SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 23, 1998
WORLD AIRWAYS, INC.
(Exact name of registrant as specified in charter)
Delaware 0-26582 94-1358276
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
13873 Park Center Road, Suite 490, Herndon, Virginia 20171
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(703) 834-9200
<PAGE>
ITEM 5. Other Events.
On July 23, 1998, World Airways (the "Company") announced
that second quarter earnings will be lower than anticipated.
Attached hereto as Exhibit 99.1 is a copy of the press release
issued by the Company on July 23, 1998.
ITEM 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit 99.1 Press Release, dated July 23, 1998.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Act of 1934,
the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
WORLD AIRWAYS, INC.
By: /s/ James D. Douglas
James D. Douglas
Executive Vice President
and Chief Financial
Officer
Date: July 23, 1998
Exhibit 99.1
SOURCE World Airways, Inc.
CONTACT: Jim Douglas, Chief Financial Officer of World Airways,
703-834-9208
INVESTOR CONTACT: Doug Poretz of The Poretz Group, Investor
Relations, 703-506-1778, ext. 222, for World Airways
World Airways Says Second Quarter Earnings
Will Be Lower Than Anticipated
Washington Dulles International Airport - July 23, 1998 World
Airways, Inc. (Nasdaq: WLDA) announced today that it expects to
report a loss of between $0.35 to $0.45 per share for the second
quarter ended June 30, 1998. The company had reported a loss of
$0.40 per share for the first quarter of 1998, and analysts were
expecting that the company's second quarter loss would not be as
large.
Chairman and CEO Russell Ray said that the disappointment was
largely due to lower than expected flying as a result of the
following:
The Company had entered into a contract with a Florida-based
cargo company that called for the customer to lease from World
Airways a DC-10 for a three month period beginning March 1998,
followed by the long term lease of an MD- 11. "Unfortunately, our
customer's business was significantly below their expectations,
and they could not justify the use of the MD-11. We worked with
them to retain the DC-10, although sufficient business was still
not available. That aircraft was used at low levels during June
and remains at low utilization," Ray said.
In May, 1998, the company announced that it had entered into a
wet lease agreement with Viacao Aerea Sao Paulo (VASP), Brazil's
second largest carrier. Under the agreement, World Airways would
provide to VASP an MD-11 aircraft configured for passengers for a
six-month term beginning mid-June 1998, with VASP having the
option to extend the agreement for additional six-month periods
and to add a second aircraft. Ray said that "VASP has been unable
thus far to obtain Brazilian government approval of the wet lease
although a similar arrangement between the two companies had been
previously approved. The aircraft has been used in ad hoc service
for other customers during this period but at a lesser level of
flying than was planned under the VASP contract."
Ray also said that "we had planned for substantial down time for
eight aircraft that had been used for Hadj flying while we
transitioned them for use by other customers. The good news is
that three of those customers (El AL Airlines, Aer Lingus, and
Monarch) are new for us and represent opportunities for long term
relationships , and each represent geographical diversity to
contrast with our traditional Asian business. The down side is
that each carrier required special preparation of the aircraft
including painting the planes in the customers' livery. While
this preparation time is normal, it is extremely rare that we
would lose so much contract time at once." Ray added that all
three customers had commented that World Airways' service has
been exceptional and one customer has already extended the term
of the agreement as a result of that quality of service.
Ray also said that World Airways has continued to receive calls
from investors regarding the financial health of the Company.
"Questions regarding the events of default of WorldCorp (NYSE:
WOA), which owns 80% of the entity that owns 50.18% of our common
shares, has created that confusion. We ended the quarter with $9
million in cash as well as an unused line of credit of $25
million. We therefore believe that the concern for our economic
stability is unwarranted."
World Airways provides worldwide passenger and cargo air
transportation under contracts with major airlines, the U.S. Air
Force and tour operators. Operating a fleet of MD-11 and DC-10
aircraft, World is owned 51% by WorldCorp (NYSE: WOA), 17% by MHS
Berhad (KLSE: MHS), a Malaysian strategic investor, and 32% by
public investors.
"Safe Harbor" statement under the Private Securities Litigation
Reform Act of 1995: This release contains forward looking
statements that are subject to risks and uncertainties including,
but not limited to, the impact of competitive services, services
demand and market acceptance risks, reliance on key strategic
alliances, fluctuations in operating results and other risks
detailed from time to time in the Company's periodic reports
filed with the SEC (which reports are available for the Company
upon request). These various risks and uncertainties may cause
the Company's actual results to differ materially from those
expressed in any of the forward looking statements made by, or on
behalf of, the Company in this release.
