Too bad we've seen no mention of this in the local media. They were quick last week to throw Gulfstream's latest SEC filing on the front page with banner headlines, but they seem to be ignoring this story.
Will the neglect continue?
Here's the update:
August 30, 2010 09:00 AM Eastern Daylight Time
Gulfstream International Group Receives Strategic Investment Commitment
Investment Will Strengthen Company’s Financial Position and Enable the Company to Execute an Expanded Strategic Plan
Scott R. Silverman, Managing Partner of Sah-Vul Strategic Partners, to be Named Vice Chairman of Gulfstream’s Board of Directors
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--Gulfstream International Group, Inc. (“Gulfstream” or the “Company”) (AMEX: GIA) announced today that it has received a commitment for an investment of up to $2.5 million from Sah-Vul Strategic Partners, LLC (“Sah-Vul”) that will enable the Company to strengthen its financial position, and enables it to expand its strategic plan with an increased focus on growth and maximization of stockholder value. The commitment includes an initial $1.5 million in the form of a secured convertible note, and provides an option for Sah-Vul to invest an additional $1.0 million.
Consummation of the transaction is expected to occur shortly and is subject to certain conditions, including receipt of third party consents and approvals.
Gulfstream International Airlines currently operates more than 150 scheduled flights per day, serving nine destinations in Florida, 10 destinations in the Bahamas, five destinations from Continental Airline’s Cleveland hub under the Department of Transportation’s Essential Air Service Program, as well as licensed daily charter flights to Cuba. A sixth destination from Cleveland is scheduled to start October 1. Gulfstream has code-share and alliance agreements with Continental Airlines, United Airlines and Copa Airlines of Panama.
With this investment, the Company will look to expand service in its current geographic markets and open new regional markets that are underserved by larger carriers. In addition, Sah-Vul plans to work with the Company to refinance its fleet of aircraft from Raytheon Aircraft Credit Corporation and lower its operating costs.
Sah-Vul Managing Partner Scott R. Silverman will assume the role of Vice Chairman of Gulfstream’s board of directors upon consummation of the investment. Commenting on the investment, Silverman said, “Based on our evaluation of Gulfstream’s operations and its unique model in its geographic markets, we believe the Company presents a compelling growth opportunity that can return significant value for Sah-Vul and all GIA stockholders. We believe that our capital and vision can help Gulfstream as we work to unlock its potential value.”
Silverman is currently the Chairman and CEO of PositiveID Corporation, and has led public companies including VeriChip Corporation and Digital Angel Corporation (formerly Applied Digital Solutions, Inc.). Silverman graduated from the University of Pennsylvania in 1985 and Villanova University School of Law in 1989.
Thomas A. McFall, Chairman and Senior Executive Officer of Gulfstream, said, “We look forward to bringing in Sah-Vul as a partner and new investor, with its significant capital markets experience, a proven track record of enhancing shareholder value, and its belief in the prospects of Gulfstream. With the continuing consolidation of larger airlines, the Company has an unprecedented number of growth opportunities available to it and we are excited about proceeding to develop those, particularly as we expand our initial base in the Northeast.”
About Gulfstream International Group, Inc.
Gulfstream is a regional air carrier based in Fort Lauderdale, Florida, operating for more than 20 years. The Company specializes in providing travelers with access to niche locations not typically covered by major carriers. For more information on the company, visit the company's website at http://www.gulfstreamair.com.
Special Note Regarding Forward-Looking Statements
In addition to historical information, this release contains forward-looking statements. Gulfstream may, from time-to-time, make written or oral forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to, among other things: its business strategy; its value proposition; the market opportunity for its services, including expected demand for its services; information regarding the replacement, deployment, acquisition and financing of certain numbers and types of aircraft, and projected expenses associated therewith; costs of compliance with FAA regulations, Department of Homeland Security regulations and other rules and acts of Congress; the ability to pass taxes, fuel costs, inflation, and various expenses to its customers; certain projected financial obligations; estimates regarding capital requirements; the likelihood that Gulfstream will receive any of the committed funding; and any other plans, objectives, expectations and intentions contained in this release that are not historical facts.
These statements, in addition to statements made in conjunction with the words "expect," "anticipate," "intend," "plan," "believe," "seek," "estimate" and similar expressions, are forward-looking statements. These statements relate to future events or future financial performance and only reflect management's expectations and estimates. All forward-looking statements included in this release are made as of the date hereof and are based on information available to Gulfstream as of such date. The following is a list of factors, among others, that could cause actual results to differ materially from the forward-looking statements: changes to external competitive, business, budgeting, fuel cost or supply, weather or economic conditions; changes in its relationships with employees or code share partners; availability and cost of funds for financing new aircraft and the ability to profitably manage its existing fleet; adverse reaction and publicity that might result from any accidents; the impact of current or future laws and government investigations and regulations affecting the airline industry and its operations; additional terrorist attacks; and consumer unwillingness to incur greater costs for flights.
Gulfstream assumes no obligation to update any forward-looking statement. Risk factors, cautionary statements and other conditions which could cause actual results to differ from management's current expectations are contained in Gulfstream's filings with the Securities and Exchange Commission, including Part I, Item 1A, "Risk Factors," of its Annual Report on Form 10-K for the Year Ended December 31, 2009 and subsequent Form 10-Q filings.
AGAIN, YOU ARE FALLING FOR A FALSE BILL OF GOODS... A little research into this will show this doesn't turn anything around.
ReplyDeleteYou need to dig a little and do your homework.
The company willing to invest isn't doing much better than Gulfstream. They are only willing to invest 1.5 million with an option on another million. This doesn't even cover the losses GIA incurred over the last three months. It is just a bandaid that will allow Gulfstream to make the lease payments on their aircraft which is due today. The money will only keep them operating and really doesn't change their financial situation... and the CEO of the other company becomes Vice Chairman of the Board of GSI... They are selling their soul to stay alive.
They had to borrow a few months ago after they had defaulted on their payments. Eventually, this house of cards will fall. They are borrowing money to stay afloat. All of these loans are short-term and will have to be paid back. Hopefully not on the backs of the taxpayers.
Yes, Gulf is turning around..and the word gullible isn't really in the dictionary. Read the 10-Q filed a week ago. I think even the casual observer will see that this "strategic investment" is nothing if not a cup of water in a large bucket with many holes in it. This "investment" is a secured convertible note..these are promissory notes that are win-win's only for the lender-they are short-term, high-yield and are secured in the case of a sudden bankruptcy. It sounds like this Sah-Vul(great name) may also be calling some of the shots as a result of this very 11th-hour deal. Oh, and the 2nd loan of a mill is an option..they can make their short-term hit then walk if they want. I agree with our Town Supervisor that the local press should have reported this part of the story as well, but is it in fact the silver bullet he thinks it is? It would appear "the neglect" isn't limited to the local media. Some people are neglecting important financial details. Bigger planes would be great out of Massena, but will they be flying a year from now?
ReplyDeleteThe local press did report this part of the story. It's in the story. They said that, in fact, fi they didn't get the 1.5 mill by August 31st, they'd probably go bankrupt.
ReplyDeleteBoy, can anything ever be done to satisfy you guys? Can any airline other than Cape Air ever pass muster? What about the third bidder - Charter Air Service? Have you checked them out? Would they be an acceptable alternative, or should we just take Cape Air as our only option?
ReplyDeleteAs a bunch of people have said, no airline is perfect. I give you guys a lot of points for loyalty, however.
Actually, i believe some of us have checked Charter Air out(another great name)-they haven't yet flown a scheduled flight, seem to have no airplanes, don't even have the paperwork to operate, and haven't shown up in our town. Perhaps we should be asking YOU who you have really checked out-have you even read Gulf's recent 10Q or anything else regarding their financials? For those who have and know what we're reading, it reads as scary as any Stephen King book. How funny you should mention loyalty points; with your expressed dislike of Cape Air and no mention of any other alternatives it is quite apparent in whose basket all your eggs lie. I just hope that whoever it is-Gulf, Cape Air, the Grace L. Ferguson Storm Door and Airline Company-that it is someone who can safely and reliably fullfill the next contract.
ReplyDeleteAnon. 12:37 - I see you're writing on work time again....
ReplyDeleteI expressed dislike for Cape Air?? Can you show me any evidence to support your ridiculous claim? In fact, I have repeatedly praised their company and their service to Massena. I have not been critical of them in anyway other than to say some people will not fly with them because of the size of the plane and the absence of a second pilot. Those aren't my opinions but merely those that have been expressed to me on numerous occasions.
And I have checked our Charter Air and spoken to the company's rep as well. I wouldn't take a chance on them but the EAS folks already have.
You say they "don't even have the paperwork to operate." Oh really? Well did you and your crackjack research team know they have been awarded an EAS contract for two cities in Michigan?
Please, don't pretend to be all-knowing and the least bit objective about this issue. You are clearly a shill for Cape Air, and there's nothing wrong with that.
Just be honest about it!
I find it interesting that you seem to know when i'm working-I happened not to be at the time-and that you seem to know more about a company that you "wouldn't take a chance" on then the one to which you are giving your unconditional support. I still find no evidence that Charter Air has yet flown a single flight, and last I had heard they didn't have an operating certificate. Which cities in MI will they serve? As you have said, the DOT has certain criteria for the folks that get these routes, and if there has been a recent development with Charter that you are aware of and I am not, you do have my apology. It seemed to me that the opinions you proffered re: Cape Air were yours-I recall them being expressed in the first person, but if i err, I again apologize. But just because I disagree with your reasoning and methodology is no reason to unload, to rant and namecall. Actually, call me whatever you want. All I want is good, safe, reliable, and decently priced air service for this town. And a larger plane would be great, if we can get it. Whatever the outcome, I do hope we'll get the best we can out of this..and that said, I must also say that your at times belligerant behaviour on a public forum is unbecoming of a public official. I'm sorry we disagree on some things-it's just a shame that only one of us realizes that we can do that and yet still be on the same side.
ReplyDeleteThanks for your comments. I don't mean to be belligerent. I certainly felt I was on the receiving end of a few body shots as well. As I have said before, I grew up on spirited, vocal, sometimes loud family debate. In the end, we were all still family and didn't take the shots personally.
ReplyDeleteI'm sorry you're out of work and my comments certainly came off as patronizing and demeaning. That wasn't my intent. I apologize for that.
We'll all have to take a deep breath, relax and see what happens.
It's safe to say that no one will die or even be injured by the outcome of our air service debate. Hope you'll keep reading and commenting.
Did you ever have the meeting with Gulfstream?
ReplyDeleteI notice Gulfstream has promised to keep one or two seats per flight at $39. Did they also mention they charge $30 for the first checked bag? Which now makes the $39 fare $69 if you check ONLY one bag. And what will they charge for the other 17 or 18 seats on the plane?
ReplyDeleteDear Anoo. 5:38 and 8:48 - Yes we met with Gulfstream last Friday. They told us of the announcement of the pending financing package which was made public Monday. And 8:48, I'm not sure what you mean by "one or two seats at $39," all seats will be $39 and the we also asked about the crazy rumor of the $30 baggage fee and here's what they said: They charge a $10 baggage fee except on tickets with a Continental code share, where Continental charges $30 and they merely pass it on to Gulfstream customers. So they don't charge $30, Continental does. Would you expect Gulfstream to just eat that expense and pass on the good will to Continental? That seems like a crazy thing to do. Where do you get your information? Who said only one or two seats will be $39 dollars and who made up the $30 Gulfstream charge? Sounds like foolish rumors from someone desparate to keep things the way they are. And if you're booking a direct flight from Massena to Boston to connect with Continental, does 69 bukcs really seems unreasonable? What would it cost you to drive to Syracuse, providing you can make a Contninental connection there?
ReplyDeleteLet's deal in facts, truth and honesty, not ruomors, conjecture and deception.
First of all Gulfstream's announcement was the deal had been arranged and would be consumated in the near future. I follow the market and have not seen any follow-up story that the agreement was actually done. Announcements like that are sometimes made to keep creditors at bay for a short period of time while they negotiate "the big contract." I have seen no filings with the SEC on the new investors.
ReplyDeleteYes, lets deal in truth, facts and honesty. All airlines offer lower fares on a limited number of seats. I'm sure Essential Air Service is not designed to cover the entire cost of the carrier's operation. If you got that promise in writing that ALL seats will be $39 for the two years of the contract and you can get the DOT to go for covering the entire cost of the operation, I would say you have worked out an amazing deal and you should be commended for it. If it is an unfounded and undocumented promise, I would suggest you sharpen you negotiating skills!
Please stop refering to everybody who believes a smaller stable carrier is better than one on the verge of bankruptcy as being overly loyal to Cape Air. I would love to see larger planes service Massena, but I would like to know the one we choose will still be here in two years.
How do you know I don't have political aspirations? Maybe I am soliciting your comments to document these negatives were brought to your attention and you still decided to back the much more expensive and more risky service.
Good luck to you! I'll stand by my decision.
ReplyDeleteOh, by the way, I'm a rather easy target, wouldn't you say? You know who I am and where I can be found. Can't say the same about you.
ReplyDeleteSince you are posting stories believed to be favorable to Gulfstream, here is an opposing story from last week:
ReplyDeleteGulfstream delays plans to offer service from Pittsburgh
Thursday, August 26, 2010
By Mark Belko, Pittsburgh Post-Gazette
A Fort Lauderdale-based airline's plans to launch service to Harrisburg and other cities from Pittsburgh this year have been grounded for now.
At one time Gulfstream International Airlines had hoped to be flying from Pittsburgh International Airport by the end of the first quarter of 2010.
But it now has pushed back its timetable until at least the start of 2011, perhaps longer, said Mickey Bowman, the airline's vice president of corporate development.
He said Wednesday the delay is mostly related to the economy.
"We're just waiting for the market forces to coalesce again so we can feel secure in opening up the routes," he said.
Gulfstream, a regional carrier founded in 1988, began talking to the Allegheny County Airport Authority in May 2009 about launching service to Harrisburg, Du Bois in Clearfield County, and other cities using 19-seat Beechcraft 1900D turboprop jets.
Pittsburgh has been without a nonstop flight to Harrisburg, the state capital, since September 2008, when US Airways dropped it as part of a series of cutbacks that have left the airport with a fraction of the service it had a decade ago.
Mr. Bowman said Gulfstream still was interested in providing service from Pittsburgh once the economy improves. Despite the cutbacks, he believes the market "has tremendous potential."
Before it moves forward, however, the airline is hoping to get authority from the U.S. Department of Transportation to continue flying to Du Bois; Franklin; Bradford, Pa.; Lewisburg, W. Va.; and Jamestown. N.Y., from Cleveland.
Those routes currently are up for renewal under a federal program that provides subsidies to airlines to fly to certain cities, Mr. Bowman said.
He said an issue at Pittsburgh International continues to be its high cost per enplanement, which is currently $15.24. To help with that, the airport has been considering reduced landing fees and marketing incentives.
While Gulfstream views the cost per enplanement as a concern, it was not a factor in the airline's decision to delay any start of service, Mr. Bowman said. "The biggest pause we had was just the economy in general," he said.
JoAnn Jenny, an airport spokeswoman, said that while Gulfstream has asked about rates, it has yet to negotiate a lease to supply any service. The airport definitely is interested in working out a deal, she added.
"We think it's an opportunity to offer air travelers in [Harrisburg and other cities] more options for flights," she said.
THANK YOU DEPARTMENT OF TRANSPORTATION!
ReplyDeleteBR
November 5, 2010
ReplyDeleteSo much for the "NEW DELOPMENT IN THE AIR SERVICE WAR" --
THE CHICKENS HAVE COME HOME TO ROOST!
In Gulfstream International's notice to the SEC on their filing for chapter 11 bankruptcy protection, it is stated:
"Sah-Vul...believes it 'may have been fraudulently induced' by the Company (Gulfstream) or its management to make the Sah-Vul loans. In addition, on November 3, 2010, councel to Sah-Vul notified each Company that a 'default' by the Company exists under the Sah- Vul Note and related documents."
Hopefully the Massena Town Council will not continue to believe promises the people from Gulfstream have to tell you about "righting their ship." They have been delisted from the American Stock Exchange, so their share price which was at sixteen cents per share as of November 4, cannot be tracked.
This company is a train wreck that Massena can't take the chance of riding with.
11/9/10:
ReplyDeleteNow that the Ogdensburg City Council and the Ogdensburg Bridge and Port Authority have endorsed Cape Air, the only Gulfstream proposal left for Massena's consideration is Option #4. This option calls for combining flights with Watertown and takes Albany totally out of the picture. When you take a 19 seat plane and divide it by two cities, you average 9.5 seats per city. A half seat more than Cape Air offers on their planes, not worth giving up a stable air carrier for. Cape Air still offers the community desired Albany service along with Boston and no combination flights with Watertown.
Funny, this sounds remarkably like a telephone conversation I had with a Cape Air official yesterday..... But you forgot to mention that Cape Air cannot fly to any destination more than 50-60 minutes away.
ReplyDeleteI think you are understating that figure a bit. They fly Boston to Saranac Lake which is an hour and a half. I believe they stated 90 to 100 minutes as a self-imposed limit in the interest of passenger comfort.
ReplyDeletewow, as an airline employee from another airline, I read this stuff and absolutely laugh out loud. For people to even consider Gulfstream (Joe Grey apparently is the only one that does now) is appalling. Joe you apparently know absolutely nothing about aviation or the aviation industry. The company is bankrupt JOE!! Add in maintenance nightmare, not prepared for winter flying, etc etc. Oh did I mention bankrupt!! Im not saying I think Cape Air is the best fit or not, But for a community that has half the number of people because of all the business shut downs they are the best fit. A.) because they are cheaper and B.) The community can't fill planes. For massenablogger, if you actually think that G4 would keep a $39 fare forever you obviously haven't done your research on changing factors. The airline could lure you and in two months change this fare to 100 because of whatever ridiculous excuse they can come up with,(fuel, maintenance etc etc). Overall, for being in the airline industry I have seen Cape Air for some time and they seem to do a great job with a very stable financial wallet.
ReplyDeleteAnon. Airline employee: Can you name one major airline, other than Jet Blue, that has not undergone Chapter 11 restructuring??
ReplyDeleteFor being such a dummy about airlines and air travel, I remember all of them filing over the past deacde or so - and they emerged stronger than ever!!
Typically, you bring up the phantom issues of maintenance and winter flying. Being the expert you are, you surely know those are specious at best. Cape Air can't bring their bigger planes here from Guam because they cannot withstand freezing temperatures.
I'm not a shill for any airline or bidder. Can the same be said for you?
Thats exactly my point is what you just said "Can you name one major Airline that has not undergone Ch11". Please put an emphasis on MAJOR. G4 does not have any major airline backing. Continental would no way have any backing for them at all. And for you to say that about the ATR is absurd, the ATR does reconnaisance in Antarctica for many foreign governments etc, so thats funny. Im not supporting any airline, Im just voicing my opinion that Cape Air is a much better choice.
ReplyDeletePS. Cape Air has never gone bankrupt
and for your list of airlines that filed Ch.11 why dont you look up, ATA, Big Sky, Skybus. Tell me what Ch.11 did for their so-called restructure
This comment has been removed by a blog administrator.
ReplyDeleteGulfstream Airlines Headed for Jan. 4 Auction
ReplyDeleteWhether airline owner Gulfstream International Group Inc. continues flying beyond the first week of January will depend on the outcome of a Jan. 4 auction for the parent of Gulfstream International Airlines Inc.
Yesterday, the bankruptcy judge in Fort Lauderdale, Florida, approved procedures whereby bids for the airline are due on Jan. 3, in advance of a Jan. 4 auction and a hearing on Jan. 5 to approve the sale.
Absent a buyer, Gulfstream will be in default under an agreement with aircraft owner Raytheon Aircraft Credit. Default would allow Raytheon to repossess the 21 aircraft it provides.
Gulfstream is working on an agreement to sell the airline to Chicago-based Victory Park Capital Advisors LLC, the provider of financing for the Chapter 11 case. Any deal to buy the airline must be acceptable to Waltham, Massachusetts-based Raytheon.
Gulfstream said it won’t accept an offer to purchase only the operating certificate. If a buyer intends to run the business as an airline, it would presumably be required to confirm a Chapter 11 plan to avoid the need for seeking a new operating certificate from the Federal Aviation Administration.
A buyer is eligible to take advantage of an offer from Raytheon to sell the aircraft at a specified price. The price isn’t being made public. Gulfstream said it doesn’t have enough funding to continue operating in Chapter 11 absent a quick sale.
Gulfstream filed for Chapter 11 reorganization on Nov. 4 in Fort Lauderdale, where it is based.
Gulfstream had assets of $13.6 million and $26 million in total liabilities on the June 30 balance sheet. Revenue of $46.3 million for the first half of 2010 resulted in a $1.6 million operating loss and a $2.8 million net loss. Revenue in 2009 was $87.3 million.
On entering Chapter 11, Gulfstream had 23 turboprop aircraft seating 19 passengers each. The company at the outset had more than 150 daily flights from Florida, the Bahamas and Ohio. Gulfstream operates under code-sharing arrangements with Continental Airlines Inc., UAL Corp.’s United Airlines and Copa Airlines.
The case is In re Gulfstream International Group Inc., 10-44131, U.S. Bankruptcy Court, Southern District of Florida (Fort Lauderdale).