Cargo carrier Southern Air plans to move to Cincinnati as part of its Chapter 11 bankruptcy restructuring. In a statement, a company spokesperson said, “After careful analysis and deliberation, and as part of our ongoing efforts to position Southern Air for the future to best serve our air cargo customers, we expect to relocate our operations and headquarters to Cincinnati/Northern Kentucky Airport by March. Bringing together our operations and corporate activities in a location near our largest hub of activity is part of our financial and strategic plans to operate more effectively and grow our business for the long term.” The spokesperson added that “all employees affected by this planned closure… will be provided support and assistance.”
Southern was not prepared to go into details on the numbers employed at its current base in Norwalk, Conn., or on the size of its current operating fleet. However, we understand that the company filed a mass layoff notice with the state Department of Labor advising that 120 workers would be impacted by the relocation, with the first phase of redundancies planned for March 18. Southern, which operates commercial, military and humanitarian relief charters, filed for Chapter 11 bankruptcy protection for the second time in September 2012 as creditors were preparing to repossess two of its leased aircraft fleet. At that time, the carrier was operating three B747-400BDSFs, with one more in storage; one 747-400ERF; and five B777Fs, one operated under CMI lease for TNT Airways and four operated under ACMI lease for DHL Express. Southern’s last B747-200F was scheduled for retirement this spring, and it already had three B747-300SFs in storage. Southern previously went through bankruptcy in 2002 but re-emerged in under a year after a debt restructuring. Private equity firm Oak Hill Capital Partners bought the company in 2007, but it has run back into trouble following cutbacks by the Department of Defense. In September, with assets worth $206.9 million and liabilities totaling $486.5 million, Southern announced a pre-arranged restructuring that it said had the support of a majority of its key financial stakeholders, and added it would work with them to implement a reorganization plan that would restructure its balance sheet and reduce its legacy debt by more than two-thirds. “The actions we are taking will dramatically change and improve our capital structure, eliminating the substantial cost burden of legacy debt and other costs from our acquisition in 2007,” said CEO Daniel J. McHugh at the time. “It follows our operational transition over the past 18 months from a high-maintenance and labor- intensive fleet to a modern, fuel-efficient fleet of 777s and 747-400s.” Southern Air’s German subsidiary was not included in the bankruptcy filing.Source: aircargoworld
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