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Global Crossing Airlines Group Inc. (GlobalX), on May 27, 2021, released more details regarding its FAA certification progress and the Canada Jetlines’ spin-out, during a virtual presentation delivered by GlobalX CEO Ed Wegel and CFO Ryan Goepel.
GlobalX, headquarted in Miami, anticipates an exceptionally busy “couple of months” with the “belief that [the airline] could be flying as of July,” while “simultaneously finalizing the spin-out of Canada Jetlines.”
“We believe these two airlines working together are really a very powerful combination,” said Wegel.
Previously, Jetlines had set out to become Canada’s first true ultra-low-cost carrier (ULCC), but couldn’t get off the ground. At the time, the Vancouver, British Columbia-based carrier accused WestJet’s Swoop of “purposely pricing its airfares lower” as an attempt to drive other low-cost operators out of the market.
In July 2019, Jetlines staged an event “in which skydivers protested the Competition Bureau’s perceived lack of action to protect competition in Canada’s airline industry.” Four planes and 18 skydivers encouraged supporters to visit Jetlines’ website to sign a petition supporting increased competition and lower fares.
After efforts to secure over $40 million in additional financing fell flat, Jetlines postponed its launch indefinitely in October 2019.
In June 2020, U.S.-based charter and cargo operator GlobalX took over “the shell of the past Jetlines.”
In the last six months, GlobalX has “signed for more passenger and cargo aircraft under LOIs” while building cabin and cockpit crew teams to staff its fleet fully.
As restrictions lift across the U.S. and airports become busier, Wegel said GlobalX’s “strategy to work through the pandemic and seek to emerge on the other side as a certificated airline [was] the right strategy, [allowing GlobalX to avoid] a little over a million dollars in additional cost.”
Three of four certification phases are now complete, as GlobalX works towards the U.S. flag carrier certification, allowing it to operate for other airlines. Completion of certification is anticipated over the next few weeks.
“We have not had any impact on our contracts or the flying that we have put on the books for starting in July and through the summer,” said Wegel. At this stage, they are exactly where they hoped to be.
The primary aircraft that GlobalX is operating and certifying with is the A320 passenger aircraft; the carrier took delivery of its first A320 in January 2021, and has been training on the type since. GlobalX will also operate the A321 passenger aircraft. The airline took delivery of its first A321 in April 2021.
Vendor agreements have also been signed to complete a three-year cargo plan. Branding will be rolled out as the certification is completed.
Moving forward, GlobalX anticipates delivery of the first A321 Freighter late this year in December 2021. “We anticipate that we’ll be able to put that aircraft onto our certificate in January 2022,” said Wegel.
On the financial side, “sufficient cash is on hand, and available [to] ramp up to six passenger aircraft and at least one A321 Freighter,” said Wegel.
“And frankly, given where we are with revenue contracts and our cash flow, that number is actually much higher. We probably could increase that to eight passenger aircraft and two to three freighters over the near term,” he said.
GlobalX is looking toward opportunities to grow its narrowbody and widebody fleet. “We’ve started to look at the A330 [passenger aircraft], which is essentially an A320 which is grossed up in size. . . . We’re quite confident that we’ll be moving into A330s sometime next year,” explained Wegel. The airline expects to have between 10 and 12 aircraft in its fleet in the next 18 months.
Regarding the spin-out of Canada Jetlines, Wegel said “the opportunity in Canada for this airline is strong. The ability for these two airlines to work together in combination; to synergistically move airplanes back and forth [will] reduce costs on both sides.”
And according to Jetlines’ founding director Ravinder Minhas, the pandemic has offered a unique opportunity to capitalize on the availability of significantly discounted aircraft.
“We’re able to get airplanes at one heck of a price. Where it looks like things are down, that’s the best time to get in,” said Minhas during an appearance on CBC’s The National earlier this month.
GlobalX will operate independently of Jetlines, which will operate as a Canadian charter airline once regulatory approvals are in place. Jetlines will again be looking to secure private funding to launch operations.
GlobalX recently announced that its shareholders (invested by June 24) will receive one share of Canada Jetlines for every two shares of GlobalX.
“Pending regulatory approval, GlobalX’s reverse take-over of Canada Jetlines will maximize the value of the Jetllines’ assets and drive value for investors,” the airline said.
Also in GlobalX’s future plans is a south Florida maintenance complex to host offices and training facilities. This is currently in the planning and development phase.
