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Western Global Airlines exits bankruptcy with better balance sheet

Many cargo jets are parked, but others busy flying missions for US military

An MD-11 freighter operated by Western Global Airlines on approach to Chicago O’Hare International Airport on Oct. 26, 2020. (Photo: Shutterstock/Carlos Yudica)

Western Global Airlines has restructured and emerged from bankruptcy protection with its fleet of 19 large freighter aircraft intact. But cargo business appears continues to be constrained, with several aircraft inactive during the busiest shipping season of the year and flying heavily concentrated for the U.S. Defense Department. 

The Estero, Florida-based cargo airline reduced its debt by more than $460 million and received an injection of new capital to support ongoing business activity under a reorganization approved by a judge in the U.S. Bankruptcy Court for the District of Delaware. Western Global Airlines finalized conditions of its bankruptcy release on Dec. 4. It now has less than $100 million in debt on its books.

The company’s exit was completed in less than four months, an exceptionally fast process for a comprehensive restructuring of business operations, because there was near-universal support for the plan from creditors.

Western Global Airlines has continued to operate since petitioning for bankruptcy protection in early August with the help of $77.5 million in debtor-in-possession financing, which helped cover expenses and a cash award retention program for nearly the entire workforce. The initial reinvestment was a mix of money from owners Jim and Sunny Neff, as well as some third-party bondholders. The Neffs eventually became the sole provider of financing and waived nearly $100 million of secured and unsecured prepetition debt held by them in order to provide recovery to all creditors, according to court documents.


The restructuring gives Western Global a clean slate, wiping away obligations to vendors, customers and other creditors. The road ahead is uncertain considering the airfreight market is at an 18-month low.

“My top priority has always been to preserve the long-term viability of our company and protect our people. I am pleased our restructuring process has achieved that,” said founder and CEO Jim Neff in a news release announcing the successful restructuring.

Western Global’s fleet consists of four Boeing 747-400 and 15 MD-11 cargo jets. It also has two MD-11s that the Federal Aviation Administration must still inspect to determine whether they conform to airworthiness standards and the airline’s operating certification. Other assets include 11 aircraft harvested for parts to maintain other aircraft and maintenance equipment. During the Chapter 11 process, Western Global completed the overhaul of seven spare GE turbofan engines.

At least eight of the MD-11s are currently parked, including seven that have not flown in more than three months, aircraft databases show. One 747 is also not in service.


A large portion of Western Global’s current business is for U.S. Transportation Command, carrying supplies to U.S. and allied bases in Europe and the Middle East, including military aid for Israel and Ukraine.

In recent weeks, according to tracking site Flightradar24, five of the MD-11 freighters have regularly operated from McGuire Air Force Base in New Jersey, Travis Air Force Base in California, Norfolk Naval Air Station in Virginia, Bangor International Airport in Maine (a civil-military facility) and other U.S. locations to Ramstein Air Base in Germany; naval air stations in Rota, Spain, and Sigonella, Italy; Italy’s Aviano Air Base and then onward to Nevatim Air Base in Israel; U.S. bases in Bahrain, Qatar and Djibouti; as well as Rzeszow airport, the closest Polish airfield to the Ukraine border.

Western Global 747s have also operated from Dover AFB in Delaware to Nevatim via Frankfurt, Germany, as well as to Rzeszow airport. The jumbo jets frequently fly from Travis Air Force Base to Tokyo and bases in South Korea.

Western Global is providing extra capacity for UPS but is not flying for FedEx this peak season, pilots said in direct communications with FreightWaves and online chat boards.

Financial troubles

Western Global was forced into bankruptcy restructuring when revenues sharply contracted this year amid an overall collapse in freight demand from pandemic peaks and more competition from the rebound in lower-deck space on passenger aircraft, which exacerbated a heavy debt load and high maintenance and fuel costs associated with operating aging aircraft. The company was also harmed by pilots and mechanics leaving for better pay at passenger airlines that were on the mend, and three key customers, including Amazon, canceling contracts. Credit rating agencies earlier this year pulled coverage over the company’s lack of financial transparency and liquidity concerns.

Last summer, Neff purchased the company’s $115 million of outstanding senior secured debt for $45 million in a competitive process, a move that reduced repayment pressure from lenders but also angered creditors that were moved to the back of the line for any claims on the company’s assets.

The money Neff put into the high-interest debt is secured by the remaining assets so he gets any proceeds if the company eventually goes under.

The bankruptcy decision doesn’t limit Neff’s liability in a lawsuit by several former Western Global employees related to the establishment of the company’s Employee Stock Ownership Plan. The ESOP was dissolved under the bankruptcy reorganization.


The lawsuit alleges the Neffs profited from a bond sale made to finance an employee loan for a 37.5% stake in the company. According to the filing, the sale price for the ESOP was based on 20 times the company’s fair market value and that when Western Global issued a bond offering that shot up to 10.375% because there were no takers, Neff bought the bonds himself and stuck the employees with heavily devalued shares.

Western Global says ESOP participants didn’t purchase their shares but rather were granted them at no out-of-pocket cost and that participation is voluntary.

Western Global received restructuring advice from Alix Partners and FTI Consulting.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

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Eric Kulisch

Eric is the Supply Chain and Air Cargo Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals and a Silver Medal from the American Society of Business Publication Editors for government and trade coverage, and news analysis. He was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. He won Environmental Journalist of the Year from the Seahorse Freight Association in 2014 and was the group's 2013 Supply Chain Journalist of the Year. In December 2022, Eric was voted runner up for Air Cargo Journalist by the Seahorse Freight Association. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. He has appeared on Marketplace, ABC News and National Public Radio to talk about logistics issues in the news. Eric is based in Vancouver, Washington. He can be reached for comments and tips at ekulisch@freightwaves.com