Global Aviation Holdings, Inc., the largest provider of charter air services to the U.S. military, is petitioning a Delaware court for Chapter 11 bankruptcy for the second time in two years as Pentagon trims its cargo flying.
The Peachtree City, Ga., company late Monday cited a decrease in both military contracts and commercial freight shipping for the decision to file for protection.
"We intend to use the reorganization process to help implement our plan to lower costs, stabilize our businesses, grow revenue and diversify our product lines," a company spokesman said.
During the next 90 days, the company intends to reduce its workforce by about 16 percent. It employs about 1,200 people, according to its website.
The main revenue sources of the company, which obtained debtor-in-possession financing from its first lien lenders, are the two airlines it operates, World Airways and North American Airlines, which together operate a fleet of more than 30 passenger and cargo planes, including Boeing 767s, Boeing 747s and McDonnell Douglas MD-11s.
The company has filed a motion with the bankruptcy court to continue paying wages and providing health care benefits to its employees. It also has asked to continue its existing customer programs, and it intends to pay vendors for goods and services provided after the filing date.
Its previous bankruptcy filing was handled by the U.S. Bankruptcy Court for the Eastern District of New York.