The hits just keep on coming with airline bankruptcies this month. Following on the cessation of services from Spanair and Malev in the past several days a US-based carrier has filed for Chapter 11 protection this morning. The company is Global Aviation Holdings, Inc. and they are the largest operator of charter air service for the military, among other things. They also operate under the brand names World Airways and North American Airlines.
The filing comes as the company found itself with very little cash on hand when a customer withheld a $20MM payment. They are also faced with significantly declining demand for services as the US Government is reducing troop movements, meaning fewer charter operations. Combined with declining rates for services the company now sees itself with a glut of aircraft on lease. They intend to reject 16 of 30 active leases, returning those aircraft to the lessors as part of the reorganization.
The net impact of all these moves is pretty minimal on most folks but it does show yet another airline that managed to build an operation on unsustainable ideas and the effects of their failures.
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