Privately-held ACMI operator Gemini Air Cargo has filed for Chapter 11 bankruptcy protection. Here in its entirety is the letter from Gemini's acting CEO George Gonzalez to employees:
"Today, Gemini filed for protection under Chapter 11 of the US Bankruptcy Code. Nevertheless, we will continue operating our business as usual. To fund this process, we have secured an additional loan commitment of up to $14 million from the company's existing senior lender. We will have more details for everyone on Friday, after the court has ruled on our initial filing requests.
The decision to file for bankruptcy was brought on by the difficult times facing the airline industry - most visibly record-shattering fuel prices - coupled with revenue shortfalls we have encountered over the past 12 months: First the MD11 tail tip in Dubai last June, followed by disappointing activity during this year for the DC10s from the U.S. military and ACMI customers (driven partly by fuel prices).
Yet Gemini continues to have strengths, and in important ways we are stronger than a year ago. The MD11 operation has stabilized, with reliability and other performance measures at record levels. Demand for MD11s has increased as it is a highly fuel-efficient freighter, increasing its cost advantages over the B747-200 classics, DC10s, and other competitors.
We also have taken actions to cut our costs. With the softening demand for the DC10s, earlier this year we elected to C check only 3 aircraft, yet these are not currently operating at full capacity. Yesterday we reduced our crews to match our current operating needs, and also the marketing staff focused on the DC10s.
During the bankruptcy, we will be seeking investors for Gemini. As part of our filing, we submitted bidding procedures and expect to have a transaction complete during the summer. This we believe is in the best interests of the employees, customers, investors, vendors, and other stakeholders.
We know there are lots of questions and concerns, and we will give you all of the answers and information we can. During this time, it remains essential that we continue to serve our customers and do a great job. I look forward to giving you more information when we are together on Friday."
Photo by Phil Gengler at: http://en.wikipedia.org/wiki/Image:Gemini_Air_Cargo_MD-11.jpg
Read the complete post at http://www.flightglobal.com/blogs/runway-girl/2008/06/geminis-letter-to-employees-ex.html
Wed, Jun 18 2008 11:34 PM
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