New Orleans-based GLO Airlines may be grounded for good.
After filing for Chapter 11 bankruptcy protection in April, the regional carrier suspended service in July as it searched for a new operator for its planes. But this month, federal bankruptcy judge Jerry Brown converted the case to a Chapter 7 liquidation at the request of the U.S. bankruptcy trustee — a move that almost certainly seals the company's fate.
Less than two years after launching nonstop regional flights to major Mid-South cities, New …
"There is no longer a business to reorganize, and conversion of this case to Chapter 7 would be in the best interests of the creditors and the estate," acting U.S. trustee Henry Hobbs Jr. said in an Aug. 1 court motion, which Brown approved Sept. 1.
In his filing, Hobbs alleged that GLO founder and CEO Trey Fayard had "engaged in gross mismanagement of the estate and paid insiders of the company without this court's permission."
Fayard's attorney, William Steffes of Baton Rouge, denied the claims in a Sept. 7 court filing, saying there was "zero such evidence of any fraudulent conduct" by Fayard.
Since filing for bankruptcy, GLO accrued at least $421,572 in unpaid bills, according to Hobbs' filing, which alleged that GLO "exhibited an overall lack of control over its financial affairs."
It also noted that Fayard was being paid $7,500 per month and questioned "the necessity for retaining Fayard or the services he performs on behalf of the state."
Fayard could not be reached for comment Thursday.
More than a year and a half after launching nonstop regional service from New Orleans, chart…
New Orleans-based GLO Airlines, which has operated regional charter flights from Louis Armst…
After launching in late 2015, GLO offered nonstop service from New Orleans to Shreveport; Little Rock, Arkansas; and Memphis, Tennessee. It later added flights to Huntsville, Alabama, and briefly to Fort Walton Beach, Florida.
As a so-called "paper airline," GLO operated a fleet of three leased 30-passenger Saab 340 twin-engine commuter planes, but they were staffed by another company, Tennessee-based Corporate Flight Management.
When GLO's business relationship with the Tennessee firm — which hired, trained and oversaw the airline's pilots — became estranged, Fayard said he had no choice but to suspend service.
At the time it began, some local business executives said GLO's entry into the market highlighted an area where the New Orleans airport had room to grow: targeting under-served regional cities that would attract business people and others eager for an alternative to driving or multiple-stop flights.
Last year in its first full year of operation, GLO transported about 32,300 passengers through Louis Armstrong International Airport, where the airline was based.
When service was suspended in July, Fayard — the son of prominent attorney and longtime Democratic Party supporter Calvin Fayard — pledged that GLO would be back.
Though he's only a few weeks into the job, Louis Armstrong New Orleans International Airport…
“I started GLO to deliver a superior product to my hometown and other worthy local markets, and I refuse to settle for anything less," Fayard said at the time. "We look forward to returning to all markets and expanding further once the right partner is found."