Global Crossing Airlines Group Inc
For the period ended Jun 30, 2024. Filed Aug 14, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 14, 2024
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What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-07.
0000950170-24-054348
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0000950170-24-096828
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 69 previous paragraphs and 93 current paragraphs.
38 unchanged; 28 reworded; 18 added; 3 removed; 0 previous and 9 current paragraphs rearranged.
Tables are not compared: 5 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (18)
Current report
Slightly increase pilot headcount from 134 to 136.
Current report
Operated our first flight for the Department of Defense, a key customer representing an important milestone for GlobalX.
Current report
Due to increasingly high demand in 2024, GlobalX also contracted over 1,200 block hours on other carriers to fulfill our customers’ missions.
Current report
Charter revenue for the period decreased $0.5 million or 2.0%, from $25.1 million in 2023 to $24.6 million in 2024. Charter block hours decrease 28.7% from 2,209 to 1,575 resulting in a $7.2 million reduction which was primarily offset by the rate for Charter flying which increased 36.8% from $11,374 per block hour to $15,629 per block hour resulting in a $6.7 million impact. The increase in the rate per block hour is primarily driven by high market demand and a shortage of supply as competitors reduced capacity to increase demand, higher fuel and handling fees and the mix of flying. The decrease in charter block hours was due to the increase in the number of aircraft in the ACMI segment.
Current report
Aircraft fuel decreased by $0.5 million, from $6.1 million to $5.6 million, or 8.0%, primarily due to the volume of non-ACMI block hours which decreased 8.6% or $0.5 million. This was partially offset by an increase in fuel prices by 0.7%.
Current report
Maintenance, materials, and repairs increased by $0.9 million, from $1.8 million to $2.6 million, or 49.7%. $1.5 million increase was primarily due to volume from the increase in both the number of aircraft and the number of block hours flown which increased 3,006 or 83.8% from 3,585 to 6,591 block hours. This was primarily offset by $0.6 million due to the rate per block hour improvement of 18.6% from $493 per block hour to $401 per block hour.
Current report
Travel increased $1.8 million, from $1.3 million to $3.1 million or 131.5%, this increase was driven by increased activity at newly created bases to support new customers resulting in additional hotel, flight and meal costs.
Current report
Operating income/loss increased $9.3 million, from an operating loss of $6.8 million to an operating profit of $2.5 million. This was a direct result of GlobalX’s ability to grow its revenue faster than its cost structure as the airline works towards achieving scale and profitability. There are several factors driving the improved margins. The first factor is rates as the Company was able to secure higher rates for both ACMI and Charter contracts. The Company’s ACMI rate grew 57.1%, from $4,233 per block hour to $6,615 per block hour, while Charter rate per block hour is up 36.8% from $11,374 per block hour to $15,629 per block hour. The second factor is scale. As an example, when measured on a per block hour basis, Salaries, wages, and benefits dropped from $3,386 to $2,507 per block hour, a 25% reduction. There were also savings on a per block hour basis in fuel, maintenance, insurance, and general overhead expenses (other) which combined with the other factors drove the improvement.
Current report
Net Income/Loss
Current report
Net Income/Loss increased by $7.8 million, from a net loss of $7.5 million in 2023 to net income of $0.3 million in 2024. Net income/loss as a percentage improved 103.8%. This was a direct result of GlobalX’s ability to grow its revenue quicker than its cost structure as the airline works towards achieving scale and profitability. There are several factors driving the improved margins. The first factor is rates as the Company was able to secure higher rates for both ACMI and Charter contracts. The Company’s ACMI rate grew 57.1%, from $4,233 per block hour to $6,615 per block hour, while Charter rate per block hour is up 36.8% from $11,374 to $15,629 per block hour. The second factor is scale. As an example, when measured on a per block hour basis, Salaries, wages, and benefits dropped from $3,386 to $2,507 per block hour, a 26.0% reduction. There were also savings on a per block hour basis in fuel, maintenance, insurance, and general overhead expenses (other) which combined with the other factors drove the improvement.
Current report
Charter revenue for the period increased $7.1 million or 13.7%, from $51.6 million in 2023 to $58.6 million in 2024. The rate for Charter flying increased 26.6% from $12,393 per block hour to $15,680 per block hour resulting in a $12.3 million increase. This was offset by a $5.2 million reduction due to charter block hours decreasing 10.1% from 4,160 to 3,739 block hours. The increase in the rate per block hour is primarily driven by high market demand and a shortage of supply as competitors reduced capacity to increase demand, higher fuel and handling fees and the mix of flying. The decrease in charter block hours was due to the increase in the number of aircraft in the ACMI segment.
Current report
Other revenue for the period increased by $1.1 million from $1.1 million in 2023 to $2.2 million in 2024. The increase is primarily driven by ancillary services provided to our customers.
Current report
Operating Expenses
Current report
Salaries, wages, and benefits increased $10.2 million from $23.3 million to $33.5 million, or 43.8%, primarily due to the hiring and training of pilots and other airline personnel necessitated by the growing fleet and operations. The total employees grew 14.1% from 581 to 663 and pilots increased from 114 to 136, or 19.2%. A block hour increase of 75.5% drove $17.6 million increase, offset by $7.4 million due to a reduction in rate per block hour of 18.0%.
Current report
Contracted ground and aviation services increased by $1.6 million from $10.1 million to $11.7 million, or 16.0%. A rate increase or 29% per block hour drove an increase of $2.6 million. This was partially offset by lower charter block hour by 10.1% drove a reduction of $1.0 million.
Current report
Travel increased $3.4 million, from $3.6 million to $7.0 million or 93.5%, $2.7 million was driven by the 75.5% increase in block hours. The remaining $0.7 million variance is driven rate increase by 10.3%, caused by higher flying at outstations, thus raising hotel and meal cost for crews on missions.
Current report
Insurance increased $0.8 million, from $2.4 million to $3.2 million or 34.5%, primarily related to the increase in the number of aircraft.
Current report
Non-operating Expenses
Removed paragraphs (3)
Previous report
Slowed down our hiring of new crew and did not replace crew lost to normal attrition as GlobalX has been carrying excess crew due to delayed deliveries of aircraft. The Company will be right sized with our crew once the 20 th aircraft in added to the operating certificate by mid-2024 and the Cargo business begins to pick back up. In total we reduced our pilot headcount from 138 to 134.
Previous report
Charter revenue for the period increased $7.3 million or 27.3%, from $26.7 million in 2023 to $34.0 million in 2024. The rate for Charter flying increased 18.8% from $13,015 per block hour to $15,468 per block hour creating a $5.3 million impact or 73.9% of the increase. The primary driver for the increase was related to both high market demand and a shortage of supply as competitors reduced capacity. In addition, the number of block hours operated increased 7.1% from 2,053 in 2023 to 2,199 block hours in 2024, driven by the increased number of aircraft available to operate, creating $1.9 million or 26.1% of the increased revenue.
Previous report
Travel increased $2.0 million, from $2.3 million to $4.3 million or 90.0%, $1.9 million or 92.1% was driven by costs incurred to grow a key government contract resulting in an increased number of hotel nights. The remaining $0.2 million variance is driven by the increase in Charter block hours by 7.1% from 2,053 to 2,199.
Reworded paragraphs (28)
Previous wording
During the three months period ended March 31, 2024, the Company refocused the business back to GlobalX’s core competency – operating narrow body charter flights for both passengers and cargo. This led to the cancellation of several initiatives and the prioritization of adding aircraft to our operating certificate. Projects cancelled or in the process of being cancelled include UrbanX, GlobalX Colombia, GlobalX Ecuador, adding ETOP’s capability, the acquisition of a wide body A330 aircraft and the development of a hangar facility at Fort Lauderdale Airport. Not only does the cancellation of these projects represent significant cash savings in 2024, but it also allows the team to devote efforts towards our stated goal of creating the largest narrow body charter operation in North America generating sustainable, long term profits. To achieve this goal, GlobalX continues to invest in its three key assets–certifications, aircraft, and crew.
Current wording
During the six months period ended June 30, 2024, the Company refocused the business back to GlobalX’s core competency – operating narrow body charter flights for both passengers and cargo. This led to the cancellation of several initiatives and the prioritization of adding aircraft to our operating certificate. Projects cancelled, include UrbanX, GlobalX Colombia, GlobalX Ecuador, adding ETOP’s capability, the acquisition of a wide body A330 aircraft and the development of a hangar facility at Fort Lauderdale Airport. Not only does the cancellation of these projects represent significant cash savings in 2024, but it also allows the team to devote efforts towards our stated goal: creating the largest narrow body charter operation in North America generating sustainable, long-term profits. To achieve this goal, GlobalX continues to invest in its three key assets–certifications, aircraft, and crew.
Previous wording
GlobalX achieved the following during the three months period ended March 31, 2024:
Current wording
GlobalX achieved the following during the six months period ended June 30, 2024:
Previous wording
Department of Transportation granted us economic authority to operate 20 aircraft, an increase from 16 on April 2, 2024
Current wording
Department of Transportation granted us economic authority to operate 20 aircraft, an increase from 16
Previous wording
Took delivery of one A320 passenger aircraft and one A321F
Current wording
Took delivery of two A320 passenger aircraft and one A321F.
Previous wording
Completed three heavy maintenance events and six non-heavy maintenance events
Current wording
Completed five heavy maintenance events and 12 non-heavy maintenance events.
Previous wording
Hired and trained 60 people in dispatch, crew scheduling, operation control center and maintenance, people required to operate the volume of flights anticipated over the remainder of 2024.
Current wording
Hired and trained over 70 people in dispatch, crew scheduling, operation control center and maintenance, people required to operate the volume of flights anticipated over the remainder of 2024.
Previous wording
Unlike the cargo market, the passenger market has surging demand resulting in improved aircraft. There are several macro factors, including the supply of aircraft, reduced direct competition, increased reliance on air charter by colleges and a general increased customer demand driving increased demand for our services. GlobalX anticipates the high level of demand will continue through the summer and well into 2025. To address this demand, the Company has prioritized passenger aircraft deliveries over cargo, devoted sales and operational resources to develop long term relationships with key customers and to expand the markets served as opportunities arise. Passenger charter services will be the economic engine for GlobalX in 2024.
Current wording
The passenger market continues to experience surging demand resulting in improved aircraft utilization and improved operating income. There are several factors, including the supply of aircraft, reduced direct competition, increased reliance on air charter by colleges and increased customer demand driving increased demand for our services. GlobalX anticipates the high level of demand will continue through the summer and well into 2025. To address this demand, the Company has prioritized passenger aircraft deliveries over cargo, devoted sales and operational resources to develop long term relationships with key customers and to expand the markets served as opportunities arise. Passenger charter services will be the economic engine for GlobalX in 2024.
Previous wording
GlobalX added the A321F (passenger to freighter) aircraft to its operating certificate during Q1 2023. The Company continues to believe that the A321F will be a highly sought after cargo aircraft over the next few years. During Q1 2024, we had two aircraft offline, one for maintenance and, one for conformity. This left two operational aircraft, both of which generated lower than anticipated revenue. GlobalX attributed the softness of the market to several external factors including the rebid of the USPS contract, general economic conditions and excess capacity in the North American freight market. In response to this slowdown during the quarter, the Company cancelled two aircraft deliveries, elected to take two A321’s as passenger rather than freighter and deferred two other cargo deliveries to 2025. GlobalX is working diligently to place the aircraft we have into long term ACMI contracts and continues to make progress establishing our reputation for on time performance as the market better understands the capabilities of the A321F aircraft. While the Company cannot predict when the cargo market will recover, GlobalX has taken concrete steps to reduce our financial exposure in 2024 while expanding our customer base for the aircraft the Company does have.
Current wording
GlobalX believes in the longer term viability of the A321F (passenger to freighter) cargo aircraft. During Q1 2024, we had two aircraft offline, one for maintenance and, one for conformity. This left two operational aircraft, both of which generated lower than anticipated revenue. GlobalX attributed the softness of the market to several external factors including the rebid of the USPS contract, general economic conditions, and excess capacity in the North American freight market. In response to this slowdown during the quarter, the Company cancelled two aircraft deliveries, elected to take two A321’s as passenger rather than freighter and deferred two other cargo deliveries to 2025. GlobalX is working diligently to place the aircraft we have into long term ACMI contracts and continues to make progress establishing our reputation for on-time performance as the market better understands the capabilities of the A321F aircraft. While the Company cannot predict when the cargo market will recover, GlobalX has taken concrete steps to reduce our financial exposure in 2024 while expanding our customer base for the aircraft the Company does have.
Previous wording
Heavy maintenance checks are expected to be outsourced to FAA-approved service providers. The 6Y and 12Y checks will be primarily paid for using funds from the accrued maintenance reserves paid to lessors under operating leases.
Current wording
Heavy maintenance checks are expected to continue to be outsourced to FAA-approved service providers. The 6Y and 12Y checks will be primarily paid for using funds from the accrued maintenance reserves paid to lessors under operating leases.
Previous wording
Our management team has extensive operating and leadership experience in the airfreight, airline, and aircraft leasing, maintenance, and management industries at companies such as JetBlue Airways, Virgin America, American Airlines, US Airways, Atlas Air, Breeze Airways, Emirates, North American Airlines, Miami Air, Spirit Airlines, Continental Airlines, Pan Am, and Flair Airlines, as well as the United States Army, and Air Force. In addition, our management team has a diversity of experience from other industries at companies such as KBR, Teladoc, Halliburton, Lehman Brothers, and the Burger King Corporation.
Current wording
Our management team has extensive operating and leadership experience in the airfreight, airline, and aircraft leasing, maintenance, and management industries at companies such as JetBlue Airways, Virgin America, American Airlines, US Airways, Atlas Air, Breeze Airways, Miami Air, Spirit Airlines, Continental Airlines, Pan Am, and Flair Airlines, as well as the United States Army, and Air Force.
Previous wording
The analysis of GlobalX results for the three months period ended on March 31, 2024 and 2023 requires an understanding of how the Company fundamentally evolved during that time period. 2023 was only our second year of full operations and was a period where the company was focused on securing new customers, entering new markets, and flying to new locations; primarily in the domestic and Caribbean markets.
Current wording
The analysis of GlobalX results for the three and six-month periods ended on June 30, 2024 and 2023 requires an understanding of how the Company fundamentally evolved during that time period. 2023 was only our second year of full operations and was a period where the company was focused on securing new customers, entering new markets, and flying to new locations; primarily in the domestic and Caribbean markets.
Previous wording
ACMI revenue for the period increased by $13.9 million or 293.7% from $4.7 million in 2023 to $18.6 million in 2024. This variance is primarily driven by a 60.3% increase in the number of available aircraft which resulted in an increase from 1,067 block hours in 2023 to 2,874 block hours in 2024, an increase of 169.2% or 1,807 block hours. This volume accounted for 57.6% or $8.0 million of the increase. The average revenue per block hour increased $2,048 per block hours from $4,431 per block hour in 2023 to $6,480 per block hour in 2024. The rate increase accounted for $5.9 million or 42.4% of the increase. The primary driver for the increase was related to both high market demand and a shortage of supply as competitors reduce capacity.
Current wording
ACMI revenue for the period increased by $26.1 million or 453.4% from $5.8 million in 2023 to $31.9 million in 2024. This variance is primarily driven by an 83.9% increase in the number of available aircraft which resulted in an increase from 1,362 block hours in 2023 to 4,824 block hours in 2024, an increase of 254.5% or 3,463 block hours. This volume accounted for 56.1% or $14.7 million of the revenue increase. The average revenue per block hour increased $2,382 per block hours from $4,233 per block hour in 2023 to $6,615 per block hour in 2024 and accounted for $11.5 million or 43.9% of the revenue increase. The primary driver for the increase was related to both high market demand and a shortage of supply as competitors reduce capacity.
Previous wording
Other revenue for the period increased by $0.5 million from $0.7 million in 2023 to $1.2 million in 2024. The increase is primarily driven by management fees earned related to supporting a winter track program and additional ancillary services provided to our customers.
Current wording
Other revenue for the period increased by $0.4 million from $0.6 million in 2023 to $1.0 million in 2024. The increase is primarily driven by additional ancillary services provided to our customers.
Previous wording
Salaries, wages, and benefits increased $5.6 million from $11.2 million to $16.8 million, or 50.2%, primarily due to the hiring and training of pilots and other airline personnel necessitated by the growing fleet and operations. The total employees grew 31.3% from 467 to 611 and pilots increased from 91 to 133, or 46.1%. Headcount drove 61.4% or $3.4 million of the increase, while 38.4% or $2.2 million was due to an increase in rate per headcount of 14.8%.
Current wording
Salaries, wages, and benefits increased $4.6 million from $12.2 million to $16.7 million, or 37.9%, primarily due to the hiring and training of pilots and other airline personnel necessitated by the growing fleet and operations. The total employees grew 14.1% from 581 to 663 and pilots increased from 114 to 136, or 19.2%. Increase in block hours of 83.8% drove $10.2 million increase, offset by $5.6 million due to a reduction in rate per block hour of 25.0%.
Previous wording
Depreciation and amortization increased $0.7 million, from $0.4 million to $1.2 million or 163.0%, driven by assets acquired to support our airport operations. These assets include, but are not limited to, aircraft deliveries secured on capital leases, computers, software, and rotable inventory.
Current wording
Depreciation and amortization increased $1.0 million, from $0.4 million to $1.4 million or 226.0%, driven by assets acquired to support our airport operations. These assets include, but are not limited to, aircraft deliveries secured on capital leases, computers, software, and rotable inventory.
Previous wording
Contracted ground and aviation services increased by $2.0 million from $4.9 million to $6.9 million, or 42.2%, These costs are directly correlated to the number of Charter hours operated. $17 million or 83.1% of the increase was driven by rate per Charter block hour. The remaining $0.3 million or 16.9% was driven by the increase in Charter block hours by 7.1%
Current wording
Contracted ground and aviation services decreased by $0.4 million from $5.2 million to $4.8 million, or 8.5%, These costs are directly correlated to the number of Charter hours operated. A $1.5 million reduction was primarily driven by the decrease in charter block hours by 28.7%. This was offset by $1.1 million primarily due to an increase in rate by 28.2%.
Previous wording
Insurance increased $0.7 million, from $0.9 million to $1.6 million or 72.2%, primarily related to the increase in the number of aircraft.
Current wording
Insurance increased $0.3 million, from $1.2 million to $1.5 million or 24.8%, primarily related to the increase in the number of aircraft.
Previous wording
Aircraft rent increased $7.1 million, from $5.6 million to $12.8 million or 126.1%, primarily due to the increase in the number of aircraft from 10 to 16 aircraft in the fleet. $3.5 million or 49.2% of the increase is driven by the increase in the number of aircraft being leased, with the remaining $3.6 million or 50.8% due to rate increase per aircraft and short-term ACMI leases from other airlines due to flights sold exceeded capacity available during the period.
Current wording
Aircraft rent increased $7.9 million, from $6.8 million to $14.8 million or 116.1%, primarily due to the increase in the number of aircraft from 10.7 to 16.4 aircraft in the fleet. $3.6 million or 45.9% of the increase is driven by the increase in the number of aircraft being leased, with the remaining $4.3 million or 54.1% due to rate increase per aircraft and short-term ACMI leases from other airlines due to flights sold exceeded capacity available during the period.
Previous wording
Interest expense, netincreased $1.2 million from $0.5 million to $1.8 million driven mainly by the interest payable on the debentures issued in 2023.
Current wording
Interest expense, netincreased $1.6 million from $0.7 million to $2.2 million driven mainly by the interest payable on the debentures issued in 2023.
Previous wording
Aircraft fuel increased by $0.3 million, from $7.9 million to $8.2 million, or 3.1%, primarily due to the volume of Charter block hours which increased 7.1% from 2,053 to 2,199. The was partially offset by a decrease in base jet fuel of approximately 3.7%.
Current wording
Aircraft fuel decreased by 1.7% to $13.8 million, the volume of non-ACMI block hours increased by 14.6% or $2.1 million. This was primarily offset by a decrease in base jet fuel of approximately 14.2% or $2.3 million.
Previous wording
Maintenance, materials, and repairs increased by $1.4 million, from $1.6 million to $2.9 million, or 88.2%. $1.0 million or 74.8% of the increase was due to volume from the increase in both the number of aircraft to 16 and the number of block hours flown which increased 65.9% from 3,134 to 5,200 block hours. $0.3 million or 25.2% of the increase was due to rate per block hour rising from $497 per block hour to $564 per block hour, a 13.4% increase. This increase in rate per block hour was primarily due to repairs of rotable parts.
Current wording
Maintenance, materials, and repairs increased by $2.3 million, from $3.3 million to $5.6 million, or 67.7%. $2.5 million of the increase was primarily due to volume from the increase in both the number of aircraft to 17 and the number of block hours flown which increased 83.8% from 3,585 to 6,591 block hours. This was primarily offset by $0.3 million due to the rate per block hour improvement of 4.4% from $495 per block hour to $473 per block hour.
Previous wording
Operating loss decreased $0.9 million, from an operating loss of $5.5 million to $4.6 million, or a 16.5% improvement. In addition, operating loss as a percentage of revenue improved from (17.2%) to (8.6%), a 8.6% improvement. This was a direct result of GlobalX’s ability to grow its revenue faster than its cost structure as the airline works towards achieving scale and profitability. There are several factors driving the improved margins. The first factor is rates as the Company was able to secure higher rates for both ACMI and Charter contracts. The Company’s ACMI rate grew 46.2%, from $4,431 per block hour to $6,480 per block hour, while Charter rate per block hour is up 18.8% from $13,015 per block hour to $15,468 per block hour. The second factor is utilization as our average utilization per available aircraft grew 3.5%. The third factor is scale. As an example, when measured on a per block hour basis, Salaries, wages, and benefits dropped from $3,563 to $3,226 per block hour, a 9.5% reduction. There were also savings on a per block hour basis in fuel, insurance and general overhead expenses (other) which combined with the other factors drove the improvement.
Current wording
Operating loss decreased $10.3 million, from an operating loss of $12.4 million to $2.1 million, or 83.3% improvement. In addition, operating loss as a percentage of revenue improved from (19.5%) to (1.9%), a 17.7% improvement. This was a direct result of GlobalX’s ability to grow its revenue faster than its cost structure as the airline works towards achieving scale and profitability. There are several factors driving the improved margins. The first factor is rates as the Company was able to secure higher rates for both ACMI and Charter contracts. The Company’s ACMI rate grew 51.2%, from $4,332 per block hour to $6,534 per block hour, while Charter rate per block hour is up 26.6% from $12,393 per block hour to $15,680 per block hour. The second factor is utilization as our average utilization per available aircraft grew 6.4%. The third factor is scale. As an example, when measured on a per block hour basis, Salaries, wages, and benefits dropped from $3,469 to $2,824 per block hour, a 18.6% reduction. There were also savings on a per block hour basis in fuel, Maintenance, insurance, and general overhead expenses (other) which combined with the other factors drove the improvement.
Previous wording
Net Loss increased by $0.3 million, from a net loss of $6.1 million in 2023 to $6.4 million in 2024. Net loss as a percentage improved from (18.9%) to (11.8%), an 7.1% improvement. This was a direct result of GlobalX’s ability to grow its revenue quicker than its cost structure as the airline works towards achieving scale and profitability. There are several factors driving the improved margins. The first factor is rates as the Company was able to secure higher rates for both ACMI and Charter contracts. The Company’s ACMI rate grew 46.2%, from $4,431 per block hour to $6,480 per block hour, while Charter rate per block hour is up 18.8% from $13,015 per block hour to $15,468 per block hour. The second factor is utilization as our average utilization per available aircraft grew 3.5%. The third factor is scale. As an example, when measured on a per block hour basis, Salaries, wages, and benefits dropped from $3,563 to $3,226 per block hour, a 9.5% reduction. There were also savings on a per block hour basis in fuel, insurance and general overhead expenses (other) which combined with the other factors drove the improvement.
Current wording
Net Loss decreased by $7.4 million or 55.0%, from a net loss of $13.5 million in 2023 to $6.1 million in 2024. Net loss as a percentage improved from (21.3%) to (5.5%), an 15.8% improvement. This was a direct result of GlobalX’s ability to grow its revenue quicker than its cost structure as the airline works towards achieving scale and profitability. There are several factors driving the improved margins. The first factor is rates as the Company was able to secure higher rates for both ACMI and Charter contracts. The Company’s ACMI rate grew 51.2%, from $4,332 per block hour to $6,534 per block hour, while Charter rate per block hour is up 26.6% from $12,393 per block hour to $15,680 per block hour. The second factor is utilization as our average utilization per available aircraft grew 6.4%. The third factor is scale. As an example, when measured on a per block hour basis, Salaries, wages, and benefits dropped from $3,469 to $2,824 per block hour, a 18.6% reduction. There were also savings on a per block hour basis in fuel, maintenance, insurance, and general overhead expenses (other) which combined with the other factors drove the improvement.
Previous wording
As of March 31, 2024, the Company had approximately $8.3 million in unrestricted cash and cash equivalents and approximately $3.8 million in restricted cash, a decrease of approximately $3.3 million and $2.3 million from December 31, 2023, respectively primarily due to new aircraft deliveries, deposits, and net loss in operations. Management is confident that the augmented cash and cash equivalents, coupled with the anticipated rise in sales linked to the Company’s strategies to attract more funds, will adequately address the Company’s liquidity requirements. Management is actively assessing various options to procure additional funds, including exploring opportunities for additional equity or debt financing.
Current wording
As of June 30, 2024, the Company had approximately $8.0 million in unrestricted cash and cash equivalents and approximately $2.4 million in restricted cash, a decrease of approximately $3.5 million and $3.7 million from December 31, 2023, respectively primarily due to new aircraft deliveries, deposits, and net loss in operations. Management is confident that the augmented cash and cash equivalents, coupled with the anticipated rise in sales linked to the Company’s strategies to attract more funds, will adequately address the Company’s liquidity requirements. Management is actively assessing various options to procure additional funds, including exploring opportunities for additional equity or debt financing.
Previous wording
Net Cash used in operating activities during the three months ended March 31, 2024 increased $1.4 million to $2.1 million, consisting primarily of $5.9 million of increase in accrued liabilities and other liabilities, $3.1 million of increase in operating leases obligations, and $0.6 million of increase in prepaid expenses and other current assets. These were partially offset by $4.5 million of increase in accounts payable, $4.0 million in noncash adjustments for depreciation and amortization of fixed assets, operating lease right of use assets and debt issue costs, $4.2 million of increase in accounts receivable, $0.4 million of bad debt expense and $0.3 million of share-based payments. Net Cash used in operating activities during the three months ended March 31, 2023 decreased $0.2 million to $0.7 million, consisting primarily of $5.0 million increase in accrued liabilities and other liabilities, $2.5 million in noncash adjustments for depreciation and amortization of fixed assets, operating lease right of use assets and debt issue costs, $0.5 million of share-based payments, and $0.4 million of increase in accounts payable. These were partially offset by $6.1 million of net loss, $2.0 million of increase in operating lease obligations, $1.3 million of increase in accounts receivable, $0.5 million of share-based payments, $0.4 million of increase in accounts payable, and $0.3 million of increase in assets held for sale.
Current wording
Net Cash used in operating activities during the six months ended June 30, 2024 decreased $4.9 million to $1.2 million, consisting primarily of $6.8 million of increase in accrued liabilities and other liabilities, $6.1 million of net loss, $6.8 million of increase in operating leases obligations, and $0.3 million of increase in assets held for sale. These were partially offset by $2.5 million of increase in accounts payable, $10.0 million in noncash adjustments for depreciation and amortization of fixed assets, operating lease right of use assets and debt issue costs, $3.3 million of increase in accounts receivable, $0.5 million of increase in prepaid expenses and other current assets, $0.4 million of bad debt expense and $0.9 million of share-based payments. Net Cash provided by operating activities during the six months ended June 30, 2023 increased $9.8 million to $3.6 million, consisting primarily of $13.5 million of net loss, $2.9 million of increase of accounts receivable, $0.7 million of increase in prepaid expenses and other current assets and $3.7 million of decrease of operating lease obligations. These were partially offset by $12.7 million of increase of accrued liabilities and other liabilities, $4.8 million of increase in accounts payable and $5.0 million in noncash adjustments for depreciation and amortization of fixed assets, operating lease right of use assets and debt issue costs, and $1.1 million of share-based payments.
Previous wording
The Company has significant fixed and noncancelable lease commitments of aircraft, equipment and related maintenance checks. As of March 31, 2024, the Company had total of $14.5 million due in the next 12 months of future minimum lease payments under finance and operating leases. As of March 31, 2024, the Company had total of $94.3 million due after 12 months from the balance sheet date of future minimum lease payments under finance and operating leases, and approximately $29 million in notes payable included in the non-current liabilities presented in the Company’s consolidated balance sheet. The Company ended the period of January 1 to March 31, 2024 with twelve passenger aircraft and four cargo aircraft and expects the fleet to increase to 16 passenger aircraft and six cargo aircraft by the end of 2024. To achieve the number of aircraft deliveries in 2024, the Company currently has five aircrafts under lease with partial or total deposit paid.
Current wording
The Company has significant fixed and noncancelable lease commitments of aircraft, equipment and related maintenance checks. As of June 30, 2024, the Company had total of $15.6 million due in the next 12 months of future minimum lease payments under finance and operating leases. As of June 30, 2024, the Company had total of $97.5 million due after 12 months from the balance sheet date of future minimum lease payments under finance and operating leases, and approximately $29 million in notes payable included in the non-current liabilities presented in the Company’s consolidated balance sheet. The Company ended the period of April 1 to June 30, 2024 with thirteen passenger aircraft and four cargo aircraft and expects the fleet to increase to 16 and 22 passenger aircraft and six cargo aircraft by the end of 2024 and 2025, respectively. To achieve the number of aircraft deliveries in 2024 and 2025, the Company currently has eight aircrafts under lease with partial or total deposit paid.
Previous wording
During the three months ended March 31, 2024, net cash used for investing activities increased $2.1 million to $3.2 million, consisting of $1.7 million of Purchases of property and equipment and $1.5 million of increase of deposit, deferred costs and other assets. During the three months ended March 31, 2023, net cash used for investing activities increased $0.2 million to $1.1 million, consisting primarily of an increase of $0.8 million of deposit, deferred costs and other assets and $0.3 million of Purchases of property and equipment.
Current wording
During the six months ended June 30, 2024, net cash used for investing activities increased $1.2 million to $5.2 million, consisting of $3.7 million of Purchases of property and equipment and $1.6 million of increase of deposit, deferred costs and other assets. During the six months ended June 30, 2023, net cash used for investing activities increased $1.3 million to $4.0 million, consisting of $3.0 million of of Purchases of property and equipment and $1.0 million increase of deposit, deferred costs and other assets.
Previous wording
During the three months ended March 31, 2024, net cash provided by financing activities decreased $3.8 million to $0.2 million of net cash used in financing activities, consisting of $0.2 million of Principal payments on finance leases. During the three months ended March 31, 2023, net cash provided by financing activities decreased $2.1 million to $3.6 million, consisting of $2.5 million of Proceeds from note payable and $1.2 million of Proceeds from issuance of shares, partially offset by $0.1 million of Principal payments on finance leases.
Current wording
During the six months ended June 30, 2024, net cash provided by financing activities decreased $4.2 million to $0.8 million of net cash used in financing activities, consisting of $0.9 million of Principal payments on finance leases and $0.1 million of Dividends, partially offset by Proceeds on issuance of shares of $0.2 million. During the six months ended June 30, 2023, net cash provided by financing activities decreased $3.0 million to $3.4 million, consisting of $2.0 million of Proceeds from note payable, $1.6 million of Proceeds on issuance of shares, partially offset by $0.2 million of Principal payments on finance leases.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
Six months ended June 30, 2024 and 2023
Current report — wording carried from elsewhere
The following table compares our Operating Fleet (average aircraft equivalents during the period) and total Block Hours operated:
Current report — wording carried from elsewhere
The following table describes the degree to which variations in revenues in thousands can be attributed to fluctuations in prices and nature of GlobalX services.
Current report — wording carried from elsewhere
ACMI revenue for the period increased by $39.5 million or 360.0% from $11.0 million in 2023 to $50.5 million in 2024. This variance is driven by an increase from 2,536 block hours in 2023 to 7,734 block hours in 2024, an increase of 205.0% or 5,198 block hours. This volume accounted for 56.9% or $22.5 million of the increase. The average revenue per block hour increased $2,202 per block hours from $4,332 per block hour in 2023 to $6,534 per block hour in 2024 and accounted for $17.0 million or 43.1% of the revenue increase. The primary driver for the increase was related to both high market demand and a shortage of supply as competitors reduce capacity.
Current report — wording carried from elsewhere
The following table compares our Operating Expenses (in thousands):
Current report — wording carried from elsewhere
Depreciation and amortization increased $1.7 million, from $0.9 million to $2.6 million or 194.54%, driven by assets acquired to support our airport operations. These assets include, but are not limited to, aircraft deliveries secured on capital leases, computers, software, and rotable inventory.
Current report — wording carried from elsewhere
Aircraft rent increased $15.0 million, from $12.5 million to $27.5 million or 120.6%, primarily due to the increase in the number of aircraft from 10 to 17 aircraft in the fleet. $7.0 million or 46.5% of the increase is driven by the increase in the number of aircraft being leased, with the remaining $8.0 million or 53.5% due to rate increase per aircraft and short-term ACMI leases from other airlines due to flights sold exceeded capacity available during the period.
Current report — wording carried from elsewhere
The following table compares our Non-operating Expenses (in thousands):
Current report — wording carried from elsewhere
Interest expense, netincreased $2.9 million from $1.1 million to $4.0 million driven mainly by the interest payable on the debentures issued in 2023.