Global Crossing Airlines Inc ((TSE:JET)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Global Crossing Airlines Inc. recently held its earnings call, revealing a strong revenue growth trajectory driven by its ACMI business and fleet expansion. Despite facing challenges in the cargo market, the company is strategically positioned for future growth, with improvements in financial metrics and strategic partnerships contributing positively to its outlook.
Significant ACMI Revenue Growth
Global Crossing Airlines reported a remarkable increase in its ACMI business revenue, which grew more than threefold to $36 million compared to the previous year. This growth was primarily fueled by an increase in fleet size, strong customer demand, and an expansion in government business, highlighting the company’s successful strategic focus on ACMI operations.
Expansion of Fleet and Utilization Improvement
The company expanded its fleet and increased block hours by 26% year-over-year, with average utilization per aircraft rising by 12% to 473 block hours. This expansion not only enhances operational efficiency but also positions Global Crossing Airlines to capitalize on growing market opportunities.
Record Cargo Block Hours
In the fourth quarter, Global Crossing Airlines achieved a record of over 1,600 cargo block hours flown, marking the strongest quarter for cargo operations in the company’s history. This milestone underscores the potential for growth in the cargo segment, despite ongoing market challenges.
Improved Financial Performance
The company’s financial performance showed significant improvement, with Q4 revenue increasing by 11% to $59.9 million. EBITDA rose to $5.1 million from a $0.4 million loss, and EBITDAR increased to $19.3 million from $11.4 million, reflecting the company’s successful cost management and revenue growth strategies.
New Strategic Partnerships and Contracts
Global Crossing Airlines secured new strategic partnerships, including a six-month ACMI contract with DHL and a seven-month ACMI contract with a South American tour operator. These contracts guarantee over 1,800 block hours, demonstrating the company’s ability to secure high-margin contracts and expand its market reach.
Strategic Shift to Airframe Ownership
The company has begun acquiring airframes to optimize capital deployment and maintain a strong balance sheet. The first airframe is expected to be delivered in Q2 2025, marking a strategic shift towards owning assets that can enhance operational flexibility and financial stability.
Decrease in Charter Revenue
Charter revenue decreased to $22 million, accounting for 36% of total revenue compared to 75% in the same quarter last year. This decline reflects Global Crossing Airlines’ strategic shift from charter services to focusing on the more profitable ACMI operations.
Cargo Market Challenges
The company continues to face challenges in the cargo market, with estimated losses of $10 million in 2024, primarily in the first three quarters. External factors, such as tariff issues, have contributed to market uncertainty, impacting overall performance despite efforts to mitigate exposure.
One-time Charge Impacting Net Income
Global Crossing Airlines’ net income was impacted by a one-time $1.3 million charge related to a lease guarantee associated with Canada Jetlines’ bankruptcy. This charge affected the company’s financial results but is not expected to have a long-term impact on its financial health.
Forward-Looking Guidance
Looking ahead, Global Crossing Airlines provided optimistic guidance, emphasizing strong growth and strategic shifts in its business model. The company reached the high end of its Q4 and fiscal year 2024 guidance for key metrics, including revenue, EBITDA, and block hours flown. With plans for further fleet expansion by over 20% in the second half of 2025 and a focus on securing high-margin ACMI contracts, the company is well-positioned to sustain profitability and growth.
In conclusion, Global Crossing Airlines’ earnings call highlighted a positive sentiment driven by substantial revenue growth and strategic initiatives. While challenges persist, particularly in the cargo market, the company’s focus on ACMI operations and strategic partnerships positions it well for future success. Investors and stakeholders can remain optimistic about the company’s trajectory as it continues to navigate industry challenges and capitalize on growth opportunities.