More than a year and a half after launching nonstop regional service from New Orleans, charter operator GLO Airlines has attracted a clientele of business travelers who long sought a way to get to major mid-South cities without spending days in the car or wasting hours at hub airports during layovers.
Last year, in its first full year of operation, GLO transported about 32,300 passengers through Louis Armstrong New Orleans International Airport, where the start-up airline is based, and it was on track to surpass that figure this year, court records show.
But now that’s up in the air. It filed for bankruptcy in April and is accepting reservations only through the end of this month, leaving its fate uncertain.
As a so-called “paper airline,” GLO has a fleet of three leased 30-passenger Saab 340B commuter plans, but they are staffed by another company, Tennessee-based Corporate Flight Management.
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That business relationship has soured. The two sides have sued each other in court, and GLO was nearly grounded in April after Corporate Flight Management tried to cut short their agreement, which is due to expire July 31.
In March, GLO sued CFM, alleging that one of its pilots negligently damaged a plane, causing “significant damages, including engine repairs, rental costs, maintenance fees and lost revenues.”
In response, CFM claimed that its deal with GLO insulated it from liability for repair costs; it also denied the pilot was at fault.
CFM then notified GLO in April that the airline had breached its contract by falling behind on its payments, which CFM described in court records as part of a pattern of “cumulative and ongoing defaults.”
As a result, the firm notified GLO and the U.S. Department of Transportation that its contract would be terminated after a 10-day grace period.
GLO, which disputed it was in default, filed for bankruptcy protection and asked a federal bankruptcy judge, Jerry Brown, to allow it to continue flying until July 31 so it would not lose “its principal source of revenue.” Brown agreed. The next hearing is July 19.
FlyGLO LLC’s bankruptcy petition listed assets and liabilities of between $10 million and $50 million each, with up to 49 creditors.
The company’s estimated operational costs are $1 million per month.
Now, GLO faces a deadline at the end of the month by which it has essentially to reach a new deal with Corporate Flight Management, which hires, trains and oversees the airline’s pilots, or bring on another operator that’s certified to fly its planes.
Read the full story at TheAdvocate.com.