Earnings call transcript: Global Crossing Airlines beats Q2 2025 earnings expectations

Global Crossing Airlines reported its Q2 2025 earnings, surpassing expectations with an EPS of $0.01 compared to a forecast of $0. The company also reported a revenue of $61.38 million, exceeding the anticipated $57.42 million. Following the announcement, the stock price of Global Crossing Airlines (symbol:JET) increased by 6.67%, closing at $0.80, reflecting positive investor sentiment. According to InvestingPro data, the company has shown impressive momentum with a 302% one-year price return, though analysis indicates the stock is currently trading above its Fair Value.

Key Takeaways

• Global Crossing Airlines exceeded both EPS and revenue forecasts for Q2 2025.
• The stock price rose by 6.67% in response to the earnings beat.
• The company reported significant growth in ACMI revenue and operational efficiency.
• Executives emphasized the company’s unique business model and growth strategy.

Company Performance

Global Crossing Airlines demonstrated robust performance in Q2 2025, with revenue increasing by 7% year-over-year to $61.4 million. The company’s ACMI revenue surged by 40% to $44.5 million, indicating strong demand in this segment. The net income improved to $600,000 from $300,000 in the previous year, showcasing effective cost management and operational efficiency. The company also reported a 48% increase in EBITDA to $5.9 million and a significant rise in cash flow from operations to $8.8 million. These results highlight the company’s successful execution of its strategic initiatives.

Financial Highlights

• Revenue: $61.4 million, up 7% YoY
• Earnings per share: $0.01, exceeding the forecast of $0
• ACMI revenue: $44.5 million, up 40% YoY
• Net income: $600,000, up from $300,000 YoY
• EBITDA: $5.9 million, up 48% YoY
• Cash flow from operations: $8.8 million
• Cash and restricted cash: $14.1 million

Earnings vs. Forecast

Global Crossing Airlines reported an EPS of $0.01, surpassing the forecast of $0, and revenue of $61.38 million, exceeding the expected $57.42 million. This results in a revenue surprise of 6.9%, reflecting the company’s strong performance in the quarter. The earnings beat is significant and aligns with the company’s growth trajectory in recent quarters.

Market Reaction

Following the earnings announcement, Global Crossing Airlines’ stock price rose by 6.67%, closing at $0.80. This movement reflects investor confidence in the company’s performance and future prospects. The stock is currently trading closer to its 52-week high of $1.15, indicating positive market sentiment.

Outlook & Guidance

Looking ahead, Global Crossing Airlines aims to continue its growth trajectory by adding 4-5 aircraft annually and expanding its ACMI capacity. The company is focused on becoming the largest reliable narrow-body charter airline in North America. For FY2025, the company forecasts an EPS of $7.98 and revenue of $417.69 million, with further growth anticipated in FY2026. InvestingPro data shows strong revenue growth with a 40.71% increase in the last twelve months and a healthy Financial Health Score of 2.94, rated as "GOOD". Discover detailed growth projections and industry analysis in the exclusive Pro Research Report, available for 1,400+ top stocks.

Executive Commentary

"2025 is our year of maturation and execution," stated Chris Hamraas, Executive Chairman. Ryan Gopo, President and CFO, highlighted the company’s unique business model, noting, "Unlike scheduled carriers that commit to flights before securing passengers, we only operate once charters are confirmed." Gopo also emphasized the company’s focus on expanding ACMI capacity, stating, "Our highest return opportunities right now are expanding our ACMI capacity."

Risks and Challenges

• Aircraft acquisition and integration: As the company expands its fleet, managing the acquisition and integration of new aircraft is crucial.
• Market volatility: The airline industry is susceptible to economic fluctuations, which could impact demand.
• Competition: Increasing competition in the ACMI and charter markets may pressure margins.
• Regulatory changes: Potential changes in aviation regulations could affect operations.
• Cargo market softness: While showing signs of improvement, the cargo market remains a challenge.

Q&A

During the earnings call, analysts inquired about the company’s aircraft acquisition strategy and operational readiness for fleet expansion. Executives reiterated their disciplined growth approach and balance sheet management. They also addressed the company’s differentiated business model, which protects against market volatility by operating only confirmed charters.

Full transcript - Global Crossing Airlines Group Inc (JET) Q2 2025:

Conference Operator: Thank you, ladies and gentlemen. We will good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to today’s conference call to discuss Global Crossing Airlines financial results for the 2025. At this time, all participants are in listen only mode.

As a reminder, this conference is being recorded. Joining us on the call today are the company’s executive chairman, Chris Hamroz President and CFO, Ryan Gopo and SVP corporate controller, Wendy Shapiro. Please be advised this conference call will contain statements that are considered forward looking statements under the Private Securities Litigation Reform Act of 1995. These forward looking statements are subject to certain known and unknown risks and uncertainties as well as assumptions that could cause actual results to differ materially from those reflected in these forward looking statements. These forward looking statements are also subject to other risks and uncertainties that are described from time to time in the company’s filings with the SEC.

Do not place undue reliance on any forward looking statements, which are being made only as of the date of this call. Except as required by law, the company undertakes no obligation to publicly update or revise any forward looking statements. For important risks and assumptions associated with such forward looking statements, please refer to the company’s earnings press release for the 2025 and the company annual report on Form 10 k for the year ended 12/31/2024. The company’s presentation also includes certain non GAAP financial measures, including EBITDA and EBITDAR as supplemental measures of performance of the business. All non GAAP measures have been reconciled as directly comparable GAAP measures in accordance with SEC rules.

You will find reconciliation tables and other important information in the earnings press release for the 2025, which is currently available on the company’s Investor Relations section of its website. And now I will turn the call over to the company’s executive chairman, Chris Hamraas. Chris, please go ahead.

Chris Hamraas, Executive Chairman, Global Crossing Airlines: Thank you, operator, and good afternoon, everyone. I’m pleased to report a sequentially strong quarter for Global Crossings as we continue to build on the momentum established earlier this year. In Q2, we delivered top line growth, record block hours flown and the significant improvement in cash flow provided by operating activities, underscoring the strength of our business model and our commitment to operation excellence. During the quarter, we expanded our fleet to meet rising customer demand while maintaining strong utilization levels, demonstrating the versatility of our pricing model and our continued focus on disciplined growth. We also took a strategic step to introduce a hybrid ownership model through the acquisition of our first aircraft in July.

This initiative coupled with signing lease agreements for four additional aircraft strengthens our growth trajectory and fleet capacity. These strategic additions ensure we are well positioned to deepen relationships with key customers and capitalize on the opportunities strengthening our competitive edge in priority markets. To provide context for our broader journey, 2024 was our year of stabilization. We focused on building the foundation of a full fledged charter airline. 2025 is our year of maturation and execution.

We’re delivering on the path to sustainable profitability and demonstrating consistency in operations and financial performance as we move through the second half of the year. 2026 is expected to be our year of scaling up profitably as the timing of new aircraft deliveries is expected to enable us to expand our platform and capture the full potential of the business we’ve built. Looking ahead, we remain focused on improving corporations, expanding customer partnerships, and enhancing our reputation for excellence, consistency and reliability. Together, these efforts are expected to solidify our position as the trusted charter airline of the industry. Brian and Wendy will expand on the quarter in more detail momentarily.

I want to reaffirm our commitment to executing our strategic plan and creating long term value for our customers, partners and shareholders. Our focus is clear, execute with purpose and consistency as we work to become the largest most reliable narrow body charter airline in North America. With that, I will now hand it over to our President and CFO, Ryan Gopal to elaborate on Global Crossing second quarter operational highlights. Ryan?

Ryan Gopo, President and CFO, Global Crossing Airlines: Thank you, Chris and good afternoon everyone. We delivered meaningful improvements during the quarter across all key financial metrics. This included both revenue growth and improved profitability, reflecting the continued momentum of our strategic initiatives and our progress towards building a more resilient financial foundation. Revenue increased 7% year over year to 61,400,000.0, primarily driven by higher block hours flown, aircraft fleet expansion, and increased contribution from our passenger ACMI business. The growth in our ACMI business was due to expanded fleet capacity, growing customer demand, and increased average revenue per block hour.

Most notably, ACMI revenue increased 40% year over year to 44,500,000.0 and now accounts for 73 of total revenue compared to 55% in the prior year quarter. We continue to allocate aircraft capacity from chartered ACMI in an effort to take advantage of its higher margin profile and more predictable flying. As a result, charter revenue was 15,300,000.0 in Q two twenty five compared to 24,600,000.0 in the same quarter last year and now represents 25% of total revenue compared to 43% in the prior year quarter. This shift is the primary reason for the increase in block hours did not directly correspond to the increase in revenue with an increase in revenue. During the quarter, we flew a record 8,065 block hours, including sub service across both ACMI and chartered, a 13% increase over the prior year’s quarter and a 7% over the prior quarter.

This growth reflects strong market demand for our leading charter services and a tightening supply environment resulting from competitor capacity reductions. It’s worth noting, we did not operate any sub service hours in Q2 twenty twenty five compared to three hundred and eighty two hours in q one twenty twenty five and five hundred and sixty one hours in q two twenty twenty four. Our reduced reliance on sub service is a direct result of increased aircraft availability. In q two, we increased block hours flown for ACMI by 32% to 6,769 compared to last year. For charter, flew 1,154 block hours compared to 1,838 in the year ago quarter.

As we’ve mentioned before, eCMI brings in lower revenue when compared to charter on a per flight basis. However, it carries lower risk if the customer assumes the expenses for fuel demand and price risk in addition to other operational fees. For context, an average revenue per block hour in Q2 was 6,580 for ACMI and 13,272 for charter. As we continue our efforts to drive revenue growth, we anticipate a more pronounced improvement and profitability driven by the favorable margin profile of our expanding ACMI portfolio. Turning to cargo operations, we continue to face a soft freight market consistent with broader industry trends.

While demand has remained subdued, we have maintained steady operations with our fleet of four three twenty one freighters, aircraft that offer superior unit economics to greater fuel efficiency, reduced operating costs, and a reliable performance. As the market works through this period of recovery, our efficient platform has enabled us to stay active, serve our customers effectively, and be well positioned for an eventual rebound in the cargo market. In q two, we launched an important trial trial ACMI contract with DHL, providing us the opportunity to demonstrate the superior value of the a thirty three twenty one freighter to a key customer in the market. We’re happy to announce DHL has extended this contract by another four months, reflecting the growing confidence of a major logistic provider has in our platform. For the passenger market, we continue to see strong demand throughout the quarter, driven by continued shortage of available aircraft, limited direct competition, and growing interest from customers such as college sports teams, tour operators, US government, seeking flexible travel solutions.

To capitalize on these tailwinds, we have allocated additional sales and operational resources in an effort to strengthen the relationships with key customers and cultivate partnerships with new accounts in an effort to expand our reach. This market remains core to our strategy, and we intend to continue to scale our efforts to further diversify and strengthen our customer base. Part of our long term growth strategy, we continue to assess our operational efficiency and pricing structure in an effort to drive stronger financial performance. A steady increase in average revenue per block hour reflects the effectiveness of these efforts. As we stated earlier, for ACMI, we generated an average of 6,580 per block hour, an increase of 6% from the prior year quarter.

For charter, average revenue per block hour is roughly flat at $13,272 compared to $13,393 in q two twenty twenty four. As Chris mentioned earlier, we transitioned from an exclusively leased fleet to a hybrid ownership model with our first acquisition of an Airbus a three twenty. This strategic shift enhances our operational flexibility, facilitates long term planning, and supports improved financial performance. Aircraft ownership also enables us to better control long term maintenance scheduling, optimize capital investments, create tangible asset value on the balance sheet, and provide greater control over valuable end of life economics. Additionally, owning select aircraft reduces net expense, which in turn improves EBITDA conversion over the life of the asset.

While leasing remains key component of our fleet strategy, ownership produces a valuable lever as we scale. In addition to the acquisition, we executed definitive lease agreements for four Airbus A319 aircraft. Deliveries are scheduled between September and December with the first a three nineteen expected to enter into service by the September and subsequent aircraft phased in monthly thereafter. Collectively, these aircraft will extend our fleet by over 20% further enhancing our operational capacity and supporting the next phase of our growth. As we previously announced in March, we signed a letter of intent to require an a three twenty airframe.

We have now secured the required engines, are undergoing a maintenance check and are scheduled to be delivered in late September. Throughout q two, we completed a total of 14 maintenance events, including two heavy maintenance checks and 12 non heavy checks across our fleet. These scheduled events are part of our routine maintenance procedures in an effort to optimize performance and operational readiness. All our passenger aircraft were successfully returned to service ahead of the third quarter. Now I’ll turn over to our SVP Corporate Controller, Wendy Shapiro, who will discuss our financial results in more detail.

Wendy?

Wendy Shapiro, SVP Corporate Controller, Global Crossing Airlines: Thank you, Ryan, and good afternoon, everyone. Please note that all financial results discussed today are for the three month period ended 06/30/2025 and variance commentary is on a year over year basis unless stated otherwise. Revenue in the second quarter increased 7% to 61,400,000.0 compared to $57,500,000 The increase was primarily driven by higher block hours flown and aircraft fleet expansion as well as an increased revenue per block hour flown for ACMI. ACMI revenue increased 40% to $44,500,000 compared to $31,900,000 Charter revenue in Q2 was $15,300,000 compared to 24,600,000.0 Total operating expenses were $58,100,000 compared to $55,000,000 driven primarily by higher maintenance and personnel costs associated with the ongoing expansion of the Global X fleet. Net income improved to $600,000 compared to $300,000 Earnings per share also improved to $01 per basic and diluted share compared to breakeven earnings per basic and diluted share.

This was primarily driven by increased revenue, lead expansion and higher average rates per block hour flown per passenger ACMI. EBITDA increased 48% to $5,900,000 compared to 4,000,000 EBITDAR increased 6% to $19,800,000 compared to $18,700,000 Cash flow provided by operating activities in Q2 increased to 8,800,000 compared to 900,000.0 The increase was primarily driven by improved profitability, disciplined cost management and efficiency gains across the business. We utilized our cash flow in Q2 to invest in fleet expansion and system enhancements to fuel future growth. Turning to our liquidity. We ended the second quarter with approximately $14,100,000 in cash and restricted cash compared to $10,200,000 at 03/31/2025 and $14,000,000 at 12/31/2024.

Now I will turn the call back over to Ryan for closing remarks.

Ryan Gopo, President and CFO, Global Crossing Airlines: Thank you, Wendy. We’re proud of our second quarter results as we delivered another period of revenue growth, improved profitability, and almost 9,000,000 in cash flow provided by operating activities. With solid momentum in the 2025, we believe we’re well positioned to build on the success and execute on our 2025 goals. This concludes our prepared remarks. I’d now like to open the call for Q and A.

Sean, over to you.

Moderator: Thank you, Chris, Ryan, Wendy, and thank you everyone for joining. As we gather the queue for live questions, we’d first like to address a few of the questions that have come in via email over the past couple of weeks and even since reporting our earnings. Our first question, why isn’t Global X experiencing the same softness reported by many scheduled carriers in recent earnings reports?

Ryan Gopo, President and CFO, Global Crossing Airlines: Yeah. I think the key differentiation is to understand they’re very different models. Unlike scheduled carriers that commit to flights before securing passengers and bear the loss from vacancies, we only operate once passengers once charters are confirmed and costs are contractually covered. In our ACMI model, one pass through would be as profitable as 150 because we’re paid by the block hour, not by the seat. This structure shields us from ticket risk, volatile fuel prices and other variable costs while ensuring predictable revenue regardless of load factors.

It’s also worth noting that while we utilize moderate cost midlife aircraft as opposed to scheduled carriers who typically use newer high cost aircraft, and just as important as the customer base. Again, we don’t sell by the seat, we sell by the aircraft, which means our clients, our tour operators, college athletic programs, government agencies, they’re not as focused on fair prices or filling seats, but more so as booking flights and booking hours. This model, I think, has allowed us to increase our block hours, maintain high utilization, and even as the broader airline industry has experienced softness.

Moderator: Got it. Thanks, Ryan. And next one here, how do you think of the balance between purchasing aircraft and leasing them?

Ryan Gopo, President and CFO, Global Crossing Airlines: Well, and I think up to this point and up to this quarter, we really didn’t have an option. Because if you think about the market and the way the industry might have valued us or saw us as a credit risk, we didn’t really have any option to purchase. I think one of the reasons we’re so excited we’re able to complete the purchase on MSN 3101 is it’s a signal to us that the people who are experts in this industry, the people who evaluate airlines like us for credit risk, see us as an acceptable risk and are willing to provide us the capital needed to purchase an aircraft. So when we go forward, I think now it’s not so much we only have a choice of leasing. We now have the choice of leasing or purchasing.

And as such, we evaluate each deal kind of differently and it opens up more aircraft for us to consider. We’re not just in a environment. So I think from our perspective, there is a lot of incremental value we think as we’ve articulated in owning aircraft at this price points, but we will continue to do what we’ve done since we started, which look at each aircraft on an aircraft by aircraft basis, on a deal by deal basis, and do what we think makes the most sense for the company.

Moderator: Great. Turning to the next one. You’ve mentioned cargo demand remains soft in the past. What gives you confidence that the segment will ultimately rebound in a meaningful way? And what are the risks if the recovery takes longer than expected?

Ryan Gopo, President and CFO, Global Crossing Airlines: Well, I think to predict when the market will recover is a tough game to play because there’s a lot of macro forces at play. Near term cargo demand has remained subdued, but we do believe that the fundamentals remain compelling over the long term. I think one of the dynamics in low in The U. S. Market is when U.

S. Postal Service rebid their contract and they changed their approach to air freight, it created excess capacity and that excess capacity has to come out. That being said, we’re seeing early signs of improvements such as our extension of our ACMI contract with DHL, which I believe demonstrates our three twenty one platform delivers strong unit economics for major logistic players. Even if the recovery takes longer than expected, our cargo fleet is highly efficient, can be redeployed in ways that maintain utilization. We’re disciplined in managing costs and fleet allocation, so when the demand does strengthen, which historically accelerates in Q4, we’re positioned to capture market share quickly and profitably.

Moderator: And with positive net income and strong operating cash flow in Q2, how do you prioritize between reinvesting in fleet growth versus strengthening the balance sheet?

Ryan Gopo, President and CFO, Global Crossing Airlines: Well, I think the great thing is I get to have that conversation and I think we’re having those debates. We view capital allocation as a balance between fuel and growth and maintaining financial flexibility. I think what you’ve seen over the last six to twelve months is we’ve really invested our time and efforts, not so much in growing the fleet, but stabilizing the internal organization, ensuring we have the policies and procedures in place to operate efficiently when we grow versus growing and then fixing. And I think that’s been demonstrated in our results and our cash flow from operations. That being said, our highest return opportunities right now are expanding our ECMI capacity, which is where we’re deploying capital towards the new aircraft acquisitions and leases, which are already backed by strong customer demand.

At the same time, we’re mindful of leverage and liquidity, ensuring that we have the balance sheet strength to navigate cycles and pursue strategic opportunities. And we’ll continue to evaluate our options through that lens, disciplined growth that enhances earnings power without compromising long term stability.

Moderator: Okay. And last one here via email. You’ve added a meaningful number of aircraft between me, you’re adding a meaningful number of aircraft between now and year end. What operational risks come with that pace of growth and how are you mitigating them?

Ryan Gopo, President and CFO, Global Crossing Airlines: So, I think that’s what we spent the last ten months preparing for. I think the first part it starts is with our training. We’ve had a pilot class every month since May, but we’ve also had reasonably sized pilot classes. I don’t think we’ve over hired. I think we’re going to time these better than I think we have in the past, so we don’t have an overcapacity of pilots, but we’ve really focused on training, maintenance procedures, and scheduling.

Then when we do have these aircraft on board, we have the right pilots, we have them scheduled right, and we have the maintenance programs and the people in place to go do it. But keep in mind, many of these additions are the same type of aircraft in our fleet, so we are leveraging existing expertise, existing resources, and really it is the scaling of the business that Chris kind of talked about. This part first half of the year has been kind of the stabilization and this is the scaling that allows us to feed our growth, which we believe is going to be pretty aggressive in 2026.

Moderator: Great. And with that, we’ll turn it back to the operator for live Q and A.

Conference Operator: Thank you. Ladies and gentlemen, we will now begin the live question and answer Should you have a question, please press the star followed by the number one on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the number two. Your first question comes from the line of Brian Foote from Broadway Capital Management.

Your line is now open. Please go ahead.

Brian Foote, Analyst, Broadway Capital Management: Thank you. I appreciate it. Both Chris and Ryan, having been with you all for for many years, I wanna congratulate you on the cash generation. First and foremost. It’s encouraging to see that and thrilling to be in this situation.

I wanna go to a couple of comments that you guys made because I think that they’re very important.

George Melas, Analyst, MKH: The first is industry experts

Brian Foote, Analyst, Broadway Capital Management: have looked at your model and they know what they’re doing. They’re sophisticated and they were able to endorse and underwrite the ownership of an aircraft.

Ryan Gopo, President and CFO, Global Crossing Airlines: So they’re seeing something from

Brian Foote, Analyst, Broadway Capital Management: a credit risk standpoint that perhaps

George Melas, Analyst, MKH: other elements are not

Brian Foote, Analyst, Broadway Capital Management: seeing. The ownership of an aircraft right now for your balance sheet and for cash generation very important from a shareholder standpoint. If you could walk me through what kind of opportunities you have in terms of other aircraft when you evaluate an aircraft for purchase, what does that market look like? What kind of decisions go into that in terms of return on capital, other things? And again, what kind of capacity should we think about in terms of the credit worthiness for acquisitions?

Ryan Gopo, President and CFO, Global Crossing Airlines: Yeah, and really what kind triggered it for us is in 2024, we estimate between four and six aircraft traded, which means one lessor sold it to another, which made us think that our perception must be getting better because they’re willing to acquire that risk from us. Our first approach is really to go to the existing lessors and say, hey, if you’re going to trade these and share these companies, leases get traded quite frequently, give us a shot at it. And that’s what this first transaction was. I think there’s several others aircraft we currently have under lease, which we’re having a similar conversation with the lessor. But again, we have some pretty good lease rates.

We have pretty good terms. Now we kind of have some financing partners who are willing to, that’s the next step. We kind of put them all together and really we will do it if it generates incremental cash, incremental EBITDA, incremental net income and gives us an asset at the end of the lease life. If we get all four of those, we’ll go do it. And I think that’s what this first transaction did.

And I think will ultimately strengthen us, if you think about it with these midlife aircraft, there’s an end of life economics that we think we are in a better position with the way our business model works and how we utilize the aircraft to capitalize on and maybe some of our lessors or some of our agreements some of our agreement state. So I think from a capacity standpoint, I think there’s significant capacity out there to do this kind of lending. I think we’ve ticked a couple boxes for enough of lenders that we can have multiple financing options for these aircraft. The next step is just finding the one that makes sense. So, our first priority is taking existing leased aircraft and converting them because it’s a much simpler transaction.

The next is when we look at acquire getting aircraft, we will do the lease versus buy and we’ll announce those as they happen, but that’s again, it’s just nice to have that kind of thing in your toolbox to use when you’re going through the economics of agreement. That’s, you think about our core value, our core value is our certification, core value is our ability to take these assets and generate revenue with it. Then the next step is, okay, how can we use our balance sheet to generate even more profit, which we think will ultimately manifest itself and increase shareholder value.

Brian Foote, Analyst, Broadway Capital Management: The increasing shareholder value is pretty evident by the cash flow generation And maybe I’ll drill down on that. Now that you are a cash flow positive company from a working capital perspective, there’s other levers that you could pull on a day to day basis. I guess I’d throw it out to you, Ryan, but it’s to the floor. How do you think about the working capital at the company as you continue to grow across 2026? But maybe going forward, are there target levels that you’re considering as a more mature stable company?

Or how should we think about working capital management going forward?

Ryan Gopo, President and CFO, Global Crossing Airlines: Yeah, and again, this is as the company evolves, this isn’t something we’ve really had to the luxury of kind of deciding what’s the best way to go forward. You know, the first part was to generate positive cash flow from operations. The second point is to figure out how much cash do you need on the balance sheet or want to have on the balance sheet. And really for us, it’s to help manage the cycles. It’s also to, cash gives us the ability to take advantage of situations.

And I think we’ve done that since the beginning as a company is taking advantage of unique situations to get, I’d say the best deal, the assets at the best price for our company. And so I don’t think we’re at a stage where I’d say I have enough cash, I’ll never no finance person or leader in aviation will say we have enough. But I think what we are doing is we said this year, a goal of ours was to strike better balance sheet. And I think we’ve demonstrated in the first half, we’ve done that through generating cash flow from operations and also acquiring aircraft. So ultimately, we have a stronger balance sheet and create some sort of assets to airline.

Back

Brian Foote, Analyst, Broadway Capital Management: Very good. Just following a comment Chris made, the strategic plan is to be among the largest, most reliable. Walk us through that. Is there target timeline for being Adam and reliability is a major issue for all airlines. I mean, how do guys track those and how keep do the company on that strategic plan?

Ryan Gopo, President and CFO, Global Crossing Airlines: So, you’re not reliable, you’re not a good partner. And so in the charter business, they expect to show up on time and leave on time, just like the scheduled carriers. So, obviously we track on time performance and internally we have metrics that we hold ourselves accountable towards. I think part of ensuring reliability is ensuring the fleet stays relative. The fleet age matches the work that it’s being done.

So if you’re flying two to three hundred hours a month, you should make sure you have a young enough aircraft that can handle the work. And then as your aircraft mature, make sure they’re kind of more targeted for less lower utilization kind of work. And that’s kind of managing the life cycle of the aircraft. And so, when you talk about largest, we’ve had the problem and we’ve been here for a long time where we would promise 50 aircraft by this date or 40 aircraft at this date or whatever. And ultimately, we’ve now taken the approach of, okay, we will take on aircraft when it makes economic sense and we’ll take on aircraft, it’s not just for the sake of taking on aircraft.

That being said, setting kind of a baseline goal of adding four to five a year, whether they’re passenger, whether they’re freight, Having that kind of mindset at least gives you a framework. Now, we come across, you know, a great opportunity that allows us to add a whole bunch of aircraft from a common type of aircraft at a good economic terms, and that means we add 10 in here, we will go do that. But we also want to make sure we have the work, you know, are out of the field of dreams model, which I say build it and I hope they will come. We feel there’s demand for significantly more passenger. We don’t see necessarily the demand yet for cargo, but if that when that recovers, we think there’s a lot of opportunity to add lift in that space as well.

So, it’s a long winded way of saying is, we’re in a macro market, we deal with some pretty big forces that are not necessarily inside our control, but we have built in a flexibility and approach that allows us to take advantage of whatever opportunities we see.

Brian Foote, Analyst, Broadway Capital Management: It’s a very interesting point you just make there, Ryan, if I may. You’ve reached a point where demand is informing your decision as opposed to the, as you said, the field of dreams model that

George Melas, Analyst, MKH: might have existed in prior. Is your

Brian Foote, Analyst, Broadway Capital Management: size, your ability to interact with so many different customers, is that driving the fact that you can have that conversation and understand demand in a more reactive way as opposed to just building it and they will come. What are the factors that are contributing to that ability to match supply to demand?

Ryan Gopo, President and CFO, Global Crossing Airlines: Well, I think our focus, right? I think one of the things we’ve done in the last year is really simplified what we’ve done and what we do and where we’re gonna do it. And through that, we’ve gotten deeper with existing clients. I think we’ve identified opportunities that will allow us to expand it, whether it’s in Europe or more domestically with the similar clients asking for more aircraft. And so, we’re still, we talk about being in a niche business, but we talk about being in a niche in a $10,000,000,000 business where a niche is pretty big.

And so I think we’re still the market significantly bigger than we are right now. And I think there’s enough opportunities that adding the four to five aircraft, we don’t feel like we’re scrambling to put them to work.

Brian Foote, Analyst, Broadway Capital Management: Very good. Really helpful. Thanks.

Ryan Gopo, President and CFO, Global Crossing Airlines: Thanks, Brian.

Conference Operator: Your next question comes from the line of George Melas from MKH. Your line is now open. Please go ahead.

George Melas, Analyst, MKH: Great. Thanks a lot. Congratulations for some really good progress. A few quick questions on the new aircraft that you’re bringing on, the four A319s. Can you just give us like a little bit more information how many lessors, why these particular aircraft and what makes them attractive sort of operationally and financially?

Ryan Gopo, President and CFO, Global Crossing Airlines: Well, it’s one lessor. They’re all sister ships. They’re all the same configuration. They are high density 319s, which means they have over 156 seats, which we think is there’s a pretty robust market for that and the lease rates were really made a lot of sense. Keep in mind, we entered in this agreement last year at a time when you’re seeing lease rates for 320s in the mid to high 200s, this is significantly below that.

So from our perspective, we believe there’s market for these aircraft. There’s a certain efficiency on onboarding these aircraft. It’s one agreement, one lessor, one operator. And so they’ll be brought on sequentially. And I think the economics of these were just compelling for us to go do it.

George Melas, Analyst, MKH: Okay, great. And help us understand how long can you count on these aircraft? How long are the leases and you have sort of lease extension options involved?

Ryan Gopo, President and CFO, Global Crossing Airlines: Right. So these aircraft are two to three years, which really takes you to the next heavy check. And so I think at that point, there’s an economic decision to be made on whether it makes sense to reinvest in the aircraft to take it beyond that period of time. And so we’ll work with the lessor to decide what makes sense at that time. It might not make economic sense.

I think also when you look at our existing fleet, we have another several of our aircraft coming due in the next twelve months and we’re working on extensions for all of them and we’ll announce them as they’re done as well. So we’ve gotten to the next level of maturity where we’re starting to get into second lease agreements with existing lessors, which also opens the door for purchase opportunities. So, these aren’t six, seven year aircraft, we think that’s fine. I think this is a market that’s available and we’ll continue to keep, I think my personal take is the midlife aircraft market will become better for us, more time we can put out. I think, there’s been a lot of forces, whether it was COVID or it was the engine issues that have driven up demand for mid and late life aircraft, which I think will as the OEMs catch up and the OEMs get their production going, will soften the rates on some of that mid and late life aircraft, especially some of the engines, which will give us if we get through this two to three year window with these aircraft, we’ll have significantly, I think better opportunities to get more aircraft at better rates going forward, just sort of feeds our growth, which means, build a solid foundation, build your fortress in America for where we have a solid set of customers and then manage the fleet to ensure your fleet matches your demand.

And I think that’s what we’ve done and that’s what we’ll continue to do.

George Melas, Analyst, MKH: Okay. Okay. That’s a lot to unpack for me. I have to think about it.

Ryan Gopo, President and CFO, Global Crossing Airlines: I’m sure you call me back, George. You’ll have 20 more questions. I’ll be ready for you.

George Melas, Analyst, MKH: In terms of the with these aircraft being delivered, right? So it means that you had you ended the quarter with 19 aircraft. You add four by the end of the year. But I imagine there’s some you’re going to have some aircraft that come to end of life lease or end of lease, I should say. And so let’s say mid next year, at this point next year, how many aircraft do you think you have in the fleet?

Ryan Gopo, President and CFO, Global Crossing Airlines: 24.

George Melas, Analyst, MKH: 24. Okay. So then you have no aircraft that are really exiting the fleet in the next six months?

Ryan Gopo, President and CFO, Global Crossing Airlines: Not by design. Keep in mind, we’ve already had one exit in the sense of the three nineteen that was returned that we talked about in Q1. That takes us to 18. You had the four gets you to 22. And I think we’ll have two more before mid next year.

That’s how I get to

George Melas, Analyst, MKH: 20 So you went from 19 to 18, you add four, that’s 22. And you say you’re going

Ryan Gopo, President and CFO, Global Crossing Airlines: to add a few more? Two more, yeah. Okay.

George Melas, Analyst, MKH: Great. Okay. And then just from an operational perspective, you had no subservice this quarter. Is that because are you keeping the routes that were flown by the subservice providers are you going to fly them internally or somehow did you did these contracts expire? Help us understand how you made those decisions.

Ryan Gopo, President and CFO, Global Crossing Airlines: Well, keep in mind, we did a lot of heavy maintenance checks in Q2, right? So we had a lot of aircraft down for maintenance. And so the subservience sort of filled in while they’re being repaired and then they got redelivered and we just we resumed flying them.

George Melas, Analyst, MKH: Okay. Very good. Thanks a lot.

Ryan Gopo, President and CFO, Global Crossing Airlines: Thanks, George.

Conference Operator: There are no further questions at this time. Please continue, Mr. Ryan Gopo.

Ryan Gopo, President and CFO, Global Crossing Airlines: Great. I want to thank everyone for joining us. I appreciate your interest and your attention. Just in conclusion, I think the focus of the airline is to stay focused, keep it simple, to be the fastest growing nation’s fastest growing charter airline that does ACMI charters. And I think we’re gonna continue with that focus.

We’re gonna add aircraft, operate profitably, and focus on generating positive cash flow from operations for the year. And we look forward to our next call.

Conference Operator: Thank you. Ladies and gentlemen, this concludes today’s conference call. You may disconnect your lines at this time, and have a wonderful day. Thank you for your participation.

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