USA’s Gulfstream International files for Chapter 11

Washington DC
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Florida-based Gulfstream International Airlines has filed for Chapter 11 Bankruptcy protection.

The carrier states it has arranged $5 million in debtor-in-possession financing from Victory Park Capital Advisors headquartered in Chicago.

Gulfstream operates 23 Beech 1900D turboprops in Florida and the Bahamas, and also flies to six destinations from Cleveland, Ohio. It partners with US majors Continental and United.

In July of this year Gulfstream announced a deal with Raytheon Aircraft Credit Corporation to extend a leasing agreement on 21 1900Ds to 6 December. An element of the agreement allows Gulfstream to purchase the aircraft and reduce existing annual lease payments by $5 million.

Gulfstream has asked the bankruptcy court to allow it to pay its 600 employees at pre-petition wages, and says it does not anticipate any layoffs stemming from the filing.

Earlier this year Gulfstream agreed to pay FAA a $550,000 fine over five years related to charges by the agency that the carrier improperly scheduled flight crew duty time and installed unapproved parts on its Beech fleet.

Previously Gulfstream has said the settlement with FAA and the new agreement with Raytheon should reduce its liabilities by more than $1 million. In a statement outlining its decision to enter Chapter 11 Gulfstream states: "The company needed additional financing and investment in order to continue to meet debt requirements and fund current operations."