Global Aviation Holdings Inc.

As described above, the Company sought to reduce annual aircraft lease expense by restructuring above-market leases. Consistent with this plan, the Third Supplemental Indenture and Third Amendment and Waiver each required the Company to demonstrate to the reasonable satisfaction of the holders of a majority in principal amount of the First Lien Notes outstanding, and to the reasonable satisfaction of the lender under the Second Lien Loan, that it had reduced annual aircraft lease expense by a minimum of $18.0 million in 2012 and 2013. As of October 24, 2011, the holders of a majority in principal amount of the First Lien Notes outstanding, and the lender under the Second Lien Loan, acknowledged that the Company had demonstrated to their reasonable satisfaction that the Company has reduced annual aircraft lease expense by a minimum of $18.0 million for each of the fiscal years 2012 and 2013 as required by the Third Supplemental Indenture and Third Amendment.

If the minimum consolidated net cash flow covenant had not been waived for September 30, 2011, the Company would have been in violation under the original calculation. Accordingly, the Company has classified the First Lien Notes and Second Lien Loan as current liabilities in the accompanying unaudited condensed balance sheet as of September 30, 2011.

Sources of Liquidity. As of September 30, 2011, we had unrestricted cash and cash equivalents of $18.0 million. The unrestricted cash and cash equivalents balance as of November 7, 2011 increased to approximately $27 million. Slower than anticipated collections during AMC’s fiscal year end lead to lower cash and increased accounts receivable balances as of September 30, 2011. We do not have a revolving credit facility and there are no funds available through other unused financing options. During the first nine months of 2011, a decline in non-fuel AMC rates and entitlement for 2011, our capital expenditure requirements and a decline in anticipated commercial cargo demands and yields had a negative impact on our liquidity and financial position.  We are evaluating our capital restructuring options with our equity sponsor MatlinPatterson and our Second Lien Loan holder, GSO Capital, which include various alternatives including, but not limited to, the issuance of equity and debt for equity swaps. In addition, we have negotiated extended payment terms with certain key vendors, and have amended a number of aircraft leases to reduce aircraft lease costs by approximately $3 million, $18 million, and $18 million in 2011, 2012 and 2013, respectively. The Company also expects to achieve approximately $6.1 million in savings associated with restructuring leases of the aircraft scheduled to be returned in 2012. Finally, we have completed reductions in overhead personnel cost by approximately $5.2 million on an annualized basis, and are implementing certain additional cost-reduction programs in order to improve our liquidity. In addition to those efforts described above, we are seeking additional sources of liquidity including, but not limited to, asset sales, public or private issuances of debt, equity or equity-linked securities, debt for equity swaps, or a combination of these. We cannot provide any assurances that we will be successful in accomplishing any of these initiatives on terms acceptable to us, or at all, and a failure to do so could have a material negative impact on our financial condition or results of operations.

As described above, we sought to reduce annual aircraft lease expense by restructuring above-market leases. Consistent with this plan, the Third Supplemental Indenture and Third Amendment and Waiver each required we demonstrate to the reasonable satisfaction of the holders of a majority in principal amount of the First Lien Notes outstanding, and to the reasonable satisfaction of the lender under the Second Lien Loan, that we have reduced annual aircraft lease expense by a minimum of $18.0 million in 2012 and 2013. As of October 24, 2011, the holders of a majority in principal amount of the First Lien Notes outstanding, and the lender under the Second Lien Loan, acknowledged that we had demonstrated to their reasonable satisfaction that we have reduced annual aircraft lease expense by a minimum of $18.0 million for each of the Company’s fiscal years 2012 and 2013 as required by the Third Supplemental Indenture and Third Amendment.

If the minimum consolidated net cash flow covenant had not been waived for September 30, 2011, we would have been in violation under the original calculation. Accordingly, we have classified the First Lien Notes and Second Lien Loan as current liabilities in the accompanying unaudited condensed balance sheet as of September 30, 2011.

Our strategic initiatives are focused on, among other things, the cost savings described above, cash to be generated through capital restructuring options currently under discussion with key equity and debt holders, and progress on implementing our revenue initiatives, including increasing revenues through entitlement and rates from our AMC business. We believe that cash generated from operations and to be provided through capital restructuring options, coupled together with the timing of cash outflows and existing cash balances will be sufficient to meet our operating requirements and other obligations over the next 12 months; however, our ability to generate cash through the capital restructuring options under discussion will significantly depend on our ability to implement our strategic initiatives and the absence of adverse developments in the appeal of the judgment entered in favor of the ATA bankruptcy estate against FedEx. We cannot provide any assurances that we will be successful in accomplishing any of these initiatives on terms acceptable to us or at all, which could have a material negative impact on our financial condition or results of operations.

On February 9, 2009, Wilmington Trust Company, in its capacity as the trustee lessor to a 15-year lease agreement entered into by ATA on February 28, 2006, brought an action in the New York Supreme Court Commercial Division to enforce the guaranty provided by us of the performance of ATA under that lease. On April 11, 2011, the Court granted summary judgment on liability and directed the parties to a trial on damages. The testimony portion of the damages trial was conducted in mid-July and mid-August. In its post-trial brief filed with the Court, the plaintiff is seeking damages of approximately $18.7 million plus attorney fees in connection with the breach by ATA. Closing arguments have been scheduled for late November 2011. The final outcome of the damages amount is pending and cannot be predicted and is dependent upon many factors beyond our control. We anticipate a ruling from the court during the first quarter of 2012. The Company has accrued its best estimate of liability of this lawsuit. If the Court awards damages materially higher than our accrued estimate, it could have a material negative impact on our financial condition or results of operations. In addition, until March 31, 2012, the Third Supplemental Indenture and Third Amendment and Waiver does not permit us, without the consent of the majority in principal and the holders, to make any payments in respect of any material litigation pending against us. See Note 9 to our condensed consolidated financial statements included in this report.