Executive Summary / Key Takeaways

• Global Crossing Airlines (JETMF) is executing a strategic transformation, shifting focus from lower-margin ad-hoc charters to higher-margin, predictable ACMI (Aircraft, Crew, Maintenance, Insurance) contracts, primarily leveraging its growing Airbus A320 family fleet.
• This strategic pivot, coupled with disciplined cost management and improving operational efficiency, is driving significant revenue growth and has propelled the company to GAAP profitability in Q1 2025, a quarter traditionally challenging for charter operators.
• The company's Airbus A320/A321 fleet offers tangible operational advantages, including better fuel efficiency and range compared to some competitors, while the A321F cargo variant provides superior capacity and fuel burn relative to the Boeing 757-200.
• Despite facing a soft cargo market and managing liquidity challenges, GlobalX is expanding its fleet, securing long-term contracts (notably in government and international passenger segments), and exploring aircraft ownership to strengthen its balance sheet and mitigate rising lease costs.
• Key factors for investors to monitor include the successful integration of new aircraft, execution on cost savings targets, securing necessary financing, and potential recovery in the cargo market, all of which are critical to achieving sustained profitability and realizing the company's goal of becoming a leading narrow-body charter operator.

The Ascent of GlobalX: Forging a Niche in the Skies

Global Crossing Airlines Group Inc. (JETMF), operating under the GlobalX brand, is carving out a distinct identity in the specialized world of ACMI and charter air transport. Eschewing the traditional scheduled service model, GlobalX focuses on providing customized, non-scheduled passenger and cargo flights across the United States, Caribbean, Latin America, and Europe. Its core strategy revolves around becoming the best-in-class U.S. narrow-body ACMI charter airline, built on a foundation of operational excellence, customer-centric service, and a carefully selected fleet.

The company's journey has seen a significant evolution since commencing full operations around 2022. Initially navigating the complexities of a startup airline, including a spin-out of Canada Jetlines (CJET) and the subsequent financial implications, GlobalX has strategically honed its business model. A pivotal shift, particularly emphasized over the past year, has been a deliberate move away from a heavier reliance on transactional, lower-margin charter flights towards securing more predictable, higher-margin ACMI contracts. This strategic pivot is not merely a change in revenue mix; it represents a fundamental recalibration aimed at enhancing profitability and operational stability.

Central to GlobalX's operational strategy is its exclusive focus on the Airbus A320 family of aircraft (A319, A320, and A321). This single-fleet approach offers inherent operational efficiencies, simplifying crew training, maintenance, and spare parts management compared to operating a diverse fleet from multiple manufacturers. Management highlights specific, quantifiable advantages of the Airbus narrow-bodies over competing aircraft like the Boeing (BA) 737-800, citing lower fuel burn, superior range allowing non-stop flights from Miami to key destinations, excellent maintenance dispatch reliability, and better passenger comfort (seat width, cargo bin volume).

Furthermore, GlobalX has strategically deployed the Airbus A321 converted freighter (A321F) in its cargo operations. This aircraft is positioned as a technologically superior alternative in the narrow-body cargo market. Management explicitly states that the A321F delivers 14% more containerized capacity and offers a 19% reduction in fuel consumption compared to the Boeing 757-200, a common aircraft in this segment. These quantifiable benefits are key to GlobalX's aim of offering industry-leading pricing and operational efficiency in the air freight market, despite facing a challenging macro environment for cargo.

In the competitive landscape, GlobalX operates alongside larger, more diversified players like Atlas Air Worldwide (AAWW) and Air Transport Services Group (ATSG), which have significant ACMI and cargo operations, as well as passenger airlines like JetBlue Airways (JBLU) and Southwest Airlines (LUV) that may offer some charter services. While AAWW and ATSG possess greater scale and established global networks, GlobalX differentiates itself through its specialized focus on the A320 family, its emphasis on high-quality, reliable service (aiming to set a "gold standard" in charter operations), and its increasing penetration into specific niche markets like government contracts and collegiate sports charters. Management believes this focus allows them to not just compete, but to actively create new market share by providing a level of service often lacking among other charter operators.

Strategic Execution Drives Improved Performance

The impact of GlobalX's strategic shift and operational focus is becoming increasingly evident in its financial performance. The first quarter of 2025 marked a significant milestone, with the company achieving GAAP net income of $0.2 million, a substantial improvement from a net loss of $6.4 million in the prior-year period. This return to profitability in a seasonally weak quarter underscores the positive momentum generated by the strategic initiatives implemented over the past year.

Revenue in Q1 2025 reached a record $66.6 million, a 24% increase year-over-year from $53.8 million. This growth was primarily fueled by the robust expansion of the ACMI business, which surged 84.3% to $34.3 million and now constitutes 52% of total revenue, up from 35% in Q1 2024. This growth was directly tied to an expanded fleet, strong customer demand, and a notable 10% increase in average revenue per block hour for ACMI contracts, reaching $6,740. Conversely, Charter revenue decreased by 10.3% to $30.5 million, reflecting the intentional reallocation of aircraft towards ACMI flying.

Total block hours flown in Q1 2025 increased by 29% year-over-year, demonstrating the company's ability to effectively deploy its growing fleet. Average utilization per available aircraft also improved by 6.2%. The significant improvement in operating income, moving from a loss of $4.6 million in Q1 2024 to an income of $3.1 million in Q1 2025, is a direct result of revenue growth outpacing the increase in operating expenses. This margin improvement is attributed to higher rates secured for both ACMI and Charter services, increased utilization, and the benefits of scale, such as a 13% reduction in Salaries, Wages, and Benefits expense per block hour.

Looking back at 2024, the company demonstrated consistent progress throughout the year, achieving the high end of its Q4 and full-year guidance. Full-year 2024 revenue reached $223.8 million, a 40% increase over 2023. The strategic shift was clearly visible, with ACMI revenue in Q4 2024 growing more than three times year-over-year to $35 million, representing 60% of total revenue, a dramatic change from 22% in Q4 2023. This performance highlights the effectiveness of the management team and the execution of the strategic plan.

Operational resilience was tested in Q3 2024 when unforeseen maintenance events, including severe weather and bird strikes, took a significant portion of the passenger fleet offline. Despite this unprecedented challenge, the company's operational framework allowed for the rapid return to service of most impacted aircraft, minimizing disruption and demonstrating the team's capability.

While the passenger market remains strong, driven by factors like limited aircraft supply and increased demand from colleges and government agencies, the cargo market has presented headwinds. Management acknowledges the softness in the cargo segment due to macro conditions and excess capacity, which contributed to losses in 2024. In response, GlobalX has taken steps to mitigate exposure, including deferring cargo aircraft deliveries and focusing on securing long-term contracts for its existing four cargo aircraft, aiming to reach breakeven or profitability in this segment.

Liquidity remains a critical focus area. As of March 31, 2025, the company reported a working capital deficit of $44.90 million and a retained deficit of $70.40 million, raising substantial doubt about its ability to continue as a going concern without additional financing. However, management expresses confidence that augmented cash reserves ($7.3 million unrestricted cash as of March 31, 2025), coupled with anticipated sales growth, will address near-term liquidity needs.

The company is actively evaluating options for additional debt or equity financing and is strategically shifting its fleet acquisition model to include aircraft ownership. This move, starting with a letter of intent to acquire its first airframe, is intended to strengthen the balance sheet, optimize capital deployment, and mitigate exposure to high lease rates, providing a more sustainable long-term financial structure compared to a purely leased fleet. Full year 2024 saw positive operating cash flow of over $8 million, a significant improvement, with most of this generated in the latter half of the year.

Outlook and Risks

GlobalX's outlook is anchored in the continued execution of its strategic plan and the favorable dynamics in the passenger charter market. Management is targeting fleet expansion to 19 passenger aircraft and 4 cargo aircraft by the end of 2025, with plans to add 4 to 6 aircraft per year thereafter, aiming for approximately 35 aircraft by the end of 2027. Key contracts already secured underpin this growth, including a five-year subcontract with CSI Aviation for U.S. Immigration and Customs Enforcement flights expected to generate approximately $65 million in annualized revenue, a minimum $5 million additional revenue from a third aircraft for TUI Airways (TUI) in summer 2025, and over 1,800 block hours guaranteed by a seven-month ACMI contract with a South American tour operator. Summer 2025 passenger schedules are reported as nearly at full capacity, and all four cargo aircraft have work committed for Q3 2025.

Management believes 2025 is the year the company "will shine," fueled by the strength of its commercial business and the confidence in delivering on budgets. The focus remains on maximizing aircraft utilization, particularly selling the last available block hours which are considered highly accretive, and achieving significant cost savings, targeting $2 million to $3 million in 2025, including $2 million from a 35% reduction in insurance rates.

Despite the positive momentum and clear strategic direction, several risks could impact the company's trajectory. The going concern risk highlighted in the 10-Q is material, contingent on securing additional financing and achieving sustained profitability. The competitive nature of the market, including established players like AAWW and ATSG and the evolving strategies of airlines like Eastern Airlines Express, Breeze Airways, and Avelo, requires continuous operational excellence and effective differentiation. The softness in the cargo market could persist, impacting the profitability of that segment. Successful integration of new aircraft and the transition to a mixed ownership/leasing model present operational and financial execution risks. Furthermore, external factors like fuel price volatility, economic conditions, and unforeseen operational disruptions (as experienced in Q3 2024) could affect performance.

Conclusion

Global Crossing Airlines (JETMF) is undergoing a significant and seemingly successful transformation, leveraging its specialized Airbus fleet and a strategic pivot towards higher-margin ACMI contracts to drive revenue growth and improve profitability. The return to GAAP profitability in Q1 2025, coupled with a clear roadmap for fleet expansion and cost optimization, provides a compelling narrative of a company executing effectively on its core strategy. While the going concern risk and the challenging cargo market environment warrant careful consideration, the strong demand in the passenger segment, coupled with secured long-term contracts and a disciplined approach to operations and fleet management, positions GlobalX for potential continued improvement. Investors should closely monitor the company's progress in securing necessary financing, integrating new aircraft, achieving cost targets, and demonstrating sustained profitability as key indicators of its ability to realize its ambition of becoming a leading force in the narrow-body charter market.