Global Crossing Airlines Group Inc. (JET) Earnings Call Transcript & Summary

All right. Well, good afternoon, everyone, and welcome. We've got good attendance. Just under 100 people are attending this webinar. I'm grant Howard, President of The Howard Group. And leading the presentation today will be Ed Wegel, who is the head of the table, CEO; and Ryan Goepel, the CFO. And I see Ed and Ryan, you have a series of members of the team with you. Perhaps you could introduce everyone before we get into the presentation. [Operator Instructions] With that, I'll turn it over to Ed.

Great. Thanks, Grant. Thanks for that introduction. And yes, you're right. I have with me here some members of our team that is handling the certification and the operations of the airline. And I wanted to introduce all of them to our shareholders today and other interested parties so that you get a sense of the depth of the experience that we have here at Global Crossing Airlines and meet some of the people who make this happen. The people who are around the table here, along with one other who is off with an airplane right now, represent about almost 230 years of experience in certifying, running and operating airlines of this size. And it takes that amount of experience and it takes that breadth of experiences that they have had in their education in this business in order to certify an airline and run it properly. I just want to take a few minutes to introduce you to some members of the team with a few tidbits about their background so you can understand the types of experience that we have here. To my left, on the right side of the table, is Chris Toro. Chris is our VP of Technical Operations and oversees all of our maintenance activities and holds the Director of Maintenance post. Chris has got 35 years in this business. He was the Chief Inspector at Southwest Airlines, which, as you know, is one of the major airlines in the U.S. or in the world. That's a very, very prominent and important position. And then after that, he served 7 years at Allegiant Airlines, which is one of the largest operators of A320s in the U.S. and helped them transition from MD-80s to the A320. And while he was there, he oversaw their addition, an induction of about 60 A320 aircraft. So he's got tremendous experience with the type of aircraft that we're going to operate and knows how to bring them onto the certificate and get them ready to fly. To my right, Mike Hambrick. Mike is a former American Airlines 777 captain. He then spent a number of years at the FAA, our regulatory agency, the Federal Aviation Administration, where he oversaw airline certificates and oversaw airlines of our size and also was the subject matter expert within the FAA on the new safety management system that has been implemented across all U.S. airlines. So he's a tremendous resource and a tremendous help in that area and as well his experience at the FAA and also having flown the line for American Airlines, tremendous experience for us. And he fills the role of Director of Safety, which is 1 of the 5 key positions. Next to Mike is Julio Berard. Julio has got some 35 years of experience, maybe more in this business; has been the Director of Maintenance and Chief Inspector for a number of airlines, including a major cargo airline called Amerijet, Pan American World Airways and some others. He's got tremendous experience in his role as Chief Inspector for Global Airlines -- Global Crossing Airlines. Next to him, Widey De Armas, manager of flight training and flight training standards; over 10,000 hours of flight time, 6,000 hours pilot in command time; tremendous experience and is overseeing all of our flight training and running our standards division. Next to him, Hector Crocker. Hector, another 30 years in this business, I think about 16,000 hours of total time and 8,000 hours pilot in command. He is our Chief Pilot. He oversees all of the pilots, all of the training and makes sure that we operate to standard. Not here today but on the call with us, Juan Nunez, our VP of Flight Operations and Director of Ops. Juan has got about 30 years in this business. He has flown just about every type of airplane; has a tremendous and extensive experience operating charter aircraft on as he likes to say, every continent except Antarctica. He has flown narrow-body aircraft, the 737, in charters for the Department of Defense to Afghanistan, all over Africa, Asia, Latin America and here in the U.S. And he formerly was my Chief Pilot when we launched -- or relaunched and operated Eastern Airlines starting back in 2014. You, of course, know Ryan Goepel, our CFO. He's been on several of these calls with me. Ryan has got tremendous and extensive finance experience, about 25 years, working for companies such as Burger King, where he took them through their IPO here in the U.S.; Halliburton and KBR, where he oversaw several of their subsidiaries and did all of their merger and acquisition activities. And as you know, he was CFO of an airline in Canada for a period of time and helped them turn around their operations. So this is the team that gets it done on a day-to-day basis here. They are the ones who are leading us through the certification, which is now not only on time but under budget to this point by about $0.25 million. So we feel very good about where we are in the certification process with the FAA, the induction of our first aircraft to -- onto the certificate, which I'll discuss in a moment; and getting us through the rest of the gates and hurdles that the FAA puts up so that we have to pass through in order to get our certification completed as the U.S. 121 flag carrier. Okay. Next slide. So for those of you who have the video portion of this, we're going to take you through a number of slides as we did the last time. This is our end of September update. And as you know, we promised to give you an update monthly on our progress through the certification. And then after we're certified, we'll continue to do that as needed. There's the usual disclaimer language we have to provide to you as a publicly traded company. Let me say as an overview that we remain extremely bullish on our business and the prospects for GlobalX. As we go through this pandemic and we see what's happening with other airlines, we are positioned to capitalize on the opportunities that are being presented to us as a result of the disruption and the dislocation in this -- in the business. We'll launch this airline with a very clean balance sheet and a very, very competitive cost structure. We'll talk in a minute about what the current situation has done in terms of lease rates and our ability to get assets and the other things that we need for our business at a much reduced cost because of, again, the disruption in our business. We're establishing an infrastructure here on the backs of these gentlemen, who I've just introduced to you, to create an infrastructure that will allow us to get up to 50-or-so passenger aircraft and as many as 30 cargo aircraft. We see that as the size of the opportunity for us here in the U.S. That does not account for what we might do in Canada and other places around the world. We're well positioned to take advantage of the current situation, as I mentioned. And we've got plenty of financing in place with our GEM Facility, which is the private alternate investment structure. But -- and Ryan will talk about this in a few moments, but we've already been approached by a number of investment banks who want to start talking to us about doing major equity raises for us starting early next year. And some very prominent names in the investment banking world have approached us, and those discussions are ongoing. Okay. September has been a very, very busy month for us, very productive. We met all of our goals. In fact, we're a little bit ahead of schedule in terms of the certification activities that we need to complete. The final documents have been sent to the FAA about a week ago with the aircraft details and some final documents that needed to be provided to them. That was done this month, and the FAA is deep into their review of that as we look to move towards Phase 3 of 5 phases of certification. We'll be in Phase 3, we hope and expect, within the next several weeks. We've added a Director of HR because we'll be bringing on lots of additional staff in -- over the next 2 months, including pilots and flight attendants; Director of Inflight, who will oversee all of our flight attendant and onboard activities; and as well, Director of our Operations Control Center. We're beginning to stand up what we call the OCC. We'll talk about software and other assets in a moment, but that's a critical component for us as we get ready for the next phases of the certification. We finished the inspection of our first A321. This aircraft will be the first aircraft that we will bring to Miami to put on our certificate. Based on the demand that we saw in the market and continue to see, this airplane will be the airplane that we will certify with and we will place immediately on our Cuba flight operations as soon as we're certified. We have a second aircraft, an A320, that's in late stages of the LOI and getting a lease put together for that, which we will take delivery of about the time that we receive our certificate. So we will -- once we are certified, we will launch flight operations with 2 aircraft: 1 A321 for Cuba; and a second A320, which is a slightly smaller airplane, for charter flights that we have already contracted for. And I'll -- we'll talk about that in a moment. The first A321 is now scheduled to go into paint, which is about a 10-day process. Around the first part of November, it's going through its final maintenance-heavy inspections and other work that needs to be done in order to conform to FAA standards. And then it'll go into paint for about a 10-day period, and we expect to get that aircraft. After all of the delivery inspections and checks are done, we will fly this airplane to Miami by the end of November, where we will then use it for training on the ground and other certification requirements. We've also made application this month to Miami International Airport to operate our JV company, GlobalX ground team, which is our joint venture with Global Aviation Services, which is a major Canadian and U.S. ground handling company. They will be providing us the ground handling equipment, staff and training so that we can handle our own aircraft operations here in Miami. And we expect to expand that operation to include our operations out of Atlantic City, where we will have a hub city with several airplanes based; and as well when we fly in and out of U.S. cities such as Orlando, Tampa, Las Vegas and so forth. So ground team -- Global Ground Team will be our ground handling company that we are a 50-50 joint venture with. This is a way for us to get our costs down and keep our operation under our control so that we have the very highest standards. As you saw in a press release about a week or so ago, we have signed for 4 A321s to acquire on a purchase. We have already received 4 proposals from aircraft leasing firms to finance those aircraft for us and to convert those to cargo. The reception in the market for us getting into cargo with this aircraft has been nothing short of tremendous. And we're already negotiating LOIs with cargo companies to operate the airplane for them. We'll operate these airplanes in cargo just as we do on the passenger side on an ACMI basis. So we take no risk. They pay us and we fly. But we think that this is a significant major expansion area for us to have both passenger and cargo capability. Our pilots obviously can fly both airplanes. And it gives us a diverse revenue stream to ensure that, even in times like this, we can make money because we've got cargo airplanes that are in constant demand. Along with that, we were very honored to sign a deal with Singapore Technology Engineering, which is -- the Singapore Aerospace is one of the largest aircraft maintenance companies in the world. They have come to see us. They've done their due diligence. They like everything that they see, and they want to convert the first 5 airplanes for us to cargo. And they will be providing most of the financing for that along with the leasing companies. They see a partnership with us. They want to open up a line for the conversions here in the U.S., and we probably will be the launch airline to do that with them, which we think is a tremendous feather in our cap to work with them as we go forward. So let's talk -- here's -- in the teaser for this, we talked about our new livery. It's actually the -- basically the livery that you've seen. We've added a few minor flourishes, including an additional green line. You can see that the firm that's done the design drawings, they will actually be doing our design -- the livery for the paint for our A320s and our A321 cargo aircraft. And again, this airplane -- our first A321 will be going into paint in the first part of November. We'll actually have a time-lapse camera on it. And we'll put that up on our website, so you can watch as our airplane gets painted in its colors. Okay. One of the major elements of our plan to go forward is to ensure that this airline is fully digitized, which means that everything that we do is automated, done electronically, which cuts down on a tremendous amount of paper and makes us incredibly efficient. And we have selected 3 world-class providers, best-in-class, in the various categories of software that we need in order to make that happen. NAVBLUE, which is a company that's owned by Airbus, provides us with all of our dispatch and our flight planning software that we need and is fully integrated in with the airplane. TRAX is a maintenance MRO software tracking system. It tracks everything from every component on our airplanes to allowing us to order and buy spare parts and also a contract for maintenance. TRAX is used by most of the major airlines in the U.S. It is also used by Spirit Airlines, which is a major airline. Spirit operates almost 100 A320s. And we will be contracting with Spirit to do a lot of our maintenance, which will get our cost down. Spirit uses TRAX. We will use TRAX, and this is a tremendously efficient and reliable system that allows us to track all of our maintenance activities and drive our costs lower. MINT Software is also used by many major airlines around the world, including British Airways and Cathay Pacific. It's our crew planning and scheduling software. And we analyzed about 10 different systems and MINT -- based on seeing the other airlines that use the system as well as our own review of it, it's absolutely the right system for us to use. So all of these have been contracted for. And all of them are in process of being implemented, which means teams from TRAX, MINT and NAVBLUE have been here to Miami, started to train our senior people on the use of the systems and starting to load it up into our systems and our servers. And we're actually loading the information from our first airplane into TRAX as we start to get ready for the FAA conformity and the proving runs that we need to accomplish. Okay. Next. Our delivery schedule for the first 10 aircraft is something that we've discussed before. We're still on track. First aircraft will be, as I said, painted in November, delivered by the end of November. We have the second airplane that we need once we start operations, has been contracted for and will be delivered about the time that we will be certified. So late December, early January. We want the airplane to arrive almost at the same time that we are completing our certification process so that we reduce the amount of cost involved in maintaining that airplane and parking it and insuring it until it's ready for revenue operations. So our first 2 airplanes are well underway. The next 3 airplanes, which you see for March, May and June, have been contracted for under LOI, under exceedingly favorable terms to GlobalX. These are what we call sister ships coming out of a major U.S. airline. Very easy for us to conform them and put them on our certificate. And these airplanes have full WiFi Internet capabilities as well as in-flight entertainment, which will be extremely crucial for us to attract and keep our charter clients as we progress forward in our business plan. We're talking to leasing companies and others for the next set of airplanes that will be delivered near the end of '21 and into '22. And as I've said before, what we want to use is this opportunity, while prices and lease costs for airplanes are at a historic low, to lock in the airplanes that we need for at least through 2022 on very, very favorable terms. Now on top of this will be our cargo airplanes. They'll be financed separately. As I said, we've already got 4 offers to finance those airplanes at very, very attractive financing rates for us that include all of the costs of acquisition, conversion and bringing those airplanes into our system and as well, a bit of overfinancing on the airplane. So we actually generate cash to put into the company from the acquisition of those first 4 cargo aircraft. We are getting significant discounts by all of the vendors that we talk to, be it on the software side or on spare parts and components and other things that we need. As I said, this is a historically low point in terms of the cost of aviation assets, and we are taking full advantage of that and as fast as we can. We are locking in contracts to acquire assets at historically low prices. Okay. Next. This just gives you a sense, and you can study this at your leisure. But it shows, in fact, we're getting greater discounts off of acquisition costs for aircraft and lease rates that are even presented here. But on a rough order of magnitude, we are paying less than 50% for an aircraft today than what we would have paid in January or February of this year. That's a significant advantage to us, obviously. And that's why we are working quickly to get our 10 A320s under contract. We've got 4 of the 5 A321 cargo aircraft now under contract, and we should have a fifth one under contract very soon. Again, at extremely favorable lease rates and acquisition costs to Global. Let me take -- I'll have Ryan take over now and talk about our costs and how they compare pre- and post-COVID.

Thank you. I think the one thing to take away from this slide is, as we talk about ACMI, which is aircraft maintenance, crew insurance and debt and insurance, pre-COVID, you can sort of see how it stacked up on a pro forma basis. When you look at what post-COVID ACMI costs are going to be for our competitors, their planes, by and large, will be the same. Their crews will be the same. Their insurance may be the same or a little higher, but many of them are incurring debt to get through this period, whereas -- this kind of highlights how GlobalX will be emerging from the COVID -- post-COVID world having acquired the asset at significant discounts and has not incurred the debt, which we believe will allow us to be the lowest-cost operator in the space at a time when we think it will be critical for those -- the success of the -- any airline to be able to operate in a lowest-cost model.

Okay. Let's talk about revenue streams, and then I'll have Ryan talk about our sales pipeline a bit. We've developed a diverse revenue stream -- components. Our primary one will be what we call ACMI passenger charters, where we're flying for other airlines, universities and sport teams, all of the typical charter clients that are out there. Secondarily, our ACMI cargo operations, we want to be a world-class leader with our 321 freighter fleet. And we think we're -- we've made a lot of progress on that with the acquisition of aircraft at very, very favorable rates and a partnership with one of the top maintenance companies in the world to convert those airplanes. On the scheduled charter side, Cuba is a very, very important component for us. And our first airplane, we deliberately decided to take the 321 first so that we could put that aircraft on to Cuba. That aircraft also will do well when we launch our Canada Jetlines brand flying from Toronto and Montreal, for instance; down into South Florida, Tampa, Orlando and so forth. Also under scheduled charters, we've got our tour operators, hotels, casinos and cruise ships. And we are in contact with almost all of them, and we'll talk about that in a moment. We have a slide that shows where we see our revenue coming from. Our Jetlines Vacations brand is well in progress for us to spin that out. And you know that we put out a release a few weeks ago, stating our intention to do so: to take the assets that we got in the Canada Jetlines merger: the name, the brand, the booking platform and as well, eventually, the manuals that had been developed for Jetlines to get its own aircraft operating certificate, much as we're doing here at Global. And so we will spin that off into another company that will be publicly traded. Every -- it's our intent -- and the lawyers are looking at all of the various structures that are required to ensure that this is done on a tax-free basis, but we will spin that off into a separate Canadian company. GlobalX will provide expertise, initial aircraft and other support systems. But we will stand that up as an independent brand in Canada, Canada Jetlines, and it will eventually have its own aircraft operating certificate to operate its own airplanes within Canada and then charters from Canada to the U.S., Caribbean, Latin America and so forth. We're also starting to talk to the U.S. government about getting into the DoD flying program. We need to be as -- an operating airline for about a year, but we've already started to talk to them about the requirements for that and see if that time period can be shortened as we'll have aircraft available to us, and we'll be able to fulfill a lot of the missions that the U.S. government has. And they are typically a very, very high-utilization customer for charter airlines. So Ryan, I'll let you take us through the pipeline.

Right. So for the pipeline, I think what we really wanted to demonstrate is the amount of work that's been going into either getting contracts ready to sign, highly likely and in negotiations, active bids and active prospects. We've discussed the Cuba opportunity as a euro charter. We have the agreement with SmartLink, which we've discussed in the past. We have a college sports team ready to go and a tour company also. The highly likely is the growth associated with Cuba, and also we see some extra additional opportunities in Europe. In negotiation, that is a casino operation. I think one of the dynamics we're seeing is with the actions by the scheduled carriers, them scaling back their services, them reducing the number of flights they're offering. Many casinos and hotels and other tour companies are looking for alternative forms of lift to provide for their customers. And I think when you combine that with our cost structure, we're getting a lot of people to consider charters that weren't before. And I think when you look at active prospects, those are all, we feel pretty real. There's names, there's negotiations, there's been estimates sent back and forth. And I think as we get closer and closer to certification, the number of these that will pop up will just continue to develop.

And the next, take us through the business, please.

Sure. So I guess one of the things that some people have been wanting to understand better is why A321F, why A321F freighters. If you look at the current market, it's dominated by the Boeing 767, 757 and 737 freighters. Currently, there's 313 757 freighters, with the 2 largest operators in the U.S. being FedEx and UPS. Average age on those aircraft is 28 and 27 years. This play is eventually going to reach end-of-life with limited options for replacement. So part of the market is trying to decide whether they'll move to the 3 -- 737, they'll move up to the 767 or to the -- what we believe they'll move to is the 321. We believe going through the analysis, and we'll show you some of just the basic statistics, the operating cargo capacity and economics of the 321 is far superior to 737. And once we make this available to the market, we think there's going to be a large uptake. And the simplest way to explain it is containerized cargo capacity. So if you're looking at a 737, you can fit on the -- in the main deck, 11 containers full and 0.5 container. And in the lower deck, you can fit bulk only, which gives you roughly 4700 cubic feet of container volume. A 321, just because of the size, you can fit 14 in the main deck, 10 in the lower deck, which is a 55% increase over the 737 on what we agree -- on what we believe is on similar operating economics. So on a price per container or price for cargo or price per foot, we believe the economics will be pretty appealing. And we think now is the time, if you want to get into this business, you need to, as we said, secure the feedstock, secure the slots. And when -- as the 757s starts to roll out, they'll look for replacements, we think we'll have a natural market to fill that void. And I believe, going into the type share structure, as we discussed, we've kept the share structure relatively tight, as they say. The warrants are effectively held by people who participated in the offering. The vast majority are held by insiders. And as we say, this is kind of the structure we have in place, which we think is pretty advantageous for new and existing shareholders.

We expect over the next month or 2 to be able to continue to fund our operating budget with the proceeds received from the exercise of warrants. We are working to minimize, at this point, the draw under the GEM facility. We believe that people like myself and some other members of management and some of the insiders who invested in the $1.5 million round will be exercising their warrants that will allow us to fund our operations up to the point where we take the airplane later this year. So we feel very good about where we are in terms of our cash and our cash management and how we have funded our operation very, very tightly. We watch every penny. And again, we want to limit at this point, the use of the GEM facility so that we minimize the dilution, which is good for all of us. And we're happy to take any questions on that during the Q&A period at the end of the presentation. Okay. So to summarize, we're well into Phase 2. I hope to get to Phase 3 here in the next few weeks. Vastly improved cost structure from where we were earlier this year because of the effects of the current COVID situation in the U.S., which has driven down costs of assets, made everything that we need to acquire on a much more favorable basis. Our management is still financially committed to this, and we're exercising our warrants. The acquisition market, as I said, for aircraft and assets is extremely favorable to us. We've identified now the freight cargo market as a secondary market for us, which diversifies our revenue streams and mitigates risk on the passenger side. We're attracting great talent to our company. As I said before, we've added HR, operations control and inflight, and we're continuing to review and interview candidates for other positions here in the company as we staff up. And these are some of the best and brightest in the business who have become available because of the current situation. We're on track, under budget for our certification. Our first aircraft is going into paint. We've inspected it. It's going to be a great, great airplane for us flying on Cuba. Our next 3 or 4 airplanes have been lined up, and we feel very, very good about the terms that we got those airplanes under. I will tell you that every major leasing company in the world has come to see us here in our offices in Miami. And we have a virtual unlimited selection of aircraft that we can choose from. We're picking partners on the leasing company side who want to be partners with us and believe in our business plan and will help us grow. And I think that we've done that with the first couple of airplanes that we put under contract. So we feel very, very good about where we are. We're poised to capitalize on this tremendous opportunity that's been presented to us as a result of what's -- of 2020 and what's happened this year. We think 2021 will be just an incredible year for our business, and we have well positioned ourselves and structured our business to take advantage of all of that. So with that, my management team is here. If there are any questions about operations or flying airplanes or any questions about the presentation, we're happy to take as many of them as you can send to us. And thankfully, I've got people around the table who know what they're talking about, and we'll answer your questions as best we can. So Grant, I'll turn it back to you.

Ed, Ryan, thanks very much. [Operator Instructions] And we apologize. We had a technical issue with the video feed from the boardroom camera, but we were able to get that fixed a few minutes into the presentation. So everybody is seeing you now. So Ed, you did the full introduction of everyone at the beginning. So perhaps without going through all of that while we're waiting for questions, you can just point each individual out again, please.

Great. So this is Chris Toro, our VP of Tech Ops. Chris was the gentleman who was at Southwest and then Allegiant, knows everything there is to know about this A320. A tremendous talent. Mike Hambrick, our 777 Captain from American; FAA inspector; subject matter expert; and the new safety management systems, which basically is what the FAA uses to oversee all of the airlines that they oversee, is the safety management system. Mike is an expert in that and has gotten us through all of those certification tasks with the FAA with flying colors. Next to him, Julio Berard. 35 years in this business; spent many years at Amerijet, which is one of the preeminent charter -- cargo charter airlines in the U.S. They operate about 20 767 freighters. He knows all about that world in that business. He's been Director of Maintenance; Chief Inspector for a number of airlines of our size; a tremendous talent and a great addition to what we're doing. Next to Julio is Widey De Armas, Manager of Flight Training Standards. Widey was one of my captains, our captains at Eastern, one of our best captains. Tremendously talented aviator and a very, very good manager as well, overseeing all of our flight training standards and our training programs. Next to him is Hector Crocker, another great pilot who flew captain for us at Eastern, now our Chief Pilot here at Global; has a lot of time in airplanes, a lot of time as a pilot in command, overseeing and recruiting the first cadre of what we call check airmen for us. And I should say, I failed to mention this. We have the first class of pilots who also will serve as our check airmen have been recruited, identified. They have their offer letters, and they will be starting their training because we have to put them through the specific Global Crossing flight training program, although they're already qualified on the A320. That training will start sometime in mid- to late November so that we get them ready for other certification requirements with the FAA before we start flying the aircraft in proving runs. So our first class of pilots -- captain pilots has been identified and recruited, and we're getting them ready to come to Miami to do their training. That's concurrent with our receipt of the first aircraft to be delivered to us. So with that, Grant, if there are any questions.

Yes. Thank you for the reintroduction. The first question [Operator Instructions] Please correct me if I'm wrong. Last month, you mentioned that the FAA Phase 3 will be by the end of September, but now you mentioned a couple more weeks. Could it be delayed again?

Actually, it wasn't delayed. A number of the requirements for Phase 2 to move to Phase 3, we have passed with the FAA. There are a couple of additional documents that they required us to submit, which have been submitted. So we're actually in process of moving to Phase 3. And concurrently, we're starting to do some of the Phase 3 requirements and in discussions with the FAA about that. So we actually have not lost any time. It hasn't been delayed. The FAA asked us for some additional documents as part of their overall certification. So we expect to be in Phase 3. And actually, we are starting to execute some of the Phase 3 requirements now. So we have not lost any time in the certification.

Okay. Next question, hasn't the U.S. very recently banned all flights to Cuba?

Currently, the flights to Havana, which were authorized by the U.S. government, were stopped by both governments because of the pandemic. Those flights will start again, we believe, having talked to both governments, both the U.S. government and the Cuban government, will start again November 1. The U.S. government recently stopped all private jet charters to Cuba, which are Gulfstreams and small airplanes used by operators to fly private clients to the island. Those have been stopped. The flights -- the charter flights to Cuba will recommence about November 1. We expect to start flying those routes once we're certified, which will be sometime in mid- to late January. So no, the Havana operations will open up again. The scheduled airlines from the U.S. to Nevada will start sometime around that same time. But we, as a charter, operate differently. And we'll start our operations as soon as we're certified. So the only flights that were recently banned by the U.S. government are corporate jets and other small charters with -- that hold 3 or 4 people. The official program of charters to Havana is still in place, and those charters will commence again once both the U.S. government and the Cuban government feel it's okay with the COVID situation, which, again, we think it will be the first part of November.

Thank you. Next question, are you concerned with the much lower trading volume with Global? Maybe I'll pipe in on this one for a second. First, as a reminder, there's only 8.5 million shares that are actually trading right now. And if you recall, when Global first started trading at the end of June, there was a lot of enthusiasm and exuberance. And for such a small float, we had a few days of even over 1 million shares. And then it calmed down a bit, and there were some hundreds of thousands. And then we reached this period right now, whereas people watched the airline progress and significant progress has been made, and we're not that far from commencing operations, I anticipate -- and today is a bit of an example. We're seeing an uptake and a little more enthusiasm and support in the market. So we were into a hiatus. Are we concerned with lower volumes? Well, you always are, but I anticipate that, that is going to change as people really start to understand the progress that's being made here. Ed, Ryan, do you want to add anything to that?

Ryan, go ahead.

Yes. I think the key takeaway is I think people have been waiting and seeing. I think there's not a lot of people who want to sell. We've got buyer -- significant buyers who are kind of waiting as we go through the different milestones. And it really comes down to belief. If we believe this is going to happen, we know this is going to happen, we know we're going to get certified, and we're going to be operating. And I think as the market catches up with that belief structure, I think you'll see the volume and the price reflect that.

We should talk about moving to -- on the OTC?

Yes. Another thing we've done to help encourage -- yesterday, we did our filing with FINRA, which will allow us to move from the OTC gray to the OTCQB. So that's a 6- to 8-week process. So that filing has happened, which we believe will open it up to a bigger investor pool. There's been a lot of interest in the U.S. as we talk to various investors. Many can't participate on the exchange we are. I think as we move to the QB, that just brings more buyers into the mix. So that's another aspect.

We were delayed in doing that. We had to get all of our financial statements restated in GAAP financial from the -- was it, the international...

IFRS, yes.

The international standards. That took a period of time. That's been done. All of the paperwork has now been submitted to the OTC. And we expect a smooth transition move to the OTCQB from what's called the pink sheets. And as Ryan said, that opens up a whole new area of investors who can participate in our stock. And we're working closely with Howard Group and others to get our story out here in the U.S., where we'll be predominantly operating. I think we have a good following in Canada. And I personally believe that once your first airplane arrives here in Miami, and there are pictures of that, we may get more believers in our -- in what we are doing. And that will generate more interest in our stock. We certainly will take every public relations opportunity to put forward, not only our management team and their experience but our airplane and the other things that we are going to be doing to generate that interest. At times, we get lumped into the whole travel and tourism bucket. And all of those stocks have obviously depressed stock prices and are at less than 50% of where they were, say, 6 months ago. As we continued to differentiate our story from all of that because we are charter in both passenger and then eventually cargo and we don't send an airplane out unless it's paid for, and we are making money with it. Our story is different. Our business plan is different. Our execution is different. And we just need to continue to put that story out there so that everyone understands the opportunities that are in front of us with the infrastructure and the team that we put together. So...

Somebody who's very enthusiastic here, looking to the future. I'll paraphrase, but the question essentially is, when would you move to the New York Stock Exchange? I don't think you can answer that one right now.

When we meet the requirements.

Good. I'll paraphrase this one a bit. Is Breeze Airways a competitor? And which airline company would you compare yourself to?

Breeze is not a competitor. And we know their operation well. The founder of that airline is a good friend of mine. We actually have an alliance in place with Breeze to cross-sell our charter aircraft with their aircraft. They have now -- they're now launching and will be certified and starting scheduled service in the second -- early in the second quarter of 2021 with the Embraer 190s and then moving to the new Airbus A220. We're talking with their people about cross-selling opportunities and how we can back up their operation and so forth. But they're in scheduled service operating from secondary cities in the U.S. to other secondary cities to bypass hubs, a very compelling strategy. We do not compete with them in any way. And I think we will find ways -- continue to find ways to work together with them in the future. So we're both David going up against, in some cases, Goliath. So we're banding together. What was the second part of the question, Grant?

Who would you compare yourself to?

Well, there are fewer charter airlines in the U.S. now. There's been a tremendous consolidation in the charter airline side in the U.S. over the past few years. And then that sort of accelerated in the early stages of the pandemic. There are other -- not publicly traded airlines, but for instance, iAero operates a number of older 737, 400s and some 737 800s. They are a competitor. On the cargo side, we would compete with airlines that have narrow-body 737s, but they're all basically flying for the package companies like Amazon or DHL or others. So competitors in the sense that it's how many airplanes can you get and how many airplanes can you put into service for those companies. And we think that there's a tremendous amount of growth still in that area. So for us to be able to operate 15 or 20 cargo aircraft is just still a fraction of the market. So there are others who are in that business, but we don't see them as competitors because the size of that business is so large. There are wide-body charter operators who operate 767s, 777s and A330s. We're in the narrow-body sector, so we don't compete with them. So we're actually in a better position competition-wise than we were, say, a year ago. Certainly better than it was 3 years ago. And there is a definite need for an A320 Airbus family charter operator in the U.S. because of the better operating economics of the A320, the A321 cargo airplane and the fact that our pilots can fly both of those. So hopefully, that's an answer to your question. But we see -- we have clearly defined our niche. We've already talked to the clients who fill that niche. Our pipeline is starting to fill up for contracts that are subject to us getting certified. And we have the airplanes to fly those contracts. So we feel very, very good about where we are no matter who our competition is at this point.

We're going to make this the last question because we have to wrap here. "Will you fly from Toronto to Cuba in the future? And if so, which cities and when? I'm looking for flights now."

We can't fly you now. And GlobalX as a U.S. airline would not be able to fly from Toronto without -- to Cuba without stopping in the U.S. So nonstop flight to Cuba from Toronto for us is not a possibility. However, when we launch Canada Jetlines, that airline would be able to fly from Toronto to Havana and 4 or 5 other cities. In fact, there are probably 6 or 7 cities that you can fly to in Cuba that there would be sufficient demand from Toronto and Montreal and some other cities in Eastern Canada for those vacation people. And again, we think that there's an opportunity to launch that airline. We could only be a minority participant in that airline because of the ownership rules. But we think that that's a way for us to effectively monetize those assets that we acquired in the merger with Canada Jetlines and create additional shareholder value above and beyond what shareholders hold now. And so hopefully, when all of that is put together by the lawyers and the exchange, people will see that as a tremendous opportunity to acquire our stock and essentially get shares in an additional company.

Okay. I'm going to take one more question because I think this one is important because it speaks to time lines. Which FAA phase is the longest? 3, 4 or 5?

Phase 5 is the proving runs, which are 50 -- roughly 50 hours of flying. That's probably the shortest phase. That's probably a 2- to 3-week time period. We will have done all the preparatory work for Phase 5 in Phase 4. Phase 3 and 4 are about the same length of time. But there's a lot of things that are going on concurrently during those 2 phases, and they sort of blend into each other. So Phase 3 and 4 will run from October until, call it, mid-part of December when we're ready for our proving runs. But there is training of our pilots, training of our flight attendants, training of our dispatchers, training of our maintenance teams, all of that going on concurrently, while the senior management team is running through a series of tests that the FAA makes us go through called tabletops, where they -- on the ground, we run through a number of scenarios, and they want to see how our -- each of our departments operate together and how we take our manual set, which is everything that we submitted in Phase 2; how we take that manual set and use that to actually run our airline and to make sure that what we have designed in our manuals will allow us to run the airline. So again, Phase 3 and Phase 4 runs sort of concurrently. There's a lot going on at the same time. And that will run from now until, say, mid-December when the proving runs will start. It could be shorter than that. But we really want to be in a position to start flying after the first of the year. We believe that gets us past most of the COVID issues that may occur, say, in the fall of this year and gets us into the prime season for charters by mid- to late January and then into February. So not sure that, that answered your question. But consider Phase 3, 4 and 5 to be over the next 3.5 months, Phase 5 being the shortest. And when you get to the proving runs, that's -- everyone sort of breathes a sigh of relief because we've gotten through the documentation. And now we get to the fun part, which is we actually get to go out and fly the airplane and show everyone that we know what we're doing. So consider the next 3 phases sort of concurrent, leading up to the actual flights with the aircraft. And the next 2 phases occur over the next 2.5 to 3 months.

Okay. Thank you for that. And that's very much in keeping with what the public statements have been since our first webinar, which was early June, and then another one about a month later. So that's terrific. Ed, Ryan, thank you, and it's nice to see the team all sitting around the table. And thank you again. And with that, we're going to wrap. And to all of our attendees, thank you for participating. This has been recorded, and we'll be distributing the recording in a couple of days. Thank you.

Thanks very much, Grant. Thanks, everyone. Okay, guys, thank you.