Q1 2024 Global Crossing Airlines Group Inc Earnings Call
Good morning, ladies and gentlemen, and thank you for standing by welcome to today's conference call to discuss global crossing Airlines financial results for the first quarter of 'twenty 'twenty four at this time all participants are in a listen only mode. As a reminder, this conference is being record.
Operator: Good morning, ladies and gentlemen, and thank you for standing by. Welcome to today's conference call to discuss Global Crossing Airlines' financial results for the first quarter of 2024. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded. Joining us on the call today are Chris Homross, Executive Chairman of Global Crossing Airlines, and the company's President and CFO, Ryan Goe
Joining us on the call today are Chris from Rush Executive Chairman of Global crossing Airlines, and the company's President and CFO, Brian Goepel. Please be advised that this conference call will contain statements that are considered forward looking statements under the private Securities Litigation Reform Act of 1994.
Operator: Please be advised that 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.
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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.
Islands with B SEC Please 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.
Operator: Please 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 obligations to publicly update or revise any forward-looking statement. The company's presentation also includes certain non-GAAP financial measures, including Evita, as supplementary measures of performance of the business. All non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with SEC law rules.
The company's presentation also includes certain non-GAAP financial measures, including E V EBITDAR as.
Measures of performance of the business all non-GAAP measures have been reconciled to most directly comparable GAAP measures in accordance with S. E C rules.
You will find reconciliation tables and other important information in the earnings press release and form 8-K furnished to the U S. E. C earlier today, which are currently available on the company's Edgar page on the S. E C websites, which will be available on the company's Investor Relations section of its website.
Within approximately 24 hours. After this call has ended.
Speaker Change: And now I would like to turn.
Operator: You will find reconciliation tables and other important information in the earnings press release and Form 8K furnished to the SEC earlier today, which are currently available on the company's EDGAR page on the SEC website and will be available on the company's investor relations section of its website within approximately 24 hours after this call has ended. Now, I would like to turn the call over to the company's Executive Chairman, Chris Ramos. Chris, please go ahead.
Speaker Change: Call over to the company's executive Chairman, Chris Ramos, Chris. Please go ahead.
Unknown Executive: Thank you, Operator, and good morning, everyone. Thank you very much for dialing in.
Unknown Executive: Thank you operator, and good morning, everyone and thank you very much for dialing in like we spoke the last quarter.
Unknown Executive: Like we spoke last quarter, we expected the first quarter of 2024 to be effectively the beginning of a new chapter in the history, in our short corporate history of Global Crossing Airlines. And as you know, since our inception in 2019, we have operated with a rather acute focus on driving scale and top-line growth. And over the course of the last few years, and particularly since 2021, when we became a fully certified airline, we've developed a core competence in rather rapidly deploying new aircraft into revenue charter operations.
Unknown Executive: We we expected the first quarter, so 2024 to be effectively the beginning of the new chops.
Unknown Executive: It's true in our short corporate history of global crossing.
Unknown Executive: As you know since our inception in 2019.
Unknown Executive: We operated with a rather acute focus on driving scale and top line growth and over the course of the last few years and particularly since 2021 we'll keep it fully certified.
Unknown Executive: We've developed a core competency and rather rapidly deploying new aircraft into revenue charter operations.
Unknown Executive: And the speed to market has become our calling card, and that also enabled us to become effectively the nation's fastest-growing charter airline. And we're very proud of that heritage, and, obviously, we continue our focus on that.
Unknown Executive: And the speed to market has become our calling card and that also enabled us to become effective.
Unknown Executive: It's actually the nation's fastest growing charter airline and we are very proud of that heritage and obviously, we continue our focus on that but at the same time and like we talked last quarter and.
Unknown Executive: At the same time, like we talked about last quarter, it appeared to us that we want to, and we owe it to focus a lot more on driving profitable growth and sustained profitability, which has really defined our actions we've taken across the business over the last month. And effectively, the next quarter would be a more substantive opportunity – we would have a more substantive opportunity to talk to you about this in great detail.
Unknown Executive: We.
Unknown Executive: It appeared to us that we want to and we owe to focus a lot more on driving a profitable profitable growth and sustained profitability, which has really defines our actions we've taken across the business over the last over the last month and.
Unknown Executive: The next effectively next quarter would be.
Unknown Executive: And more stuff to.
Unknown Executive: We would have a little something to be able to talk to you about this in great detail, but at this point we have re.
Unknown Executive: But at this point, we have really refocused the airline on our core competence, which is the narrow-body charter ACMI flying, which is effectively critical to sustained profitability for us. We have terminated peripheral initiatives, and we have taken significant write-offs this quarter to make sure we have a clean slate with anything that we would deem non-core to our focus on driving sustained profitability. At the same time, As you recall, when I stepped up and appointed Ryan as President, which is a decision that is beginning to pay off very well here, our mandate is effectively clear, the complete focus on operational excellence, driving sustained profitability initiatives, again, closing and shutting down anything that would be contrary to that objective of ours.
Unknown Executive: Really refocused on our core competence, which is the narrow body charter I CMI flying.
Unknown Executive: <unk>, which is.
Unknown Executive: Effectively critical to sustained profitability for us we have terminated some peripheral initiatives then we have taken.
Unknown Executive: Significant write offs this quarter to make sure we have a clean slate with anything that we would deem noncore to our focus on on driving sustained profitability.
Unknown Executive: At the same time.
Unknown Executive: As you'll recall when I stepped up and appointed Brian two precedent.
Unknown Executive: Which which is decision that AR is beginning to pay off with better well here, our Monday to effectively clear on that.
Unknown Executive: Complete focus on operational excellence.
Unknown Executive: Driving sustained profitability initiatives.
Unknown Executive:
Unknown Executive: Again clothing, and shutting down anything that would be contrary to that science to that objective of ours and effectively we delivered the first quarter, which was a good quarter I'm, particularly when you look at and Ryan will dive into detail from a cost or expected yield perspective, our ability to command premium.
Unknown Executive: And effectively, we delivered the first quarter, which was a good quarter, particularly when you look at, and Ryan will dive into detail, from a customer perspective, yield perspective, our ability to command a premium based on our reliability of service, but it was of a very transitional nature in terms of being a transitional quarter. And we began to see the fruits of our labor at the end of March, and we can tell you that April has really been, fairly successful as well. Executives, Edward Wegel, Ryan Goepel, Grant Howard, Juan Nunez, Global Crossing Executive, [inaudible] Great, thank you.
Unknown Executive: Based on our reliability of service.
Unknown Executive: But it was very transitional nature in terms.
Unknown Executive: Being a traditional quarter and we can begin to see the fruits of our labor.
Unknown Executive: At the end of March and and we can tell you that April has really been as well Charlie.
Unknown Executive:
Speaker Change: Scripted hope everything we wanted to focus on them and as I said, Brian will provide more color momentarily, but I really wanted to reiterate our commitment to delivering on the sustained profitability, which you know I I continue to repeat that.
Unknown Executive: No again, I recognize that but we really have set up the basically two to achieve problem. That's other busy on time performance as a reliable carrier and sustained profitability and these are the sort of the awards that being accurate everyday across all functions and vertical for us.
Unknown Executive: It goes across the business and we are very happy with the momentum we're gaining in the results we are going to be delivering on a go forward basis.
Unknown Executive: I do want to hand, it over to Ryan our president and CFO to elaborate further on our strategy and review the Q1 financial highlights Brian.
Ryan Goepel: Great. Thank you, Chris.
Ryan: Great. Thank you Chris as I mentioned this on our last call, but I I am honored to be interested by the board to Shepherd Global X to a new stage of profitability and growth now turning to our recent operational highlights we achieved another quarter of significant revenue growth, while increasing EBITDAR by approximately 16 times compared to the prior year quarter or you see my business delivered the largest contribution to these.
Ryan Goepel: As I mentioned on our last call, I am honored to be entrusted by the board to shepherd GlobalX to a new stage of profitability and growth. Now, turning to our recent operational highlights. We achieved another quarter of significant revenue growth while increasing EBITDAR by approximately 16 times compared to the prior year quarter. Our ECMI business delivered the largest contribution to these results, increasing four times compared to the prior year quarter. As a reminder, in our ECMI business, we provide outsourced cargo and passenger aircraft, crew maintenance, and insurance, while customers assume fuel demand and price. We are typically responsible for landing fees, airports, and other operational fees.
Ryan Goepel: The increase in ECMI was attributable to strong customer demand and ongoing supply. As well, we see an increase in our aircraft fleet and a growth in a key government agency relationship, and we'll discuss more of this later. Meanwhile, our charter business grew 27% from a year ago to $34 million. As a reminder, in our charter business, we provide passenger and cargo aircraft, while the customer pays a fixed fee that covers fuel insurance, landing, and other operational expenses, such as travel.
Ryan: Results, increasing four times compared to the prior year quarter.
Ryan: As a reminder, in our E. C&I business, we provide outsource cargo and passenger aircraft crew maintenance and insurance what customers are seeing fuel demand and price risk. We are typically responsible for landing airports and other operational fees. The increase in E. C minus attributable to strong customer demand and ongoing supply shortages as well, we see an increase in our aircraft fleet.
Ryan: The growth in our key government agency relationship and well discuss more on this later.
Ryan: Meanwhile, our charter business grew 27% from a year ago period to $34 million as a reminder, in our charter business, we provide passenger and cargo aircraft, while the customer pays a fixed fee that covers fuel insurance and lending and other operational expenses such as travel.
Ryan Goepel: The increase in charter revenue is primarily attributable to the aforementioned growth in our aircraft fleet. Additionally, we booked 5200 hours during the quarter, a 66% increase compared to the prior year quarter, and our average utilization per aircraft grew 4% during the same period to 416 mach hours, representing a modest organic utilization growth on a per aircraft basis. Increased efficiency is more evident when looking at our average revenue per block hour. For ACMI, we generated an average of $6,480 per block hour, which is an increase of 46% from the prior year quarter.
Ryan: The increase in charter revenue was primarily attributable to the aforementioned growth in our aircraft fleet.
Ryan: Additionally, we booked 5200 hours during the quarter of 66% increase compared to the prior year quarter and our average utilization per aircraft grew 4% on the same period to 416 block hours, representing a modest organic utilization growth on a per aircraft basis inquiry.
Ryan: Increased efficiency is more evident when looking at our average revenue per block hour pretty CMI, we generated an average of $6480 per block hour, which is an increase of 46% from the prior year quarter and average revenue per block hour on the charter increased 19% to 15468 from approximately 13000 in Q1 of 2023.
Ryan Goepel: And average revenue per block hour in the charter business increased 19% to $15,468 from approximately $13,000 in Q1 of 2023. Subsequent to quarter end, we announced we had received DOT authorization to increase the size of our fleet to 20 aircraft, a target we intend to achieve this summer. I'd also like to take a moment to touch upon our strategy, which Chris alluded to a few minutes ago.
Ryan: Subsequent to quarter end, we announced we had received D O T authorization or increase the size of our fleets 20 aircrafts target we intend to achieve this summer.
Ryan: I'd also like to take a moment to touch upon our strategy well, Chris alluded to which Chris alluded to a few minutes ago.
Ryan: Earlier in my career I was a strategic strategy executive for a nationally recognized the quick service brands and I often refer back to restaurants, when explaining what drives successful execution execution for a charter airline and just generally boils down to the same two key principles.
Ryan Goepel: Earlier in my career, I was a Strategic Strategy Executive for a nationally recognized quick service brand, and I often refer back to restaurants when explaining what drives successful execution for a charter airline, as it generally boils down to the same two key principles: same store, or, in our case, same aircraft growth, and two, cultivating the right relationships to drive predictable and repeatable outcomes. Similar to restaurant brands, it's like a specialization where they have the capacity to outperform.
Same store or in our case same aircraft growth and to cultivating the right relationships to drive predictable and reoccurring business.
Ryan: So we're at a restaurant brands at select especially Jason what do you have the capacity to outperform we delivered our best results when operating as a narrow body charter airline with our current operational profile. We believe we can achieve breakeven operations. If we had 12 passenger aircraft flying full time with each additional incremental aircraft delivering accretive benefit to our bottom line.
Ryan Goepel: We deliver our best results when operating as a narrow-body charter airline. With our current operational profile, we believe we can achieve break-even operations if we have 12 passenger aircraft flying full-time, with each additional incremental aircraft delivering a creative benefit to our bottom line. In accordance, we have shuttered projects and business ventures that we've deemed non-core to our primary narrow-body passenger and cargo charter operations. We expect these actions will not only result in a more streamlined and focused profile for GlobalX but will have a direct impact on near-term profitability as the costs associated with these non-core projects are abated.
Ryan: In accordance and it in accordance we have shuttered projects and business ventures that we deem noncore do I primary narrow body passenger in charter.
Ryan: Cargo charter operations.
Ryan: We expect these actions will not only result in a more streamlined and focused profile for global ex although of a direct impact on near term profitability is a cost associated with these non core projects or avoided.
Ryan Goepel: Additionally, we recognize the importance of establishing repeat business with strategic customers. To further these efforts, we have deepened our relationship with a key government agency that is now utilizing eight dedicated aircraft in our fleet and chartering over 1,000 ACMI block hours per month.
Ryan Goepel: Additionally, we recognize the importance of establishing repeat business with strategic customers to further these efforts we have deepened our relationship with a key government agency that is now utilizing a dedicated aircraft with our fleet and chartering over a thousand E. CMI block hours per month. We expect this relationship provides us with a solid foundation, a predictable and reliable revenues, we continue to scale our business.
Ryan Goepel: We expect this relationship to provide us with a solid foundation of predictable and reliable revenue as we continue to scale our business. We are still in the early innings of implementing our new strategy, but we believe we are well positioned to execute on our objectives of growth and profitability. Now turning to our financial results. Please know that all financial results discussed today are as of March 31st, 2024, while variance commentary is on a year-over-year basis unless otherwise noted.
Ryan Goepel: We are still in the early innings of implementing our new strategy. However, we believe we are well positioned to execute on our objectives of growth and profitability.
Ryan Goepel: Revenue increased 67% to $53.8 million from $32.2 million in the prior year, driven primarily by higher block hours flown and aircraft fleet expansion, as well as continued strong demand for passenger ACMIA charter flights. Looking further into our sales, Charter revenue increased 27% to $34 million compared to $26.7 million. ACMI revenue increased four times to $18.6 million compared to $4.7 million. All other revenue increased to $1.2 million compared to $700,000. Total operating expenses were $58.4 million compared to $32.3 million, driven primarily by higher aircraft rental, maintenance, and personnel costs associated with the expansion of our fleet, as well as higher travel costs related to government costs.
Ryan Goepel: Now turning to our financial results.
Ryan Goepel: Please note that all financial results today are discussed today are as of March 31, 2024, well variance commentary is on a year over year basis, unless stated otherwise revenue increased 67% from $53 8 million from the $32 2 million in the prior year, driven primarily by higher block hours flown and the aircraft fleet expansion as well as continued.
Ryan Goepel: This also includes approximately $1 million of non-operating expenses and charges related to the unwinding of non-core businesses and other one-time items during the quarter. Net loss was $6.3 million compared to $6.1 million in the year-ago quarter. However, net loss per share remained unchanged from a year ago at $0.11 per basic and diluted share.
Ryan Goepel: EBITDAR increased approximately 16 times from $9.3 million compared to $600,000, driven primarily by the increase in revenue, improved operating margins, higher average charter rates, and higher utilization of ERCOR. Turning to liquidity, we ended the quarter with cash and restricted cash of $12.1 million compared to $17.7 million at December 31, 2023.
Ryan Goepel: Demand for passenger easy my insurance card charter flights looking further into our sales charter revenue increased 27% to 34 million compared to $26 7 million.
Ryan Goepel: See my revenue increased four times to $18 6 million compared to $4 7 million all the other revenue increased to $1 2 million compared to 700000.
Ryan Goepel: Total operating expenses were $58 4 million compared to 32 3 million driven primarily by higher aircraft rent and maintenance and personnel cost associated with the expansion of our fleet as well as higher travel costs related to government contract.
Ryan Goepel: This also includes approximately $1 million of nonoperational expenses and charges related to the unwinding of noncore businesses and other one time items during the quarter net loss was $6 3 million compared to $6 1 million in the year over year ago quarter net loss per share remained unchanged from year ago, and 11 cents per basic and diluted share.
Ryan Goepel: EBITDAR increased approximately 16 times from 9.43 million compared to 600000, driven primarily by the increase in revenue and pre the operating margins higher average charter rates and higher utilization of aircraft turning to liquidity we.
Ryan Goepel: Ended the quarter with cash and restricted cash of $12 1 million compared to $17 7 million at December 31, 2023 remain very comfortable with our liquidity position as we have ample runway to execute on our growth project objectives and turn cash flow positive.
Ryan Goepel: We remain very comfortable with the liquidity position as we have ample runway to execute on our growth objectives and turn cash flow positive. Before concluding and opening the call for Q&A, I'd like to reiterate a few key themes we've covered. We've eliminated non-core businesses and are now operating with a renewed focus on our core competency as a narrow-body charter airline. This refined focus will enable us to continue to expand our fleet and provide customers with industry-leading service while delivering sustainable growth and profitability.
Ryan Goepel: Before concluding and opening the call for Q&A and I'd like to reiterate a few key themes we've covered today.
Ryan Goepel: We've eliminated noncore businesses and now operating with a renewed focus on our core competency as a narrow body charter airline.
Ryan Goepel: This refined focus will enable us to continue to expand our fleet and provide customers with industry, leading service wasn't remain sustainable growth and profitability. We're still in the early stages of this new direction for global ex However, we are well positioned to execute on our plans, we look forward to providing an update in the quarters ahead.
Ryan Goepel: We are still in the early stages of this new direction for GlobalX, but we are well-positioned to execute on our plans. We look forward to providing you with an update in the quarters ahead. This concludes our prepared remarks. We'll be glad to answer any questions now. Operator, back to you.
Ryan Goepel: This concludes our prepared remarks, we'll be glad to answer any questions now operator back to you.
Speaker Change: Thanks, Chris and Ryan and thanks, everyone for participating on the conference call as we gather the cube for live questions. We'd first like to address questions that have come in via email over the past couple of weeks as well as as recently as this morning.
Operator: Thanks, Chris and Ryan, and thanks, everyone, for participating in the conference call. As we gather the queue for live questions, we'd first like to address questions that have come in via email over the past couple of weeks, as well as questions that have come in this morning. So, kicking off here, Chris, Ryan, can you guys share any color on the changes in demand or customer behavior following the recent IARO bankruptcy early last month? I'll take that one.
Operator: So kicking off here.
Operator: Chris Ryan can you guys share any color on the changes in demand or customer behavior. Following the recent <unk> bankruptcy early last month.
Ryan Goepel: I'll take that one. They were a major operator within the charter airline industry, and today, there's an opportunity for the remaining operators to gain share. We believe it'll be several months before the impact is fully felt across the market. However, we're already beginning to see some of the early effects as these customers turn to alternative solutions for charter flights. With respect to Global X, as mentioned in our prepared remarks, we've been able to fulfill additional flights for a key government agency customer that is now flying over 1,000 block hours per month with us. Additionally, we're already seeing price normalization as operators are no longer competing with discounted fares that appeared during the wind-down period in Q1.
Ryan Goepel: I'll take that one.
Ryan Goepel: They were a major operator within the charter airline industry and today, there is an opportunity for the remaining operators to gain share and.
Ryan Goepel: We believe it'll be several months before the impact is fully felt across the market. However, we are already beginning to see some of the early effects of these customers turned alternative solutions for charter flights with respect to global X as mentioned in our prepared remarks, we've been able to fulfill additional flights with four key government agency customer. There is now flying over a thousand block hours per per month with us.
Ryan Goepel: We're already seeing price normalization as operators are no longer competing with discounted fares. It appeared during the wind down period.
Ryan Goepel: In Q1.
Speaker Change: Great and can you give us an update on the state of the cargo business and maybe the cargo market more broadly.
Ryan Goepel: Great. And can you give us an update on the state of the cargo business and, maybe, the cargo market more broadly?
Speaker Change: Yeah I'll get this one as well we continue to see long term opportunity in cargo, but for now it's a difficult operating environment. The key driver here is going to be capacity coming out of the system.
Ryan Goepel: I'll get this one as well. We continue to see long-term opportunities in cargo, but for now, it's a difficult operating environment. The key driver here is going to be capacity coming out of the system as the older aircraft age out of service with some of the larger operators. This is something we're beginning to see, but it's not a uniform process. That said, we have a renewed sales team that is putting in the effort to win new cargo business, and recent progress has been really encouraging. Overall, we remain positive about the long-term prospects of cargo.
Ryan Goepel: As the older aircraft age out of service with some of the larger operators, which is what this is something we're beginning to see but it's not a uniform process that said Oh, we have a renewed our sales team is dedicating efforts to win new cargo business and recent progress has been really encouraging overall, we remain positive on the long term prospects of cargo.
Ryan Goepel: Yeah.
Unknown Executive: Yeah, and I would add to Ryan's remark here as well that, you know, our product is a very modern product to service the cargo market that is currently being serviced by very aged or aging aircraft of the later stage of light aircraft, which are predominantly not particularly fuel efficient. Our new product is extraordinarily fuel efficient and provides a very compelling competitive alternative to the market. So, as Ryan said, as we continue to see aging aircraft being phased out of service in North America, we do expect our aircraft to become a very compelling alternative for our shippers.
Ryan Goepel: To Ryan sorry, Mark here as well.
Unknown Executive: You know our product is a very modern product to them to serve as the cargo market that currently is being serviced by where age aging aircraft as with later stage of fly the aircraft, which predominantly are not particularly fuel efficient new product is extraordinary and fuel efficient and provides it.
Unknown Executive: Very compelling competitive alternative and an end to the market. So as Ryan said as we continue to see the aging aircraft being phased out of the service in North America would you expect.
Unknown Executive: We do expect our craft to become a very compelling alternative for our shippers.
Unknown Executive: Yeah.
Ryan Goepel: Thanks, Chris.
Ryan Goepel: This next one, last month you announced the Department of Transportation authorized the approval to expand your fleet to 20 aircraft. Do you plan to continue to rent these aircraft, or will any of these be purchased? I think I'll take the latter.
Speaker Change: Next one last month, you announced the department of transportation authorized the approval to expand your fleet to 20 aircraft do you plan to continue to rent these aircraft or will any of these be purchased.
Ryan Goepel: I think I'll take this one as well. So these aircrafts will be rented we are open to the idea of purchasing aircraft down the line and we believe there could be advantageous aspects of purchasing versus renting. However, do we not see a need to deviate from our current model at this time.
Ryan Goepel: I think I'll take this one as well. So these aircraft will be rented. We are open to the idea of purchasing aircraft down the line, and we believe there could be advantageous aspects of purchasing versus renting. However, we do not see a need to deviate from our current model at this time.
Ryan Goepel: We are pleased to receive the DOT authorization to expand our fleet and is, as I mentioned earlier, well positioned to execute the suspension this summer. Specifically, as we think about tail numbers, the serial numbers, you know, for the aircraft that we're bringing on board, the next four, the next four passenger ones will be 3349, 3869, 3670, and 1153. So the 3349 is on the ground here with the FAA. 3869 is in paint, and we'll move into the FAA approval process as soon as it comes out.
Ryan Goepel: We were pleased to receive the D O T authorization to expand our fleet and it just hasnt mentioned earlier well position to execute the suspension.
Ryan Goepel: Number specifically as we think about tail numbers.
Ryan Goepel: The serial numbers you know for the aircraft that we're bringing onboard the next for.
Ryan Goepel: And then 3670 will go into the FAA process as soon as 3869 is approved. 1153, we expect to have, and we should hopefully get all those aircraft done by June slash July. Again, the FAA process is one that, you know, we can't control, but that is the last step in this process.
Ryan Goepel: The next four passenger ones will be 3349386936701, 11, 53, so the 334 times on the ground here in the with the F. A a 3869 is in paint and we will move into the FAA approval process as soon as it comes out and then 3670 well go into the FAA process as soon as 3869.
Ryan Goepel: The proof 11 53 are we expect to have in those we should hopefully get all those aircraft done by June slashed July again, Esa process is one that we can't control.
Ryan Goepel: 1153, which we're hoping to get to August, that's still in the maintenance process, you know, the maintenance cycle, which is a little more unpredictable, but we're hoping to get that in by August. The next aircraft after that is 1938. It's a freighter.
Ryan Goepel: But that is the last step in this process 11, 53, which we're hoping to get to August that's still in the maintenance process. You know the maintenance cycle, which is a little more unpredictable, but we're hoping to get that in by August. The next aircraft. After that is a 1938 its afraid or are we expect to see that sometime in the summer. We also be returning one aircrafts.
Ryan Goepel: We expect to see that sometime in the summer. We'll also be returning one aircraft as its lease is expired, and the lessor is asking to take it back. That's 3605. We'll go back at some point in the summer. So all of those aircraft, when you add them together, will get us to our 20 aircraft this summer.
Ryan Goepel: The leases expired in the air the lessors asking to take it back. That's 30 605 will go back at some point in the summer so.
Ryan Goepel: All of that aircrafts when you add it together will get us to our 20 aircraft for summer.
Ryan Goepel: Great.
Ryan Goepel: And are you moving forward with the electric commuter flights or the warehouse? You mentioned these were on pause on the last call, but are these some of the discontinued operations that you referenced earlier today?
Speaker Change: And are you moving forward with the electric commuter flights or the warehouse you mentioned these were on pause on the last call but are these some of the discontinued operations that you referenced earlier today.
Ryan Goepel: Yeah, well, we perform best when focused on our core competency as a narrow-body charter airline, and if we're able to operate, you know, with 12 passenger aircraft flying full-time, we believe we'll be able to achieve break-even operations. As Chris said earlier, growth, even as robust as ours, without profitability is unsustainable. Right now, the path to profitable growth is by focusing on what we do best and not getting distracted with business ventures that deviate from our core competence. For these reasons, we are no longer pursuing those other ventures.
Ryan Goepel: Yeah, well, we perform best when focused on our core competency as a narrow body charter our airline and if we're able to operate with 12 passenger aircrafts like full time, but we believe we will be able to achieve breakeven operations as Chris said earlier growth, even as robust as ours without profitability is unsustainable, but right now the path to profitable growth is by focusing on what we do best.
Ryan Goepel: And not getting distracted with business ventures that deviate from our core competency.
Ryan Goepel: These reasons, we are no longer pursuing those other ventures at this time.
Speaker Change: Okay and lastly, the last one here for the email questions.
Ryan Goepel: Okay, and last one here for the emailed questions. Ryan, you mentioned breakeven operations earlier. Is this something we should expect in 2024? Yeah. Thank you for the questions.
Ryan Goepel: Ryan you mentioned breakeven operations earlier is this something we should expect in 2024.
Ryan Goepel: Yeah, thank you for the questions. We're not providing formal guidance at this time. Chris and I believe we need to deliver results before making promises to our investors, and it's still relatively early in the implementation of our new strategy for GlobalX. That being said, this color we plan to add and provide in the future.
Ryan Goepel: Yeah. Thank you for the questions, we're not providing formal guidance at this time, Chris and I believe we need to deliver results before making promises to our investors and it's still relatively early in the implementation of our new strategy for global ex that being said this color we plan to add and provide in future calls.
Ryan Goepel: Excellent.
Operator: Operator, do you mind opening it up for live Q&A? Of course.
Speaker Change: Operator would you mind opening it up for live Q&A.
Speaker Change: Of course.
Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key.
Speaker Change: We will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
Operator: Confirmation tone will indicate your line is in the question queue.
Operator: You May press Star two if you would like to remove your question from the Q.
Operator: For our participation for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.
Operator: One moment, please, while we poll for questions. Thank you. Our first question comes from the line of Brian Foote with Broadway Capital Management. Please proceed with your question.
Operator: Thank you. Our first question comes from the line of Brian Foote with Broadway Capital Management. Please proceed with your question.
Unknown Executive: Thank you and good morning.
Unknown Executive: Thank you and good morning. My first question is regarding the upfront expenses that you guys typically break out during the quarter for new pilots, new training, effectively as you grow the fleet. You have personnel that aren't productive. Is there a number that you could call out related to that for this past quarter?
Unknown Executive: My first question is regarding.
Unknown Executive: The upfront expenses that you guys typically break out during the quarter for new pilots new training effectively as you grow the fleet.
Unknown Executive: You have a personnel that's alright adopted this is there a number that you could call out related to that.
Unknown Executive: This past quarter.
Speaker Change: Yeah, So I think in the prior quarter it was around $7 million, we slowed down our hiring in Q1 and so when you think about what's training and I would almost call excess pilots, which is kind of the cost of carrying pilots in excess of the available net aircrafts keeping in mind for the quarter. When you look at what our available aircraft, where we effectively only.
Ryan Goepel: Yeah, so I think in the prior quarter, it was around 7 million. You know, we slowed down our hiring in Q1.
Ryan Goepel: So when you think about what's training, and I would almost call it excess pilots, which is kind of the cost of carrying pilots in excess of the available net aircraft. Keeping in mind, for the quarter, when you look at what our available aircraft were, we effectively only had 10 active passenger and two freighter aircraft, even though we had 15 on the books operating. The reason for the difference is one of the passenger aircraft was in heavy maintenance, kind of back to back to back; there were three different aircraft that went through it, which we tend to do in the first quarter because we want to have them available for the busy summer.
Ryan Goepel: Had 10 active passenger to freighter aircrafts are even though we had a 15 on the on the books operating are the reason for the difference is one of the passenger aircraft was in heavy maintenance I kind of back to back to back there's three different aircraft I went through it which we tend to do in the first quarter because it is that we want to have them avail.
Ryan Goepel: When you look at the freighters, we had two aircraft that were busy, were on the certificate, and one was in a long-term repair, which we had. So the number you're looking for is around 5 million, which we've alluded to before, would be related to those costs.
Ryan Goepel: For the busy summer Ah when you look at the freighters. We had two aircrafts that were busy at where were on a significant one was in our long term repair, which we have so the the number youre looking for is around $5 million, which we've alluded to before.
Ryan Goepel: We would be related to those costs.
Unknown Executive: Okay, great. And if I might have one more. When you look at the quarter on a monthly basis, sequentially, was there a cash flow break-even or cash generative month? Or we look at the shape as we exit the quarter, and we're in May already. Given the number of the plans out there, are you currently cash generative?
Speaker Change: Okay, great and if I might have one more.
Unknown Executive: You you look at the quarter on a monthly basis sequentially was there a cash flow breakeven or a cash generative.
Unknown Executive: Months or Oh, we look at the shape as we exit the quarter and we're in May already given the number of the planes out. There are you are you currently cash generative.
Ryan Goepel: So, when you look at the months, you know, January, February is a little bit of a shorter month, but March was clearly the best month of the three and was positive. We're hoping to continue that momentum through April. As we've seen, if you've checked our block hours, we had about a 30% increase in our block hours of flying in April versus March.
Unknown Executive: So when you look at the months you know I'm sure. You know January you know February is a little bit of a shorter months, but March was clearly the best month of the three and was positive.
Ryan Goepel: We're hoping to continue that momentum through April as we've seen if you've tracked or block hours, we had about a 30% increase in our block hours of flying in April versus March.
Unknown Executive: And just a side question to that: how much of that is attributable to IARO or any other factors in the market, and how much of that nice 30% growth is organic, as you classify it?
Unknown Executive: And just a side question to that how much of that is attributable to a two two I arrow or any other factors in the market and how much of that.
Unknown Executive: Nice 30% growth is organic as you classify.
Ryan Goepel: I would say, I think we saw a bit of a pickup in cargo at the end of April, which was great, which is kind of obviously a key focus for us. One of the aspects of iAero kind of going, you know, not being available as we're starting to see some of our contracts, they're utilizing existing aircraft more. And so, you know, I think a couple hundred of those hours could be attributable to that. But I think that's also kind of how we see it going forward.
Unknown Executive: I would say I think we saw a bit of a pickup in cargo and at the end of April which was which was great which is kind of obviously a key focus of us one of the aspects of I arrow kind of going.
Ryan Goepel: Not being available as we're starting to see some of our contracts, they're utilizing existing aircrafts more.
Ryan Goepel: And so you know I think a couple of hundred of those hours can be attributable to that but I think that's also kind of how we see it going forward.
Super: Super Thanks, guys.
Unknown Executive: Super. Hey, thanks, guys. Thanks, Brian.
Speaker Change: Thanks, Brian.
Speaker Change: Thank you there are no further questions at this time.
Operator: Thank you. There are no further questions at this time. This concludes today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.
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unknown: This concludes today's conference call you may disconnect. Your phone lines at this time and have a wonderful day. Thank you for your participation.
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