
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