Gulfstream International Group, the parent company of Fort Lauderdale, Fla.-based Gulfstream International Airlines, filed for Chapter 11 bankruptcy protection today in an effort to restructure its debt and secure long-term financing. Gulfstream said the filing, registered with the U.S. Bankruptcy Court for the Southern District of Florida, would not affect its flight schedule.
“We are operating our full schedule of flights and honoring all tickets and reservations,” said David Hackett, Gulfstream president and CEO. “Our passengers and employees are not impacted by this legal filing.”
Gulfstream said it has arranged for up to $5 million in debtor-in-possession (DIP) financing from Victory Park Capital Advisors, an alternative asset management firm with headquarters in Chicago, subject to court approval.
“This represents the first step in securing the right long-term financing, which would allow us to acquire our fleet of aircraft, improve our cost structure and position us for future growth,” said Hackett.
Gulfstream asked the bankruptcy court to allow it to pay all of its approximately 600 employees any pre-petition wages and continue all wage and benefit programs. The company does not anticipate any layoffs directly related to the filing.
Gulfstream operates some 150 daily flights with its 23 nineteen-seat Beech 1900D turboprops to 18 destinations in Florida and the Bahamas and six destinations from Cleveland under the DOT’s Essential Air Service program.
“While we have seen strong year-over-year improvements, the impact of our borrowing in the last several years to cope with consistently high fuel costs and the economic impact of declining traffic made it too difficult for the company to continue to meet its debt repayment needs,” said Hackett. “Essentially, the company needed additional financing and investment to continue to meet debt requirements and fund current operations. Gulfstream received strong interest from a number of investment sources; however, all of them noted the need to restructure the balance sheet through Chapter 11 prior to making those investments.”