Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Global Crossing Airlines Group Inc (JETMF, Financial) reported double-digit revenue growth with record block hours flown, driven by the ACMI business which almost doubled to $37 million in revenue compared to the year-ago quarter.
- The company successfully managed unforeseen maintenance challenges, restoring four out of five affected passenger aircraft back to service by early October, demonstrating operational resilience.
- Global Crossing Airlines Group Inc (JETMF) expanded its fleet with the delivery of two additional aircraft, bringing the total to 18, and has signed letters of intent for four more aircraft to be added in the second half of next year.
- The company secured contracts with over 10 college basketball teams for the '23-'24 season, reflecting its strength in the collegiate sports sector.
- Global Crossing Airlines Group Inc (JETMF) announced a new partnership with Airblox, operating round-trip cargo flights between Chicago and San Juan, enhancing its cargo operations with improved efficiency and pricing.
Negative Points
- The company faced significant operational disruptions in September, losing approximately 35% of its fleet for almost two weeks due to severe weather, bird strikes, and third-party vendor damage.
- Cargo utilization was down 77% due to the loss of the US Postal Service contract, impacting overall revenue.
- Despite revenue growth, the company reported a net loss of $4.9 million, unchanged from the previous year, indicating ongoing financial challenges.
- The company's cash and restricted cash decreased to $7.8 million from $10.4 million at the end of June 2024, reflecting liquidity pressures.
- The cargo charter market remains soft due to macroeconomic factors, leading to deferred cargo aircraft deliveries and a strategic shift towards passenger aircraft.
Q & A Highlights
Q: Can you provide more color on what led to the sequential increase in block hours flown? Is this rate of growth sustainable?
A: Ryan Goepel, President and CFO, explained that the 15% increase in block hours in Q3 compared to Q2 was driven by new contract wins and effective fleet deployment, along with overseas seasonal demand. However, Q4 block hours are expected to be lower due to the absence of European seasonal demand, but the rate per block hour is expected to improve.
Q: Can you expand on the growing demand in the passenger market? And do you expect this to continue into 2025?
A: Ryan Goepel noted that demand in the passenger market is accelerating due to limited aircraft supply, reduced competition, and increased air charter use among various groups. This trend is expected to continue into 2025, with a focus on passenger aircraft deliveries over cargo to meet market needs.
Q: How do you plan to achieve your goal of becoming the nation's largest charter airline?
A: Chris Jamroz, Executive Chairman, stated that the strategy involves operational reliability, customer relationships, and expanding fleet capacity. The focus is on high-margin ACMI contracts and strategic partnerships, along with investing in infrastructure and management to support growth.
Q: Can you provide an update on the cargo charter market?
A: Ryan Goepel mentioned that the cargo market is soft due to macro factors like the US Postal Service contract shift and excess capacity. The company has deferred cargo deliveries and secured bookings for three out of four cargo aircraft in Q4 to capitalize on holiday demand, aiming for breakeven or profitability.
Q: What does the delivery schedule for 2025 look like, and how does it split between passenger and cargo aircraft?
A: Ryan Goepel explained that four leased aircraft are expected in the second half of 2025, with potential for more depending on market conditions. The focus is on maintaining discipline in acquisitions and exploring both leasing and purchasing options.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
