The U.S. airline industry faced major financial distress in 2025 with several airlines and aviation services providers filing for bankruptcy protection.
Rising operating costs, driven by inflation, consumers’ reluctance to spend on expensive travel, and fierce competition in the airline industry have been blamed for much of the financial distress.
The most significant bankruptcy filing this year has been Spirit Airlines, which filed for Chapter 11 protection for a second time on Aug. 29, 2025.
Spirit filed for Chapter 11 the first time in November 2024.
Also, Silver Airways on July 28, 2025, converted its Chapter 11 case to Chapter 7 liquidation.
The Fort Lauderdale, Fla., airline, which was established in 1988, had a fleet of eight ATR turboprop planes that it used on flights to destinations such as Orlando and Tampa, Fla., and Nassau, St. Kitts, and San Juan in the Caribbean.
Shutterstock
Corporate Air files for Chapter 11 bankruptcy
And now, struggling charter airline and aviation services provider Corporate Air LLC has filed for Chapter 11 bankruptcy protection with a restructuring support agreement that will hand the firm’s assets to its secured lender Vantage AGC.
The West Mifflin, Pa., aviation company and six affiliates filed their petition in the U.S. Bankruptcy Court for the Western District of Pennsylvania, listing $1 million to $10 million in assets and $10 million to $50 million in liabilities.
Related: Discount retail chain closes half its store locations
The debtor’s significant unsecured creditors include Francois Bitz, owed a $3.44 million litigation judgment; Signature Energy, owed over $887,000 from a litigation judgment; Images 280 LLC, owed $654,000 in a litigation judgment; American Express, owed over $544,000 from a litigation judgment; and 84 Lumber, owed over $461,000 in a litigation judgment.
Corporate Air also owes over $2.57 million in secured debt to Huntington National Bank, over $472,000 to the U.S. Small Business Administration, and $2 million in a prepetition bridge loan owed to Vantage AGC.
Corporate Air’s significant unsecured creditors
- Francois Bitz, owed a $3.44 million litigation judgment.
- Signature Energy, owed over $887,000 from a litigation judgment.
- Images 280 LLC, owed $654,000 in a litigation judgment
- American Express, owed over $544,000 from a litigation judgment.
- 84 Lumber, owed over $461,000 in a litigation judgment.
The debtor operates general and business charter flights, aircraft management, hangar rental, fuel services, maintenance, and flight training out of Allegheny County Airport in Pennsylvania, where it holds a land lease, according to a declaration by Corporate Air’s Chief Restructuring Officer David Nolletti.
Corporate Air, which was established in 1986 by Mark Schreiner, began expanding in 1999, purchasing the flight department of Westinghouse Electric.
Corporate Air’s top secured creditors:
- Huntington National Bank owed $2.57 million.
- U.S. Small Business Administration, owed $472,000.
- Vantage AGC, owed $2 million.
It also began managing Consol Energy’s and Marconi Communications’ flight departments, but lost the Marconi contract after it sold its aircraft two years later.
In 2001, the company began providing charter services to Dick’s Sporting Goods, and in 2003 began providing services to real estate developer St. Maarten.
Dick’s Sporting Goods drops charter airline
In 2023, Dick’s Sporting Goods, which accounted for about half of the company’s revenue at the time, ceased doing business with the company.
The loss of Dick’s business resulted in liquidity constraints, making it difficult for Corporate Air to service its debt obligations. The company lost two more service contracts in 2024 and another in 2025, which directly impacted charters, fuel sales, and maintenance revenues.
The loss of these contracts led to a dire liquidity situation by August 2025 and forced the company to sell assets, including aircraft and a hangar.
Debtor secured bridge loan to survive
With a risk of losing its ground lease due to defaults, the debtor signed a management services agreement with Vantage, which included the $2 million prepetition bridge loan to fund the company’s operations until it could file for bankruptcy and secure debtor-in-possession financing.
More Bankruptcy:
- Beer brand and brewery files Chapter 11 bankruptcy
- Italian chain closed most restaurants in Chapter 11 bankruptcy
- Popular healthcare retail chain files for Chapter 11 bankruptcy
“The bridge financing provided by Vantage has allowed the Debtors to stabilize their operations and preserve their assets in the short term, as well as to pursue a value-maximizing going concern transaction with Vantage,” Nolletti said in his declaration.
The debtor also agreed to a restructuring support agreement with Vantage that called for the lender to provide $4.5 million in DIP financing and exchange debt owed on the prepetition bridge loan for all the equity in the reorganized company.
Related: Another favorite whiskey brand files Chapter 11 bankruptcy
#Troubled #airline #files #Chapter #bankruptcy #seeks #sale