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

Good afternoon, good morning, depending on where you are. Welcome to this Management Update Webinar for Global Crossing Airlines. I'm Grant Howard. Joined today, Ed Wegel, CEO; and Ryan Goepel, who is the Chief Financial Officer. There's a lot of information on this deck, good information, solid. The growth has been exceptional. Contrary to what the stock may be doing in a psychotic market, the company is performing, in fact, firing on all cylinders. And I'm not going to steal any thunder. So with that, Ed and Ryan, I'm going to turn it over to you.

Great. Thanks, Grant, and good morning, good afternoon, everyone. Thanks for being with us on this quarterly update, our second full quarter of operations, revenue service. We're very happy to be here and very glad to be able to present to you some of the highlights of this quarter -- go to the agenda. Highlights of this quarter. We'll do a comparison of this quarter versus Q4 of 2022. We'll look at some objectives that we have for the second quarter. We'll do a rundown of some of the major contracts that we have signed and updated forecast numbers. We're going to talk a little bit about the A321 freighter, which we will introduce into revenue service by the fourth quarter of this year, which is a very important growth element in our story. And talk a little bit about the unit economics of both the A320 passenger aircraft as well as the 321 freighter. So with Q1 behind us now, again, this -- we had a very good first quarter, despite the negative effects of Omicron which, as you remember, affected everyone late December, January and into the mid part of February. So we were not immune to that. We had a number of pilots and flight crew and even office staff who were affected by that personally. And as well, a number of our clients had to either cancel, defer or delay some of their trips because of Omicron. Despite that, our revenue was a little over $16 million for the quarter, which was a good jump over the fourth quarter of 2021. We're now projecting $90-plus million in revenue for the full year 2022. And total contracts and LOIs that we now have in place exceed $200 million, and that breaks down over the next 3 years as follows. So $70 million in signed contracts now for 2022, so it's a short jump to get us to over $90-plus million for the full year. For 2023, we have $76 million in signed contracts already. And for 2024, we've already booked $52 million in revenue contracts. So we've got a good base, a good foundation of revenue for the company as we move forward. We'll talk about some of those contracts in a moment, but the vast majority of those are recession-proof. And as we look at the possibility of a recession later this year in the U.S. and Canada, maybe all of the Americas, this bodes well for us because we are largely shielded from that economic reality. Our operating hours per quarter will increase 300% in the fourth quarter of this year versus the quarter that just ended. So we're going to have tremendous growth over the balance of this year, which comes from additional passenger aircraft as well as the introduction of the first freighter aircraft. And we'll get into this in a moment, but we'll have 3 freighter aircraft on the certificate by the end of this year. So we're forecasting our profitability in Q3. Q2, we're still investing heavily in pilot recruitment, pilot training, IT systems, all of the things that we need to lay further foundation for our growth to take on additional aircraft and to take on the A321 freighters. So with that, I'll turn it to Ryan to go through the quarter versus Q4 last year.

Yes. As Ed stated, Q4, we saw $11 million of revenue, which we grew to $16 million, which is a pretty large increase. One of the benefits you'll notice as we add aircraft is we don't necessarily add 1 for 1 in all other costs. So for example, salaries and wages did not increase to the proportion of revenue. And as we add more aircraft, we'll see that continue. Aircraft fuel is largely impacted by how many contracts we do that are either ACMI or full contract. We flew a lot of March -- schools in March, and so that included fuel in those costs. Again, that's on a cost-plus basis. So that's a pass-through cost that we mark up. So we don't take any fuel risk there. Maintenance expense was up as we basically onboarded 6 aircraft pretty quickly at the end of 2021, and there are some upgrades that need to be put in place. And that wasn't necessarily -- that was a big increase over Q4. When we look at travel and insurance, those are just -- rent. That's just a reflection of adding aircraft. So we're excited about the cost structure. We are continuing to invest in people. We're continuing to invest in systems, as Ed alluded to, in order us to feed the growth that we're projecting through the rest of the year.

Some of the expenses that we highlight here, as Ryan said, relate to the 3 aircraft that we brought on in December of last year, there were certain maintenance expenses involved in bringing those aircraft on. We've expensed them fully in this quarter, and we believe some of those will be recaptured from the lessors and some of the other maintenance providers of those aircraft. We also had professional fees were up because we got our S-1 finalized and made effective at the U.S. SEC. We had a number of charges related to that, all of which we took in this quarter and expensed them so that we don't have any overhang going forward. And as we are building our systems, we are required under the FAA to build and develop our human infrastructure in terms of our maintenance capabilities, our dispatch, our scheduling and our other systems with the people and the systems that we need before we take the airplanes on. So we incur those expenses, the training expenses, the salary expenses, before additional aircraft are brought on to the certificate. So that's an important thing to note, is that we have to have the -- all of the pieces and elements in place before the FAA and DOT will allow us to bring additional aircraft on. We have done all of that hard work. We have spent the money. We have spent a lot of money on people and systems that allow us to effectively double our fleet from now until the end of this year. As we look at some of the key contracts that we have signed over the past 3 to 4 months, a couple of things of note. So we've got over $200 million in contracts for 2022 and beyond, so 2022, '23 and '24. And we are still building on those every day. We sign contracts almost every day. We've got LOIs that are contingent on us getting airplanes in, such as some of our freighters. But we're very secure in those LOIs. We've got deposits, cash deposits up from the clients for those contracts. Key contracts include the U.S. government. We will do just shy of 5,000 hours for the government this year, in 2022. And we've already looked and have booked over 9,000 hours so far for 2023 and 9,000 in 2024. U.S. government is recession-proof, and that business will continue to grow for us. Our contract to fly from Miami into Havana and from Tampa to Havana has been renewed. This represents a little over 1,700 hours in 2022. And as you may have seen, yesterday, the Biden administration opened up all the Cuba province cities now for air service again. So we're projecting that we will fly to 4 cities on top of Nevada relatively soon. And on a full year basis, those additional flights represent about 780 hours per year. Our collegiate, fan and incentive travel business continues to grow. We're signing up more and more brokers, we're providing dedicated aircraft to the NCAA and others, providing dedicated aircraft to brokers who specialize in certain conferences and certain championship series. For instance, we're putting 2 airplanes into the NCAA College World Series that starts later this month. And because of our performance in March Madness, which was the College Basketball Championship, where we had 2 aircraft this year, we have now been asked to provide 6 dedicated aircraft to that championship next March. So we're building a reputation: On time; reliable; clean, great aircraft; clean systems; great crews. And so as a result, we're seeing repeat business and that business is actually growing in terms of the volume. We're also flying later this month and into June for a major U.S. airline LCC. We're going to do 171 hours for them in what we call subservice. So we'll fly certain routes for them. They are growing rapidly. They need additional capacity on some of their routes, so we're opening up a route for them. This is really one of the reasons that we built this airline the way we did, as a U.S. 121 scheduled flag carrier, so that we're able to perform missions just like this. And so we mimic that other airline with their onboard service, but with our crews, our aircraft. And they came to us because, again, our reputation already established for our on-time and our clean aircraft or great crews. And we think this business will continue to expand for us with other airlines in the U.S. We've also signed with a major European tour operator for this summer. We're moving 2 airplanes to Amsterdam in the end of June. We'll fly 400 hours per month per aircraft in both July and August, and this is the start of a major program with this tour operator that should go on for the next 10 or 20 years, however long these programs will be in existence. But we've got a great relationship with them. We've got everything in place to move those airplanes over during what is a relatively quieter time for us here in the U.S. in the summertime, we're able to get almost double utilization out of 2 aircraft in July and August. On the cargo side, we're making great progress now as we get closer to having the first 2 airplanes on our certificate. We've got LOIs and actually a signed agreement now with a major Latin American airline to provide them one airplane, minimum of 200 hours a month at a great ACMI rate. We'll be announcing with this airline this deal within the next few days. They're putting out their entire fleet plan. This is part of it. We'll do a separate announcement as well at GlobalX for this contract. We also have a major logistics operator in the Caribbean that is signed for a number of hours. Not fully a dedicated aircraft, but we have other pieces of contracts that we'll put in place to fill in for this airplane. As we look out over the -- our delivery schedule, which we'll get into in a moment, of the A321 freighters, we now foresee that the first 5 aircraft are essentially fully placed or fully booked going forward due to the demand that we're seeing for this particular aircraft type, the 321 freighter. So we feel very, very good, very, very confident about our cargo business now going forward. Do you want to take this?

Sure. Current status of aircraft. We have obviously the 6 aircraft on board. Our first A320, which -- our next A320, which is [ N-284 ], we'll show pictures. It's in paint and should be delivered here at the end of the month. Our first 319, which will be delivered in June. These were hoped to be here earlier in the year. They've been going through significant maintenance checks. And they've been delayed on that side, but we're excited to get him on board. Our next 321 will be coming in July, and the next 319, we hope to have here in August. I think when you look at the cargo aircraft, we have 13 on firm lease, either firm leases or LOIs with deposits and 7 additional lessor commitments. We'll walk through that on a later slide. The first aircraft to be delivered in August to allow us to complete our certification, which is all on track, and Ed will detail that process. Second aircraft, first week of September. And both are going to revenue service by October 1. When we look at our team, I think one of the key elements is getting pilots through our training program. We currently have 30 in training. We are starting classes every 2 weeks. That pilot group is growing, and that's given us the capacity to go do the work that we need to do over the next 9 months. When looking at bases, Miami, Atlantic City and Las Vegas are operating. And we're opening a San Antonio office for flight attendants and maintenance to support our government work down there. So all elements are growing. We're still adding the planes, we're adding the people and the systems, and this is kind of where the investment is. And if you look at the next slide, it's real. The 284. It's been painted. This is the next one to join. It's in our original livery. We're excited. This is another aircraft that we're getting from Alaska. So it will have 3 sister ships, all sequential serial numbers, which is great for us from a maintenance and record standpoint. And the 2 we have now been performing admirably throughout. Looking at Q2, you want me to?

Yes.

Looking at Q2, our objectives. We're targeting $19 million of revenue, EBITDAR positive. Now EBITDAR is a metric that is used in aviation. And basically, it's earnings before interest, taxes, depreciation and rent., It's commonly used in analyzing airlines because it allows apple-to-apples comparison by removing the rental cost. The reason this is important is it allows you to compare companies with similar operations who choose to acquire their assets differently. Whether they buy the asset or they lease the asset, EBITDAR as a metric that allows you to compare the 2. We're looking to take delivery, as we said earlier, of our next 319 and 2020. We'll get 2 additional passenger aircraft LOIs signed to support the government contract. We'll announce multiple cargo contracts, and we are bidding all the fall football season work. We look to finalize those contracts. There's been a lot of competition, and we're trying to see what we can do to optimize the schedule and our utilization of our aircraft for the season. I think now I'll turn it over to Ed, who will walk through cargo.

So this is our -- the concept designed for our 321 freighter. As we said, the first 2 aircraft will be delivered, first, mid-August; the second, near the end of August. We have our teams up in both conversion facilities, working with the conversion vendor to get these aircraft converted to cargo. Both are outstanding OEM contractors, one is Precision, and the second one is ST Engineering, which is the largest maintenance -- aircraft maintenance, engineering MRO in the world. And so we've been up to Lake City, Florida for the -- for 1 aircraft, and the second aircraft at San Antonio. You may have seen some of the pictures of our cutting the door ceremony in San Antonio. And in a few weeks, we'll have a ceremony in Lake City, Florida for the placement of the cargo door into our second aircraft. 321 versus the competition. We've gone through this a bit, it's on our website. But this airplane is the next shiny thing in the aviation business. We've seen Lufthansa and Japan Airlines committing wholesale to this aircraft after we committed to the aircraft, so we feel very good about that. It competes very well against the 757 and beats the pants off the 737-800. In both cases, more volume and less fuel burn than both of those aircraft. 14 pallet positions gives us a tremendous airplane. And as we have met with potential clients and walked them through the economics, they have gotten very, very excited about the ability for us to operate this aircraft for them. So we're talking to some major package carriers here in the U.S. I think we'll have a contract here in the next few months. As I said, the major Latin airline which we will announce in a few days has actually asked for as many as 4 of these airplanes from us to operate for them. And we're talking to other major Latin carriers, all of them very, very interested in this airplane. And as I said, we are confident that the first 5 of our 321 freighters have been placed with minimum monthly, hourly guarantees that make this a very, very profitable aircraft and operation for us. This is just a comparison of the A321 versus the 757 and 73. You can see that we effectively get 14% more containers than the 75. And I believe it's about 55% more than the 737-800. So this airplane is just absolutely the best-in-class narrow-body freighter that's out there. We'll talk in a moment, but we have 13 under firm lease or LOIs with deposits and commitments for 7 more from lessors. So they're out finding the feedstock for us to convert these airplanes. They've committed to us that they will find the airplanes, convert them and put them into our fleet. This is our delivery schedule, 2 airplanes, again, august. Late August, early September for the first 2, December for the third. We're working to get 2 more in the first half of 2023. We're working to move both of those to January, February, working with the conversion shops to do that. And then we have a very good schedule of deliveries after that, July, September, October, and then on through January. We'll fill in some of that as some more lines open up for the conversion, but this is a great delivery schedule for us. It allows us to absorb the airplanes, get the crews in place, get the contracts in place for us to do this. So when we are operating 20 A321 freighters, we will be extremely profitable. Here's pictures of the first 2 aircraft, manufacturer serial number 1199 and 1438. Both in progress. Doors have been cut. And these are on track to be delivered to us in late August. So again, we feel very good about the 2 OEMs conversion shops that we are working with. They're best-in-class. They do this better than just about anybody on the planet. So one of them is an Airbus affiliate that works with ST Engineering. The second is Precision, which works with ATSG, which is one of the premier air cargo carriers as well as conversion shops in the world. So we've got 2 great names behind us that will be providing us, between the 2 of them, all 20 of our A321 freighters. So we're in a good partnership, we're in good hands, with these 2 conversion shops.

Sure. I think one of the things we've been trying to get across is the story and how to understand the story and what's the potential of the story. I know we've been a little bit vague on this. We figured we'd be pretty direct on today's call. When we look at modeling how we want to -- what we believe each passenger aircraft and each cargo aircraft can contribute to the company, these are kind of the targets that we work with, and we're comfortable that this is what we'll hit over a 12-month period with each individual aircraft. So if you're looking at a passenger aircraft, we expect between $1.5 million and $2.2 million gross profit before overhead for passenger, and $4.2 million to $5.5 million gross profit per overhead -- before overhead for cargo. These are impacted by basically utilization rates and obviously charter rates, but those are the targets we're looking to get and we're starting to see. I think obviously, you have to have an overhead to pay for this. By and large, that's in place. We think we have enough of an overhead in place for the first 20 aircraft. We are staffed for 24/7 operation, which allows our operations center and our maintenance facilities or our maintenance support to work around the clock, which was a big step-up which we worked through in the first quarter. So we think with this fleet plan, I think we try to make the math as pretty straightforward as possible as where we see the opportunity being. I think with that, I'll turn over to our favorite slide.

So this, with all of the great news. We went from -- we got certified in the middle of pandemic, sent our airplanes to Afghanistan, got several more aircraft on the certificate, got up to 6 aircraft in January. Now working very quickly and closely to get to breakeven and then into positive EBITDAR and fourth quarter profitability. We have tied up 20 of the most valuable aircraft in the world today, which is the A321 freighter. We will have 10 passenger aircraft by the end of this year, most of them signed up in contracts that are mostly recession-proof. So despite what happens in the economy, these aircraft will be flying and will be flying under good contracts because they are with clients who have to fly no matter what the economic conditions are. So in the face of all of that, this is what our management team faces, is a share price that has effectively been cut in about 70% over this time period. I can tell you that we are working very hard to get the story out. We have [ tried in many meetings with ] IR firms and others to get the story out. It is the fact that we are on OTC, and institutional investors, by and large, cannot invest in us yet, it's holding us back. We are a bit frustrated. We've put this out on our website, we put it out through all of the social media, and we continue to get comments that nobody knows that we're putting this information out. So we will continue to work in a positive manner to get our story out. We're working with a number of social media sites, we're working with the media companies and others to put this story out. The efforts of Howard Group have been phenomenal in getting the story out. But we do get a lot of criticism over our share price. You have a management team that is performing. You have a management team that has provided all the things that we have said that we would do, and then some. And I think that we've got some tremendous foundational elements in place now to build this airline to the 50 aircraft fleet that we project by the end of 2025. Just want to leave you with the comment again that we are doing everything we can to get this story out. We have been through probably 4 or 5 IR firms in Canada and the U.S., PR agencies, social media and so forth. And we will continue to do that until we can finally break through and people understand the power of this company and the strength of our story. So with that, Grant, I'll turn it over to you. We'll take any questions that are appropriate.

Thank you Ed, thank you, Ryan. And folks, just a reminder, if you do want to submit questions, at the bottom of the screen, there's a Q&A button. Please submit it on that. And while we're waiting for those questions to come in, just a couple of comments on the presentation. I'm running the numbers on your gross margin, where you're doing $1 million. We're talking about gross margin of $1.5 million to $2.2 million annualized for the passengers and $4.2 million to $5.5 million on the cargo. If you annualize Q4, the numbers I'm getting is that your gross margin, of course, that's gross margin, would be $27.6 million to $38.5 million. And for the Canadians, please remember all the numbers here are U.S. So if you look at a USD 90 million base case, the gross margin going profitable this year. Can you please send me information on any other company on a junior Canadian exchange that went from 0 to over CAD 100 million in just over a year and is throwing out these types of numbers, and the track to future growth is as clear as it gets? Again, we've got a goofy market and people are selling out of fear and they're not looking at the fundamentals. I keep harping on the stock. I keep buying and I will continue to do so because this is as clear as it gets. So with that, I will stop ranting and we are getting some questions in now.

So the first one is from [ Ian McQueen. ] It says, to date, your operating margins are negative, which is no surprise given that you are building the business. In Q1 '22, costs were 129% of revenues with the big contributors being salaries, wages and benefits at 32% of revenue, fuel pass-through at 20%, contracted ground and aviation services at 18%, aircraft rent at 21% and other costs at 14%. If we look to 2023-plus, where do you expect operating margins to be? And what do you expect run rate costs as a percentage of revenue to be for the categories mentioned above?

Thanks. You want me to do that one? I think one of the tough parts about -- I think the best guidance we can give is what we talked about on a per aircraft basis and then the amount of overhead to maintain it. One of -- for example, on aircraft fuel, right? If we do a full contract, that cost is included and is included. If we do an ACMI contract, it's not. So as our mix changes of how much is ACMI versus full contract, that as a percentage of revenue will change. So we haven't projected gross margin or put that out yet. I figured we'd start with unit economics, and then we'll build up to a macro model over the subsequent calls.

What is your current cash position and the monthly burn rate?

I believe we -- Q1, we ended -- it was over $11 million was on the balance sheet. And our burn rate is getting -- is shrinking. I think it's below $1 million through the course of -- through the year, and then it gets to cash flow positive Q3, Q4. So burn rate is becoming something that's not -- as something we -- it's not a burn anymore, it's going to be accretive.

[ Chris Moffet ] asks, why was [ N-627 ] parked for a few weeks?

That was actually parked at doing a C check. So every 18 months, aircraft have to go through -- or 2 years, they have to go through a 2-year check. They take between 14 and 18 days. So 627 was at an MRO facility being overhauled. Right now, 626 is there, and then 276 will follow it straight after. So those -- we have 3 aircraft that are going through what we call C checks or 2-year checks. So that's why it was there.

[ John Chamberlin. ] Quite serious. Do we have a dedicated PIO for the company? I don't know if that's public information officer or what. Are there any thoughts on having that in place? In my experience, the PR firms only respond to dollars.

We have -- Ryan and I effectively service the public information Officer. But our CMO, Mark Salvador, that primarily -- is the primary senior officer overseeing our social media sites, our website and so forth. So we maintain a very lean senior management team here in the face of the fact that we can't -- or we won't be able to move off the OTC and move up to NASDAQ or the New York Stock Exchange until we raise some additional capital and get profitable, no matter what we do. And I will say -- I will underline that. No matter what we do, not what we say, no matter what we do in a press release, the negativity about what we say or what we do is prevalent. I guess because no one in Canada has seen an actual airline like this, as you say, Grant, to operate on a junior exchange and actually do what they say that they're going to do. But we put out on LinkedIn, on Twitter, on Facebook, on our web pages, through press releases, we've put out all of the information that anyone needs to determine whether they want to invest in this company. We are public, which means they can pull all of our public documents off of the free SEC website. So there is plenty of opportunity and plenty of ways for anyone to access information about us. A PIO would just merely put out more press releases. We found them to be of limited value, frankly. So what we have decided to do is that we are going to outperform every other airline like us in the market, and eventually, someone will notice. And it won't be because of a press release or a tweet or a post on LinkedIn. It will be because someone will wake up and say, "My Lord. They have 20 of these freighters coming. My Lord, they have 10 passenger aircraft. Look at the contracts that they have." Someone eventually wake up and pass the word on this. We've tried everything. Nothing works. We will continue in a positive way to do that. But until some people start to wake up and understand what we have here and not just read our press release, but understand what's in the press release, we're not going to get any movement.

Got you there. Concerning NASDAQ. Do you still believe you'll be able to uplist by the end of the year? And do we still need a minimum bid of USD 2?

So I think we've said our line on NASDAQ or NYSE is always have positive earnings and multiple quarters of revenue growth, have cargo on the cargo active and under contract and generating revenue. I think when you see that, we would hope that the share price would reflect it, and we can address it there. So I think external factors are external factors. And obviously, there's some frustration on how that impacts us. But on the same token, we can control what we do here and what we perform. And I think with that performance, it will take care of itself in the sense of eventually, the comps and the comparisons and all will sort itself out. So we just need to keep delivering the revenue, deliver the $90-plus million, deliver 3 cargo aircraft by the end of the year, 10 passenger and $200 million of contracts and more. And we believe the share price will reflect that and make the uplisting a pretty simple process.

Yes. We have said until we're blue in the face that we are not affected by the oil price. We're largely not affected by it because our clients pay that. And most of our clients have to fly, so they will pay that. No matter how many times we say that, when oil goes up, our stock price goes down because people panic. Say it's an airline, and they're affected by oil price. Despite the fact that we've set it 73 times, they still don't get it. So if someone has an idea or suggestion for how we can say that the 74th time and get through to anyone, we would love to have that suggestion.

Talk later. And 1 -- 2 more questions on an uplist. From [ Chris Moffett ]. How does GlobalX retain its pilots and staff and keep them from moving to other airlines after training?

Well, it's quite simple. We take very good care of them. The pilots that we're getting, particularly those in the left seat, are coming to us with 10,000 to 12,000 to 15,000 hours of piloting command time. They're coming out of the Middle East, where they've flown for a number of years. They're coming out of Asia. They're coming out of China. Even some coming out of Latin America. They want to live in Miami, they want this kind of lifestyle. They don't -- at their age, they don't want to go to the majors because they'll be in the right seat and they'll be on reserve for the next 10 years. So they want to come to us. Our wages are comparable. In fact, they're exactly the same as what Allegiant pays. Allegiant has 160 airplanes and we have 6, and we pay the same rates as Allegiant does. We take good care of our people. We've got a 401(k). We've got employee stock purchase plans. We talk to our people, we take them to launch, we take them to dinner. We make them feel like they're part of the family here. And we are having a growing number of captains who are bringing some of their former colleagues from overseas to work with us, and others. So we feel very, very good about our pilot group. We've had less attrition on a percentage basis than just about any airline out there that I've spoken to. And so we take our people seriously. We take our culture seriously. And we've created a work environment where they want to stay. Even though they might make more money at one of the ULCCs or a major, they want to be here because of quality of life.

[ Chris Moffat ] again. When are you planning on breaking ground on the proposed Fort Lauderdale hangar/office?

We expect to have final approval from the Broward County Aviation Department by late June, early July. We've got to do the final design, which is in process now for the building and determine how much office space and perhaps training space we want to put there. And then depending upon how much preparatory work needs to be done in terms of mitigation of the land, we expect right now to break ground some time in the third quarter of this year. It's fully financed. And just barring the final regulatory approvals and the mitigation of any environmental issues, which we think will be minimal, we'll be ready to go and break ground.

Question from anonymous about Flugy, if there are any updates on that idea.

So Flugy is the platform, the travel platform, we call it. It's a very direct travel company. We had announced our agreement with Soho House. We've done 1 trial -- we did one event with them. We're working to schedule about 4 or 5 more. The next steps to the platform has been effectively built out. We're working on putting the resources together to grow the customer base and see what we can do to monetize it. So we really wanted to get to a proof of concept, which we believe we've done. We wanted to get technology to a platform where it's usable, which we've done. We wanted to do some test flights, which we've done. And now the next part is in Q3, we're looking to expand it to beyond one customer and work at other groups and then hopefully get to the point where we're doing 10 to 15 flights a month through Flugy.

So we've got one strategic partner now, as Ryan said, with Soho House, which is a great brand to partner with. We're looking for other strategic partners. We've started to talk to some of the OTAs, the online travel agencies, some of the conglomerates that own a number of online travel agencies. And let me say that we're getting some very interesting responses and proposals on working with them along with Flugy. We're primarily -- we are a charter airline running an OTA or online travel agency, which effectively is not our core business. We do want to maintain a piece of this business. We think that we can monetize a piece of this business and get all the capital we need to grow that particular division of our company into a major player in the online travel space.

[ Hennessy ] is asking about the Eve eVTOLs. That's the vertical takeoff vehicles. The LOI announcement is exciting. The vehicles look incredible, especially with the logo on the side. But to what degree does CargoX plan to utilize these? Could you provide a little more insight? And then he says, incredible work from the team so far.

Yes. The eVTOL concept is something that we wanted to be involved in early on. There's a number of players out there designing and building and manufacturing the eVTOL aircraft. We selected Eve because it is a division of Embraer. Embraer is a major aircraft original equipment manufacturer, or OEM. They've got tremendous experience in building airplanes. They don't build airplanes in their garage, they build them in real facilities, they've got real engineers, and they've got real money behind them. They've just gone public. Eve has gone public with a $600 million SPAC and it's got a great valuation. We believe that is the right eVTOL application for Miami Dade and Broward County. We intend to use that aircraft in a number of ways. To move passengers from off of our charter flights to Port Miami, where they can get on cruise ships. Or out of Miami Airport or Fort Lauderdale Airport to go down into the keys, Key West, Islamorada and so forth. That's a perfect application for this VTOL aircraft. As well, we can move our crews back and forth between the airports in South Florida, and we're going to be doing more and more flights out of Fort Lauderdale, Palm Beach, even over on the West Coast of Florida, Sarasota and Fort Myers. So this aircraft, by the time it is fully developed and manufactured and certified in 2026, we'll have the range with its batteries for us to be able to do that. So -- and we're working now with Miami Dade County on developing an eVTOL plan. We also have partnered now with [ Rovio ], which is a worldwide expert in construction of airports and heliports and the sorts of facilities that are needed for this type aircraft. So we wanted to get in early, make sure we had an order position for these aircraft. The aircraft won't deliver for another 4 years. But we serve on the advisory board for Eve. We've been giving them our thoughts on how the aircraft to be used here in Miami Dade, working with Miami Dade County government as well, looking where we can build heliports or v-ports, as they're called, all the way down to Key West, so that we can provide to our clients, who want to fly into South Florida, an additional service, which is to put some of their best customers on these eVTOL aircraft to get to cruise ships, to get to destination spots on the keys, to get to their hotels on Brickell or on Miami Beach or all the way up to Fort Lauderdale. So it is an absolute extension of the services that we currently provide to our clients, absolute extension of what we do at GlobalX.

Questions on NASDAQ on the EV planes, which has just been answered. And from [ Axel Brun ]. Is there a possibility? Or are you considering participating in conferences, such as Wolfe Global Transportation and Industrials Conference this year?

So we are in conversations about that. I've done 2 conferences in the last month. So we are participating in conferences. We are talking to Wolfe and some of the other brokers about participating in that. I think part of that is us getting to the size that we're getting to, where we're getting on their radars. And so we are going to be active in the conference community.

One of the things that we'll be announcing soon, to take the thunder away from this release, is the senior airline analyst at Cowen and Company, who has done a number of broadcast with us. Helane Becker, who is one of the top-ranked airline analysts on Wall Street is going to be joining the Advisory Board of GlobalX here shortly. And we anticipate that she'll join the full Board once she retires fully from Cowen in about the next year. Helane has been a great supporter of ours, has opened a number of doors for us on Wall Street. And now in an official advisory board capacity, we believe that she'll be able to help us to get into some of the conferences where we'll be punching well above our weight because we're still a small airline, and we don't get invited to those kind of conferences. And we believe that she'll open up those doors, and we know that we'll be in some of those conferences later this year.

Gosh. Some e-mail questions from [ Mike Roberts ], I think all of them have been addressed, except for how is the ground handling business progressing?

Yes. So we currently self-perform here at Miami Dade. We're getting -- what we want to do is get good at it. We're getting the processes in place. We had a little bit of a slow start, but we've managed to put the right people in place now. They're performing excellent. I think it's a very efficient operation for us. And then eventually, we'll be able to use the expertise we've gained to piggyback on some of our work around the country. So we want to get the processes, people and procedures down to a very efficient operation so we have something duplicate going forward.

So just to expand on that a bit. So here at MIA, Miami International Airport, we have our own ground handling operation in place called ground team. The result of that is that we've reduced our ground handling costs here at MIA by about 1/3 while providing much better service because ground team obviously is completely under our control. We're now expanding that. So we're going to be adding fueling capability here. We'll fuel our own aircraft here at MIA, which will save us money even as we pencil out all of the costs of that. Plus, it gives us greater flexibility in our fueling. We are often the second or third cousin when it comes to getting fuel because of the big presence of American Airlines and some of the big ULCCs that are here at MIA. So we're getting our own fueling trucks, which will save us money and reduce our handling times. And as well that we're looking to expand, as Ryan said, ground team to the West Coast of Florida. We're looking at Tampa, where we operate now to Havana, and we'll probably expand that operation. So it makes sense for us to have our own people there. We've invited -- we've been invited to put a ground handling operation in St. Petersburg, Florida, which is a growing airport, and we'll probably put it there. But just in the case of the fueling operations at MIA, the airport there has asked us if we could fuel other airlines now because of the difficult situation for fuelers and the number of fuelers here at MIA. So we're going to provide for ourselves, and as well, we're going to fuel other airlines, and we expect to make money doing that.

Here's just one more. Certainly, there's been a lot of controversy in the U.S. It's a very political issue, the problems at your southern border with immigration. And [ Mike Roberts ] profits again is asking, if Title 42 comes to an end, is that going to impact your government contracts?

No, it won't. Personally, I don't think Title 42 will end. If it does end, there's still -- the number of illegals who've come across the border are so large, and the people that we transport back are being transported back for reasons other than the fact that they've crossed the border. So that will not end. And the need for these services, we have been told by the government, will increase from -- almost double the number of aircraft that they need in this program over the next several years. So we feel pretty confident about that business. It will be run under our Capital Airlines subsidiary. We believe that we provide a very efficient service for the government, one that is much needed. But we also do things in that contract, such as moving minors to other parts of the U.S. so that they can relink up with their families, which we think is a very, very good thing for us to be doing. So no, we don't see an impact either positively or negatively. We just believe and understand that, from our government contacts, that this business will continue to grow, particularly in a recession where the recession impacts all of the Americas.

With that, gentlemen, I believe that was the last question because nothing else has come in. So we're going to wrap. Again, congratulations. You're doing a great job, you and the team. We've got a stock that's trading at about -- current market cap is about half of what you're forecasting as your base case revenues this year. So we'll let that speak for itself. And perhaps the market will have an epiphany and we'll see a reversal on the stock price. Again, thank you, Ed. Thank you, Ryan.

Thanks, Grant. Thanks for the platform. Thanks for allowing us to use it today. Everyone, have a great day.

Thanks to everyone.