Q3 2023 Global Crossing Airlines Group Inc Earnings Call

Yes.

Uh huh.

Okay.

Alright, where it gets started.

Morning, Good afternoon wherever you are.

And welcome to the Q3 global ex management webinar.

The OLED legal and CFO, Brian Goepel gentlemen.

Great growth the border.

Lauren very mixed market right now and I'm sure you'll be talking about them.

Philadelphia further Ado I'm going to hand, it over to you Ed.

Great. Thank.

Thank you grant and good afternoon, or good morning to everyone and thank you for joining today's call.

We are pleased to report our third quarter earnings today, and which we reported a relatively small EBITDA loss for fully expensing pilot training expenses, which totaled almost $6 million.

As well as significant investment in upgrading of our flight dispatch and document management software as we move to being a 100% paperless. So we continue to invest in our business people systems training, which allowed us to get to 13 aircraft on our certificate today with at least four more are being added to our certificate by year end 2002.

'twenty three.

Bringing aircraft onto a certificate as a very extensive process not the least of which is recruiting hiring and training our flight crews all.

All of whom are on payroll and incurring training expenses for 90 days prior to them being able to fly revenue flights are pilot hiring pipeline is robust with 14 pilots having started training in October at 18, who will start in November.

Currently at four two crews per aircraft and we see.

See no difficulties in recruiting and hiring sufficient pilots to fund our growth.

We're being overwhelmed with pilot resumes at this point that we feel very comfortable where we are with our pilot numbers given the shortage that still exists.

This has positioned us well for the fourth quarter and for 2024 as it allows us to continue.

A fairly aggressive aircraft delivery schedule, we see tremendous opportunities in front of us with.

With the bankruptcy of our main competitor and issues with some of our other competitors. They are moving quickly to fill the void in certain market segments.

And we know we will be successful in gaining more than our fair share of the market, we provide to our clients a modern fuel efficient aircraft.

<unk> by Greg crews and that is resonating in the charter markets.

I remain very bullish on our prospects as we move into 2024 with increasing demand that we're seeing for our aircrafts from the U S government the enc double a through our top flight subsidiary wet leases to other airlines. We have flown in Europe is as you may know from with with TUI and.

And we're seeing more and more of those requests come in over next summer.

And we're also seeing strong demand for our freighter aircraft as the <unk> hundred 21 freighter proves everyday its competitive advantage over the $75 seven and 737 freighter.

We flew a few two freighters to Israel last week with over 55 tons of medical supplies.

This is what we do the missions on flights that are too difficult for other airlines.

We will move through a short presentation now in the third quarter and we will be happy to answer your questions. Afterwards as always so I'm just trying to get yourself.

And the next one.

This is the standard disclaimer language as it relates to forward looking statements that are made.

Right.

We will cover global X at a glance as a reminder for everyone kind of where we're at as a company in Q3 highlights Q3 financial results and update on our fleet and outlook for the remainder of this year and a quick investor update as we talked about where we are at the stock.

Looking at Global X.

At a group we are one of the fastest growing we are the fastest growing north American domestic and international hybrid charter cargo airline.

<unk> service, both passenger and freighter freight customers, we operate a fleet of 13 now aircraft 10 pasture three cargo.

The third cargo was added after October 15th.

I was added at the end of October on the certificate is planned to grow to by 18 at year end, our actively transitioning the fleet towards the mix between passenger and cargo totaling 50 aircraft by 2025.

During the quarter were able to close a $35 million financing with a strategic strategic partner, which has allowed us to take delivery of these aircrafts and hire the staff and crew we need to make sure. This works, which eliminates the need for <unk> short term equity and when you look at our balance sheet, we significantly reduced the working capital deficit from Q2 and Q3.

We're projecting $150 million of revenue for the year with positive EBITDA and EBITDAR in Q4, 95% of which is contracted.

We will discuss our customer mix, but again, we are targeting robust contracts with relationships in place and that are effectively recession proof type clients.

We're getting ahead of the pilot shortage out we had 120 at the end of the quarter were over 125 today.

We're increasing utilization on aircraft as you see a large jump as we had in Q3 from Q2.

And again, we're in the business of selling the whole plan.

Allows us to mitigate many risks.

Traditional for airlines, specifically fuel risk, which is one of the largest.

And we would argue we are a highly attractive valuation with about a $40 million U S market cap today.

So we look at what we've created as a company since we started in August one of 2021, when we were certified.

We have a 13 aircraft on our certificate a born and delivered in Q1, Q4, and Q1 of 'twenty four.

Operator over 25000 hours.

20% of which were in the last quarter again 120 pilots at the end of the quarter. We will we've achieved key certifications and why this is really important is the.

The more certification you have the larger your total addressable market becomes.

<unk> allows us to operate in Europe, and the U K Department of Defense allows us to offering for a relatively large market within the department of defense and I also certification has allowed us to significantly increase number of flights we performed for the airlines, which we'll talk about in the next slides. So just I wanted to.

I wanted to comment on this.

It shows a tremendous amount of progress shows a tremendous amount of corporate development spirit global ex that.

Cost money, but we have built a very very strong platform.

Which we can now use to accelerate aircraft deliveries accelerate services for our customers.

Using our certifications we have aircraft flying in Europe, we have aircraft flying for the department of defense.

And we're getting more and more airlines requesting our services because of the certifications that we have.

Excuse me.

So we built the foundation for a extremely strong platform.

With this airline so that we can fulfill any mission.

That's presented to us.

And we've got the crews and the aircrafts the expertise and the capabilities to perform those missions. So we've done all of the heavy lifting now in 2022 and 2023.

The stage for us in the fourth quarter of this year.

As well into 2024 and 2025, so we built a tremendous track record of success with the regulatory agencies.

With the agencies that provide our certifications with the leasing companies that provide airplanes with the cargo operators, who need our cargo aircraft.

A whole list of third parties, who worked with US now are increasingly.

Buoyed by the fact that we can put all of this into place and we have a very very strong airline here that can perform we're seeing more than our fair share of the market come to us because of the capabilities that we provide the on time service the reliability clean aircraft great crews.

So again the heavy lifting has been done we're now I've set the stage for our success into 'twenty four 'twenty five.

Quickly running through the highlights of Q3, obviously, the closing of the $35 million of debt facility was of course, a big was a big hurdle and a big accomplishment for the company.

Signed LOI for two passenger <unk> hundred 20 passenger aircraft to 100, <unk> hundred 21 passenger aircraft all of which were attempting to get delivered in the fourth quarter two for sure the third one.

Where it will be at the very end of the fourth quarter. We've increased our pilot head count from the end of last year from 60 to 120. This is a significant investment both on the side of the company, but also as an opportunity for us going forward, we flew over 1800 hours under our <unk> contract with two one of the largest future carriers in Europe.

We took delivery of one <unk> hundred 19, which will be used MGIC configuration, which we used for the charter market.

<unk> hundred 21 freighter was delivered in late September and is now flying for us.

We completed the financing and signed the lease for the maintenance facility to built in Fort Lauderdale at should be breaking ground soon and be operational by early 2025, which will drive significant savings as it relates to maintenance cost and efficiencies on that side, you'll find a lot of airlines are not only moving more into getting these facilities not so much as to say money, but to control it.

Have any control over your maintenance cycle is a very key aspect of what we want to do going forward.

Finally, we booked over 100 hours for NCA basketball, including nine of the top 20 men's and women's basketball programs for the 2023 2004 season, which will see partially in late Q4, but that's mainly a Q1 activity, which we're very excited about.

When you look at who we're flying for this list continues to grow and continues to.

To get stronger as you see on the MTA College sports that's a fraction of the teams that were flying for for this year concerts bad money Lady Gaga, Harry styles, and numerous others, you'll get the government, we discussed <unk> NASA and.

Department of transportation.

If you look at Airlines I think this is the biggest kind of jumped we've had and.

We recognize that in Q3 and this is a direct result of iOS audit flying for TUI links are breeze Allegiant available with all large operators are looking for us to come back next summer. So we're also very excited about our prospects for next summer as we worked through signing those contracts in the next few weeks brokers.

Brokers and tours tour operators Theres, probably not a broker in the U S market that we havent worked with.

And we continue to deepen our relationships there and on the cargo side, we are growing our customer base as well.