Glo Airlines of New Orleans reached an agreement in bankruptcy court on Tuesday that will allow it to reinstate all flights canceled amid a contract dispute with its direct air carrier, Corporate Flight Management Inc. of Smyrna, Tennessee.
The airline, which filed Chapter 11 bankruptcy on Monday, said it will continue operating at full service to all destinations, which include Little Rock, New Orleans, Memphis and Shreveport, Louisiana.
But in a separate action, Glo filed a lawsuit against CFM and a related company, Air Carrier Management Co. LLC, seeking damages and a declaration that Glo was not in default of its contract with the companies.
“We at Glo would like to thank all of our loyal customers for standing by us,” CEO Trey Fayard said in a news release. “The last several days have been hard on the entire Glo family and we are happy to be able to continue to bring the best value in air service back to the communities that have embraced us.”
Shane Carter, spokesman for the Clinton National Airport in Little Rock, said Glo operations continued as usual on Tuesday. Glo currently offers a flight to New Orleans and, beginning May 5, had planned to resume a popular summer route to Destin, Florida.
“The airport has a great relationship with Glo, and we look forward our passengers having many more flights ahead,” he said.
The company provided an email address (info@flygo.com) and phone number (855-435-9456) for those seeking to rebook. Travelers who already received refunds for flights will be invited to book again, spokesman Jordan Mitchell told Arkansas Business.
The agreement came in an afternoon hearing in U.S. Bankruptcy Court in the Eastern District of Louisiana. On Monday, Glo asked the court for permission to receive a $750,000 loan to continue operations while it sorted out its business.
The company wouldn’t comment on the agreement Tuesday, except to say that flights would continue uninterrupted. Mitchell and Glo President Staacy Cannon stressed that it was the contractual dispute with its carrier, not the company’s business model, that caused the disruption, and they confirmed that CFM would continue to operate the flights.
In its lawsuit against CFM and Air Carrier Management, Glo alleged that the companies “repeatedly breached their duties to Glo,” “erroneously billed Glo for charges not authorized by the contracts, prematurely demanded payment of certain expenses, submitted invoices that were erroneous, hired employees who were not properly qualified, and negligently managed Glo’s maintenance department …”
Glo also described an incident in which a CFM pilot improperly started a plane, causing “severe” engine damage, grounding of the plane and forcing the cancelation of “several” flights.
Glo has said that its increased scrutiny of CFM’s practices led to CFM abruptly canceling its contract with Glo on April 17. In its lawsuit, it said CFM “repeatedly threatened to cease performing unless Glo” met certain demands.
Glo’s Chapter 11 filing lists between $10 million and $50 million in debt and $10 million and $50 million in assets. According to the filing, its largest unsecured creditors are GE Engine Service LLC of Cincinnati, $979,380; Alandia Air of Mariehamm, Finland, $920,381; and Aviation Inventory Resources of Alvarado, Texas, $262,097.
Fayard founded GLO Airlines in 2013, and the regional airline began operations in November 2015.
In 2016, he told Arkansas Business that the Gulf and Mid-South regions “have been underserved by air carriers for a long time, resulting in an overreliance on road travel.” Glo aimed to fill a need for affordable, regional air travel, providing services in Little Rock; New Orleans; Memphis; Shreveport; Huntsville, Alabama; Fort Walton Beach, Florida.