Global Crossing Airlines Group Inc. (JETMF) Q1 2023 Earnings Call Transcript

Global Crossing Airlines Group Inc. (OTCQB:JETMF) Q1 2023 Earnings Conference Call May 10, 2023 2:00 PM ET

Company Participants

Grant Howard – Investor Relations

Ed Wegel – Chairman and Chief Executive Officer

Ryan Goepel – Chief Financial Officer

Grant Howard

Okay. We are going to start. Thank you to everybody who’s attending today. There’s still more being admitted into the room. There’s a lot to talk about, and we always get a lot of Q&A on this. So I’m going to dive right into – or let – sorry, let the Chairman and CEO, Ed Wegel dive right into it and Ryan Goepel, CFO, to talk about the first quarter results and an outlook for 2023. With that, Ed and Ryan.

Ed Wegel

Great. Thank you, Grant, and thanks to everyone who is joining our call today. We appreciate your interest and your support, and I hope that we’ll be able to give you a good presentation.

Today, as you know, we reported our first quarter earnings. And first, I would like to say thank you to our 436 team members for their great work in this quarter, during which we received our cargo certification and started cargo operations, while battling some uncontrollable events in January and February. And as we battle through those, we delivered a record revenue result in March of this quarter.

We will get into the events, the uncontrollable events and how we dealt with those later in our presentation. But I will say this, given the progress we made in the first quarter in building the platform and setting up the company for a huge second half of this year, Q1 was a very, very good quarter for us. And in the process, we are building a very resilient and resourceful workforce that can ensure our airline operates safely and efficiently every day. I want to talk first, before we get into the presentation, about our approach to this business. It is important for investors to understand how we think about our airline and our short- and long-term planning.

We have gotten to where we are. Today, 9 passenger aircraft soon to be 10 and 1 A321 freighter aircraft soon to be 2 with full 121 flag certification with every other certification available to us except ETOPS, which we are on track to receive in November this year. We can operate this airline now worldwide. We have done this with $28 million of capital, with $7 million of that $28 million in cash deposits on our balance sheet. We have minimized shareholder dilution, we have been extremely careful how we raise money, and we have used the money we do have to continually invest in this business.

In my view, this Board and this management team have done an exceptional job building this platform for minimal dollars and minimal dilution. And we have done this in a very uncertain economic and geopolitical environment. We went through the end stages of COVID and Omicron. This is after certifying this airline through the very bad days of COVID. Rising interest rates, inflation, rising oil prices, war in Eastern Europe, falling cargo demand, combined with an intense work with talent, particularly with pilots. We are constantly juggling a number of forces, which impact our business and impacts the pace of aircraft deliveries. Having said that since certification, we have taken delivery of an aircraft once every 2.5 months, once every 2.5 months, that’s pretty darn good.

To take delivery of an aircraft requires months of planning. It also requires having trained crews, cockpit crews, cabin crews, cash for deposits and for the conformity of the aircraft. It is an intensive choreographed effort to put an aircraft on a US 121 certificate. And for us to be at 10 and soon 12 aircraft on our certificate, including freighters, is a remarkable achievement. And we have been planning ongoing for the rest of our aircraft deliveries this year, subject, of course, to the DOT and FAA approvals. So what is our approach to this business? It’s important for you to understand how we view this. So let’s get to the first slide. This is our approach to the business. We take a long-term view of this business. Many charter airlines want to get to 5 or 6 airplanes and think that they can just make money for the next 30 years. That is a not sustainable approach, and we have seen many charter airlines go out of business because of that.

We take a long-term view. We are going to build a durable, sustainable and long-term profitable U.S. charter airline. We continually reinvest in the business. We are undercapitalized, for sure. But we take the dollars that we have and every dollar goes back into the business. We’re adding aircraft, both passenger and private aircraft. We’re hiring and training pilots, and we’ll get into the number of pilots that we’ve been able to hire and train over the last few quarters, it’s quite remarkable. And we use information technology to its full capabilities to move towards total paperless airline. We integrate ground handling and fueling to better control our products. We invest in our ground handling operations, and we see diversified revenue streams to reduce our overall risk.

Again, let me stress, we take a long-term view of this business. We are in this for the long haul. We are building a platform. We are investing in our business. We are making sure that we’ve got a platform that’s scalable and can take additional aircraft, both passenger and cargo aircraft that we can ramp up our people and our infrastructure in a way that is sustainable, and we can do within our budget requirements. That’s our view of the business.

And I think if anyone believes that we should take a different approach, then this investment may not be for you. So Q1 is a reflection of our approach. Cargo, after 2 years of planning, and we started cargo planning pretty soon after we started the certification process on the passenger side, but we knew because of the long planning time that’s required to operate cargo airplanes as well as get those cargo airplanes under LOI and under lease that we have to start early.

So we tied up 15 A321 freighters even before we were certified as a US 121 airline. Certification happened in the first quarter of this year, and we received our first airplane, and that airplane is now operating and operated for 21 days in Q1. Tremendous amount of effort, sweat, tears and cash to do that, but we invested in this business, and this now is going to be one of the main drivers of our growth in the years to come.

Cuba. Big important part of our strategy is to be the dominant charter operator to Cuba. We are now in that position. We’ve laid a strong foundation. We brought the three largest tour operators to Cuba. We dominate that sector, and it’s a good foundation of revenue for us each one.

Pilots. We invest in pay and benefits to reduce attrition, along with intense focus on recruitment and training. We did a tremendous amount of that, and we’ll get to a slide where we show how many pilots we have been able to recruit and train and retain which is the most important of those 3 words as we move forward.

Infrastructure. We’re building our IT systems, but as well, we’re building a great team of dispatchers, crew schedulers, flight attendance, finance, other team members within this organization. It’s important to have each one of those teams operating. And as we like to say, we are a team of teams, and we’ve built the infrastructure for a sustainable platform that we can grow and scale and be sustainably profitable and our certifications in the first quarter, culminating 18 to 24 months of work. We received our DoD, Department of Defense approvals. We received our IOSA certification for – which allows us to operate for other airlines, and we received our EASA certification, which allows us to operate within and within Europe, which is very critical as part of our business plan as we move forward. We have started ETOPS certification in Q1, and we expect to receive our certification sometime in Q4 of this year, that will allow us to fly the North Atlantic as well as to Hawaii and other destinations in the Pacific once we have that certification.

So commentary on Q1. Traditionally, the slowest quarter in commercial aviation, every major airline and most of the ULCCs lost money in the first quarter. We are different than the scheduled airline, and there are some different elements of our first quarter that impacted our profitability, which we’ll talk about. But we had some significant scheduled maintenance during Q1 as a result of the leases that we put in place. We’ve got tremendous lease benefits because of the scheduled maintenance that was scheduled as part of our acquisition of those aircraft, but we had to endure that during the first quarter. We got through that, but it effectively reduced our fleet by 2 aircraft. We knew that going in and we had planned for, but that allows us now to be relatively heavy maintenance-free for the balance of the year. We accelerated hiring and training of pilots and flight attendants to allow us to execute what is a robust sold out summer schedule, and we’ll talk about that in a moment.

As mentioned, we added two major tour operators to our Cuba operation effective of March 1. This gives us a stable long-term cash flow, $3 million from those two major tour operators with the third operator, we’re up well over $4 million per month, which is a great foundation of revenue for us as we move forward. As I said, we finalized and received our key certifications DoD, IOSA and our TCO for the EASA. We signed LOIs for 2 additional A320 passenger aircraft, and we had a deferral of the major U.S. government contract that we had planned for, which we have started to fly in December of last year. And because of some issues within the U.S. government about how they were treating transborder issues on the Southern border, this contract had to be deferred. Now, we are starting to pick up that work here in May, and that will continue for the balance of the year. We will eventually pick up all of that revenue again, but it impacted Q1 outside of our control, we work with our major clients, the U.S. government to mitigate that.

We were able to get some other contracts in place quickly to sort of mitigate that, but we didn’t go as far as possible in order to get to a breakeven in Q1. Had we had that major contract and had we had a few less issues on getting our aircraft out of scheduled maintenance, our Q1 would have been breakeven or slightly positive. Let me say that again. After 2 issues outside of our control, both of which now, we believe, will be to our benefit as we move forward, we would have been breakeven in Q1 as we had predicted as well we had invested in the business in terms of cargo and aircraft and systems and people. And so in my view, again, Q1 was a huge success for us.

I’ll ask Ryan to go – start going through some of our metrics.

Ryan Goepel

So one of the key elements that we talk about is we’re more than just an airline – many people categorize this as an airline. We’re trying to position ourselves more as a service company and as a service company we sell block hours.

Now our metric, our key metric is how many block hours and a block hour for those who don’t know, is when an aircraft pushes back in the date, the blocks come off and then the aircraft gets pushed back the date, the blocks go on. It’s right time for taxes. But the number of block hours per month is a key metric to track. The other key metric we track is how many block hours we fly per aircraft per month. Both of these, as you can see, have had double- if not triple-digit growth since March of last year, and we’re continuing to see that trend going into the summer.

Our key element in order to fly this aircraft performing the block hours is our pilot pool. As you can see, our pilot pool has grown from 65 to 85 – or 60 to 85 over the course of the quarter, a 41% increase. We also allude to I guess a minute later slide, we’ve continued that hiring into Q2, and we’ll give you an update on that and again, the net aircraft days per month. As you can see, despite our block hours growing at 110%, our net aircraft days have only grown by 35%, which means we’re utilizing the existing assets more effectively and more efficiently and bodes well for what we consider our growth plan going forward.

Looking at the Q1 ‘22 results. $32.2 million of revenue, which is our best revenue month – our best revenue quarter, sorry, adjusted EBITDAR of $2.5 million and adjusted EBITDA of $2.9 million. The key adjustments we put in to factor in is $500,000 per share-based comp and $1.4 million for private training and $240,000 worth in cash lease accounting adjustment. What I think this reflects is our ability to start delivering profit and how close we are to becoming a profitable airline, but while reflecting the investment we’re making in our crews and infrastructures that are needed too.

Ed Wegel

The important issues here now, this is a loss of $2.9 million on the EBITDA line. Had we had the revenue from the contract that was deferred, we would have been closer to $40 million in revenue and that would have been just a blowout quarter for us, sometimes things happen in this business, sometimes they happen in sequence. And that’s what occurred in Q1, but we don’t see this as any indication of the sustainability and the profitability of this platform.

Again, we built a platform through this whole quarter and set us up for what should be a very robust second half of this year. And again, have we not deferred that revenue from Q1 into later in the year, we would have been breakeven or profitable for this quarter, even with all of the investment that we took into this business. And we need to emphasize that, when we invest in this business in training and recruiting, hiring and all the other things that we do here in the company, we expense them immediately. There is very, very little that gets capitalized. So while we are creating assets for the company, we are expensing them as we go. And so this leaves us clean as we move forward so that we’ve got good comparisons month-over-month and quarter-over-quarter as we move forward.

Our outlook for 2023 is we’re reaffirming our forecast of $140-plus million in revenue, positive EBITDA, 75% of the $140 million is under contract. The balance will be under contract here very soon. We expect not officially to do much better than $140 million, but right now, our guidance is between $140 million and $145 million, frankly, for this year. A little over 12,000 hours contracted for 2023 to date. We have the potential to contract up to an additional 10,000 hours depending upon aircraft delivery dates, which is a fluid element of our business, and we’ll discuss that in a few moments. This compares to about little over 10,000 hours that we contracted in 2022.

Fleet size target at the year end again passenger between 9 to 12 aircraft and cargo, 2 to 6 aircraft. This all depends on the final DOT approvals and our ability to get these aircraft out of heavy maintenance and deliver to us on time, which is an industry-wide problem at this point, both on new aircraft deliveries coming from the OEM as well as used aircraft going through maintenance to be delivered to another lessee.

In addition to this, later this year, we will start Department of Defense contracts. We’re already bidding on some. We will complete our ETOPS, which allows us to operate over water 180 minutes. We will finalize our Colombian AOC applications. We are actually entering phase 3 of our AOC process in Colombia, which is the Colombian CAA air version of the FAA reviewing our manuals and moving us on to the last phase, which are booking flights. We are focused like a laser on expanding both passenger and cargo charter businesses in 2023. We are well on track. Our revenue is there. Our systems are there. Our people are there. All of the infrastructure that we need to deliver in the second half of this year has been developed between the fourth quarter of last year and the first quarter of this year. We have set the stage for great growth, profitable growth and long-term sustainability of this platform. This gives you a sense of the breadth and depth of our operations that we’ll conduct this summer.

This just shows the scheduled operations. And when I say schedule, we’re a charter airline, but we provide essential scheduled operations every day to Cuba, scheduled operations every day to the Dominican Republic and scheduled operations to Cancun and then as well, we will be operating out of Calgary for a Canadian airline called Lynx into LA, Las Vegas and Phoenix. We will be operating for Red Way out of Lincoln, Nebraska, to Las Vegas and Orlando, Atlanta, Minneapolis, Austin and Dallas, and we have some other scheduled operations for other airlines that are shown here. This gives you an idea of the breadth of our North American operation this summer. And you can see on the bottom as well, we’ve blown out the Cuba operation.

You see that we fly to 4 cities there as well as Cancun. We will start operations into Haiti at the end of this month and operations into Santo Domingo and La Romana, a year-round and this summer will peak with as many as 8 or 9 flights a week into the resort towns in the Dominican Republic. We are the only charter operator into the Dominican Republic this year from North America. We have gained 100% market share, U.S. charter markets in the Dominican Republic.

Next is our operations in Europe. We will fly two airplanes, two in Netherlands out of Amsterdam. This is the initial schedule that we’ve been given. We will fly 400 hours per aircraft per month over 2 months and then 1 aircraft in September, they’ve already asked us to extend the operation through the month of September with 1 aircraft. So this is a great operation for us. We’ll be operating all over Europe, the Mediterranean, North Africa, Turkey and Greece.

And we are really looking forward to this. As you know, our operations last year were impacted by regulatory approvals. All of that has been solved. We’ve received all the approvals that we need. We have a great relationship with TUI. We now have a 3-year deal with them, and we’re now talking to them about operations in the U.S. where we can combine our strengths and our synergy and operate for TUI operators here in the U.S. with some of their aircraft and our infrastructure and back office operations.

So we are looking forward to a great summer all over Europe, all over North America, all over the Caribbean, and as well on top of this, we have all of our ad hoc operations. So we’ll be flying to Greenland this summer for cruise lines. We’ll be flying all over South America and Central America, and we’ll be expanding our cargo operations starting this summer so that we’ll pick up another post office route as well as routes out of Mexico and Texas into some of the industrial cities in the Northeast on behalf of some automakers and some others. So our cargo operations on top of our scheduled passenger operations lead us to a very, very robust summer. And we’ll talk about the block hours that we project for this summer and into the fall.

These are two aircraft that we recently added to the fleet. On the left is another airplane that we took from Alaska Airlines. We got a very good lessor airborne capital that we have been working with, and we chose to think this in what we would consider a retro delivery. It’s got a lot of interest and a lot of kudos for this particular delivery that we put on this airplane. And as well, we took our first cargo aircraft N410GX. We received that in February, finalized all of our cargo certifications and that airplane started flying on March 10. It’s had 100% dispatch reliability. Lower fuel brand than what we had been projecting and greater reliability and the customers that we have flown this airplane for love the aircraft, love the lower belly loading system, and love the fact that it’s 50% more volume than its main competitor. And it’s just a great airplane, and we’ve got 15 more of these coming over the next 24 months.

Again, when we have shown this slide previously that we are moving towards 30 aircraft by the end of 2024 moving more towards a mix an equal mix between passenger and cargo aircraft, now we’ll eventually get there probably in 2025, but we still see this as our evolution of aircraft over the next 2 years. This is all impacted by a number of things, as we’ve discussed, heavy maintenance prior to delivery. We’ve experienced delays in every aircraft that’s come out of heavy maintenance, just like every other airline around the world has been experiencing. It’s subject to having crew availability, we have to recruit, hire and train pilots and flight of things. So that’s a constant process, and it impacts our ability to take aircraft on a certain schedule and as well as other factors, including the – our ability to put these aircraft to work to ensure ourselves that we’ve got contracts that we can fly for these aircraft as soon as they are on the certificate. But we feel very comfortable with these numbers over the next 2 years. This is our delivery plan. The A320 was delivered and N411GX, which is our next freighter aircraft, which brings us to 2 freighters now should be delivered the last week in May. We will need to do some conformity and some regulatory work on that airplane, but we expect that airplane to be flying in revenue service in early June.

And let me stress and all of you know this because we have talked about it. Our first freighter aircraft was delayed about 6.5 months coming out of conversion. And the second airplane, the second freighter is going to be delayed about 8 months. If we had had both of these aircraft as we had projected in December of last year, our profit – we would have had an additional $6 million of revenue in Q1. But we were impacted by their ability to get these aircraft out of the MRO, get the components and parts that they needed, get the manpower that they needed to get these aircraft converted and get them to us. So significantly negatively impacted by the inability of the MROs to get the aircraft to us and that will continue for some time. But we are making the best of it. These aircraft are coming in as soon as we can get them, and we are putting it out to work as soon as we can get them.

Our target plan for the rest of the year is several additional A320 passenger aircraft as well as several additional freighter aircraft. Again, we are impacted by their ability to deliver the aircraft out of heavy maintenance. And so some of these dates will slip, but that’s okay. We will deal with that, and we will adjust, we will get these airplanes in and we will get them to work as soon as we can, which is another way of saying that we need to take a longer-term view of this business.

There are lots of factors outside of our control that impact our ability to operate. We have a team that knows how to adjust to that. We have a team that knows how to accommodate those issues. We just have to work through it like every other airline is working through it as we speak. So entirely confident in our team to be able to adapt to delays in aircraft and delays in deliveries and the impact that has on our customers and our operations. But we know how to deal with that. We’ve dealt with it over the last year, and we will continue to do so. Again, take a longer-term view of this business. Where are we going to be a year from now? Where are we going to be 2 years from now? Short-term issues and invest that affect us do not impact our longer-term vision for this airline and what we will accomplish. Ryan, why don’t you take us through passenger sales?

Ryan Goepel

Sure. Passenger sales. We’ve discussed many of these elements, but this is sort of a way of summarizing it to two major tour operators generating about $3 million a month over 600 hours of Lynx Air, 240 hours a month with of Red Way Air out of Lincoln, Nebraska. That’s starting as a 3-month program. We expect that to be year around. 150 hours per month for 4 months with the Caribbean Airline, which we expect to be extended as well. In addition to the 2,000 hours per year with TUI for the next 3 years. We’ve executed on our March Madness strategy. We talked about our servicing the NCAA. We operated over 70 flights over 30 weeks, over 3 weeks, almost 50% of all flights from our standards.

Focusing on securing for the fall when we look at contracts to be secured, we’re focusing on securing NCAA Fall Football, Department of Defense and hopefully basketball another government business, which is – with a sold-out summer that’s where our sales focus is really starting to write down.

Moving to cargo, as Ed alluded to, we operated 21 days in Q1. The second aircraft will start on June 1. First aircraft, 100% dispatch reliability. Operating costs and fuel burn less than forecast. Really proving out the economics of this aircraft. With the lower belly system now installed, it is a huge – it’s a big differentiator versus the competition, which is really 737, 800 and 757. We’re very excited about this product, we’re excited having 15 more of these coming online. And we’re even more excited about what our customers are reacting to, and we truly understand the economics of this aircraft and this really does business comes down to economics.

Ed Wegel

So we have projected and expected six aircraft months of greater operations in Q1, and we ended up with 21 days. Now we’re going to operate this airplane for the next 15 years. So a blip in Q1 where we had some delays in aircraft that we work through and instead of six aircraft months, we ended up with a little less than one. It’s frustrating. And it impacted us short term. But again, let me say, we’re going to be operating all of these airplanes, some of them for as long as 15 years, some for 10 years, but many of them are for as many as 15 years. This is a great airplane. So the market is a great airplane for us, and we take a long-term view of this business. We are going to build a very, very robust, very sustainable cargo business around this aircraft and then a sister ship, which will be the A330 cargo aircraft in the next year to 2 years.

So had we have six aircraft months available to us of cargo aircraft in Q1, that’s almost $7 million in revenue. And we ended up with a little less than $1 million of revenue. But again, it’s one quarter in 1 year, we’re going to be operating this airplane for 15 years.

Pilot recruitment is something that we focus on at an 8 a.m. meeting every morning here in this conference room. And in Q1, we grew our pilot headcount by a little over 40%, in Q2 to date, another 30%. We’re utilizing the agreements that we have in place now to increase our pipeline, and we’ve talked about this before, OSM, CAE, L3 and our use of the Colombian AOC once we get through that certification process will allow us to attract pilots there that will fly on the Colombian certificate until we can get them up into the U.S., but we will also use those pilots to fly intra-Latin America as well as from Latin America to the U.S., which takes some pressure off of our need for U.S.-based pilots.

We are getting much better at this for a number of reasons. One, we are seen as a stable, sustainable airline now that we’ve reached 10 airplanes. And given the progress that we’ve made in cargo and our certifications. Some pilots who have left us for major airlines are – we’ve got two calls from pilots this week asking that they could come back to GlobalX. The grass is not as green at some of these major airlines as many of them think. And some of them, the rest have come back to us.

We think that’s a pretty good sign. So we’ve been successful in our recruiting and hiring upgrade for pilots, both direct entry captains as well as first officers. As we grow, as we get stronger, as we show that we have the quality of life here that is better than other places where they can fly and that word gets out through the pilot ranks throughout the industry, we think that we will do better than our fair share of pilots and good pilots as we move forward.

Ryan Goepel

Yes. One thing that I wanted to touch on is on the Investor Relations side. We did have an issue – I wouldn’t say an issue, there was a concern, I think, on the last call as it related to warrants that were expiring. On April 26, 4.6 million warrants did expire, which reduced our fully diluted share count by a little under 8%.

If you look on the right, an updated cap table of our common Class A and Class B. We also show our existing warrants that are outstanding. It should be noted of those 11 million warrants, 9 million of those warrants are restricted in the sense they can’t convert into more than 4.9% of common equity. So from that perspective, it’s likely those will go to expiry if they do get converted.

If you look at the fully diluted number, again, one of the elements of recruitment is on RSUs. We really do encourage employee ownership and employee RSUs for retention. Those – most of those vest over 3 years. But again, I think our capital structure as it is right now is pretty tight considering where it was from the beginning and to where we are now. If you look at some of the initiatives we did in Q1, we have a digital program that has increased our mailing list by 14,000 names, many of you are on it. Attended two major microcap conference, Planet Micro Cap and Sequire in Puerto Rico. Registered to present at the Gravitas conference, June 5, in Los Angeles, and we are still planning an uplift in conjunction with growth and capital raise in 2023. It will not be a Q2 event. It will be later in ‘23 as we – is our ambition, as we’ve alluded to on the previous call.

Ed Wegel

As we said in the press release that we put out today, we’re in active and, I would say, advanced discussions with a number of equity funds and other credit funds. We are financing our business going forward. We’ve got a tremendous amount of interest. I need to be careful about what I say, but I think that we are in a good position. And let me stress something that I said in my preamble to this presentation. This management team has been very, very diligent and very, very careful in how we raise money and how much money we raise and the dilution that results from them. I think that we have done between us and the Board of Directors who’ve done a great job in managing that. Again, we have gotten to this point in our life cycle with $28 million of cash, $28 million, $7 million of which we still have, it’s on our balance sheet for deposits for airplanes and airports and other deposits that we have to make.

Given the progress that we’ve made, 121 flag carrier with all of the certifications that we have plus cargo, plus the ability to tie up 15 A321 freighters, all of those things combined for the price tag that we have brought this in for and the dilution or the minimal dilution that we believe we have endured I think is a tremendous statement about this management team and this Board of Directors in delivering value to its shareholders. Are we frustrated with the share price? We see a lot on social media, and I get a lot of messages meaning the up over it. And all I can say is I have more shares than anybody out there. And so if anybody is as frustrated about the share price, it’s got to be me. What I do is I come in here every morning at 7:00 a.m., and I don’t leave until 7 p.m. and we work hard every day, every day, including Saturdays and Sundays to build this company to create shareholder value, and we will continue to do that. We have a tremendous platform that we have created, and we’re about to reap the benefits of that as we get into the second half of this year.

We will do what we can in outreach. Ryan has done an incredible job. He must talk to 30 or 40 investment groups every week about who we are and what we’re doing. He attends the conferences. We have Zoom calls. We are getting the word out there. A lot of this is restricted because of our – where we are listed and many institutions will not be able to invest in us until we get to NASDAQ. We think about NASDAQ or the New York Stock Exchange just about every day and how we can get there. And I will assure you that we are focused on that and doing everything that we can to get it. No one is as interested in the stock price as I am, but I’m more interested right now where we are in our life cycle as a company. I am more interested in ensuring that we have built a sustainable, profitable platform that can continue to grow and continue to compete effectively against our competitors. We have put all of the building blocks in place, certifications, aircraft, people infrastructure to do that. That’s the most important thing at this point because we take a long-term view of this business, and we’re creating long-term value for our shareholders.

Finally, just something that we wanted to ensure everyone knew and we’re quite proud of this. We worked very, very hard here to create a culture with the right set of values the way we work with and we treat our team members. We went through a pretty rigorous certification process with surveys and interviews with our team members by an outside group called Great Place to Work. They have certified companies like American Express and Delta Airlines and others. So we went through that process, and we received our certification for this coming year. We’re quite proud of that. We’re putting that in all of our recruiting materials, especially to pilots and flight attendance. And we think that this indicates that we’re on the right track in terms of building a culture with a set of values that will allow us to maintain this airline and grow it profitably in the years to come.

So with that, Grant, I’ll turn it back to you for questions. And again, we appreciate everyone for your interest and support on this call. Grant, fire away.

Question-and-Answer Session

A – Grant Howard

Ed, Ryan, great job as always. And as I say, every quarter on these webinars, Ryan find me another company listed on a junior exchange in North America, that’s a complex as much or so little as you spoke out. So congratulations. Number of questions already, and I’ll get right into it. 400 plus employees, can you please tell us what your monthly payroll is including taxes and benefits?

Ryan Goepel

I think I would hate to quote a number, I’d be wrong. It will be in our Q under salaries, wages and benefits, divide that by 3.

Ed Wegel

So that includes – so let’s talk about the various categories within them. That includes all of our ground handling and fueling operations here at MIA which is approximately 60 to 70 people, right? That is in place because it effectively reduces our overall cost. By adding those people in place, it reduces our ground handling costs on a turn of our aircraft here in Miami as well. The market rate, which is about $2,900 a turn down to about $1,500 a turn. So that’s a very, very effective use of capital and a very effective use of team members because it reduces our overall cost. On the fueling side, we are now at breakeven even with all of the fuels and the fuel trucks and so forth that we use. The important thing about our fueling operation is it ensures that our aircraft depart on time.

The other fuelers here at MIA, at Miami International, are not very good. And we were experiencing delays every day, sometimes 2 or 3 hours because they focus on American Airlines here at MIA, and we were always an afterthought. So we went and got our own certificates to fuel our own airplanes. And now we’re on time, and we’re breaking even and now we are approaching other airlines to fuel their airplanes. And we expect this to be a profit center for us in the next quarter to two quarters.

On the other categories, we’ve got obviously pilots, a little over 100 pilots, which we need to fly the summer schedule. Flight attendants, again to fly the summer schedule about 150 flight attendants at this point, over three bases, Las Vegas, San Antonio and Miami. And then we’ve got maintenance. We do a lot of our own maintenance in-house. So we have aircraft maintenance technicians who operate on our aircraft. And so we’ve got a large contingent of them that actually drives our costs down. So we have built here in Miami, the ability to handle our own airplanes to fuel our own airplanes and to maintain our own airplanes, which is almost unheard of for an airline of this size.

And overall, it reduces our costs, increases our operational efficiency and makes us a much better airline because of the vendors out there who shall I say, don’t really perform up to our standard. Beyond that, we are growing our finance team. We have a very, very complicated operation over Europe and the U.S., and we operate for lots of different clients. And we’re a public company. So we need a fairly robust finance team on the dispatch side, as we grow our operation, which is now a 24/7 operation. We have dispatchers on through the night because we operate 24 hours a day. And that also includes crew schedulers and others who help us to operate on a 24-hour schedule.

So it may seem like a lot, but we have built the infrastructure now so that we can take all of the airplanes that we expect to take this year in advance of when those aircraft come which is a requirement of the DOT and the FAA.

Ryan Goepel

To answer the question about $3.7 million.

Grant Howard

Topic of money. Question here about the bad debt write-off. So we asked for paying in advance. And I’m going from memory, weren’t the bad debt something under $20,000 that were written off?

Ryan Goepel

Yes, we do ask for money, cash in advance. We do have elements of reconciliations when we incur costs after the fact they tend to be pretty minor in the big scheme of things. And so yes, I think the numbers are small, but there are true-ups. So we have a base fuel price. So we invoice the customer for fuel after the fact – we did actually have some bad debt recovery. I think it was a recovery this year. So we have written some off and then collected it after the tax.

Ed Wegel

So it’s certainly less than 1 quarter of 1%, and probably much less than that. We focus on that a lot, as Ryan said. We do a fuel reconciliation. And – because it’s after the tax, sometimes we get into a healthy discussion with the client. 99% of the time, we collect the money because they need us supply again for them. But it’s like any business. There are some things that are collected after the event and sometimes, we have to negotiate a deal. But it’s a de minimis amount of money that we write-off.

Grant Howard

And you’ve addressed this in part, and I understand you have to be cautious, but a little bit of a two-parter, so how active are discussions on raising capital and in this great credit environment, is it the case of getting a good deal versus any deal?

Ed Wegel

The financing – and Ryan will provide some color to this. For every business out there right now, the financing environment is tough. Last year, every private equity fund pooled in their – pooled their stock and wanted to see what happened, right? And as I said in my preamble, right, we’re dealing with a lot of different events right now. We’ve got inflation. We’ve got rising interest rates. We’ve got a war in Europe. We’ve got issues with the southern border. Lingering effects of COVID and on and on that we have dealt with. Having said that, through the course of the last 18 months, we get approached almost continually by people who want to take a look at it and see if it makes sense for them to invest in us. As you know, we’ve done almost none of that. We financed ourselves internally with some of our investors because we don’t want to suffer the dilution that would come from that. We’ve lived on our own resources, we’ve lived on our own cash. We are thinly capitalized in terms of working capital.

We’re talking to a lot of different groups. And as we’ve said in the press release, we’re in what we think are advanced discussions with a number of parties. Nothing is said. Nothing is – nothing has been signed. We look at a range of different ways to invest in this company. Because of our stock price, most of those ways are involved a debt or a credit facility with warrants. We’re negotiating very hard with each one of those. We’ve negotiated with a number of groups who have walked away because perhaps we’ve been a bit too tough on them.

Because we’re really bullish about this business. And we want them to pay for what we think we have created here and what the potential opportunity here is for an investor. But we’re – in order for us to take additional aircraft and grow the way we want to grow and to put some cash on the balance sheet, which is important. As we move forward, and there may be other external shocks to the entire ecosystem around the world, we need more cash on the balance sheet. So we’re talking with a number of parties, we’ve got two great investment banks that are working with us and advising us. And I – again, I need to be very careful, but I am optimistic. And I don’t know, Ryan, if you want to add some color?

Ryan Goepel

No. I think – we believe we have a great platform, and we’re very encouraged going forward, and there is a lot of interest in what we’re doing and how we’re doing.

Ed Wegel

I think universally, the reaction that we get as we do our initial talks and then groups may get into a data room that we have put together is that they are amazed at how far we have gotten on such little cash and the platform that we have built. And so they see the opportunity. And again, we’re – because of our stock price, we’ve got to be very careful about how we structure this. They understand that, and they are all working with us, and we’re looking at facilities or credit facility, and even in some cases, facilities to be able to acquire our own aircraft instead of lease moving forward, not using operating leases but being able to acquire aircraft to put on our balance sheet. So again, Ryan and I are optimistic. We’ve talked to a lot of groups. We’ve got a number of groups that are very, very interested. It’s getting the right deal that’s in the best interest of all of our shareholders. And we keep in mind the interest of all of our shareholders in every one of those discussions.

Grant Howard

Comment here about your candidness and holding quarterly webinars. I will paraphrase this next question, but effectively asking the secure contract, you’re bidding a lower rate than perhaps the competition and again, I have to paraphrase this point?

Ed Wegel

So the question is what to get to where we are with discounting. Is that the…

Grant Howard

Yes. Effectively, yes.

Ed Wegel

No. So we’ve done an analysis, which Ryan has run. He and his team have sliced and diced our data now, and we’re starting to get enough data from enough months of operation that we can actually start to look at trends and how we’re doing. So our unit economics, and I’ll let Ryan talk about this. But essentially, we’ve been improving every month and our unit economics. So our need to discount to sharp elbows to get into the business that’s waning very quickly because of our reputation now for providing a great product in terms of our aircraft and how they look and how our crews look and act and the professionalism of the entire organization. We believe that we’re in a position where we can increase – continue to increase our block hour rates. Of course, it all depends on time of the year. There are certain months that are not as robust in terms of activity as other months, July and August, very, very solid, December, very, very solid, March very, very solid. Other months, the shoulder months and the low points of the year, we have to do some discounting, but I think you should talk a little bit about our unit economics.

Ryan Goepel

Yes. So we make the statement that every flight we fly, we make money. And what that means is, we don’t fly empty aircraft. One of the risks on the scheduled carriers you fly an aircraft don’t sell in a seat, you don’t sell the seat at the right price if fuel goes up and you end up burning money on a flight. Every flight we fly generate contribution to overhead. As we’ve been growing the business and getting utilization, so there is really two metrics. There is how much did you make per hour and how many hours did you fly. So we see a considerable improvement in our unit economics and how much we’re making per hour especially over the last 9 months. And as we add aircraft utilization, which is the number of dollars we fly, we get much closer to the unit economics we talked about. And we have talked about over the last 18 months of targeting $200,000 to $250,000 a month. And contribution margin for passenger aircraft, $400,000 to $500,000 a month per cargo. We’re working towards that goal. We’re getting close to that goal every day. And I think you see considerable improvement, especially over the last 9 months as we get towards that. As we add aircraft that becomes easier to accomplish because you are – you can be more efficient in the way you deploy the aircraft, and that trend is held true over the last 9 months.

Ed Wegel

So – and just sort of add to that. One of the revenue streams that we have developed stems from the fact that as I mentioned before, we’re impacted by our ability to get our aircraft out of maintenance. The major airlines out there, including the LCCs are having difficulty getting delivery of new aircraft from the manufacturers. In some cases, delayed as much as 2 to 2.5 years to get those airplanes. We’re getting calls every day from airlines asking if we can provide airplanes to them to fill in until they get their new aircraft manufactured.

And in those cases, they don’t ask too much how much we’re going to charge them, they just say how many months can you give us the airplane? So we’re seeing that there is an actual shortage of aircraft out there and that’s the result of the net maintenance delays, inability of the manufacturers to get the airplanes through their factories because of supply chain issues. And we think that this condition will exist for the next few years. That will have upward pressure on block hour rates that we charge and will make us more selective. So we can provide more differentiated revenue streams that are focused on that line of activity as opposed to some of the other charters where we don’t get a very good block hour rate. So we can be more selective as we move forward with the clients who we fly for to maximize our revenue.

Grant Howard

Ryan, you’ve already spoken about NASDAQ uplift this year. Question here is, are you on track to uplift this year? I don’t know if you want to say anything else further to what you’ve already said?

Ryan Goepel

I think we’ve said enough.

Ed Wegel

There is really not too much that we can say there about that. Everyone knows what our objective is. And we would have to add assets to our balance sheet to be able to do that. And we are working actively to do that.

Grant Howard

Speaking of long-term, which has been the theme of this webinar question is, I understand the long-term goal. You need a critical number of aircraft, pay, amortize fixed costs across the operation. Nevertheless, when do you expect profitability?

Ryan Goepel

Yes. I think we’re – we expect profitability this year. We said we will be profitable in 2023. I think, what I don’t want to do is a mistake. So a mistake this quarter would have been not to hire 40 pilots to fly this summer because we’re worried about being profitable this quarter. I think as we look at the forward-looking numbers, as we look at how much work we have, we need to make sure we can do it. I think ultimately, when we get to 10 passenger two to four freighters, I’ll be very comfortable with our profit numbers going forward on a monthly basis, and we will be able to absorb that kind of growth because as a percentage, it won’t be doubling your pilot count. It won’t be doubling your fleet in a span of 4 to 6 months. So we would say with 2023 will be profitable, and we’re really excited about this one.

Ed Wegel

Important thing to remember, the charter airlines, scheduled airlines that got to seven or eight airplanes and said, this is great, we will now reduce our burn, we will just operate seven airplanes, and we will make money every quarter. Every one of those went out of business, why, because for a couple of quarters, they made money. And then they didn’t grow. When they didn’t grow, the amount that they pay pilots and the amount they pay flight attendants and the amount that they pay everybody else has increased and with a small number of airplanes, they are very vulnerable to outside shocks. So, we can manage this business to get to seven or eight airplanes and produce profits, and we would have been happy and we would not have survived very long. I have been doing this for 40 years. The airlines that make money and survive, airlines that make money and survive are the ones that have reasonable and sustainable growth. They invest in their business and understand that they need to continually increase the number of aircraft units that we operate, bring in lower priced, lower salaried employees at the bottom of the scale continually to reduce you’re their overall funding costs and that shows that there is a career growth for the employees and team members who are there. Every airline that went to six or seven airplanes and said, hey, this is great, we can make money for the next 30 years. Is out of business within 2 years, cannot do that. The history in the last 40 years indicates that that’s the mistake that we were not going to make. We are not going to manage the short-term results. We are going to manage this company on behalf of our shareholders for long-term growth, long-term sustainable profitability. We are developing assets every day. A lot of those don’t show up on the balance sheet, but they are there. 15 A321 freighters are not on our balance sheet, but I get calls every day from airlines wanting to know if they can have our airplanes. That doesn’t show up anywhere on any balance sheet. It’s no asset. But what we have got is 15 A321 freighters coming up that will drive tremendous growth in this company, will drive tremendous profitability. If we wanted an airline that went to seven airplanes and stopped, we would have done that months ago and we would be hurting right now. Because pilots would not want to come and fly here, flight attendants would not come to work here, great finance people would not want to come and work for an airline that’s only got seven airplanes and has no intent to grow. And so all of those factors go into the fact that we need to take a longer term view of this business, people don’t like the fact that in the short-term, our profits are impacted by the fact that we are investing in our business. I have to manage this airline in a fiduciarily responsible way. That is the best way to be responsible as a fiduciary just to continue to grow this airline and invest in this business.

Ryan Goepel

And I think we demonstrated that in Q3 of last year. We had – if you looked at our flight, our aircraft, we have been at six for a couple of months. We hadn’t really grown or we had stabilized at six. We took our seventh aircraft in August – at the beginning of August, and we generated a profit in Q3. Looking forward, the idea was we didn’t want to stay at seven aircraft, we wanted to add cargo. We want to add three passenger aircraft. We are looking to add two to six cargo aircraft and that investment really started in Q4. And I think we are seeing that in the numbers, but that will pay dividends, and that will take off as we get into the summer months.

Ed Wegel

The other benefit of having a growing an airline is when you do get a minor shop like the deferral of a government contract for a few months, it becomes less and less materially significant to the company, the larger the company is. And the smaller the company, the more material that shock is to our system. So therefore, we need to diversify our revenue streams. We need to have a larger base of aircraft operating for a diverse set of clients so that any one issue doesn’t become a black swan issue for us. It’s just a minor irritant along the way. And we are building this airline so that there are no external shocks to the system that will take us out of business.

Grant Howard

So, the brand is in question, can you take the picture of what GlobalX will look like post 50 planes in the air, targets, goals over the next 3 years to 5 years? What is your long-term big picture growth plan, such as drone next-gen technology, acquisition growth? There is a lot of moving parts on that question.

Ryan Goepel

Yes, there is – go ahead.

Ed Wegel

Yes. The first thing is to get 250 – through the 50 aircraft number, right. And each aircraft that we take on, as I mentioned in my preamble, should take some tremendous amount of effort, especially these days, given the issues with maintenance facilities and new regulations, aging aircraft regulations, all of that impacts, the timing and our ability to take aircraft on a schedule that we want to take them on. So, a lot of our day is consumed with planning for the delays and other issues around getting the airplanes here and on the certificate. Having said that, this team does an incredible job doing just that, taking these airplanes, getting them informed, getting them into our configuration and getting them on our certificate. So, immediate goals are to get to 25 passenger 320 family, 25 A321s. We are also looking at the A330. We are in deep discussions about that, and we wanted to get through these two quarters and make sure that we are prepared for this summer and fall, which will be very, very big quarters for us. And we also just got through a process of getting certified in a number of ways, and now we need to get ETOPS certification. So, bringing an A330 on is another layer of complexity. We need to be a bit bigger before we can do that, but we have the capability in-house to do exactly that. And we want to get 330s on the certificate as soon as we can in a way that makes sense without negatively impacting the rest of the operation. So, longer term, we will operate A320s, A321s, A330s. Eventually, as the new generation A320s get a little older, and we can afford them as a charter airline, we want to take 12-year-old A320neos, which is a 20% savings in fuel burn, newer technology aircraft, lower operating costs and all that. We are not quite there yet. We have got to wait for a few more years, so the prices of those to come down so that we can effectively employ them within our budget. But beyond that, we see M&A opportunities for us in the years to come. We see opportunities to take this brand and scale it and is a very, very good reason why we call it GlobalX. We are looking at putting an AOC in Europe. We have got the AOC that we will have in Latin America. And we believe that there is a big and growing market and a demand for this type of airline in Asia. And so we have done very, very preliminary work. We don’t think much about it at this point because we have got other more important things to do. But I think that eventually in the next few years, we can put a GlobalX in Southeast Asia. We can put a GlobalX maybe in Australia. GlobalX in other parts of the world, perhaps on some sort of franchise basis, where we provide aircraft and crews and support systems and infrastructure. We haven’t thought through all of that, but we think pretty broadly about this business. We think the ACMI business is a growing business, a good business for us to be in, and we are looking at ways where we can scale this around the world and other parts and other continents where this sort of service is new.

Grant Howard

You are talking about the summer and the question here after the big push to hire pilots and flight attendants, do you anticipate you will be fully staffed the demand for summer and the second half of this year?

Ed Wegel

Yes. The short answer is yes. So, big push Q4 and Q1 of this year to bring pilots on and the cost profile to have them in training for three months, going up hotels for DMs, simulator time, instructor time, getting them out on OE is…

Ryan Goepel

$28,000 a month over three months.

Ed Wegel

So, $28,000 per month, per pilot over three months to get them ready to fly the line, right. So, it’s almost short of $90,000 to bring a pilot on and to get them ready to fly. And we have got to do that in advance of that airplane being delivered to us so that those pilots are in place. So, you can see what the cost is just by doing a simple math, but us have 110 pilots on our certificate able to fly our airplanes. It’s a significant investment that we have made in pilots. We made a significant investment in quality of life for them and benefits so that we don’t lose them. No point in doing that, spending $90,000 and then being a little cheap on benefits or some other life – quality of life issues and then having them move off to a Spirit or an Allegiant six months after we train them. Not a very, very good effective use of our cash. But it’s a tremendous investment that we have to make in human resources to be able to operate this airline. We have made that investment. And we are in a position to fly a very, very busy and robust summer schedule, as you have seen in the two maps that we put up on the current presentation.

Grant Howard

Ryan said about Flugy as – can you provide an update, please, and perhaps remindful what Flugy is?

Ryan Goepel

So, Flugy is an on-demand charter tool that would basically allow you to crowd source charters. It’s been developed. The technology is valid and available. I think over the last two quarters. We have really been focusing on growing our passenger charter business, and we will be revisiting that in the summer and looking to monetize that going into the end of 2023.

Ed Wegel

Yes. Our strategy there is to attract some outside investors so that we can spin this off, investors who understand technology and some of the areas that we are not as versed in. What we want to do is provide aircraft for the charters that Flugy creates. Our goal is to maintain a minority stake, but have well-heeled investors who understand technology and some of the other aspects of that business so that we can run at their hotels, but most importantly, would be a great source of charter business for us as that platform grows. We have got a very, very nominal amount of investment in that business. We believe that we can get it capitalized with some very savvy, well-heeled outside investors. But we are quite ready, been so busy getting ready for the summer that we haven’t spent a lot of effort on it. We are talking to an individual who we think we can bring in, who can take that whole company and platform to the next level, so very much on our minds to do something there. It’s a little bit lower on our list of priorities right now. We need to make sure that the mainline company is performing well and prepared for the second half of this year.

Grant Howard

A couple of people have asked about progress and status on the Fort Lauderdale facility.

Ed Wegel

So, we have received final approval from the FAA, who is the developers and builders have received final approval from the FAA. We have got two financing sources now that have come in and committed to building the facility. We are hoping to break ground here within the next 60 days, and we are still aiming for Q4 of 2024, to occupy that facility.

Grant Howard

Can you please explain why adjusted EBITDA excludes pilot training costs? Aren’t these regular ongoing expenses?

Ryan Goepel

So, those are regular ongoing expenses for existing pilots. These are pilot training costs, pilots in excess of those needed to operate the revenue generated. So, if you need 30 pilots to generate $30 million of revenue, and you have 60 pilots on your payroll, 30 of which are not flying for revenue but are training so we can do $50 million in revenue, that’s what the adjustments for. So, this is not recurring training. This is not for existing pilots that are flying for revenue. These are non-revenue generating pilots for future revenue growth.

Ed Wegel

It’s really an investment in growth. So, we separate that out.

Grant Howard

Just a question here, do you have further plans or what are your plans for A330?

Ed Wegel

A330 is on our list. We will, at some point, sign operating leases for A330s. We have actually started pulling together the manuals that we would need to submit to the FAA to do that. We have not pulled the trigger on signing any LOIs at this point. What we want to do again is ensure that we get the airplanes on to our certificate, the A320s and the freighter aircraft to ensure that we lock in our 2023 plan. But we have a planning team that has put together our plan to put the A330 on the certificate. We have got a timeline. We have got a basic set of manuals put together. We are talking to every lessor about out there about the A330. And in particular, talking about A330 passenger aircraft that could eventually be converted to A330 freighter aircraft. That would be one offer a mix of passenger and freighter aircraft to complement these narrow-body fleet that we have.

Grant Howard

Does any future financing include taking out the $6 million, 15% instrument that comes due in March, but I don’t think that’s right?

Ryan Goepel

So, what’s the question?

Grant Howard

Well, if your – I guess the question that the person is trying to ask here is you – and I am going from memory, you had a $5 million note and you have drawn down against that and I believe it was a six-month note, so what are plans in and around that?

Ed Wegel

So, yes. So, the first part of the question is in our new financing would we take that out. Yes. Our plan would be to take out the $6 million as well as we drew $2.5 million of the $5 million. So, it’s $8.5 million. So, in any financing structure, as we have talked to potential investors, we make it clear that, that money has to be – or that those facilities need to be taken out. And of course, anyone coming in would want to do that because they would look to have a senior position on the company. So, that’s – we had always intended to finance those out. It was a very good way for us to raise money with minimal dilution, and so we will take those out as part of any larger financing that we do.

Grant Howard

A question about the growth, hope I pronounced that properly based on an insider report, you sold 376,000 shares in early February to early March, I believe, still hold 2.5 million shares. So, the question is you used to be on your Board, do you have any background on that? And I have already asked the question, yes, he is a major shareholder.

Ed Wegel

Yes. Look, people sell shares for lots of different reasons. One of them is to pay taxes. I don’t know if Joe’s personal situation and certainly wouldn’t ask him. He was one of the first dollars in back in 2019. And he runs a private equity fund, and he has got lots of funding requirements for lots of his other transactions. So, I don’t see anything untoward in what – in his selling. Again, it’s a fraction of what he owns. He continues to be a big supporter of ours, he has opened many doors for us. We keep him – to the extent we can, because he is not an insider. We keep him appraised of what we are doing. So, I don’t see anything…

Ryan Goepel

I don’t think – there is no conclusion to draw from his selling other than he has had the stock for over 5 years and he sold some.

Ed Wegel

Yes. He has investments in his fund and he has to show some liquidity and some progress in those investments. By the way, I bought shares during the first quarter, which everyone should have seen those reports.

Grant Howard

Somebody wanted GlobalX to manage several aircraft, would you have that ability?

Ed Wegel

We need a little more detail. It depends on the aircraft and some other things. But we have been approached to manage other people’s A320s, not a business that we want to get into right now. We certainly would look at it money is money, revenue is revenue. But given the complexity of our operation now, I think that we need to focus on what we are doing, focus on A320 passenger and cargo airplanes. Certainly, if the right deal came along, we would take a look at it, but that’s not our focus right now.

Grant Howard

Interesting question of why are you providing a plane or planes to Lynx Air, which is a competitor to Canada Jetlines?

Ed Wegel

Lynx doesn’t compete with Canada Jetlines. They operate out of Calgary. Canada Jetlines operates out of Toronto. And if you look at what they are doing now, well, what Canada Jetlines is doing is exactly what GlobalX does. So, they are flying sport teams. I think they have signed some deals with some soccer teams up in Canada. They are flying for Sunwing. They are buying for Flair. They are very much our business model, and they have seen what we have been doing. We talk to them. We give them advice on what we did right, what we did wrong. They are doing some scheduled service I saw, I guess Toronto, Vancouver at some point and some other things. But when it comes to customers and clients, we are separate from Canada Jetlines. We are agnostic in who we provide our aircraft to. As long as it’s a viable real organization, they have money, okay, and they pass all of the KYC tests and everything else that we put them through. We are agnostic. We will fly our airplanes to them. That’s where our responsibility is to our shareholders. We are not limited in who we can fly for or how we can fly vis-à-vis any other airline. We work for our shareholders, just as Canada Jetlines works for their shareholders.

Grant Howard

And what are the future plans for Capital Air?

Ed Wegel

Capital is just a shell company. It’s a name that we have trademarked. Our thoughts may be in the future that a lot of our government business moves to that, but that would not be a separate certificate. It would not be separate pilots and flight attendants or a separate organization. They would just be a DDA name from GlobalX, so that we can better align that subsidiaries’ operations with the client and separate that from our other core businesses, which are – fly for other airlines for teams and so forth.

Grant Howard

We have some other questions here about the Oaktree financing, which you have already talked about, maintenance facility. So, all of that has been covered. There are a number of questions there. Thank you for a very detailed answers and gentlemen, with that, any closing comments?

Ed Wegel

Well, Grant, again, I appreciate Grant Howard for saying this together. We appreciate everyone’s participation with everybody, a little over 40 people, which is about what we have done in the past. We will just say that this management team and Board are working very, very hard for our shareholders. We made significant progress in Q1 in developing our infrastructure, our corporate development so that we can take advantage of the opportunities in front of us this summer and this fall and going on into 2024. We are set up to be able to take the freighters. We are set up to be able to take the passenger aircraft. We are set up to bring on more clients and increase the flying that we do for our current clients as well as add new clients to our roster. So, we are very bullish about this company. We are very bullish about our prospects and the opportunities in front of us. Again, we take a longer term view of this business and I believe that, that view has paid dividends because we are now in a position over the next 12 months to double the size of this company. So with that, Grant, we appreciate your efforts and appreciate everyone’s time. And Ryan, do you have anything to add?

Ryan Goepel

No. As Ed alluded to, I think there is a lot of positives coming out of this quarter. We believe we are really well set up for the future.

Ed Wegel

It’s important for investors to look at the progress that we made this quarter in developing our infrastructure to take advantage of the opportunities that are in front of us. Tremendous amount of effort, assets that we have created that don’t go on the balance sheet, but are there for us now to monetize in terms of increased line for more clients on more routes and more parts of the world. So, with that Grant, thank you very much. I look forward to talking to everyone again next quarter.

Grant Howard

Thank you, gentlemen and thank you those who attended.