Under the title of “Impressive Block Hour and Revenue Growth”, Ian Macqueen of Bancroft Capital takes a highly detailed look at not only Global Crossing Airlines’ third quarter results but his perspective on two different scenarios for 2024.

In commenting on Q3 he wrote, “Management put in a Herculean effort to achieve an 81% Q/Q increase in block hours flown and a 35% Q/Q increase in revenues in Q3.” but did note that this growth required a material increase on the expense side.

Below are his summary points on the third quarter (All $USD)

  • 6,506 operated block hours which were 8% above our estimate of 6,050.
  • Revenues of $42.6MM which were in-line with our $42.4MM estimate.
  • Expenses of ($44.9MM) which were 13% higher than our ($39.6MM) estimate.
  • Net Income of ($4.9MM) vs. our $2.0MM estimate.
  • EBITDA of ($1.8MM) vs. our estimate for $3.4MM.
  • EBITDAR of $7.6MM vs. our estimate for $10.4MM.

Mr. Macqueen didn’t shy away from the stock being down following the Q3 results saying, “The market response to Q3 results, with shares down ~10% on the release date, suggests that investors’ main criteria is profitability over growth. Management continues to reinforce the need to reinvest for growth but a projection on the Q2 call for a profitable Q3 seemed to be top of mind for investors” and then added, “Thankfully, the $35MM debt financing closed in Q3 and with no imminent need for capital, the share price weakness is an inconvenience and not a death sentence.”

His report details a variety of influencing factors that led him to constructing the base and upside cases for the coming year. The base case sees revenues at $265 million, a net loss of $9 million, and EBITDAR (Earnings Before Interest Taxes Depreciation Amortization Rent) of almost $61 million.

His upside case comes in at just over $360 million in revenues, $18 million net income and $107 million EBITDAR.

As of this writing GlobalX’s market cap is $36 million (US) / $49 Million (CDN) with the stock trading at $0.64 (US) / $0.90 (CDN).

GlobalX CFO Ryan Goepel always speaks to the importance of EBITDAR on the company’s quarterly webinars and this point is reiterated by Ian Macqueen,“The peers listed below (chart within report) both own and rent aircraft while GlobalX rents all of its aircraft. In order to have a metric that allows us to compare these airlines using different mixes of operating and finance leases, we need to add back rent expense on operating leases to EBITDA so that we’re comparing apples to apples”.

As a general comment on the airline sector, GlobalX is not immune to general negative investor sentiment that airlines have been fighting the past couple of years. As one example of many, below is the stock chart for Sun Country Airlines that was trading at $43 in July 2021 and is now under $15 (USD).

What the broad market may still not fully understand is that GlobalX as a charter and cargo airline doesn’t sell seats like the scheduled carriers, there’s no fuel price risk as that’s covered off contractually and the money is in the bank before the wheels go up.

To read the Bancroft Capital update report, which also looks at a range of “fair value” for the shares based on his scenarios.

Readers of this commentary and Mr. Macqueen’s report should understand the following, which in part reads:

This report has been commissioned by Global Crossing Airlines Group Inc. (GlobalX) and prepared and issued by Bancroft Capital Corp. in consideration of a fee payable by GlobalX. This report is published for informational purposes only.

Ian Macqueen owns GlobalX common stock.

Ian Macqueen’s bio:

Mr. Macqueen has over twenty years of varied capital markets experience. He currently runs a consultancy service assisting clients with corporate planning and investor relations. Originally a Professional Geologist by training, Mr. Macqueen worked as an equity analyst focusing on the energy sector for a number of different banks between 2005 and 2020. Prior to that, he spent five years evaluating and marketing oil and gas assets.


This report is published for informational purposes only. Under no circumstances is it to be used as, or considered to be, personal investment advice or a recommendation or solicitation to buy or sell any securities. The author accepts no liability for any damages (including, but not limited to, lost profits) arising from reliance upon this material. In all cases, interested parties should conduct their own investigation and analysis of GlobalX.
Dealing in financial instruments, derivatives or other products involves risk. The recipient of this material should not deal in these products unless it understands their nature and its exposure. Before buying or selling any security, one should fully evaluate the investment, including the suitability of any investment in light of its overall financial circumstances, and consider retaining a professional investment advisor.
Bancroft Capital Corp. is not registered with the United States Securities and Exchange Commission (the “SEC”): as a “broker-dealer” under the Exchange Act, as an “investment adviser” under the Investment Advisers Act of 1940, or in any other capacity. It is also not registered with any state securities commission or authority, or Canadian securities regulator, as a broker-dealer or investment advisor or in any other capacity.
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This report contains certain “forward looking statements” and “forward-looking information”, as defined under applicable United States and Canadian securities laws, concerning anticipated developments and events that may occur in the future. Forward-looking statements contained in this report include, but are not limited to, statements with respect to the Company’s aircraft fleet size, the destinations that the Company intends to service, the delivery and entry into service timelines for future aircraft, the Company’s growth plans, future revenues and financial performance.
In certain cases, forward-looking statements can be identified by the use of words such as “plans”, “expects” “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved” suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking statements contained in this report is based on certain factors and assumptions regarding, among other things, the receipt of financing to continue airline operations, the accuracy, reliability and success of GlobalX’s business model; GlobalX’s ability to accurately forecast demand; GlobalX will be able to successfully conclude definitive agreements for transactions subject to LOI; the timely receipt of governmental approvals; the success of airline operations of GlobalX; GlobalX’s ability to successfully enter new geographic markets; the legislative and regulatory environments of the jurisdictions where GlobalX will carry on business or have operations; the Company has or will have sufficient aircraft to provide the service; the impact of competition and the competitive response to GlobalX’s business strategy; the future price of fuel, and the availability of aircraft. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include risks related to, the ability to obtain financing at acceptable terms, the impact of general economic conditions, risks related to supply chain and labor disruptions, failure to retain or obtain sufficient aircraft, domestic and international airline industry conditions, failure to conclude definitive agreements for transactions subject to LOI, the effects of increased competition from our market competitors and new market entrants, passenger demand being less than anticipated, the impact of the global uncertainty created by COVID-19, future relations with shareholders, volatility of fuel prices, increases in operating costs, terrorism, pandemics, natural disasters, currency fluctuations, interest rates, risks specific to the airline industry, risks associated with doing business in foreign countries, the ability of management to implement GlobalX’s operational strategy, the ability to attract qualified management and staff, labor disputes, regulatory risks, including risks relating to the acquisition of the necessary licenses and permits; risks related to significant disruption in, or breach in security of GlobalX’s information technology systems and resultant interruptions in service and any related impact on its reputation; and the additional risks identified in the “Risk Factors” section of the Company’s reports and filings with applicable Canadian securities regulators and the U.S. Securities and Exchange Commission. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those described in the forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements are made as of the date of this report. Except as required by applicable securities laws, the Company does not undertake any obligation to publicly update any forward-looking statements. If GlobalX does update one or more forward-looking statements, no inference should be made that it will make additional updates with respect to those or other forward-looking statements.