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

All right. More people are joining us. We're going to get started. First, gentlemen, spectacular first full year of operations. Results were terrific. You exceeded forecast, and the detailed information has just hit the wire. So with that, CEO and Chairman, Ed Wegel; the Financial Officer, Ryan Goepel. There's a lot of detail in this year-end and Q4 presentation. So with that, gentlemen, I'm going to turn it over to you.

Great. Thank you, Grant, and good afternoon to everyone. We greatly appreciate your participation in today's earnings release and our update call for GlobalX. As Grant mentioned, 2022 was the critical first full year of operations for our airline. We needed to get to a critical number of aircraft so that we will be operating financially at breakeven. We needed to recruit and train pilots to crew those aircraft during the current pilot shortage. We needed the systems and processes and infrastructure in place to satisfy the U.S. Department of Transportation, the DOT, and the FAA that we could operate those aircraft. And we needed to show that we had enough capital on our balance sheet to satisfy the DOT. And while we were doing all of that, we needed to operate an on-time and reliable airline so that we could build customer confidence in our product. We needed to market our airlines to every possible charter customer in the U.S., from the U.S. government, to the NCAA, to Cuba tour operators, to incentive groups and many, many others. And we needed to build a culture at GlobalX that was inclusive, forward thinking and customer-centric, where every one of our team members felt they are part of a much greater whole and their contribution to that was needed and important. And finally, we needed to do all of that fast to fill the big hole that we saw in the U.S. air charter market. So despite the obstacles put in front of us, including the lingering effects of COVID and Omicron early in 2022 and inflation and rising interest rates, I am happy to report we were successful in accomplishing all of that and then some. The state of our airline is strong, growing and able to withstand anything that 2023 can throw at us. economically, politically or financially. We have built an outstanding Airbus-centric platform, and we have options in front of us and the ability to grow our airline and take advantage of the opportunities that we see in the near future. We operate all narrow-body aircraft, the A320 family, but we have plans to operate the A330 wide-body aircraft with certification starting later this year. We are building a hangar in Fort Lauderdale for our maintenance needs, 80,000 square feet, $30 million development, all fully financed. We are taking delivery late this year of a new full flex simulator from CAE, the world's largest simulator manufacturer for our pilot training needs with no cash required from us upfront. We have started the certification process for our ETOPS approval, so we can operate long routes over water. Like I said, we are moving fast. And the airline you have invested in is getting ready for the future. We have placed orders for the eVTOL aircraft called Eve made by Embraer, and we will be the launch customer for all of Florida for the Eve aircraft starting in 2026. We can ignore the future of aviation or we can embrace it and be a first mover. We decided to embrace it. United Airlines ordered this aircraft after we did. So we must know something about what we are doing. We have also ordered the Alice all-electric 9 passenger aircraft. Air New Zealand ordered this aircraft after we did. So again, we are happy to see major airlines follow our lead. And both of these aircraft are part of our overall ESG strategy and in the future to reduce our carbon emissions. So let's get back to today and where we are and what we need to do in 2023, but we'll get into some specifics. Just a quick run through our agenda for today. We'll talk about our accomplishments in this past year, including block hours and revenues. We'll take a look at our 2022 and Q4 financial results, which are now in the press release, which everyone should have and outlook on '23, look at our fleet and our fleet plans, look at passenger sales and our cargo operations, talk about pilot recruitment, our recent certifications and then we'll finish with discussion of our capital markets activities. Our accomplishments for 2022, I highlighted some of those in my opening remarks. But we hit $97 million in revenue for the year. We beat our forecast by 8% and it was -- and that $90 million included cargo revenues, which we did not get in 2022 because of the late delivery of our cargo aircraft. So this was a spectacular result for us considering that the cargo revenues did not start until 2023. At year-end, we had 8 passenger aircraft, and we operated revenue flights during the year to 266 different airports on behalf of 105 different customers. We developed our strong operational reliability, and that enabled us to establish our businesses with the NCAA in the Dominican Republic charter market where we now dominate that market, we now have established as the leading charter airline to Cuba, and we have established ourselves with U.S. government contracts, and that's a growing revenue stream for us as we move into 2023. In addition, as I mentioned, we received approval for the new hangar facility at FLL, which should break ground late Q2 of this year. And we'll talk in a moment about our certifications, but we completed during 2022 and all of the underlying work for 4 major certifications, EASA, which is our European certification; Department of Defense; IOSA, which is the IATA safety standard certification; and as well our cargo certification. So we began 2023 having recruited and trained 405 highly motivated, well-trained team members who are now executing our plan. In terms of quarterly revenue and block hours, we had an increase of approximately 50% from Q1 of 2022 to Q4. And our quarterly revenue increased almost 98% from Q1 to Q4. That's mainly a result, of course, of adding aircraft to the fleet, but also a consistent focus on sales and expanding the number of revenue streams that we develop and providing great service to our customers. I'll ask Ryan to talk us through our results for the year and the quarter.

For 2022, we ended with an adjusted EBITDAR and EBITDAR is earnings before interest, taxes, depreciation, amortization and rent. This is a key metric in aviation used to properly compare airlines with purchased aircraft versus leased, and our situation released all of our aircraft. So we deploy significantly less capital, but to compare results, you need to compare it on an EBITDAR basis. EBITDAR for the year -- sorry, EBITDA for the year was negative $6.6 million. But I think more importantly, when you look at Q4, our EBITDAR was positive $9.3 million, and adjusted EBITDA was $846,000. The adjustments made were for share-based compensation and for money spent on pilot training and launching of cargo operations in Q4, which we don't believe will continue or be a cost going forward.

Thanks, Ryan. As we look at 2023, we have forecasted our base case for revenue of a little over $140 million with the current fleet and positive EBITDAR and positive EBITDA. I'll say it again, positive EBITDAR, positive EBITDA. Our base case -- our budget revenue is, at this point, about 60% contracted. That means that we have developed the clients. We have signed the contracts and those contracts and that flying is now in our schedule through the balance of the year. An additional 40% or so, about $60 million, is currently being actively quoted and negotiated. And we are highly confident that we will contract that revenue over the next 30 to 60 days. This assumes the current fleet of our current nonpassenger and 2 cargo aircraft. Our target for the end of the year 2023 is to increase our passenger aircraft from 9 aircraft to 12, and our cargo aircraft in the current 2 aircraft to 6. And we have plans in place to make that happen. In addition, through 2023, we will develop our Department of Defense revenue stream. We'll talk about our certification with DoD in a moment, but we're quite proud of that, and we are already in the DoD system bidding and quoting on various DoD missions for the Department of Defense. We will expand our CAE partnership, and we will have 1 Level 6 full flight simulator delivered to us by the end of this year, housed in Miami for our exclusive use, which will be a tremendous benefit for us as we move forward in our pilot training. And we'll talk about pilot training and recruitment in a moment. We expect to break ground on our new hangar complex fleet in Q2 at Fort Lauderdale Airport. Again, this is a great asset for the company, and it's fully financed, and it will help us reduce our maintenance costs, will allow us to do our own C checks and be a place for us to have a center of excellence for maintenance within the company. We will plan to begin A330 certification in early Q3. We've identified aircraft that we think would be suitable, and we're in discussions and negotiations with lessors, and we're starting the process to certify that airplane onto our certificate. We have also started and will complete our ETOPS certification. ETOPS allows us to operate on 1 engine for up to 180 minutes. This is required for us to be able to fly to locations such as Hawaii or to Asia and even allows us a more efficient routing to apply to Europe from the U.S. We also plan to expand our ground team operation, our ground handling operation here at MIA, which has become very successful for us for our internal needs. It's helped us to reduce our costs tremendously. And we have added recently our own fueling operation here at MIA, which allows us again to reduce cost has eliminated all of the delays that we experienced in fueling our aircraft from third-party vendors, and we think can be a very important growing part of our business across the U.S. in years to come. And we will soon become, within the next week or so, a member of IATA, the International Air Transport Association. This is an outgrowth of our IOSA certification, which we'll talk about in a moment. So these are the key metrics for us for 2023. Our base case budget, our revenue is essentially locked in for the year. We're now building on that revenue base as we add aircraft. So we are comfortable in our and confirming our revenue assumptions for the year as well as our positive outlook in terms of our EBITDAR and EBITDA. A quick look at our 2022 fleet. This is how we ended the year, very proud of the fleet that we have put together. It's a great fleet of aircraft. It's served us well and will continue to serve us well. We're adding aircraft, obviously, to this so that we get to 11 aircraft within the next 60 days. We're adding 2 more passenger aircraft and an additional freighter aircraft, which brings us to 11. This is the fleet that we ended in 2022, all on great lease terms that we were able to negotiate during the pandemic. We see an extension of those favorable lease terms on the aircraft that we are bringing into the fleet in 2023. And we believe that we still have a window of about 12 to 15 months where we can lock up aircraft, midlife aircraft, which are the type of aircraft that we need at very, very favorable lease rates and conditions for us to bring into the fleet. So we're very bullish on our fleet. We're very bullish on our ability to grow that fleet on terms very similar to the terms that we got during the pandemic. Talk about our fleet evolution by aircraft over the next 2 years. This is subject to a number of things: access to additional capital to satisfy our DOT requirements, being able to access, recruit higher trained pilots and as well ability to get aircraft out of heavy maintenance predelivery. So we're seeing some delays because of supply chain issues. Those issues are starting to improve, and so we're confident that we'll be able to take aircraft on a better delivery schedule than we have seen over the past year. Just to give you a sense, as you know, we were expected to start cargo operations in the fourth quarter of 2022. Both of our first 2 cargo aircraft were delayed because of supply chain issues and other issues up to as much as 6 months of the aircraft that we would take delivery of in late August, we took delivery of in February. And the aircraft we were taking delivery of in September, we're taking delivery of within the next 30 days. We think that situation will ease as more A321s get converted, but it did impact us in 2022. We expect by the end of 2023, if all goes well, that will be a 12 passenger aircraft, 6 cargo aircraft and by the end of 2024, 18 passenger and 12 cargo aircraft. This is, for us, rational and sustainable growth. And this also does not include any A330 wide-body aircraft that we may add to the fleet. But again, this is good growth for us. It's contingent on certain things happening. We are in the process of making those things happen. We're very confident we will hit this number of aircraft by year-end of 2023 and 2024. And as we look at the delivery plan on the next slide. Our base plan currently 8 passenger aircraft and 1 A321 freighter in our fleet, that's 9. We will add another A321 freighter, the second freighter and as well an A320 passenger aircraft within the next 30 days or so. Our target plan then is to add an additional 5 aircraft and potentially 2 more A320 passenger aircraft on top of that. So 4 of those would be freighters to bring us to 6, and 3 of those would be passenger to bring us to 12, that gets us to our 18 aircraft. So again, our base plan, which includes the current 9 aircraft plus the 2 listed here get us to the $140 million plus of revenue which, again, we have essentially locked in with contracts, long-term contracts and short-term contracts and ad hoc contracts that we already have on the books. So this is our plan for 2023. Now we get all of these aircraft out to work. It's in the -- in our sales team, which is a very, very strong, very cohesive unit that works well together, has been creating some new revenue streams and opportunities for us. And we're very confident as they continue to explore new avenues for revenue streams that we'll continue to add to the number of customers that we fly for and the number of contracts that we signed. But we have a significant repeat business. We mentioned a few of these already. The NCAA, which is the colleges and universities, football, basketball, baseball, track and field, has become a very, very important source of business for us. In 2022, we flew 2 airplanes for the NCAA March Madness. This year, we will fly 6 airplanes dedicated to the 2 to 3 weeks of March Madness basketball that will start very soon. As well, we have started our life as an airline with 1 Cuba tour operator. We now have a second Cuba tour operator that we fly for. And next month, we will add a third Cuba tour operator, so we will become the largest airline serving the tour operator market to Havana, to Cuba, to the other 5 cities in Cuba that take charter operations. And as well, we have developed our business with the U.S. government flying for the Homeland Security, flying for customs and border control and also signed contracts with the State Department and others. We have shown the government that we can rely that we can fly reliably and on time and that they can count on us to serve their missions. We also have new multi-month contracts that we've put into place. I mentioned Havana and Cuba, but the Dominican Republic is now becoming a very, very large focus for us, particularly with our summer tour operators. We are the only airline flying with summer operations to the Dominican Republic. On some days, this summer, we'll have as many as 6 flights from landing into Punta Cana and Santo Domingo. We've expanded our market opportunity due to our new certifications, our EASA TCO, which allows us to fly within Europe. And so we'll be flying 2 airplanes in Europe this summer for [ 2 weeks. ] Our IOSA certification opens up a whole world of opportunities for us to fly for other airlines around the world, but primarily here in the U.S. We started to fly for one of the largest and most successful low-cost carriers here in the U.S., providing them incremental lift as they are delayed on their deliveries of new airplanes and as well to allow them to expand into new markets before they take delivery. And our DoD certification opens up to us a $6 billion market for narrow-bodied aircraft flying within the Department of Defense system and within their programs. We've also developed our VIP tour business. So we created the ability to put change one of our aircraft to 68 VIP seats. And over the past few months, we threw everyone from Bad Money, and you see the airplane there wrapped in his logo, Lady Gaga, Harry Styles, and even the Tampa Bay Buccaneers who are shown here getting on their airplane as we got them out of harm's way from the last hurricane. Our ad hoc business remains strong with over 90% of our ad hoc charters projected to return to fly with us in 2023. So passenger sales are very strong. We've developed a reputation in the market for on-time, reliable service, clean aircraft and fantastic outstanding crew members, and we get accolades every day from the people that we fly for, for the crew members for the service that they provided and for the overall flight experience. So we're very confident in our ability to hit our revenue numbers because of the team that we have and our passenger sales and the reputation that we have developed over the past 18 months. Complementing our passenger business is our new cargo division, which now operates 1 freighter, soon to operate 2 freighters, and as I mentioned, projected to grow to 6 freighters by the end of 2023. The A321 freighter is a game changer. We have talked with many, many potential customers showing how this aircraft stacks up against the 737-800 freighter and even the 757. And we are generating tremendous interest in this aircraft. We're working on 20 or 30 new projects, new quotes, new proposals every week. We have just recently signed a big contract for April that will probably be expanded through November or even through the end of the year for a major package customer. That's 260 hours a month at a very, very good block hour rate. We have other revenue streams that we have developed for our A321 freighters. Other airlines, particularly Latin American airlines that need incremental lift that don't have narrow-body freighters, are talking with us every day about our aircraft that are being delivered this year. As you know, we announced last year a transaction, a deal with Avianca Cargo, and we expect that deal to materialize, and we will start flying for them in April or May of this year. The delay in delivery of the freighters caused us to have to move our start date with Avianca, but they are a good partner of ours, and we look forward to flying with them and for them and hopefully more than 1 airplane for them for many years. We've also started to fly within the automotive market from Mexico and Texas to the major cities that have auto plants. So we've flown into Indianapolis. We've flown into Detroit and Flint and other centers where autos are assembled. And quite frankly, we could probably put 5 or 6 airplanes into the automotive market over a period of time and keep them fully occupied. We don't want to do that. We want to have a diverse revenue stream, a diverse streams of revenue from various customers. But this is a great customer for us. We've flown for Honda. We've flown for GM, and we've flown for Ford already with our first freighter. We're also talking to and working with the U.S. Postal Service. We're bidding on new routes that they are having put out to bid for this year. And we hope and expect that we will get some of that business. I mentioned Department of Defense. We will be able to start bidding our cargo freighters with the defense department here within the next few months. And of course, the package carriers, we're talking to all of them. There are 2 in particular that understand now the value of the A321 freighter versus how they operate with the 737-800, and I'm very confident that we will get a number of airplanes in with them over the course of the next year. We have 10 A321 freighter aircraft now under lease or LOI with deposits with the MSN identified. And in my view, this is the single greatest asset of the company outside of our U.S. 121 flag carrier certificate. This is going to provide tremendous growth for us. It provides diversity of revenue for us so that if we do get into another COVID-type situation, we know that the airlines that did well or at least got through the pandemic did so because of their ability to move cargo. And so we identified early on that we wanted to be in this business. We went out even before we were certified and tied up a number of these A321 freighters before anyone else woke up to the concept that this was going to be just a tremendous airplane for the cargo business. So we have a number of major airlines that have followed us to see if they can get our freighters. Their first question is, how did you get so many of these before we got them. And we just simply say, "We knew what we were doing." So it's a great asset for us, great growth for our company, gives us the diversity of revenue and allows us optionality as we move forward. We have an additional 5 aircraft that are under LOI with lessors, subject to identification of the right A321 feedstock for us. So right now, we're comfortable in projecting that we will have 15 aircraft, 15 A321 freighters flying for us between now and 24 months from now. And we're constantly working on additional feedstock to increase the number of freighters that we have under lease. Let me talk a little bit about pilot recruitment. The question we hear most often and often from some of you who are on this call, given the news about our pilot shortage, is how we are dealing with this. Short answer to that question is we are dealing with it very effectively. In 2022, we recruited and trained 55 pilots on top of the 20 pilots that we started with. We have 20 pilots that we hired, recruited, trained to get ready for our certification and to start flying in August of 2021. Through 2022, we recruited 55 more pilots. And now in 2023, we have already held 3 pilot classes, and we're adding 24 more pilots to our total list of pilots on the payroll. We think this is very good given the experience that we see with other airlines of our size. I think it's a function of many things that we can talk about, but it's the culture that we have created here, the quality of life situation that we have created for our pilots. And I think just the atmosphere and the type of flying that we do has been a big draw for us as we go out and recruit pilots. But we've also signed some major agreements to increase the available pool of pilots to us, particularly with first officers. We signed 3 agreements. You know about the OSM Aviation Academy agreement. That's already produced 8 first officers for us, and we expect another 5 first officers to come to us over the next 30 days as they finish up their program there at OSM and get their 1,500 hours as a flight instructor. We also signed a deal with CAE with their pilot program, and we have quarterly produced 3 FOs from that in the last month. CAE is the big simulator manufacturer. They also run major simulator centers and training centers, and we're starting to get some of their trained pilots with an A320-type rating being referred to us. And as I said, we've already taken on board 3 first officers from that program. We just signed with L3Harris, which is the second largest manufacturer of simulators and one of the major companies involved in pilot training. We signed with them on a pilot pathway program, and some resumes and CVs and referrals have already started to come in from that program. We also, as you know, have launched GlobalX Colombia. This is a Bogota-based air operating certificate. Currently, we're almost through Phase 2, which is the submission of our manuals, and we will enter Phase 3 with the CAA in Colombia within the next 60 days. That's their review of the manuals and then their clearance for us to bring an aircraft to Colombia and start approving runs. We did this for a number of reasons. One of the reasons was that some of our Latin American potential customers asked us if we could fly within Latin America, and we can do that with an AOC based in Colombia. But secondly and probably more importantly, this allows us to hire Colombian pilots who are already tied on the A320 family of aircraft. And there are a surplus of pilots in Latin America. They can fly this airplane, the A321 freighter, from Latin America into the U.S. on that certificate. And while they're doing that, we can go through the process of getting them approved to fly in the U.S. with [indiscernible]. So there's a twofold reason for this. We think that we can create a steady stream of pilots out of Latin America by running them through our Colombian subsidiary, and it also expands to a number of clients that we can have within Latin America because of that AOC. So it's a dual benefit for us to create this new airline subsidiary in Colombia. And we've had discussions, and we're starting to work through some agreements with major airlines as well as low-cost carriers to develop what are called flow-through agreements so that our first officers -- many of them are young and many of them want to eventually fly for United or Delta or Allegiant or JetBlue, will have the opportunity to do that with us. They come with us for a year, 2 years, in some cases, as many as 3 years, they'll have a guaranteed interview and almost a guaranteed job with any of those airlines by coming through our program and having our agreements in place with each of those airlines. So it's a recruitment tool for us to say to potential pilots working for us that we will provide them the opportunity if they want to move to a major airline or to one of the large LCCs. We're talking about our certifications. We've mentioned this a few times. And as you know, one of our taglines that we use is global presence and local focus. Our certifications allow us to implement that very tagline. We execute on this by expanding our areas where we can operate our aircraft. First one is EASA, third country operator authorization. This gives us the authority to operate within Europe. So we provide the airplane to Europe. Until we receive this authorization, we could not fly for any of the airlines in Europe to fly, say, from Amsterdam to Athens or from Frankfurt to Egypt. This now allows us to do that. And we have a tremendous number of requests of European airlines to bring our airplanes to Europe to fly for them, particularly during the summer. We have an agreement with Tuohy for this summer for 2 aircraft, and we hope to grow that program as we grow the number of aircraft in our fleet so that we fly as many as 4 or 5 airplanes in Europe during the summer. I also mentioned IOSA earlier. That's the safety standards that have been developed by IATA, the International Air Transport Association. This allows us with this certification now to be able to fly for any other airline without having to go through the typical and normal audit that, that airline is required to do and perform on us before we're allowed to fly for them. This opens up a whole new world for us of airlines that we can fly for immediately particularly here out of our Miami hub where we have many international airlines that fly. So we're talking to a number of them about providing the backup agreements now to fly in the event that they have an AOG, or a maintenance issue, or to expand or increase the number of flights that they have from the U.S. This is a tremendous authorization for us. There are many airlines in the U.S. that do not have this. And some of the airlines, low-cost carriers that we're talking to are amazed that we got it that fast. They, in fact, do not have this IOSA authorization. This allows us also, as I mentioned, to join IATA. And now that we're IOSA-approved and we're in the final stages of doing that, we expect to become a full member of IATA in the next week or so. And as I mentioned, the Department of Defense, with our fuel now from the Defense Department to fly A320s and A321s as well as our freighters for DoD, we've been now bid on the missions that they have within the U.S. also from the U.S. to Europe. And as I mentioned earlier, this is a $6 billion market. We hope and expect to get our fair share of that, and that would be a tremendous boost to our revenues and a tremendous boost to our credibility around the world line for DoD. So these certifications, which we laid the groundwork for all of these in 2022, we have to spend money on each of these to get them in terms of bringing in advisers and consultants to ensure that we get all of the right certification work on our manuals and our systems and our processes. But it's money well spent because it now opens up many, many opportunities for us to fly, not only within the U.S. and Latin America but around the world. And it frankly makes us a stronger and safer airline having gone through these audits and these examinations from these well-known, recognized international aviation bodies. I'll ask Ryan to discuss our capital markets [indiscernible].

Yes. Thank you. So as a public company, there's a lot of awareness as to our capital structure. There's a lot of effort being put into a digital program to raise awareness about the company and the stock and the progress we're making. We're starting to see dividends from that investment. Our mailing list, which is -- which many of you on this call are on has grown -- has almost doubled in the last 3 to 4 months. When you combine that with the good news, we're able to share, we think that's had a positive effect on the stock. As you noticed -- many people have noticed, we've had a fairly good run over the last 30 to 60 days. One of the questions I get asked often, there's 2, really. One is about warrants. One is about our poster. Currently, there are a series of warrants that are expiring in April of 2023, and other warrants that were outstanding are soon to be expiring, 2.1 million have been exercised, generating $1 million of cash received. I'm happy to state the warrants were exercised by an institutional investor looking to acquire a substantial position in the company, which we're really excited as the Board. And as we look towards the additional warrants, there's 4.7 million warrants still outstanding, [ brings to ] the dollar. If all our exercise that should bring in 4.7 million warrants into treasury. I'm in conversations with multiple institutional investors who are looking to acquire larger stakes to try to match with people's warrants and also talking to people with warrants to explore their exercise at once. The other question we get pretty much daily is when are we uplisting. We have said probably for the last 4 quarters, we wanted to show 4 quarters of growth. We wanted to show cargo and the certification. We wanted to show a healthy growth plan because we wanted to be a company that institutional investors will be interested in investing. We do plan to uplist in conjunction with the growth capital or debt raise in 2023, and we will maintain our discipline as it relates to equity raise. We do not believe we will not raise money at these current rates, and that's -- and we've demonstrated that with the last few capital injections being a form of debt. But we are open-minded as we look forward to 2023 as we have an incredibly aggressive growth plan. We want to get the aircraft on board as quickly as possible. We want to get the pilots on board as quickly as possible. So we have the customers to go fly for. So looking forward to 2023, we will maintain our discipline as it relates to raising money, but we are absolutely planning to do an uplist and then look forward to getting that done in 2023 responsible. Going to the next slide. Sure. So this is kind of a fun slide. This is just a sample of the teams we have flown. We've flown over 70 in the last 12 months. Over the next week, we'll probably -- we will fly with our 6 aircraft effectively almost every single team in the final -- in the NCAA tournament. This is a core business for us. We have demonstrated the capability to fly for these teams. This is a fun flying for us. We love to see the players. We love seeing the fans, and it's a very robust market. And I think we've established an excellent position in the market. And we're going to continue to grow this as it is a very large market going forward. I think finally, going to the last slide...

This is a sample of the things that we're doing to grow our brand and bring brand awareness to GlobalX. We've registered a number of trademarks. Some of you have seen them in some of our press releases and our social media. You can't beat the experience. Global presence, local focus, commercial air charter for professionals and so forth. You can see the list there. Each of these we use in certain situations. Our Client Connects and Cargo Connect trademarks relate to apps and software that we have developed to keep stay in touch with our -- both our passenger charter clients so that they have every piece of paper that's involved with their particular charter. As well, we've got Cargo Connect, which we have trademarked, which provides to our cargo customers on an iPad or on their computer, all of the documents and everything that they need to be able to operate with us on their charter. As an aside, we are now almost 100% paperless in the company. We're stopping out the last bits of paper that we still use within the company. But by the end of 2023, this airline will be run completely on iPads. So this is a list of some of the things that we're doing. We're using some of these out in the market and testing some of them. We're using them with some specific revenue streams and clients. But we want to be very much -- while we're a charter airline, we very much want to be seen as a global brand that is very focused on its business. And these trademarks, in many ways, allow us to do that. So Grant, with that, that's the end of our presentation. We're happy to take questions and continue the dialogue. So...

Thank you, Ryan. One thing I've always enjoyed about the GlobalX webinars is there's a lot of detail, but you filled several buckets with details on this outstanding job. The outlook was great, what's been achieved. So do thumbs up, terrific job, to you and your team. We already got 17 questions from folks who are attending. If you do want to submit a question, there's a Q&A at the bottom and submit your question through that. I expect there's going to be questions on warrants and everything else but you've already been answered. The first one was about warrants. Bill Deegan asking about your current cash balance.

I think cash balance at the end of the year was a little over $6 million, and that has grown since the end of the year.

Several questions from Gary Cole. I want to go through them in order. I'd like to confirm that your 2023 guidance for $140 million in sales assumes only the 9 passenger and [ 2,3 ] aircraft in service, any additional aircraft in service could add to the current 2023 EBITDA guidance and he has a question mark around that, so he's just confirming the base case.

Yes. So I would also indicate we didn't say 0 EBITDA with $140 million, we said positive. So I'd be a little more optimistic than that. And yes, any additional aircraft in service would add to the current 2023 revenue and EBITDA guidance.

And what dollar amount are you seeking to pay for mid-life Airbus aircraft such as the A320 and A321?

We seek the minimum dollar amount. But I mentioned before that we're still seeing some deals for aircraft very close to what we saw in -- during the pandemic. The next A320 passenger aircraft that we're taking is just slightly above what we paid for a similar type aircraft last year, but not a real material difference. So we're in the low 100s still for A320s, and we think that we will be able to continue with those sorts of deals for at least the next year. I just came back from the ISTAT Air Leasing Conference in California and met with about 20 different lessors, all of whom want to do business with us, all of whom are offering a A320 aircraft. And so it's still a buyers' market for those airplanes, especially mid-life airplanes. And so we see a constant steady stream of those over the next few years. We're also talking to one of the big low-cost carriers about taking on their older aircraft as they get their new A320s. And I think that we'll also be able to develop a steady stream of good aircraft for us by working with the low-cost carriers that operate the 320s.

Look forward to [indiscernible]. For people who don't know who he's been around a lot of years, call him a newsletter writer, but much more than that, it's a large subscription base. I know he is a shareholder and very recently, chose GlobalX as one of his top picks for 2023. But what Keith asks is a key in airline industry is the capacity, i.e., the jet contingent overflow that doesn't seem to jive with the idea that we will continue to get these leases. Help me understand.

Okay. That's a good question, and I can get you to understand the situation. So with the major airlines and the low-cost carriers, and these low-cost carriers that are experiencing right now is delay in delivery of new aircraft. The new NEO, on the A320neo, the 737 MAX, in some cases, those aircraft are delayed as much as 2 years. That's OEM supply issues, similar to what we experienced trying to get our mid-life aircraft or our freighters out of conversion, they're seeing, because of the supply chain issues, the new airplanes are being delayed. So those airlines won't go and get a mid-life aircraft to substitute for 2 years until they get their new aircraft. They all turn to us and say, can you provide us some lift while we're waiting for our new aircraft. And in fact, we are flying right now for one of the low-cost carriers. It's a month-long contract, which I think will get extended for several more months, and we have a second LCC that has asked us to fly for them. And we have a major international airline based in the Americas that flies into the U.S. that has also asked us for capacity to fly for them. Their NEOs are delayed. They've already announced routes, they sold tickets and they don't have an airplane. So we suddenly become very, very attractive to them. And frankly, if we had -- we discussed this every day, if we had the pilots on the airplanes, we could probably fly 15 airplanes right now in our fleet. We obviously don't have the pilots. We have to develop the infrastructure, and we're growing at a pace that's reasonable and rational. But we see this as a growing piece of our business over the next few years, and I think will continue even after the supply chain issues are resolved because we can provide additional complementary lift for these airlines that want to open new routes or add capacity until some of their order positions are filled. So we're very bullish on this. We can drive very, very good rates, and it's good flying for us. We're working with professional airlines who know what they're doing. And it's a great opportunity for us to show what we can do. So the disconnect there is that the airline needs to the new airplane. They won't go and get a mid-life airplanes to fill the gap until they get the new airplane. They fill that gap by coming to us.

Other one is repeat. When you launch a new plan, you have training expenses, start-up costs, et cetera. What's the payback on that? How many hours of flight or how many months for payback?

It's about 3 to 4 months. And that's -- the biggest chunk of that cost is deposit, which sits on our balance sheet. So that's a deposit that we ultimately get back at the end of the lease. But when you factor that in, you're looking at 3 to 4 months.

We've -- recently, we've been negotiating with lessors to not put up 3 months deposit. In some cases, we're putting up only 2 months deposits. And that's a positive for us, obviously. And as Ryan said, that money goes on the balance sheet. So it's on the deposit line. But in general, the cash requirements to bring an A320 passenger airplane onto the certificate are about $500,000. The cash requirements to bring the freighter onto the certificate is close to $1 million because of the deposits, primarily.

Somewhat along the same theme from -- I recall several prior to this, what are your fixed and variable cost per hour or block hour flying time? Two, how many block hours a year, does an aircraft need to fly to cover all costs? And three, that is equivalent to what utilization rate?

So when we talk about how we operate, we are an ACMI operator. And that stands for aircraft, crew, maintenance and insurance. Those are our costs. There are other costs that cost to fly such as fuel, ground handling, overflight fees. Those are either charged through at a market to the customer or paid for by the customer. So what we really need to look at is the ACMI. So aircraft is fixed. The lease rate is fixed. The insurance is fixed per month. When you look at the crews, you need a certain number of crews per month in order to operate. So that's -- it's variable, but sort of fixed when you look at fleeting is fixed in the short term. And then maintenance is a per hour cost. So that's variable based on the number of hours flying. So when we think about how many hours you need to fly, it really depends on -- there's 2 kinds of customers. There will be ad hoc, which is short trips that tends to be at a much higher rate, $5,000 to $6,000 an hour. Or you do programs when you fly 2 to 300 hours in a month, and you might charge between $3,500 and $4,500 an hour. I think probably as a rule of thumb, those off the top of my head, probably 70 to 80 hours, and you're breaking even for a month, and we target around 140 to 150 hours of tail on an average -- and that's an average upon an average, right? So in some months, for example, in Europe, we'll fly 400 hours a month at a lower rate. Or when we're flying sports teams, we'll fly 110 hours a month but at a much higher rate. I'm not sure if that's helpful, but that's -- it's really -- the goal is to get over 100 hours on the aircraft every month, and then we kind of play with price and hours after that, if that makes sense.

Back. He was asking about are we flying at 100% capacity. I guess you'd have to first define capacity and what percent capacity were we in Q4 '22?

All depends on how you define capacity. Based on defining capacity is how many people are in the airplane because we sell the whole airplane to the customer. In some cases, we sell a higher block hour rate for our customer who wants it for a period of 3 or 4 weeks. We pay a higher block hour rate, but the number of hours that they fly is less. What we're really looking for is the revenue that we generate per airplane. And so we play with the number of block hours they need and the rate that they're willing to pay. So we have started to track the capacity in terms of the number of hours per airplane on our schedule. And for instance, for this past for March, we're projecting 93%, 94% utilization, which doesn't mean we're flying 24 hours a day for 31 days for each airplane. It's a little hard to describe and sort of soundbite here on this call. But as Ryan said, our basic metric is to get to 150 hours per airplane per month. We'll play with that if the customer -- if the customer needs an airplane for a few weeks or for multiple flights, the utilization could be reduced, but our block hour rate goes up. So we play with utilization and block hour rate to get to the amount of revenue that we need.

You had suggested 11 planes would be breakeven. Is there any update on that? I actually thought it was 7 to 8, and it depends on the cargo-passenger mix.

So I think we should look at the last 2 quarters, right? So -- and if you look at Q3, where we were positive EPS, we had effectively 7 aircraft for only August. When you look at Q4 and when you factor in maintenance events, we actually had fewer aircraft in Q4 than we did in Q3, and we're still pretty close to breakeven on an adjusted basis at our new ER. I think -- and kind of our model is if that's effectively breakeven, each tail that's fully utilized beyond that. So 8, 9, 10, 11 direct generates profit. So no, I don't think it's 11 aircraft, I think it's less. But then you have to factor in downtime for maintenance events, planes are going for what we call 2- and 6-year checks for 10 or 20 days. So you lose that tail. So you need a little bit of a buffer in there, but 7 aircraft will be utilized should be breakeven. Yes, which is pretty close to what we have. Yes.

Brian, Randall, very impressed with your 2022 performance. Well done. At the size you are now, are you large enough to seriously compete on the narrow-body charter arena. Is your focus new business line or taking business from the competition?

I would say our focus is both of those. We've been very successful in taking business from our -- from some of our competitors. In 2023, with our additional Cuba flying and some other flying that we are doing, we've effectively taken about $30 million of revenue from our other major competitors. So that's a continued focus for us, but we're actually looking for new business lines over in Europe. We're looking for business lines. We're talking to every airline in Latin America, now about providing lift for them. We're talking to every LCC in the U.S. about providing lift for them as well. So we don't focus on any one thing. Our focus is to cast as broad a net as possible for new customers to bring into our business.

Operating pilot recruitment item, how are you doing with mechanics, which is arguably more difficult right now?

We just hired 5 new what we call AMTs, aircraft maintenance technicians, mechanics. We've not had an issue hiring here in Miami. We've not had an issue hiring mechanics or AMTs for our maintenance base in San Antonio. We're swamped with resumes from AMTs here in the Miami, Fort Lauderdale area who want to come work with us. They see our fleets growing. They see us adding freighters. They see us adding A321s. They hear we might add A330s. And so they want to be where there is growth in the airline, where they can move up the ranks from being an AMT to being line supervisor, to being a manager of maintenance. And we're going to provide those opportunities, particularly as we open up our new hangar facility in Fort Lauderdale, where we're going to be doing their own C checks. That will be a great attraction for a lot of the AMTs here in South Florida. We want to deal with a growing airline where they can get promoted rapidly and move up the chain. So, so far, everything is good. We've got a great team of AMTs. We've got a great team of supervisors and managers, and our [ 19 ] teams in our maintenance department are just top notch. And we're just -- we are really creating a very reliable on-time airline in terms of our dispatch reliability because of our maintenance capabilities.

There's a lot of questions coming in. Hopefully, we can get through most of them. When can we expect significant profit within the next 2 to 3 years?

The plan is to generate a profit. That's why we're here. I think the answer with the guidance we would give is 7 to 8 aircraft is breaking even, and we're targeting 18 to 30 aircraft. We believe that will generate a profit. We will get better. We're not in a position of forecasting profit at this stage. We will -- we'll get more finite when it comes to guidance on that side. But at this stage, with the amount of variability of delivery and on the day to day, we basically will guide on unit economics as we have in the past in our filings and indicate as we add aircraft to the fleet that generates incremental profit. And if we're breakeven at 7 or 8 planes, I'll let the rest -- everyone else do the math.

We're also investing very heavily in the business, right? So pilot recruitment and training, developing all of the infrastructure that we need to continue to take aircraft and show the FAA that we had the capability to manage and fly those airplanes. Our IT systems, we're constantly upgrading and improving. We're bringing in 2 new software systems this year. to help us with our document management systems with our manuals and as well to fully automate all of our documents across the company. So we're going to continue to invest to create the best possible Airbus-centric platform in the U.S., and that takes money. We noted in our financial statements, you see how much we spend. We're going to continue to do that as we grow. So...

Update on the uplist, more likely Q3 or Q4? Or is there anything more definitive in your mind at this point, Ryan?

2023.

Yes. Any updates on Flugy?

Yes. There are a couple of things going on with Flugy. We sort of put it to the back burner as we went through all of the other certifications and added airplanes very rapidly to our fleet. But we're talking to a number of OTAs, online travel agencies as well as some luxury brands up investing in Flugy and becoming a partner with us in that business. So I think that will have some movement on that over the next 60 days or so. It's an important part of our business. Again, we put it to the back burner so that we can focus on getting the airplanes on the certificate and getting the certifications, but we have some very, very definite plans for Flugy and we're bringing in some strategic partners to help us execute on those plans.

Question on Canada Jetlines as to how is your investment in Canada, Jetlines doing. And for those people who may not recall, Global Crossing is the biggest, if not one of the biggest shareholders of Canada Jetlines, and it was a spin-off back in July of 2021. So any further comment on that, gentlemen?

Look, so we -- as you said, we own a significant stake in Canada Jetlines as well as all of the shareholders in GlobalX at the time that, that was spun off. We talked again to Jetlines on a weekly basis. We've referred business up to them. They referred business to us. We back up their operations. As you know, they've started to fly Las Vegas and Melbourne, and we can provide backup for them. They have a small fleet at this point, but we're ready and willing to fly for them if and when they need that. They've been so focused on getting certified, getting through the CTA and then getting some airplanes in the air that we've sort of left them alone to get that done. I think over the coming months, we will have some very substantive discussions about how the 2 airlines can work together. So we're very bullish on their prospects. We think they have a good management team, a good Board. We're cheering them on from the sidelines because as a U.S. airline or U.S. investor, there's only so much we can do with them. The Canadians are very strict about all of that. But we think it's a great opportunity. Everyone sees where the stock price is, shares we own somewhere around 10 million or 12 million or so. So we're cheering them on. We think that this could be a very good strategic investment for us, and we're very happy and pleased with the way that they've executed, and we hope that we can monetize our investment state sometime in the future.

John, first off, congratulations on an outstanding first year, great teamwork and management of fluctuating markets. Can you please touch on the current status of the secondary bases, such as Las Vegas, Atlantic City, et cetera? Also Canada Jetlines seems to be pretty active. Is there any updates to your partnership and you've addressed that part?

So on the bases, Las Vegas is still in operation. And in fact, we're going to start another flight attendant class or flight attendants who will be based in Las Vegas. At Atlantic City, we maintain a maintenance base there in Atlantic City with support from Spirit Airlines, which has a lot of flight activity in and out of Atlantic City. At least once a week, we operate a charter into the Northeast, and we bring the airplane back into Atlantic City to have to sit there overnight waiting for its next operation. We brought out Atlantic City flight attendants into our Miami flight attendant base for the time being. As we grow our business in the Northeast again, we will reactivate Atlantic City and put flight attendants there again. So we're adjusting based on where we see our demand, where we see our charters, how efficiently we can move flight attendants from bases to other bases or through or to their flying, wherever the airplane may be, where they have to pick it up. So it's a -- it's -- we constantly look at all of this. We also have a base in San Antonio with a number of flight attendants. So as we grow the airline, we're constantly looking at where we can put bases, where it makes sense to put bases, where we can effectively and efficiently move the crew members in those bases to the charter flying.

Of the River Walk in San Antonio. Mike Ares, I'm truly proud of the progress that has been made over the last year and the foundational work that has been completed is very exciting. The number of planes projected by end of 2025 appears to be less than presented over the last year. It was projected that you would have 25 cargo planes by the end of '25, and the current plan appears to be 15 by mid-'25. Can you comment on what is constraining the growth in the number of planes and anticipated time frame?

Sure. So if you go back to the slide that we presented a few minutes ago, 18 aircraft by the end of 2023, 30 aircraft by the end of 2024. Assuming then we take another 12 to 15 airplanes in 2025, that gets us up into the mid-40s. Could we accelerate that? That's dependent upon a few things. And as we've learned over the last 18 months, right, it's the availability of pilots, availability of aircraft, the ability to put those airplanes on the certificate, get those airplanes from their former operator onto our certificate after they go through maintenance. So there are a number of moving pieces to that. Do I want to get to 50 aircraft by the end of 2025? Yes. Do I think we can get there? Yes. Can I affirm for you right now that I can get there? The answer is no. So what we're showing you is growth that we know we can do based on pilots, based on aircraft, based on the length of time it takes to put aircraft on to the certificate. So I think we're not too far off from 50. That's certainly our goal, but we will do it in a reasonable fashion, in a profitable fashion and in a way that does not let us outrun our cash or our capabilities or the number of people that we have to do this work.

Question from Rick Taylor. He's asking about the fact that you had Ryan lead or principles of any that whether or not that can be leveraged in any way?

No. As we -- this question was asked during the Annual General Meeting back in December, and I made it clear at that point that we -- first off, [indiscernible] was not formed with any intent or notion that we would do something with it in GlobalX. Secondly, it's very, very difficult, if not impossible, for us to do something with that because of the conflicts of interest. I'm the Chairman and CEO of the airline, Chairman and CEO of the SPAC. So there is absolutely no intent or reason or ability for us to do anything with that SPAC and those discussions have never been contemplated.

Andrew Yang, if NASDAQ uplisting is completed this year, then will the current NEO stock be changed to NASDAQ stock with a new ticker code?

I don't think there's necessarily need to do that. We want to ensure our Canadian investors have easy access to trade the stock. So it makes sense to maintain both.

Yes, the NEO has been a very, very good partner of ours, very, very supportive in terms of getting the word out about our company. And as Ryan said, it's a convenient way for our Canadian shareholders to be able to sell their shares. Having said that, Ryan, you may want to talk about the Jet Feedstock, I wonder what might happened there. That's always a question that was...

Yes. If and when we offer to Nasdaq, we will [indiscernible] to the end of the comment because we'll be able to meet the USP. We have made a conscious effort to bring in U.S. shareholders, and we're consistently addressing the ratio which created the problem that caused us to go from [indiscernible] to B to create the Jet-B. If you're a Jet-B holder, there is nothing to be concerned about. When we do collapse it, your stock will just get converted or exchanged for stock in the comment. So our goal is to get rid of the B, it's not really necessary as we update our shareholder base, and that's one of the benefits of uplisting.

Great. You are getting some redundancy in the questions here from Ken [indiscernible]. What is your position on any dilution of the stock or concern from an investor since the beginning of the question, Mark. This is effectively true after listing on the NASDAQ.

Well, I guess like -- I think we've demonstrated over the last 12 to 18 months, we're concerned about it as well. We're not out there actively trying to dilute the share price. But we also have to keep in mind, we're growing the company in triple-digit numbers. And so there is a point at which you want to bring in new capital and it's capital at the right price. And so I think if my company or this company is any company I invest in is 5x larger and I own a smaller percentage of it, my stake is 5x larger. I'm not concerned with it. So I think dilution for the stake of dilution is something we're very wary of, and I think you've seen the way we've behaved. I get a little -- I don't know if frustrated is the right word, where people think dilution has been -- dilution -- growth capital -- growth is important. And I think as long as we're outgrowing any sort of dilution, and that's definitely our plan. I think that should be less of a concern.

Yes. And just remember that Ryan and I are both major shareholders of this company. I think between us, we probably have almost 8 million shares. So you should take comfort in that, that we're not going to just dilute everyone for the sake of dilution, right. We have a measured reasonable growth plan, we require capital to meet that growth plan. We can't stay where we are right now with the number of aircraft we have. We need to add aircraft. We need to add pilots. We need to add assets. We need to add maintenance capabilities so that we can grow into a 50-aircraft airline. And that's going to take additional capital. We're going to be very judicious in how we do that. because our 8 million shares between Ryan and I will get diluted like everyone else's, right? And so you need to have trust and confidence in us that we've done pretty good so far to get us to where we are at, okay? Where we are at is a tremendous Airbus-centric platform, 15 A321 freighters coming, 12 passenger aircraft to soon be on the certificate, the ability to operate worldwide, okay? and we have done that with USD 28 million. $6 million of those USD 28 million are deposits on the balance sheet. This management team has been about the most frugal management team in getting this airline to where it is in the history of U.S. commercial aviation. You need to trust us and you need to have confidence in us, okay, that we will continue to be very, very frugal in growing this company. But don't be afraid of dilution. Don't be afraid of us doing what we need to do to get this airline to 50 aircraft and a $2 billion valuation. We can't do that with what we have now, but we've done what we have done now with $28 million.

People who are attending, please do the research and find another company that's made this much progress with a little more than $20 million in equity and $6 million in debt and a short-term loan. And good luck if you can come up with one. From Jim Wall, not a question, just passing on his congratulations for a great job. From Andre Ruble, what is the status of the Fort Lauderdale hangar construction?

We expect to, as I said in the main body of our presentation today, that we will break ground within the next 90 days. It's fully financed by Oaktree Capital. They're going through some final soil testing and some other approvals, but the main approvals are in place. The ground lease has been signed. Our agreement with Oaktree has been completed, and it's just now a question of getting the final approvals to stick to shovel in the ground.

It appears that the ideals of the A321 conversion is catching on or the idea, I guess, of catching on with other airlines. How many conversions do you have contracted at the moment? And are you working on acquiring more conversion slot?

First of all that question is very true. Lufthansa, after we started our process of acquiring A321 freighters suddenly woke up and said they want 25 of these Qantas. A few weeks ago, said that they need 12 of them as soon as they can get them. Both airlines have called us to see what they could do with us. That was a very short conversation. In terms of the slots that we have, we've got 10 aircraft that are now slated for conversion that we have under lease or strong LOI with deposit with MSN identified. We have another 5 airplanes that we have agreements with lessors to provide to us. They are not buying A321s now to marry up with the conversion slot to provide to us. My goal is to get to 25, as I've mentioned. So yes, we are out looking at more slots. We expect to sign an LOI for another aircraft that will be converted in China, and Chinese conversions go faster. And we'll get into the politics of that, but they go faster. And that's an airplane that we could probably add to the 4 that we are expected to take this year. So I spent a good part of my day out looking for more lessors, more aircraft, more conversion slots because I believe that this is the growth engine for this company.

[indiscernible], are you still evaluating each aircraft or maybe valuing each aircraft at $30 million to $40 million market cap? Leasing instead of owning the aircraft isn't a big difference when comparing to, I believe, in some country or others?

So it's not my valuation. It's the market valuation of aircraft, and I'll leave that to the market to determine how they valuate. And really, when you talk about lease versus buy, which is why you see airlines are valued on an EBITDAR basis, which we mentioned, because an airline that owns all of its aircraft, its EBITDAR is equal to its EBITDA. An airline that leases all its aircraft, its EBITDAR will be significantly higher than its EBITDA. The amount of capital employed to generate that money is significantly less. If you look at our EBITDA margins -- EBITDA margins and our return on capital employed, they're best in the industry, and that's what we're forecasting to get to. So when we look at comparing the airlines, yes, it would be ideal. There is a benefit to owning some aircraft, but there's also a benefit of getting a really good lease rate. And so I think as we've operated, we came into this business with opportunities to acquire aircraft at significantly below market lease rates, which is that's the way we've gone. As we go forward, as capital becomes available, would we consider acquiring aircraft if it makes sense? Yes. It's the lease versus buy, and there's benefits to both. I think as you said that, ideally, when you get a very mature fleet, you get to like 40, you get to 50-50. But that's over a longer term, we were in a situation where lease rates made a ton of sense, and so we're going to continue to do that.

And plus we did add the equity to put into acquiring an aircraft.

I didn't have [ $100 million. ]

And lease rates were significantly depressed -- well under the cost of capital of the lessors. So to go buy that airplane with all the cash that's required made no sense. And as Ryan said, we've talked to a number of aviation leasing experts. And over time, we want to get to 50% leased, 50% owned. That seems to be the formula that works best for airlines of our size, and we're looking at that. Some of our lessors have asked us about selling us their aircraft. Right now, we're focused on putting our dollars into the growth of the operation, all of the systems, getting additional leased aircraft and growing our revenue base. We'll get to this question probably later this year when we have more capital, hopefully available to us. But right now, it's not a focus. We'd much rather get cheap leases on our aircraft right now and going through the pain of trying to acquire an aircraft and put it on the balance sheet.

From Rod Lee. Can you please speak to your sales strategy, cargo or passenger?

Yes. I think we -- well, perhaps we can refer you back to the presentation that we just made. That's a very detailed -- and that question requires a lot of detail and a lot of explanation and not really prone to a good sound bite. Happy to talk with you off-line about that if you want, but I refer you back to our presentation.

Questions on funding other than the warrants expiring in April. And Ryan, correct me if I'm wrong, I believe that's April 26. Is that correct?

Yes, correct.

Okay. Do you have any sources of funding available to you, cash 31 December is less than short-term securities, and working cap is approximately $16 million. We're starting to already getting the lead here now.

Yes.

Well, the first question I'd ask, Gary, is how does he feel about dilution. If you don't want dilution, then it is what it is. If you like dilution, then we can make your day.

But the other way we address it is we did announce the debt facility, the $5 million we announced in January. That was from one of our larger investors. They've made a commitment to increase that if we need it. Again, we only take the money when we need it. One of the aspects of our working capital because we lease all our aircraft and under IFRS 16, that's with the current value of all the years lease payments on your balance sheet and the current liability. And so the aspect is, is we are going to be generating revenue to cover off a big chunk of that working capital. But it's just the byproduct of a highly leased fleet, and you'll see negative working capital. But the quick answer is we have existing investors who have committed to us who provided capital as they did in January. We do have the warrants, which many people have started to exercise, and we expect to be profitable. So the need for cash is significantly decreased.

So for instance, we took -- we put in place a $5 million facility, we've only drawn half of it. The other half is sitting there if we need it. As of right now, we don't need it.

Get to some of these questions. Again, we're getting redundancy in and around financing, which has been answered. There's questions here that have been answered in the presentation and more questions about the Canada Jetlines. If there's any contribution from Canada Jetlines to your balance sheet. I don't believe so.

No, we account for them on the equity method. So until they turn -- they will start generating equity, the earnings -- equity earnings when they start earning. But until they're profitable, there's no impact on our balance sheet or income statement.

More congratulations, which we're always pleased to hear, and thank you for sending those along. More questions about coupon and debt rate and how do you expect to raise millions of dollars that are [indiscernible] aircraft. We are getting really deep into the weeds on some of these questions. So gentlemen, if you offer -- or let me have a little discretion here, we're going to go to the last bit of this pretty quick because we're coming up to 1.5 hours now. Can you tell me how do you structure the leases, what the average rates are for your current aircraft? Do I get back to your earlier questions about you've been able to secure [ techno ] aircraft at very attractive rates.

Well, I think it's a supply and demand issue. And really, it comes down to getting the right aircraft at the right price from the right lessor or buying it. So it's -- when we say we're looking at a number of aircraft, we're probably actively looking at 20 to 30 aircraft kind of continually. And a lot of it has to be where is it, is it the right condition, how old are the engines, how good are the engines, who were the previous operator. So all of those factor into price, and I think we've demonstrated we've managed to get very good deals on the aircraft we've gotten to date. And we will continue to do so.

Ray Taylor, I just want to give my respect to Ed and Ryan for their discipline with capital. Great work from Dick Lawson, it goes on and on. Frankie Davey was asking about warrants. That has been answered in the presentation. So gentlemen, there is one more question. How do you feel regarding the competition with iAero and World Atlantic, but also potentially on the national as you move into the wide-body category?

We compete against iAero and World Atlantic. In some cases, there are contracts where some of our airplanes are married up with airplanes from World Atlantic and iAero. So we work with them. There's plenty of work out there, but we don't really look at our competition. We know that if we put out there a great product -- and what I define as a great product is an on-time, reliable product with a clean aircraft and a great crew. We will get more of our fair share of the market. They can do what they do. They're both good airlines. We compete against them. Sometimes we lose business against them. But I would think, overall, looking at all of the competitors in our marketplace, we have shown over the last year that we can get more than our fair share of the market. And the market is responding to us. We want to be the first call they make and not the second and third call they make to see if they can get an airplane. That's what we're striving for. We're beginning to make inroads in that. We're becoming the first call. Like we said, we've got 6 airplanes going into the NCAA March Madness over the next few weeks. So we feel very good about that.

We're going to wrap. Ed, Ryan, thank you. We're taking a lot of time to answer the questions. Terrific presentation. Any closing comments?

Well, again, thanks, everyone. This is a long presentation. For those of you who stuck in, we appreciate it. We appreciate your interest in GlobalX and your investment. And all these are good questions, questions that we -- Ryan and I would be asking if we were in your shoes. So we're always available to answer questions. You can send them to Howard Group, and they can get them to us. To the extent we can answer because unless we let every investor know the information we're providing. In some cases, we can't provide an answer to just one investor. But we're happy to talk with you. When you come to Miami, we're happy to host you hear for a cup of coffee and a discussion. And I'd like to thank Howard Group for all of their efforts, especially the last presentation they put together with the cartoon guys and why buy stock in GlobalX. We all got a chuckle out of that, but it was all very, very effective. And I think...

What I said -- I appreciate those comments that, but I said why we own GlobalX. Why we own it. If I say buy, I'm in big trouble. But we'll be exercising our warrants. So we will be buying more Global Crossing. Thank you for those comments and super, super job guys.

Great. Thanks, everyone. Have a great evening.

Thank you.

Thank you.

Goodbye.