CHEYENNE – Wyoming’s only airline could face immediate seizure “of substantially all” its assets after defaulting on a $27.5 million loan it only secured in December.
In a federal filing, Great Lakes Aviation officials said the company had defaulted on its loan, opening the door to its lender to collect all $27.5 million lent the struggling company, even if that comes in the form of assets. While it is unclear what lender Callidus Capital Corp. will do, the default pushes Great Lakes interest rates from 14 percent to 17 percent.
Earlier this month, the chief financial officer of Great Lakes aviation, Michael Matthews, flew the coop shortly after the default occurred, causing an executive shakeup. Matthews left the company with a cushy severance and consulting agreement that nets him $12,500 per month over the next 10 months. The company hired Stan Gadek, formerly the president and chief executive officer of Minnesota-based Sun Country Airlines, to occupy Matthews’ former role. Gadek didn’t immediately return a request for comment, and Matthews had been unresponsive to Business Report requests long before his final departure.
The $27.5 million loan came about in the eleventh hour to be able to pay off loans from other lenders before the company had to resort to even more drastic measures to stay aloft.
In its most recent quarterly report, company officials said the pilot shortage has been worse than expected, forcing the company to close off legs to many airports like Sheridan County Airport, which has been without passenger service since March 31.
Great Lakes also admitted it doesn’t think it will be able to comply with its loan requirements throughout the rest of 2015, calling to question further the solvency of the company.
The company said it is working through the issues, exploring possibilities ranging from debt and equity financing to selling its aircraft and leasing them back.
“The company cannot make assurances that its assets or cash flow from operations will be sufficient to repay borrowings under its existing debt obligations,” the company’s management said in federal documentation.
The doubts are large enough to cast a stormy shadow over the entire company’s ability to stay in flight, and Great Lakes itself questions its ability “to continue as a going concern,” or a business that can operate indefinitely.
Wyoming Business Report
An escaped tarantula in the cargo hold of a Delta plane delayed a flight from Baltimore to Atlanta Wednesday night, an airline spokesman said.
Flight 1525 was supposed to take off from Baltimore-Washington International Thurgood Marshall Airport at 7 p.m. and arrive at Hartsfield-Jackson International just after 9 p.m.
But when Delta baggage handlers on the ground noticed the baboon tarantula out of its carrier container, the captain ordered the plane grounded in Baltimore overnight to be searched for any additional arachnids, Delta spokesman Brian Kruse said.
“They were able to capture it, and they contacted the handler” to verify it was the only spider in the cage, Kruse said.
The captain told the waiting passengers the eight-legged reason for the delay, and passengers were let off the plane and put on another flight, which departed about three hours later, Kruse said.
Kruse noted that the spider was confined to the cargo hold and never entered the cabin. Nevertheless, the plane stayed at BWI, where it was searched and determined to be all-clear.
“Safety and security are our top priority,” he said.
The Baltimore Sun
SAO PAULO – Delta has filed for regulatory approval to increase its new nonstop service between Orlando and Sao Paulo from four times per week to daily. Delta will begin service in the market four times per week beginning Dec. 19, and expects to start serving the cities on a daily basis Feb. 20.
In June Delta announced that it would have four U.S. gateways to Sao Paulo, giving customers the option of flying through New York, Orlando, Atlanta and Detroit. In addition, the Sao Paulo-Orlando flight will offer convenient connections to nine major U.S. destinations, including Atlanta, Boston, Detroit, Los Angeles, Miami, Minneapolis, New York (LGA and JFK) and Raleigh.
Further, Delta’s alliance with Brazilian airline GOL Linhas Aéreas Inteligentes extends the reach of the Orlando-Sao Paulo service to 32 Brazilian destinations and provides seamless connections at Guarulhos International Airport.
“It is exciting to have the opportunity to have a daily direct flight connecting Sao Paulo to Orlando and to offer customers the reach of GOL’s network with over 700 weekly codeshare flights to Brazil’s interior,” said Nicolas Ferri, Delta’s Vice President for Latin America and the Caribbean. “Delta’s continued expansion of routes important to Latin American customers demonstrates our commitment to the region and keeps us in line with our promise to be the best U.S. airline in Latin America and the Caribbean.”
The new service will be operated using a Boeing 767-300 aircraft with 35 flat-bed seats with direct aisle access in Delta One cabin, 32 seats in Delta Comfort+ and 143 seats in the Main Cabin.
Delta Air Lines