Moody's Investors Service downgraded the probability of default and corporate family ratings of Global Aviation Holdings (GAH) to "D" and "Ca", respectively, upon its filing for bankruptcy in the Eastern District of New York.
The parent company of World Airways and North American Airlines has also seen its ratings cut on $145 million of 14% senior secured notes due August, 2013 to "Caa3" from "Caa1".
Moody's will withdraw all of its ratings assigned to GAH.
"The combination of lower demand since the recent withdrawals or reductions of troops from Iraq and Afghanistan, lower rates from the Air Mobility Command and overcapacity in the market for commercial air freight have restricted the company's cash flow generation," said Moody's. "GAH intends to utilise the reorganization process to achieve a lower labour cost structure and right-size its fleet of leased aircraft to its expected level of future demand."