The numbers for Global Eagle‘s Q1 are not good. The company reported a loss of $80.9 million for the first three months of the year, more than doubling the prior year’s loss. Backing out the $22 million write-down of a joint venture helps soften the blow, but the cash flow challenges only worsened in Q2. Now the company depends on airlines not only getting back in the skies but getting more passengers on board for its revenue stream to improve. And with a narrow margin of liquidity before it is considered in default on its debt, the timing is tight.
Noting these financial constraints, Global Eagle points out a “substantial risk” that a Chapter 11 bankruptcy filing is on the horizon.
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