Wednesday, July 3, 2002
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Wednesday, July 3, 2002 |
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World Airways hoping for federal funds Peachtree City's World Airways announced it filed an application last Friday with the Air Transportation Stabilization Board (ATSB), pursuant to the Air Transportation and System Stabilization Act established by Congress after the September 11 terrorist attacks, for $27 million in federal loan guarantees. If the loan guarantee request is approved, World Airways plans to raise a total of $30 million. "We believe we can make a compelling case to the ATSB," noted Hollis Harris, chairman and CEO of World Airways. "The loan would strengthen our working capital position and help us return to profitability." World Airways plays an essential role in the U.S. aviation system, with a fleet of seven DC 10-30 and eight MD-11 aircraft. The company has been in continuous operation since 1948 and produced $318 million in revenue for fiscal 2001. Its global customer base includes the U.S. Air Force, the company's largest customer. World Airways has participated in the Civil Reserve Aircraft Fleet program since its inception, and the company is the leading carrier in transporting long-haul military passengers. The tragic events of September 11 resulted in weakened passenger and cargo demand, which had a significant, adverse impact on the financial performance of World Airways. The company has developed a restructuring plan aimed at returning the airline to profitability and enhancing cash flow. The plan includes temporary aircraft lease payment concessions and instituting company-wide line item cost reduction programs. The company also completed an Employee Salary Exchange Program, in which employees exchanged 10 percent of their salary for World Airways stock. All these initiatives have contributed to lower unit costs and enhanced cash flow. World Airways' loan application includes a detailed seven-year business plan, which shows increased utilization of existing aircraft, expanded sales efforts, continued support of the U.S. Air Force Air Mobility Command program, lowered costs through process improvements, and continued customer service initiatives. As the Company's financial performance continues to improve, the loan would be repaid from 2005 to 2009. "Our business suffered greatly as a result of the September 11 tragedy, and this loan guarantee will be an important validation of our role in U.S. aviation and our ability to return to profitability and future financial success," noted Harris. "The cost reductions we've taken to date, combined with our business plan for future growth, will clearly demonstrate our ability to repay the loan. We are hopeful that our discussions with the ATSB will be fruitful, as we continue our recovery efforts during 2002," he concluded. Utilizing a well-maintained fleet of international range, wide-body aircraft, World Airways has an enviable record of safety, reliability and customer service spanning 54 years. The company is a U.S. certificated air carrier providing customized transportation services for major international passenger and cargo carriers, the United States military and international leisure tour operators. Recognized for its modern aircraft, flexibility and ability to provide superior service, World Airways meets the needs of businesses and governments around the globe.
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