Illinois business owners may be interested to know that the U.S. Military’s largest provider of commercial charter air transportation, Global Aviation, has filed for bankruptcy again on Tuesday, Nov. 12. It just emerged from Chapter 11 bankruptcy in February after filing last year. This was to achieve competitiveness in the industry by reducing costs and debt.
As a result of the ongoing recession, a worldwide decline in mercantile freight markets is evident. The military has also reduced its expansion in cargo flying. This decision made by the military would cause a reduction in planned 2014 revenue of Global Aviation by approximately $54 million. The military charter division of its business will also be over capacity as a result.
These factors have prompted the move to file for Chapter 11 again. Global Aviation has made its intentions with the reorganization process clear. The process will help in the implementation of its planned cost reduction, stabilization of the businesses, escalation in revenue and diversifying its product lines. It also intends to reduce the workforce by approximately 16 percent over the coming three months.
To sustain the business for the duration of the reorganization process, it has secured DIP financing. Upon approval from the Bankruptcy Court, the new funding as well as the income generated from the company’s continuing operations will enable it to take steps to bring costs in line with the marketplace. Illinois business owners who have to face a sudden and drastic reduction in turnover have the option to consider whether a Chapter 11 bankruptcy may be a viable business solution.
Source: CNBC, Air charter provider Global Aviation files for bankruptcy again, No author, Nov. 13, 2013
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Air charter company opts for a second Chapter 11 filing