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Global Aviation files for bankrupcy

Global Aviation Holdings which provides air charter for the US Military has filed for bankruptcy. This is big news and demonstrates the difficulties faced by suppliers to the US Government and administration has reducing costs is one of the key focus. Global Aviation Holdings operates two charter brands: World Airways, which has flown U.S. soldiers since the Korean War in 1951, and North American Airlines. Both are symbols of an era and the company struggled recently financially, seeking financial protection under the Chapter 11 conditions. Global blamed its latest financial difficulties on the U.S. Air Mobility Command, the Air Force unit that transports military personnel and supplies. The Command recently decided to cancel its 2014 contract with the company as the military adjusts to a tighter budget under the 2013 sequester. That will mean an expected revenue loss of $54 million “and will create significant over-capacity in the military charter cargo business,” the suburban Atlanta-based company said in its Nov. 12 filing in Delaware. As a result, Global Aviation is being squeezed by high costs and pinched income: Large jets it leases suddenly have fewer business uses. Efforts to sell all or parts of the company failed over the summer, Global said. Global Aviation has had a troubled financial history, dating to its former parent, ATA Holdings, which filed its first Chapter 11 case in late 2004. Four years later, ATA filed its second bankruptcy and shut down its passenger airline operations, which were later acquired by Southwest Airlines. Global Aviation has 14 wide-body airplanes. In 2008, the company operated a 757 painted “Change We Can Believe In” for the Obama presidential campaign. It also operated a charter plane for George W. Bush in his 2000 presidential campaign and for Hillary Clinton in 2008.

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