North American Parent Company Emerges from Chapter 11

Last week, Global Aviation Holdings Inc., the parent company of North American Airlines (NAA) and World Airways, announced that its plan of reorganization (POR) became effective on February 13, allowing the company to complete its financial restructuring and emerge from Chapter 11. In connection with the POR, the company also secured $35 million in exit financing.

Global Aviation Holdings filed protection under Chapter 11 of the bankruptcy code in February 2012. Under threat of Section 1113 filing, the pilots engaged in bankruptcy concessionary negotiations with management, and ratified a tentative agreement in September. Reaching a consensual agreement with the NAA pilots and other employee groups was key to the company’s successful emergence from bankruptcy.

“NAA pilots are committed to preserving our jobs and helping to ensure our company’s future financial viability,” said Capt. Rob Lewis, NAA MEC chairman. “Now that our company is turning its focus to growth and business development, NAA pilots stand ready to work closely with our management to help advance our mutual goals going forward.”

To that end, NAA-ALPA pilot representatives and management have met several times per the new collective bargaining agreement to discuss issues of mutual interest and concern, including clarifying some of the contract language and resolving outstanding grievances through the implementation of efficient dispute resolution processes. As a result, the MEC ratified a memorandum of understanding with management that streamlines the grievance process; and members of the NAA MEC, Grievance and Scheduling Committees, and staff from ALPA’s Representation Department recently met with management to deal with the backlog of outstanding grievances. Future meetings to address these and other issues of mutual interest are being scheduled as the pilot group continues to implement its contract and letters of agreement.