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

All right. We're going to get started while more people are entering the webinar. Thank you very much for those who are attending. And, Ed Wegel, CEO at the head of the table; to his left, Mark Salvador, Chief Marketing Officer; and Ryan Goepel to Ed's right, Chief Financial Officer. And first, Ed, on behalf of many people we've spoken with, just want to extend our congratulations to you and the team for the magnificent job you did in regards to the Afghanistan evacuation. It was really quite amazing how quickly you and the folks pulled everything together. So that was extraordinary. There are a number of things to update today, including the revenue picture, which is most interesting. And once again, this team continues to deliver a lot in a short period of time. So with that, Ed, I'm going to turn it over to you.

Great. I appreciate that, Grant. And you're right, we'll talk about the Afghanistan operation in a few minutes, but it certainly shows the ability of this team to execute on a very short notice. Good afternoon, good morning, everyone. We're very excited to talk to you at the end of August, beginning of September. August was a great month for us for a number of reasons. We got our 121 operating certificate from the FAA, And shortly thereafter, as you know, we had the show cause order that's allowed the DOT to and the FAA to allow us to start operating domestic flights and domestic operations here in the U.S. Today, we're going to go through a number of things. We're going to talk about the other authorizations and certifications that we received during the month. We're going to talk about our fleet progress in terms of bringing new or additional aircraft onto our certificate. We'll talk a little bit about Afghanistan more as a case study of what this company can do. Then we'll give you some updates on our hangar, some of our financing, our new contracts with clients, the bases that we're setting up. And Ryan, will talk about the Canada Jetlines' current situation, and then I will recap on the last 14 months since we did the financing back in June of 2020. So let's go to the first slide. As I said, we received our 121 operating certificate from the FAA in early August. That, combined with the DOT certificate of public convenience allowed us to begin domestic operations, and we operated a number of charters almost immediately, which Mark will talk about when he gets to his part of the presentation. One of the things that -- or authorities that we need on top of those 2 items was the ability to operate foreign or international charters. And by regulation and statute, this is something that is reserved for the President of the United States to provide and authorize for us. He does that for every new airline. And so, as soon as we received our operating certificate and DOT authority, this was immediately applied for. It normally takes 60 days to go through that process. We were able to get through that process a little quicker. Some of it was as a result of our Afghanistan operations, where essentially the President had to authorize us to operate internationally in order for us to do that. So we were able to reduce that time line down to about 34 days, which has now allowed us to start international operations, and we will start doing international operations as of next week. So we're very happy to get this. Again, we got it in about half the time that it normally takes to get it. It is the last piece of authorization that we need from the DOT in order to be able to operate worldwide as a domestic and flag carrier of the U.S. We also had to put the A321 on the certificate. And the reason for that is, as you remember, we went through the certification process with the A320 where we had to do an emergency evacuation drill and pop the slides and have our flight attendants and cruise go through a drill in front of the FAA inspection team. The A321 has some additional exits and a different number of flight attendants. So we actually had to do another evacuation drill with the A321, which we did last night and it was successful. In fact, we popped the 2 slides -- excuse me, 4 slides on the 321 had to be popped. We did it in 10.5 seconds, and the FAA said that they think that, that is the fastest that it has been done on this airplane since they've started doing this. So our crews were extremely psyched and prepped and ready to do this last night. We did it on the first try, and it was a tremendous success. So that airplane is now on what we call our operation specifications. We are clear to operate the A321 in domestic and flag operations. That means that we are now certified to fly the entire A320 family of aircraft, which is -- runs from the A318, 319 and 320, of course, which we had already certified and now in the 321. So we can operate that entire family of aircraft. And both airplanes are now operational, and we'll be flying and Mark will talk about this, and we'll be flying this weekend and we have a pretty heavy schedule set for that as we move forward. Let me talk now a little bit about aircraft 3, 4 and now #5, we've talked about 3 and 4 in the past that those were under LOI. Those airplanes are now -- those leases have been signed, and they are in process to be delivered to us in the next -- first aircraft in the next few weeks and then the second aircraft will be delivered in about 6 weeks from now, which is good timing for us in terms of crew training as well as contracts as they come online. So N279GX comes from Avolon, which is the second largest aircraft leasing company in the world, and we expect to do more business with them. The test flight is today. It will go into paint on September 7 next week, and we expect it to be delivered to Miami sometime mid-September after it comes out of paint and it's final inspections. That aircraft will then be put on the certificate and will be put to work almost immediately. It has charters booked on it, and we expect that airplane to be an on-time delivery and into service as quickly as we can put it there. Aircraft #4, 276GX comes from Genesis leasing. Test flight right around the 1st of October, will go into paint a few days after that, and then delivery to Miami, hope and expect mid-October. That airplane will be assigned, and we'll talk about this in a few minutes, but it will be assigned to our new base in Atlantic City, where it will start flying and a number of charters beginning as soon after it gets delivered and put on our certificate. We've identified Aircraft #5, this comes from DAE leasing, DAE lease is our first A320 and 276GX. This is a very, very good airplane for us. It comes out of Alaska, previously operated by Virgin America. It's got the full-scale WiFi on board, the 2Ku band, which a number of our clients need. The airplane will be in great shape. We have signed the LOI. We're inspecting the airplane this weekend. We're projecting the delivery after it goes through heavy maintenance and paint sometime around the first part of next year. And that airplane will be a great airplane for us because of its capabilities at its pedigree. It will be very easy for us to put that on to our certificate, and it's got full WiFi capability, which is important for us. Beyond 3, 4 and 5, we're looking at 2 additional aircraft coming out of Alaska, 2 320s, again with a full WiFi capability on board in the same pedigree, which is very good for us because of the ease with which we can transition that airplane onto our certificate. We'll talk a little bit about Afghanistan to the extent that we can. We received a call, as I said, from the government. We received it on August 18, asking if we could provide both aircraft to the operation in Afghanistan. We immediately said, yes, we can do that. We were designated a state aircraft, which means when we were under the guidance in command of the U.S. government, which allowed us to operate N277, even though it was not on our certificate. We made all the preparations and within 36 hours, our airplanes were on the move with crews to Tajikistan, where they set up a base camp and then operated a number of flights into Kabul. We expect it to operate more, but with the C-17s coming in and out, the ramp space was a bit tight, but we've got as many airplanes in as we could. We've got about 1,000 people out, and we flew almost half of them to Ramstein airbase in Germany. The operation went flawlessly. There was no aircraft down. Every aircraft departure was on time. We've got great rave reviews from the U.S. government, people on the ground, who have set word up through channels that GlobalX ought to be very high on the list for new government contracts and missions in the future. And we have actually petitioned now the Department of Defense in the U.S. to move us forward. It takes about a year before you can start the application process to fly Department of Defense charters. We have requested a waiver based on our operation into Afghanistan to start that process as of now, and we're waiting on word back, but I think that we'll be able to reduce that time and get additional Department of Defense charters in the future. A quick update on our real estate requirements and needs. As I discussed last time, we need a permanent home for our airline as well as a maintenance facility where we can maintain up to the C check level, our A320s, 321s, 321 freighters and potentially larger aircraft, A330s in the future. We identified where we want to be. We've been given a parcel of land -- designated a parcel of land from Fort Lauderdale Airport. We have an initial design in place. We've engaged architects. We have the funding in place, and we are moving forward on that with an expected completion date where we can move in sometime in the first quarter of 2023. It's very tight on timing, but we're going to move this forward as fast as we can. I want to stress that there is no cash out of pocket from GlobalX on this development, but all of that will be taken over by the funding that is in place. And we will lease this facility on a 35-year lease once the facility is completed. This is important for us for a number of reasons because it helps us control all of our maintenance activities up to the C check level. And in so doing, we reduce our heavy maintenance and overall maintenance expenses by as much as 20% to 25% and as well ensures the quality of our work and it raises, within the eyes of the FAA, our credibility in terms of our operation and our ability to maintain our aircraft. We're also looking at building office space there to consolidate all of our people in one location and as well a training center. No decisions have been made on that as yet, but we do have the land and we do have the financing. And again, no cash out of pocket in GlobalX. So all around, this is a very, very good deal for the airline. I'll let -- ask Ryan now to talk about our S-1 process.

The S-1, it's a share registration statement. It's required of all U.S. companies to register with the SEC and for our -- U.S. companies listed on the TSX. We filed our final version with them last week. Basically, we did the initial one earlier in the summer. We've gone through 3 comment letters. And what that means is as you can file it and the exchange reviews it and issues comments, i.e., questions as it relates to the -- as to the filing. You address them, and ideally with each comment letter, you go from many to none. So we felt -- the latest comment was received last week. We responded the next day, and we're pretty confident that within the next week, we should have that effective. We will then -- once we have that in place, be in a position to apply for a NASDAQ application in early September. So that's a key step as far as ensuring compliance, but also -- it also helps us get our -- everything organized in effect for regulatory purposes.

And it also sets the stage for us when we get ready to raise money in the public markets. We've got the first S-1, even though it's a share registration statement. We've got the basic document done and approved by the SEC, which is the foundation then for later filings if we decide to raise money again in the public market.

Yes. And to follow-up, I think one of the things that we've been asked is what are we doing to help get our story out. Now that we are certified, now that we're applying for revenue, we believe there's a significant interest as it relates to more institutional kind of investors. Hopefully, some of them are on this call today. But this is just an example of some of the activities we've engaged in, that we will be engaging in. Obviously, we attended the Banff Capital Conference hosted by CEM in late August. We will be presenting on September 10 at the Cowen Global Transportation Mobility Conference. We'll be issuing a press release with that link, so you can register to watch. We've also engaged with [ North ] Equities, a social media marketing company to help spread awareness across multiple platforms. We've actually created an YouTube channel, where Ed has been posting on weekly kind of interviews with background and more kind of background information and updates to help people become more aware of our story as we go forward. We've also had internal resources to spearhead communications with and direct outreach to new and strategic financial investors. As it says, with any company, you have to manage your performance. And generally, if you perform, it should be reflected in the stock price. You've also got to make sure that people understand the story and hear the story. So we're taking it as a pretty large action right now. We will -- with certification, with revenue growth, it's a much more compelling story, I think, for a much broader audience. And these are just some of the actions, not all of them, that we're taking Investor Relations to sort of get the story out and hopefully bring more attention to the stock.

We know we've seen a lot of the jackpots, and we don't need to be reminded of this that we have to get our story out to help support our stock and help support the company. Now that, as Ryan said, we're through the certification process, and we can take a deep breath and look at other things that we need to be doing, this is an intense focus for us is to get this story out to more and more institutional investors, particularly in the U.S., get ourselves uplisted and continue the growth and progress of the story in the market. And we think there's a lot of compelling facts behind what we are doing as we compare ourselves to others, as we came out of this pandemic, as well as a partial ownership of Jetlines and some other initiatives that we will be announcing over the next few months. So this is an intense focus for us. I'll just remind everyone that all of the senior management are major shareholders in this company. And so, we are as keen to see this story get out and the effect of getting that story out is every one of you. So we will do that. Let's talk a little bit about our August sales and then our -- some of our projections going forward. I'll turn it over to Mark Salvador, our Chief Marketing Officer.

Thanks, Ed. So as we had mentioned, we came into FAA certification and DOT approval towards the end of the first 7 days of the month, and we went right to work. So what you'll see here are aircraft is that we flew on a short month across both 276 and 277. 277, of course, taking into account days that we were deployed overseas in the Afghanistan mission. But we are starting to look at these metrics around total aircraft days flown. And you'll see here that within a short month, we have 27 total days of aircraft flying time. Those particular days amounted to 175 hours. And if you've been paying attention to what our standard is or what we benchmark is a healthy business, it's 175 hours within a month -- I'm sorry, it's 150 hours within a month. And you'll see that within a 3-week period, we flew 175 total hours. So we went out of the runway strongest first month of operation. Those 27 days and 157 hours representative of $1.4 million in revenue. And once we were in the throes of contracting, we contracted 40 contracts in the month of August to include a bunch of new clients. We'll talk about it on the right-hand side. I'll let Ryan talk about plane month equivalents and then I'll come back into the new business.

Yes. And the idea of the plane month equivalent is as we add claims, it makes a big difference when you add it on the first of the month, the 10th of the month or the 20th of the month. So what we try and track is effectively, how many planes do we have for the period of the month. So even though we had 2 planes flying. They had not flown for the whole month. So it worked out to about 1.09 planes being available for flying for the month. So for September, for example, for these 2 planes, it would be 2 as they're available for all the days. And so as we add capacity in the middles of the month, and especially in the early planes, because if you add a third plane it's a big chunk. We want to make sure we're kind of comparing apples to apples on a revenue basis. And so for the first 5 to 6 planes, we'll probably start talking about plan month equivalents. So you can really understand our capacity and what we have available to sell.

And everyone always wants to talk about who we're flying and what new business we're going after. So our sales team has been very busy this month signing new clients. We signed U.S. government flying in addition to the government flying that we were asked to do on behalf of the President. Because we had performed so well on that Afghanistan mission, we have been presented more opportunities to fly for the U.S. government, and we are quickly adding those into our schedule. I see that as a very strong piece of business for us going forward, and we have very great accolades behind us as a result of our time in Afghanistan that we are working very hard to monetize. We have signed a major Cuban OFAC approved tour operator that we'll be working with for our flights into Cuba. We've signed an agreement with a major Caribbean airline. We added an additional casino resort in California. We added some schools on football flying, and we picked up a client that it does very good work on our flight South Florida. They fly World War II, Korean and Vietnam era veterans to D.C. for the day to visit their memorials and they do a really fantastic program with the armed services, veterans that we have here in South Florida and the armed services is very important to us here, obviously, based on what we've done and the things in the groups that we associate with. So we're very happy to have gotten the business from other flight upward and be flying them to their memorials starting first in September.

Let me just say that on this list of new clients, we've got many others that we are either in the initial stage of LOI moving towards a contract or about to contract with them or we've cast such a wide net that we're in discussions with a lot of clients already about 2022 for major track programs during the summer to Caribbean destinations and all sorts of clients across the board in all categories, major pro sport teams, college teams, European soccer teams, rock star tours with rock bands, all those sorts of things that make up a big chunk of our business. We have cast a wide net, and we are pulling those clients in. We're also very focused, as you can see, with the Cuban operation and our operation that we'll be putting into the Dominican Republic as part of the Venezuelan operation until Venezuela opens up, which we think will be soon. We are also looking for major, what we call track charter programs where we fly as many as 150 to 200 hours a month for a specific client on a specific route. That allows us to get our costs down. It allows us to put crews and other resources in place efficiently and it's a good base of business for us. So we have major track programs now into Cuba, into Venezuela by way of Dominican Republic, and we've got 2 major track programs coming online for Mexico. We're expanding that track program so that next summer, we expect that, that list will at least double with the number of aircraft that we have. And again, that allows us to efficiently utilize crews, aircraft and resources.

So to Ed's point about the various types of revenue that we see, what this graph will show you by quarter, what our projected revenue looks like based on what is contracted or what we expect to come in, in ad hoc charters. So you'll see for Q3 2021, we expect a little over $2.8 million for which the majority of that is already contracted in the [ food bar ]. The other pieces, you'll see in gray, what we have quoted, what we have under LOI and green and then what we expect based on the run rate of our business in August to pick up from an ad hoc charter perspective. Ad hoc charter, meaning call within a short period of time today, tomorrow, a few days' time for a mission that needs to be flown. And we do have a small amount of capacity in our schedule to be able to handle those things. And ad hoc works really well for us in that we have the ability to schedule it at times that we would call non-peak. So while we have our peak times already precontracted, we can actually move those ad hoc charter requests until the later part of the day, early evening, where we have the ability to get better utilization on the aircraft. Our flight started on August 7, like we had mentioned. And going forward, we expect about 30% of our flown revenue to be ad hoc in addition to that solid base of contracted that you'll see here today. On the quoted side, just a quick note that we assume 40% of those quotes issued will be -- will result in a contract, and those quotes are specifically to what we are looking at in the ad hoc area. So we expect 40% of the ad hoc requests that come in to be resulting in a contract as evidenced by our month-to-date results from August and what we expect into September based on current volume. You'll see that, that number increases significantly in Q4 to $7.5 million and increases additionally, again, a little over 30% in Q1 to 10.4.

I think those -- the numbers for Q4 and then Q1 of next year are a bit conservative. Based on what we're seeing in the market, based on the number of quotes we're being asked for and the programs that we think we can get from the U.S. government and others as a result of our very smooth certification and our ability to operate airplanes, which we evidenced in the month of August. But this gives a good foundation for the company. It's good growth. It's in line with the airplanes as they come online. So we're not taking them too fast or too slow. It allows our infrastructure here in the airline to catch up in terms of train pilots, train flight attendance, additional maintenance personnel and additional people needed to run the operations. So we are operating within our capabilities as an airline, again, not growing too fast, not growing too slow. We are right on track to where we need to be right now. We talked a little bit about the regional bases that we're setting up. We've talked already about Atlantic City a number of times. That base is now operational, 12 flight attendants graduated here in Miami. After 3 weeks of training in Atlantic City, we brought them down here to Miami for their final training and final testing. We had an airplane going back up to the Northeast on a charter flight yesterday, and so, we put them all on board. They got some additional OE experience, which is required under the FAA regulations. We put all 12 onboard, flew them up to Atlantic City, had a little celebration there for their arrival. The State of New Jersey and Atlantic County are absolutely ecstatic about what we are doing. They are paying 75% of our people's salaries in Atlantic City for the first 6 months that they're on the payroll. We will start a second class in Atlantic City in a few weeks. The State of New Jersey has actually bought and the County had bought us all the training equipment that we need, including a door trainer that will be based in Atlantic city, so that we don't need to bring subsequent classes down to Miami for their final week of training. And that will be in place for the next class. Atlantic City is very, very important to us because of its location in the Northeast. They're very, very economical operating costs at Atlantic City in terms of overnight parking as well as landing fees and the weather in Atlantic City is more moderate or tempered than it is throughout the rest of the Northeast because of its location. As a result, putting that airplane there, we're able to quote and bid on lots of charter work in the Northeast that if our airplanes are based in Miami, we would not be able to get. In fact, we flew our first charter out of Atlantic City yesterday, and we've got a book of business that's starting to build out of Atlantic City or out of the Northeast U.S. because we're putting an airplane there. So the next airplane or the fourth airplane that we get in October will be signed full time in Atlantic City. And we expect in -- sometime in 2022, we will probably add a second airplane in Atlantic City in the first half of the year and a third airplane in the second half of the year. This is all part of our strategy to diversify our bases, so that we get airplanes out of Miami so that we could be more competitive as we quote business with charter clients. We will also establish our third base out West in Las Vegas. There's obviously a lot of charter activity into Las Vegas in and out, but it's also a great location in terms of getting people who are experienced in hospitality to be flight crew members. And as well, we can move an airplane from Las Vegas to the West Coast to Arizona up to the Northwest or even into the Midwest that maybe, and again, be very competitive with other airlines that are in the charter space. Because we have an airplane there, we could move it quickly. We don't have to move it from Miami. So Atlantic City is up and running. We will put a pilot -- excuse me, a pilot base in Atlantic City, probably within the next 60 days. So pilots will be permanently assigned there. And then we will be opening Las Vegas, as I said, sometime around the first of the year, and we'll assign airplane #6 when that comes to be based in Las Vegas. So we're very excited about this. This allows us to cover the entire country and allows us to move an airplane anywhere in the U.S. with a maximum of about 2 hours of ferry time, makes us very, very competitive against our -- the other airlines in the charter space. I'll ask Ryan to bring us up to date on Canada Jetlines. Now just as a reminder, GlobalX -- Global Crossing Airlines Inc. will own, does own with its common shares as well as its warrants and restricted stock, currently owns 25% of Canada Jetlines. So this is very, very important for us. This is a great asset for us on our balance sheet. We believe as Canada Jetlines grows, it will see some of the same success that we've had here at GlobalX. And that shareholding, although it will be diluted as we do more financings for Canada Jetlines, will be a great asset on our balance sheet and we'll have great intrinsic value to our entire operation. So Ryan, you want to talk?

Yes. And sort of, this is kind of like talking about Global Crossing a year ago as far as they go through the certification process. It's a little bit different in Canada where they do the financial fitness and the Canadian control submissions upfront, whereas in the U.S., it's kind of at the back. Those submissions have been made. We're expecting approval by mid-September. With this, we can formally move forward with the Transport Canada side, which is including the FAA side of the approval. It should be noted that prior versions or prior attempts to launch Canada Jetlines has never got past this stage. So we're pretty excited about our ability to get through it. I think we have the documents and everything in place to do so. The management team is being built out. We've brought on a new CFO. A new Chief Pilot has started, and we're also building up the commercial team. The stock exchange listing is progressing. We expect to start trading in late October, if not sooner. And so that's working its way through. Finally, Canada Jetlines Vacations has been created. We will be sourcing flights from GlobalX to service the very -- Christmas busy Christmas period. We'll be updating more on that. It allowed Jetlines to sell the flights for Christmas and have GlobalX fly the planes. We're working through the progressive and getting all the systems in place. We'll figure we'll have more announcements on that in the next week or 2. The first A320 will be delivered in December. That agreement has been signed. It's going through inspection and a heavy check, and we're looking to finalize an LOI for a second 320 aircraft. So if you think about the progression and where it's at, I say this is moving much quicker than Global Crossing and so much has had a big head start. So we're excited about the team and what we're putting together there, and we're looking forward to the ways we can work together going forward.

Yes. As we've mentioned before, and I think it's important to point out again. There's a lot of synergy between the 2 airlines. In fact, we've got marketing campaigns about that. We've trademarked some slogans like Birds of a Feather and Global Presence, Local Focus and other things that we've talked about previously. But then at the operating level, there's a lot of strategy. So Canada Jetlines has been able to sort of piggyback on a lot of the work that was done here at GlobalX in terms of identifying the software systems to make themselves an entirely digitized airline. So they're using a lot of our contracts and our experience in implementing those software systems as they get up and running. They're using our research on A320s, the availability from lessors to identify their aircraft, and we're working with them to negotiate those deals to move those aircraft to them as efficiently as we can. And as well as Ryan just said, we will start at GlobalX, flying flights for Canada Jetlines before they get their certificate for the Canada Jetlines Vacations brand in December, where we're looking at flights out of Toronto into South Florida and perhaps some other destinations. With someone like Duncan Bureau as the Chief Marketing Officer at Canada Jetlines, who had that role in Air Canada and also Swoop and WestJet, he knows how to fill those airplanes. So this is good revenue for Canada Jetlines as well, it's good revenue for GlobalX as we fly those flights for them prior to them getting their certificate. And we'll continue to provide airplanes to them. Now they'll always need more airplanes. And so we can always be the next airplane that they need. We can fill in for them until they take delivery of an aircraft. Between Canada Jetlines and GlobalX, We cover the entire waterfront in terms of North America, Caribbean, Latin America, South America. And we've got some ideas about expanding our number of airlines. But for now, these 2 airlines give us tremendous optionality in terms of moving airplanes to clients and to be able to move airplanes to them or from Canada Jetlines to us as needed and as we both go out and co-market our 2 brands and our fleets of aircraft. So this is a tremendous asset for us. And we believe Canada Jetlines believes GlobalX is a tremendous asset for them. And again, GlobalX owns 25% of this airline. So we have a very, very keen interest in ensuring their success and that they can grow and that we can provide whatever resources that we can provide that they need to fulfill their business plan. So this is a great story of how we have taken what was a -- shall we call, a default airline in Canada, took the listing, took the assets, took the intellectual property. And now I'll talk about it in my recap what we've been able to do with that. So I just -- I think it's important for us, as we look forward constantly and think about the things that we want to do and need to do, it's sometimes good to take a look back to see where we've come from in a very, very short time. And this slide, I think, encapsulates that very, very effectively. So we really started this journey on -- in June of 2020 when we got the stock back floating on the Toronto Stock Exchange, we raised $1.5 million and off we went. And since then -- and back then, let me say, we promised you 1 airline. Since then, we have launched 2 airlines, GlobalX and Canada Jetlines. So you got to buy one, get one free out of this deal. And we all think that that's a pretty neat thing to have accomplished. So on the GlobalX side, what have we gone in the last 14 months? We received the highest levels of U.S. DOT and FAA certification that any airline can get. U.S. 121 Domestic and Flag Carrier, that's the highest level of certification that you can get. Certificate of Public Convenience from the DOT because of our economic fitness, the strength of our management team and the experience of our Board, we were cleared as fit, willing and able to provide air transportation to the public. We then got our foreign air transport operating authority signed off by the President of the United States as a result, in large part, because of our ability to operate airplanes very quickly and very efficiently and on time to a major part of the world. It's about 7,000 miles from our home base. So we did that within 2 weeks of receiving our certifications as a 121 Flag Carrier. And now we can operate all of the aircraft in the A320 family, A318, 319, 320, 321. On the Jetlines side, as Ryan just talked about, we successfully spun that off as a dividend to GlobalX shareholders. Manuals have been written and submitted, initial funding raised, listing expected soon, and Ryan mentioned. At the end of October, that's primarily because of the exchange rules and the legal paperwork that needs to be done. We could list that sooner if all of that could be cleared up, but we will list that as soon as it is physically possible to do so. And the first aircraft is now in heavy maintenance for a December delivery to Jetline. So they are well on their way to being certified as Canada's next newest airline, newt newest charter airline, and we'll be serving initially from Eastern Canada into South Florida, into the Caribbean, into Mexico with great support from GlobalX. But also, we've done -- let's take a look at the last slide is our corporate development. So as we stated, we've established the 2 bases, Miami and Atlantic City, one is in process in Las Vegas. We have 2 A320s or 321s to 1 A320, 1 A321 now on our certificate and in operation and flying. Two more A320s under lease and will be -- being prepared for delivery, again, mid-September and mid-October. One A320 under LOI for a late December, early January delivery and we've got 2 or 3 more A320s now in negotiation for the first quarter of 2022. As we've discussed in other presentations, our cargo plan has now been established and we moved out quickly, even while we were in certification, to tie up 321 freighter aircraft under LOI, knowing that this would be a very, very hot aircraft. And that as we would be one of the few Airbus certified platforms in the U.S. that could operate this airplane, we quickly became very popular amongst the leasing companies that were looking at converting aircraft A321s into freighters. So we now have 15 of them under LOI. That gives us a great base of business as we go out and talk to some of the major package carriers and talk about our capabilities and the fact that we have aircraft coming that we can deploy for them. We've developed major track charter programs as we discussed before for the Dominican Republic, Venezuela and Cuba. The foundation of clients -- charter clients has been established. Our permanent home, including a maintenance complex, has been designed and financed in the ground leases in negotiation. And we've got a great core base cadre of 20 pilots, all captains, 44 flight attendants who are trained and all qualified now to fly our family of aircraft. We're starting another pilot class in a few days and another flight attendant class by mid-September. So we will grow the number of our crew members, obviously, as we add aircraft and we are on track to do that. So far, we have had no problems, no issues finding great pilots and great flight attendants to come work for us. So that's what we've accomplished in 14 months. We think that this team has done an incredible job in getting essentially 2 airlines up and running through the middle of a pandemic, both well financed, both have the attention of certainly, the aircraft leasing companies, major aircraft and aviation vendors and destinations in the Caribbean and Latin America and others that need additional charter capacity. So we are well positioned with these 2 airlines now, primarily GlobalX, to take advantage of tremendous opportunities that we see now rolling out in front of us. We have a plan to bring airplanes on. We have a plan to grow our infrastructure. We have a plan to finance all of that growth and we have a point to ensure that those airplanes are well utilized across the charter markets in the Americas. So with that Grant, that concludes our formal presentation, and we're happy to take any questions.

Thank you, gentlemen. Excellent. Once again, it's amazing how much has been accomplished, and that it was good to reflect on the past 14 months. [Operator Instructions] This is from Keith Schaefer, a well-known newsletter writer, has a large following. "is it fair to say that ongoing U.S. government revenue is a wildcard that investors could not have priced into the stock previously? And in regard to that, do you think the U.S. government revenue would be more ad hoc? Or do you think there is a possibility you can make that -- make that a recurring enough revenue stream that analysts could, one day, model that in?"

I'll take the last part of the question first. So the regulations require us to be an operating airline for 1-year before we can request from the Department of Defense to be added to their list of airlines that can compete for charters. And once you go through that process, get added to the list, and there's an inspection after the first year that you go through with the Department of Defense and you get on that list, there is a recurring revenue stream that can be modeled. We have to look at it each year to see what the DoD requirements are, then they put that out in various RFPs. And we can calculate what percentage of that we think we can get. I don't want to overplay what we did in August. Memories tend to forget things on the government side, but we think that we are looked upon favorably enough that we will be called upon to do other missions in the normal course of business for the Department of Defense, not an evacuation from an entire country. And so, we think that there is business that will come to us as a result of that. I can't tell you how much. We can probably model a very, very conservative estimate of that. But we believe that the U.S. government business, for us, will grow over time, and it will be something that we can, with some accuracy, estimate and forecast in our normal forecasting process, as we're allowed to do as a public company.

Next one, from which base will the freighters operate from? And when will the first freighters come into service?

We are looking for the first delivery now. It's been a little bit delayed into the first part of the quarter 1 of 2022, not our fault. It's a supply chain issue that's being rectified by the various conversion shops that are converting these airplanes. Only 2 have been -- only 3 of these airplanes have been converted. And so the supply chain has to catch up to now the number of airplanes that need to be converted. But we expect the first delivery in the first quarter of 2022. We have briefed the FAA on our plans and our manuals have been all created, drafted and ready for submission. The airplanes themselves will operate from a number of bases, and I can't accurately predict where that will be. It all depends on where the package carriers and others who want to have us operate for them, want to have us put our airplanes to operate into their hubs. So the airplanes will move around from the various hubs of those various package carriers. We will certainly have 1 or 2 airplanes permanently assigned to Miami because there's a lot of business out of Miami on an ACMI basis into the Caribbean and to the northern part of Latin America, Colombia, Peru, Guyana and so forth. And we can probably accurately start to forecast that later this year based on our discussions and negotiations with various third parties. But again, that's a long-winded answer. We expect these airplanes to be operating all over the U.S., all over the Caribbean and into parts of Latin America. So the airplanes will move from hub-to-hub based on which package carrier we are flying for or which freight forward or which logistics company wants our airplanes to move freight for them.

All right. And some of the questions I've been scanning came in prior to the answers being provided in the presentation, but I'll bring them up in case people missed parts of the presentation. And I'm also going to aggregate some of these questions. There's several here about Afghanistan. I don't know how far you can go. I appreciate that you're somewhat hindered as to what you can talk about. This was answered in part as to whether or not you were asked to perform the mission or that you volunteered yourself? And I think it's a little bit of both, isn't it Ed?

It's a little bit of both. So we were -- a lot of airlines were contacted. I think we were the only ones crazy enough to raise our hands and say, we're going to go do that. We had great assurances from the U.S. government about safety and that they would not let us fly if they felt that there was any notion that the -- flying into Afghanistan created any sort of safety risk for us. So we ended up being the only U.S. commercial airline that flew into Kabul that week. Others were asked. They did not go. The big airlines, United, Delta, American made a lot of publicity about the fact that they flew into Doha or other places and moved people out of there. We had actually put our airplanes right into Kabul. But we were safe the entire time. We were under control of the U.S. military and the U.S. government. And so it was a great mission for us, not only because of what we did, but from an internal perspective, I think that the camaraderie and the bonding that occurred amongst our flight crews, our maintenance team, our dispatch, senior management all working together to make sure that this was a success. And remember, we put our entire fleet over there. There were only 2 airplanes, but that was our entire fleet. And it was a tremendous logistical exercise for us. We learned a lot through that process. We tightened up some of our procedures, and changed some procedures, but it was a great exercise for us for a whole number of reasons. And we're very proud to have done that, and we certainly would answer the call again if we were called to do that.

And I had heard that you, Ed, stayed up more than 30 hours to help the crew on the line get the aircraft ready?

You do what you have to do.

Can we assume that the Afghanistan flights for high-margin positive revenue charters?

Yes.

This has been addressed, it's regards to the S-1, Ryan, has it been made publicly available?

Not yet. Yes. So once it gets approved, it will be filed publicly right before it stands effective. So it's not public, yet.

And also in regard to NASDAQ, that when you obtain the NASDAQ listing, will the existing shares listed on the TSX Venture be delisted and all shares transferred to NASDAQ?

That's not the plan as of now. But again, we will visit that as a go forward. We have a lot of investors who are on the TSX, and we can only access this through that exchange. So we don't see a real need to delist that.

Yes. I think we should be more affirmative and say, no, we will not delist from the TSX. Uplisting to NASDAQ is important to us because that opens up a whole new list of U.S. institutional investors who can now invest in our stock. But again, many of them can't invest when we're on the OTC. So we need to move to NASDAQ. We actually meet the NASDAQ asset test as of now and could start that process. We're going to wait until the S-1 is effective and to make that a much more efficient process as we move forward.

Also, on NASDAQ, how long you anticipate the process will take to achieve the listing?

I think that's really dependent upon the exchange. So they say anywhere from 8 to 12 weeks from when we applied.

This is in regards Vallair and the A321F. Is there any update on that?

Yes. That's the airplane that's been delayed, primarily because of the supply chain issues. The other lessor that we are working with, ST Engineering, ST Leasing, which is the largest aircraft MRO in the world is looking at ways to get an airplane to us faster so that we could start the process of putting the airplane on our certificate. So we're working with Vallair as well as ST, Greenwich Highland and a couple of others that we're negotiating LOIs with now. ST, we believe, will open up a second line of conversion -- a conversion line for the A321 here in the U.S. in Mobile, Alabama, co-located with Airbus. And if they do that, then we will accelerate all of our deliveries and we'll get as many as 10 airplanes from them over the next 18 months. So we're working with all of the vendors, all of the lessors, to try to get one of these airplanes in as fast as we can. We're working with an airline in Europe right now to see if we can dry lease, one of their A321s beginning in December or January for a period of time to cover us until we can get our first aircraft, if needed. And so believe me, we are working very, very hard to get one of these aircraft as fast as we can. This is a great revenue stream for us. It diversifies our revenue streams, and it's an important part of our business plan going forward. So we are doing everything we can to accelerate all of the deliveries, even the ones that we projected out to 2024, we're trying to move forward into 2023 because we know that this airplane will be a very hot item in the cargo world.

Next one is regards to COVID and I don't know if this affects you as much as it would a scheduled carrier. But the question is, how are you handling COVID cancellations or refunds?

Well, we are not a scheduled carrier. So we do not sell individual tickets. So we do not have to make any refunds. Our charter clients, all of them are, I would say, 2-way client are COVID-proof in terms of they have to fly. They have to fly their mission unless there is a total lockdown in the U.S., which none of us predict. All of those clients will need to fly the flights that they have contracted with us. And so we believe that our revenue is protected from any COVID-related effects over the near term.

On Canada Jetlines, will it trade on the TSX Venture or NEO Exchange?

While we're in the application process, we can't disclose where it will be once it's conditionally approved by the exchange at this point.

A general question. I can see a lot of great progress, which is very true. And now that you're flying in particular, but the stock price is not as reflective as the operations and certainly the tier up in the number of hours. I think it's as much a comment as it is a question.

Yes. It's something that I think we addressed during the presentation. This is a hope for us. The 3 people here at this conference table own large amounts of shares at GlobalX. And we are cognizant of where the stock price is. I think that there has been some issues because of the Jet B shares and the common shares and all of that settling out. I think that will settle out over the next, call it, 30 to 45 days. But we are going to start performing and that story will get out there. And I think the pressure, as we move to NASDAQ and institutional investors to move into our stock we'll -- we will be -- our stock will be viewed as other stocks are. If we're performing and we've got institutional support, then our stock price should reflect that reality. We're sort of frustrated. We put out as much as we can through social media, through press releases, through these webinars, and we still get comments that -- from investors that they don't have any idea what's going on with us. And so I don't know what else we could do. We're talking to our Investor Relations people, Grant, we're talking to you all the time. We're talking to various people here in the U.S. about getting the story out, but certainly to our investor base, we think we made -- we've gone out of our way with monthly webinars, with our social media on Twitter, LinkedIn and so forth, our press releases to get the information out to everyone almost as soon as it happens. And certainly, with all of the information and facts that people need to determine whether they think we are good operators or not. And so there's always going to be a certain amount of people who say that they just -- they bought the stock and they don't know anything about us. And I'm not quite sure what to do about that. But this is a major area of focus for us now. Now that we're certified, now that we have airplanes in the air generating revenue, to get this story out. And the story includes Jetlines. And the fact that Jetlines came out of GlobalX, GlobalX owns a major minority stake in Jetlines and these 2 airlines are going to work together. And until people see that in action and the synergy of that, which is going to be dramatic. When that happens, then I think our stock price will reflect that. And again, we've got to get to this Jet B, Jet A common share sort of knothole that we're in and people not understanding the difference between the bearer shares and do they buy one or do they buy the other and how they can convert and so forth. And so I think that's been a bit of a drag, but that will clear up over the next 30 to 45 days. And I think that we have a very compelling story.

We'll certainly agree, and I can tell you, in terms of inquiries at our office just since late June has responded to either by e-mail or a lot of personal conversations. There's been more than 400 responses and answers to a series of questions just out of our office. So it's getting to the point where we almost needed a small call center to handle all of the inquiries. So there's an abundance of information that is available, and I know that all of you are responsive as well.

Yes. I think -- and one other thing I want to say so, Ryan, as he mentioned in his presentation was at the Banff Conference. I don't know how many companies presented there, but we were voted, and I don't know how they vote or who was there, but we were voted the #1 -- Ryan, perhaps you can describe it?

Yes. I guess one of the things we were told afterwards, we were considered one of the top stories presented amongst, I think, the 30 companies that were there. So I think once people understand our story and they understand what we've done and what we're about to do, it's very compelling. So all we can do is just keep telling.

Absolutely. And I can tell you, I was in the room with the investors because I was also there as an investor because we do, as we have done in Canada Jetlines and Global Crossing, and there were 22 companies and definitely Global Crossing was very near the top in terms of top picks. So back to the questions, there was one about Class B shares, but you've answered that. Question about rival of the cargo or the freighters, you've addressed that about the slight delay. There's one here. I think this is more an operational question than an investor question, but it's asking if there will be a requirement for pilots to live at base.

Typically, in this business, the pilots are assigned to a base. They can choose to live in the local community, or they can commute. And since pilots get moved from base-to-base, it's sort of hard for them to keep moving their families and their homes from 1 base to the next. So because pilots have the ability to fly, jump seats and have -- we have reciprocal agreements and so forth. They generally will live in one part of the country and stay there and then will commute to wherever they need to fly from. In this case, I think some of our pilots actually want to move to the Atlantic City area. And so they'll be assigned there. But in general, pilots commute. They're required to report at a certain time before their flight and it's their responsibility to be there.

Can you comment on any issue's perspective customers have raised and reasons customers or prospective customers decided not to contract with Global?

Mark, do you want to take that?

I'm not aware of customers that we've been discussing that decided not to contract with us. We have really great relationships with those that we have been in discussion coming into our youth as an airline and the customers that we sourced and the customers that we're working with now signed with us. Obviously, they're along the way that we've spoken to people that may have gone one way or another based on timing. But we have a solid book of business, and we have a good group of customers that have been by our side for the last 12 months, and we're now starting to fly them.

Yes. I think you have to remember, with only 2 airplanes, we often run into situations where we get the call, we can't provide the airplane at the time that they want. That could be a football team or a client that needs to get to or an incentive group. So we offer them alternatives and options, obviously, based on when we could fly for them. And they may need to move away from that because they're time sensitive. That's the only reason that we would lose a client at these stages because of their time sensitivity. And that's a function of not having very many airplanes in the fleet as yet. If we had 30 airplanes, you can usually find a way to take care of a plane. You can move airplanes where the airplanes flow, and so forth. When you have 2 airplanes, it becomes much more difficult to do that. So the only reason that we are losing clients at this point other than they -- when they see the price and they decide maybe they need a smaller airplane is the fact that we can't fly exactly on the day and time that they need, again, because of the small fleet that we have.

Ryan, for you is in regards to NASDAQ. To uplist to NASDAQ, don't you need a $4 stock price? If so, how will you achieve that? And I think this is an important consideration because we certainly have feedback. People expect that there would be a consolidation for Global Crossing to get to NASDAQ when in fact, you don't need that stock price based on other criteria. So I would like to allay concerns that there has to be a consolidation.

Well, the basic criteria is if you keep your stock price over $2 for a 90-day period, which we have, that you can either kind of have it over $2 for a 90-day period, over $3 for a 5-day period or $4 at listing. Those are the criteria. So we've been over $2 since early June on a U.S. basis. So as long as we stay over that, we can qualify on that basis.

There's a question about Canada Jetlines. And I think there still might remain some confusion about scheduled carrier versus charter and cargo? And what is required to operate under the regulatory environment? But the question is how will Canada Jetlines compete with the ultra-low-cost carriers taking over Canada lately such as Flair?

Well, I guess, I could comment to that. Necessarily, I think, we've taken over. I think they've been busy. I think from our perspective, and I think that's probably more of a more detailed Canada Jetlines conversation is we believe there's an opportunity as it relates to distribution and how you sell and who you sell with. So we will still be a low-cost carrier in the sense of our cost structure. We think, we'll be some of the lowest cost structures of the airlines operating at North, but also the way we sell it is -- will be different. An ultra-low-cost carrier is a very different business model that has a very low pros kind of a la carte pricing system. We are more geared about working with our distributors, working with our hotel partners to provide packages in such that our distribution will be the way we compete. So I think those are 2 different animals, and I don't think they're really competing head-to-head, and we're comfortable with the expertise we have onboard. Obviously, Duncan have, like, filled 146 planes a day. For Rouge having helped start WestJet, has an extensive experience as it relates to selling tickets within Canada. And I think if anything from my experience at Flair, you can't just put your shingle out and say, "Hey, I'm flying there," and sell tickets. You actually have that relationships. You have to have distribution thought out. And I think that's something that will differentiate us going forward in Canada.

From Mike Harrison, who is a very meaningful shareholder who's been there from the beginning of the public listing prior to, actually. "In August, $1.4 million in revenue was generated based on the $1.1 billion plane in service equivalent. In Q1 '22, it is forecasted that there will be 6 planes in service, although 2 come into service in January. I would expect that over Q1, you would have 5.3 plane equivalent in place over the quarter. Using the revenue ratio from August, that would generate $20 million in revenue versus the $10 million forecasted on this webinar. Is the future revenue based on a lower hourly rate? Or is this a very conservative forecast?"

No. There's one other nuance in that number that needs to be explained. We operate under 2 different types of contracts. One is ACMI where we charge for the aircraft, improve the maintenance and insurance. And another is a full contracted rate, where we pass through to the customer. We pay but the customer reimburses us for all of the other expense items, fuel, ground handling, landing fees, overflight permits, et cetera. So in our forecast, we have a mix of business between ACMI and full revenue charters. And it's always a difficult thing for charter airlines to show their revenue because there is this mix. We could either take the ACMI piece and artificially increase it by the amount that we would have been paid if there was a full revenue charter. Again, understanding that all of that revenue just flows through us out to the vendors. So this is a conservative estimate based on basically ACMI rates, but our revenue could be much higher based on having full paid charters, as we call them, where the fuel, ground handling and so forth gets passed through us to the vendors. And that's as much as 60% more than what we get on an ACMI basis. I know that's sort of confusing. We are debating here how best to present that financial information out there. We've looked at other charter airlines that do a mix of business like Sun Country and others to try to determine how they best equalize that revenue forecast between the 2 different types of charter operations that we fly. Again, one is ACMI, which is, in general, around $4,000 a block hour and full revenue charters, which are probably $10,000 of block hour but $6,000 of that is in fuel and ground handling and other expenses that we basically collect from the client and then pay out to the vendors. So there's not a direct correlation between the number this month or this quarter and the first quarter of 2022. We have to -- we'll break it down for you in the next presentation between ACMI and full revenue charter, so that you can see an increase in both of those categories based on the number of airplanes.

Thank you for the clarification. In regards to NASDAQ, again, do you have institutional investor interest ahead of the uplisting to NASDAQ?

Well, I think that would be the idea. I think from -- as we talked about on the Investor Relations, we're doing a significant amount of reach -- outreach to the investors, institutional client base. Obviously, the sales cycle with an institutional client is not overnight. But we have approached and discussed with over 40 different clients or investors over the last 2 weeks, and we're working through various stages of due diligence with them. And So I think you would anticipate if that's the last hurdle, then yes, we would have significant interest as part of the uplisting. I think we do have some institutional investors today. So they're key in helping kind of get the story out. But again, this is a story you just have to keep telling, and you have to work through their due diligence and work through their questions, and that's why they write bigger checks is because they do a lot more homework in general. So it's by no means an overnight process, but it is part of the piece that will allow us to attract what we think is some really solid and long-term investor groups to help support us to grow.

It's -- and Ryan's right, yes. Yes, there is institutional interest. But there is such a universe of things that they can invest in that we are competing for their attention between Bitcoin and SPACs and high tech and all of these other things that keep coming up and are the flavor of the day, we are a -- we're an industrial operating company. And as excited as we are about airplanes and what we do, investors get more excited with Bitcoin and NFTs and these other things that are out there. That doesn't mean that we cannot break through all of that clutter. But it takes time, and it takes a story, and it takes performance on our side to break through that. We're going to present at the Cowen Conference in Boston in September 10, I think, we've mentioned. Cowen's airline analyst, Helane Becker is one of the top airline analysts on Wall Street. She's a big supporter of ours, and she says, when you get to NASDAQ, then the full power of Cowen can be used to make sure our story gets out. But in the meantime, she's allowing us to present at her conference because she sees us as an up-and-coming airline that will have a tremendous amount of attention put on it once our story breaks through. So if we can get to the Cowen Conference and the Stifel Conference and some of the other transportation conferences, that's where we break through all of the clutter to those institutional investors who see and have made money in airlines, in aviation, in aerospace and see this as an asset play and as a growth play and is a long-term story. So we'll continue to do that. We'll eventually break through. People will understand who we are and what we're doing. And now again, now that we're certified, we've got some time now that we can focus on this and get the story out there to everyone.

This question is directed to Mark. With the rebound in casino and resort revenue in Atlantic City over the recent years, has Global Crossing secured any contracts with resorts for charter services?

So very good question. Yes, Atlantic City has seen a great rebound with the investment in some of the new resorts there, one being Hard Rock, the other being the rebirth of the Ocean Resort there. We are actively speaking with all of the casino resorts in Atlantic City. I can't speak to the conversations that we have with them, but there's not -- there's a very strong reason why we have airplanes in Atlantic City. Number one is because its cost base is effective for us. Number two, it's because we can react very quickly in the Northeast region for charters that are non-casino, and we see the casino market growing for us as a result of our presence.

Which are the most crucial vacancies that remain to be fulfilled on the senior management level?

Well, we will continue to grow the senior management team as, obviously, we add airplanes and infrastructure, and our operation grows. We've got the full 119 team, of course, the Chief Marketing Officer, Chief Financial Officer. We could - we will need to continue to build out the finance team, especially as we get into more complicated financings and filings as we get to NASDAQ, and we have to sort of up our game in that area, if you will, with institutional investors. On the marketing side, we need to bring in under park a VP of Sales, Director of Sales, probably a Head of Social Media and Communications, but that gets built out over time. We only have 2 airplanes right now to spread the infrastructure over. As we get more airplanes, we have the ability to add those positions. So under each of the principles in the sea level and then on the operating teams, we'll continue to add people to supplement and support what the principles do so that they can delegate more of their work so that they can focus on longer-term strategy, client development, business development, working with institutional investors on the finance side, getting the story out and so forth. So we've got a good team now for the size of our airline, and we will grow that team as we grow the airline.

And I believe this is going to be our last question because we're now through an hour 20 and you've been most generous with your time. Gentlemen, you rock as a team. Thanks for all your work, and thanks for stepping up for the Afghanistan mission. Kudos to the entire GlobalX team. You reported the possibility of over $10 million and revenue for first quarter '22. I'm assuming that will not be annualized. What do you now expect for total year revenues in '22?

That's -- we're sort of on the fringe of disclosure here and probably have disclosed too much. So I really don't want to get into 2022 other than to say that we expect to have,, at the end of 2022, 10 A320s in passenger charter operations. So by the end of 2022, we will have 10 aircraft month equivalents versus 1 today -- or 2 today, excuse me, August was about 1, September will be 2. So we will increase the plane month equivalents by a factor of 5 between now and the end of 2022.

Plus you have -- plus the freighters.

That is a factual basis that I can disclose is our plan. I really don't want to get in -- really cannot get into what we expect 2022 to be in terms of overall revenue.

Most understandable. Again, thank you for your time. Still good interest. We've got over 80 people that are still on the line. With that, we're going to wrap. You've been very, very good in regular reporting to the shareholders. And of course, these webinars are circulated, and they end up being viewed by 600, 700, 800 other people after this. So thank you, and thank you to the participants, and I expect we'll see you again in the not-too-distant future.

Thanks very much, Grant. Thanks for everyone who stayed till the end. We appreciate it.