Hello everyone, and welcome to the Global Crossing Airlines Group, or simply Global X Fireside Chat. My name is Robert Bloom, Managing Partner here at Lytham Partners, and today I'll be moderating a Q&A discussion with Ryan Goepel at the company here. Quick reminder, the company trades under ticker symbol JETMF in the United States. Ryan, welcome. Thank you. Appreciate it. For those maybe new to the story, how would you sort of describe the company today, you know, its assets base, its asset-based business model and, you know, sort of how the company has evolved over the past couple of years? Yeah. We started in June of 2020 when we listed on the TSXV. We're also on the OTCQB, and we're on the Cboe Canada. We launched as an airline. We're an airline, as what it relates to as a Part 121 charter airline, but it's a very different business model than most airlines as you would look at. What I would describe as a sort of like a hybrid between private jet charter and scheduled service. Scheduled service is the business you know, whether it's Air Canada or Delta or United operates Airbus. We operate the Airbus family of aircraft. We operate the bigger aircraft. We don't publish a schedule, we don't sell tickets, we don't take fuel risk, which is a big topic today. We provide full charters. We sell the whole aircraft to a varied group of clients. We're now almost in year five of our operation. We've had pretty consistent growth and really what we do is we have a fleet of aircraft that we effectively rent out on a per hour basis, and we operate them all over the world. In sort of the current aviation cycle, has this outsourced capacity become more strategic rather than sort of merely supplemental for some of the airlines and, you know, what does that sort of say about the role of charters and ACMI providers? Yeah you know, aviation's a massive business. You know, it's whether it's billions or trillions, it's one of the largest industries in the world. We are a very small niche inside that market, but keeping in mind, being a small niche in a trillion-dollar market is very large. What we seek to do, and with our flexibility, and I think our business model is different in the sense is we have ultimate flexibility to adjust it as the market moves. When you're in a scheduled carrier or you're a big player, the die is kind of cast for 6-12 months. There's not much you can do about it, where we can sort of change on the dime. What we've actively been doing since we started, the great thing about aircraft is they can move, right? It's not like it's hard to get it from one place to the next. That's what they're designed to do. What we've been doing is we constantly are seeking out the underserved, the poorly served, and the niche markets that just aren't served by the greater industry. In so much that has been U.S. government work, that's sports teams work, that's college work, that's flying as supplemental carriers for other airlines. Like some airlines, there's been a lot of supply chain issues, whether it relates to engines or aircraft deliveries, and in order to meet their schedule, because they're committed to it, they'll come to airlines like us to go fill those gaps. I think one of the nature of what we do is we kind of react quickly, we're flexible, and we're capable of doing it, and it's a business that actually truly scales and is global. You know, we are GlobalX by name, but we can operate anywhere in the world. Right now the market for us is in the U.S. That's one of the biggest markets in the world. I think it's one of the most underserved markets in the world for what we do, and that's where our key focus has been the last two to three years. You know, just thinking of things a little bit more macro here for the moment, and, you know, we'll dive into the company more specifically here, but with sort of the aircraft deliveries delayed, fleets aging, you know, really across the global globe here, what's become sort of the real bottleneck? Is it metal crews, maintenance capacities, you know, maybe just general reliability, and how has that changed the economics of the market? Yeah, it's interesting. We heard a lot about pilot shortages. A lot of that kind of got eased, I would never say it's not an issue with pilots, because I think there's always gonna be great demand for pilots. It got eased a bit by delivery delays, and so as the planes didn't get delivered, you obviously have fewer pilots needed to fly them. I think probably one of the more dynamic aspects of what we're seeing is if you're flying older aircraft, they tend to require more maintenance. We've seen a lot of cost pressures in the maintenance area, a lot of shortages in the maintenance area for staffing and people. What that does is that creates uncertainty, and it also creates opportunities for us. For example as a scheduled carrier, as aircraft goes in for scheduled maintenance, instead of taking one week, it's taking three weeks, it's taking six weeks. That's where someone like us can come in and fill that gap, right? I think if anything, it made the ability to provide the service more unpredictable, and in that unpredictability is an opportunity for us. You know, sort of this, the mid-life narrow body aircraft, you know, sort of appear to become, you know, more strategic assets than maybe many investors had realized. How do you think about the value of those aircraft and sort of this constrained supply world? I think you kind of alluded to a little bit there, but maybe expand. Yeah. When you think about mid-life aircraft, usually the model for an airline is to run the heck out of an airframe until it gets to around 20-24 years, and then part it out. Most major carriers, like tier one carriers, will run it for 12 years, and then kind of they'll cycle out because they become inefficient. Everything's about utilization, so it's how many hours you can fly every month. The younger an aircraft is, the less maintenance is required, the more hours you can fly. As aircraft get older, they require more maintenance, they break more often, and you can't fly them as much. Airlines have kept aircraft longer than normal. What the opportunity is for us is we have a lower utilization model, and what that means is by design, we fly fewer hours per month than a United, as an example. What happens is if an airframe has a certain number of hours left in its life, we can. Whereas in United it might die at 22 years of operation, we can extend that out to 30, right? We can take that asset, which might be worthless or not nearly as valuable for one carrier, and it's really valuable for us. I think where we've seen that adjustment in us is we call that end-of-life economics. There's a lot of maintenance reserves that are paying into. There's a lot of decisions that get made at years 20, 24, and year 30 that by owning the airframe and owning the aircraft, we think we can that's an opportunity for us. Because we have a different utilization model, we could stretch the life out. We become a natural place. I think if anything's created a ton of opportunity for us, it's also given us access to metal that we just don't. The honest answer is if United wants a plane, they're getting the plane. They're not coming to us, right? If lessor's looking at should we give it to United or Global, they're going to United. In the situation where the major carriers don't want it doesn't fit their business model anymore, we think there's a huge opportunity for us, and we're seeing it now, as the planes age and they get used. This is just kind of being pushed to the right. Because they've kept these planes longer, I think there's just gonna be more and more of these aircraft as an opportunity for us, which is why you've seen us. We converted one lease to a purchase. We purchased a second airframe. We're also looking at finance leases more aggressively because we wanna actually own these airframes because we think we can get more value out of them at the end. Again, sort of that backdrop there. What is sort of maybe the clearest way to understand the company's positioning today? You know, is it as sort of that charter airline, outsourced capacity provider, or is it something broader? It's a good point, question. I think I wouldn't say we're necessarily an outsourcer, w e meet the needs that aren't being met by the current infrastructure, right? If you are a group of people and you have 100 tickets you need to buy, and you want to get from point A to point B, have you tried to do that online through a scheduled carrier? It just doesn't make sense, and especially if you're not living in a hub city, right? If you're a college and you're in a small town and you're two hours from the main nearest hub, it doesn't make economic sense necessarily to use a scheduled carrier because you can lose days or multiple days. Whereas with us, you can hire us. We'll show up when you wanna be shown up. We'll fly you to your game. When the game's over, we'll bring you back. You know, you save on hotels. You save days. I think there's a market for that. There's other government work, and there's other you know, Department of Defense work, where they just don't go to a commercial carrier. It just doesn't make sense. I think if anything, we are just literally finding out little niches in the market, and little niches are $100 million, multiple $100 million dollar niches in the market to go serve, and I think we're doing a really good job of doing it. Yeah. The broader, you know, maybe the emphasis on the passenger ACMI, you know, what made that the right place to sort of lean into? There's two kinds of contracts we'll do. One's called an ACMI, and that stands for aircraft, crew, maintenance, and insurance, and another is a full charter. The difference is the amount of services provided in the contract. A full charter is everything. That's a turnkey everything. That's fuel, ground handling, permits, landing rights, catering. Everything is in charter. ACMI is just kind of the bare bones you need to offer in order to fly. What it doesn't include is all those other things, fuel, charter, and lands. Now, the main difference between the two is an ACMI revenue per hour, because we sell it by the hour, is gonna be, you know. Sorry, a charter is about 2.5 times higher just because of all these third-party costs, but those are passed through at little to no margin. The operating margin per hour on a charter flight is lower, but the revenue is higher. From our perspective, we're a little indifferent, but the reality of why we've done more ACMI work is ACMI customers, so someone who wants to buy ACMI, we tend to do that. They'll get dedicated aircraft. They'll make minimum commitments for a month, so we can really plan our month for the aircraft. Whereas a charter will usually be a one-off flight, right? They'll fly two, three flights, which is great for three of the four days of the month, but what do I do the other 26 days, right? I want my planes flying every day, consistently flying every day, and ACMI work tends to be that way, and that's just where it's been. Now, that was very different from the first two years we were in operation. That could change a year from now. We can adapt. We can do either one, and we just kinda go to where we don't try and force the market. We're market takers. We're not, you know, we don't get to dictate to the market. What that's allowed us to do is to get our utilization on our aircraft higher, and that's the number of hours being flown. When you're working with a fixed asset that has a fixed cost to it, the more hours you fly, the better your margins. On that point right there, a lot of sort of the recent improvement seems to come from sort of that utilization improvement contract mix and really the quality of block hours, you know, not just from fleet growth, right? Sure. How do you balance adding aircraft with protecting returns? You know, in the last year and a half, we haven't added any aircraft really because we've actually even subtracted. Because the lease rates for aircraft were so high, while we could have made money in the year, I'd be worried about the next four years with those high lease rates. Okay. We really just didn't take aircraft. We focused on how do we get more efficient with what we've got. I think we've gotten our aircraft and our utilization and our efficiency to we can't squeeze another hour out of the metal we have. The growth from this point forward, and then we've talked about this in our earnings calls, and we'll continue to talk about it, we've managed to secure aircraft at prices that make sense to us, and the growth in the next 12 months is gonna come from fleet growth. Now, the offset to that is you'll see a little bit reduction in the utilization. It'll be more efficient because one of the downsides of having fewer planes flying them a lot is you'll have non-revenue hours, right? Because you gotta get the planes where they need to be. It's really a price times volume. You know, revenue is price times volume. I think the growth that we'll continue to be at the next growth will be metal. I don't think you'll see them at the same hours, but it'll still be substantially. It's incremental profit, and so any incremental profit. Because really what we're trying to cover is our fixed overhead. If you think about our fixed overhead, you know, we're at that point now where almost every incremental operating profit, almost 80% of it goes to the bottom, right? Whether I make 120 hours or 180 hours on the incremental tail, as long as it's profitable, it'll drop to the bottom. Government related flying, you know, sort of appears to provide a steadier foundation under the network here. What does that business do for the company strategically beyond just sort of the revenue that it brings? Well, I think one of the things is it's hard flying. You know, the government's pretty demanding. They expect a lot out of their contractors. It's given us scale and bases outside of Miami, so it's given us scale and bases in the South and then in the West, which allows us to kind of launch from and access more charter customers, right? So as we grow, we now have infrastructure built out in multiple locations and not just one locations in the terms of maintenance in the term of parts, in the terms of crew, in the terms of aircraft. While it's a steady baseline level of work, it has again provided scale in multiple locations, which allows us to kind of as we add to our fleet, it's not like establishing a new beachhead. We're just building on what's already been built. Yeah. You know, maybe adding sort of next step there, you know, with airline customers like Sunrise, along with, you know, I think you alluded to sports teams. Mm-hmm concert tours, and other sort of specialized charter demand. How do you think about customer diversification and the relative strategic value of those different revenue streams? We've said this from the beginning is, you know, we wanna have a pretty broad base of customers, and I think we've established quite a broad base of customers. Then as you add aircraft, you go deeper with existing customers. You know, whether it's Sunrise or it's with RED Air, or if it's with some of our other partners, you go from a half a plane to a full plane to two planes to three planes. It's pretty easy to add an aircraft to an existing program, flying to more destinations or more frequently. It's harder to gain new customers. I think we've gone, you know, a mile wide and an inch deep with most of our customers, so there's a lot of capacity to grow and that's kind of the mindset we've had is we're now comfortable adding aircraft because we know we have places for it. The analogy I use, I remember when Starbucks first launched, I grew up in Vancouver. There was this corner in Robson Street, which is like a shopping street you go on, and I remember Starbucks opened one on one corner, and it was so busy they opened one across the street. It was so busy it opened another one across the street. Three of the four corners were Starbucks, and that's kind of the mindset we kinda have with ours is get established reputation, quality, service delivery with customers who wanna grow, and then grow with our customers. I wanna come back to something you mentioned here, sort of the, you know, the basing and repositioning strategy as, you know, another competitive edge, if you will. How important is geography and network design in terms of winning the right business, you know, quickly, but also doing so profitably? The biggest cost, you know, the biggest determinant in winning a bid, we'd love to say it's quality, we'd love to say it's service, but sometimes is it availability and close, right? Because if your aircraft is a 30-minute flight away and you're competing with a competitor whose aircraft is three hours away, there is no way they can compete with you on price because it's all gone in repo, right? What we call reposition or dead legs. By having aircraft positioned in different parts of the country, it just opens up. You know, it's a lot easier to sell to California schools if you have a plane in Arizona than it is if you have a plane in Miami, because if you have a plane in Miami, you're adding six hours to what might be a two-hour flight, whereas if you're in Arizona, you're adding 45 minutes or an hour to the flight. Your price, while margins are still strong, will be considerably less than any competitor who doesn't have an aircraft nearby. Yeah. I wanna touch on something else that you mentioned here a moment ago, which is sort of this move from an all leased fleet towards, you know, hybrid ownership model, and sort of the change that, you know, that's made to the story. What, you know, what does owning select aircraft change in terms of flexibility, sort of the maintenance planning and really just broader long-term value creation? When you lease an aircraft, there's a couple elements, and it's really kind of unique to U.S. kind of GAAP versus IFRS. There's an accounting, technical accounting part of it. When you lease an aircraft, you pay into maintenance reserves, which is a cash payment to the lessors that they hold onto, that are for maintenance events in the future, right? Two things, the maintenance reserve payment and the lease payment go through your operating income, so that's pre-operating income. It comes through R, the R, which is the rent on your income statement. If you own the aircraft, it flows through depreciation and amortization, and you don't have to pay the maintenance reserve. You get to hold onto that cash. Sometimes those maintenance reserve payments are bigger than the lease payments. In many of the times, especially with older aircraft, you'll never do that maintenance work. It'll get to the end of the lease, you'll hand the plane back, and they'll part it out. Right? They get to keep all that maintenance reserves, which is a prepayment for maintenance work that never gets done. By owning the aircraft, a couple things happen. One, the cost of that flows through depreciation and amortization. Now, like it or not, EBITDA tends to be a pretty common. A multiple of EBITDA is a valuation metric people use. If I take a leased aircraft and convert it to a purchased aircraft, it can add $2 million-$4 million, depending on a whole bunch of terms, to my EBITDA every year. If I'm getting a multiple of EBITDA, you know, you look at what our results were for last year, I think it was $21 million of EBITDA. If I had my entire fleet was owned, that number would've been $80 million, right? Mm-hmm. Okay, you look at that. That's just a balance sheet thing. What would you value us if we had $80 million EBITDA versus $20 million? I'm willing to bet the number would be a lot better than what our share price is at today. While it might seem like accounting gimmicks, it does two things. One, it's better EBITDA. Net income, it can sometimes be worse. You know, you have depreciation and amortization, right? Which hits net income. But you also control your cash, and you get to control the maintenance plan, right? The other side is if there's a slowdown or if there's a plane you need to park or if you're not as busy, you don't have that fixed nut going out every month, so it gives you more control and more flexibility with your planning. Something I maybe should've touched on earlier here, you know, cargo is still part of the platform, but it's clearly been the more difficult piece. Mm-hmm of the portfolio. Sure. How are you thinking about cargo today, and what would have had to change for it to become, you know, an upside contributor rather than maybe a drag on the broader thesis? Yeah. When we first launched cargo and when we first launched, the idea was cargo and passenger markets don't necessarily. They're not necessarily a correlation with the health of the two businesses. They're very different. Our platform allows for both. We had made a huge commitment to cargo, which we scaled back initially about two years ago to four aircraft. As I said on the earnings call, it probably cost us $10-$13 million of loss in last year on the cargo side, and we found parking it versus operating it on an earnings basis was almost neutral to us for this year. On a cash basis, it was significantly worse because there's CapEx that goes into maintaining these aircraft. The reality is passenger work is really busy. If I think about my business, I have three assets. I have planes, I have certifications, which allows me to do everything, and I have crews. I want my crews flying higher margin passenger work because the cargo work isn't there. We've decided, you know, we talked about parking two of our cargo planes. Two of them are active, which will help mitigate that loss from last year. We're gonna basically reassign some of those crews to the passenger work and grow the passenger work this year. That all being said, the world changes rapidly. Things happen. Who's to say two years from now I might say, "Wow, there's a really great opportunity in cargo"? The good thing is we'll already have the platform. We'll have the systems. We'll have the people. We can turn that on and accelerate that, which goes into the whole flexibility of our business. We operate in a multi-billion-dollar, if not trillion-dollar industry, and have a platform that allows us to play in almost all the pockets. We go to where the demand is, and if it's not there, we stop, right? We don't have to keep doing something if it doesn't make sense. Right now, cargo doesn't make a lot of sense, and the reason is there's too many narrow-body cargo aircraft on the market. As a result, the pricing is poor, the demand is low. There's a different story in passenger, which is why we're focusing on that. I think one of the things investors should take away from this is we have the ability. We're kind of a pure play, so we can go to where the market is and where it makes the most sense. Couple more questions here. 2025 showed sort of that strong demand, you know, is not necessarily enough if maintenance and operation don't scale with it. What sort of learnings did you sort of have from that, you know, as you begin to scale and build the company going forward here? I think one of the challenges of growing a company as quickly as we have from zero is ensuring you have the right people in the right roles, right? Just the job fundamentally changes as you get bigger and you have to rely so much more on processes versus people. Like, we've had great people since the very beginning, but they can't be. They only have so many hours in the day, and so what happens is if that person can't be there for everything, you have to rely on a process. If your process isn't great, that's where things will fall apart. I think we've really done a lot of work over the last 15-18 months to make sure we have the processes to scale and get the right people in the right jobs so they can actually perform. That was the benefit of 2025 and the second half of 2024. I think we've done great work in it. I think we're gonna see that pay off for us in 2026. Excellent. Final question here. You know, as we sort of look to the next, you know, 12-18 months, you know, what are some of the milestones that matter most in sort of proving out that the company can convert this strong demand into sort of durable, scalable profitability? Well, I think that's what they're looking for is, I think, this is the year we have to do it, right? I think we've got all the pieces in place, to be sustainably. You know, we demonstrated almost a 300% improvement on cash flow from operations last year. We have to keep building on that. We have to now convert that positive cash flow from operations into net income, right? You know, we talk about EBITDA, you talk about EBIDAR, you talk about revenue. It really comes down to, are you making money? I think we've done. We can do that in a bunch of different ways. You know, I think we've done a lot of work on our processes so we can deliver a higher volume of work profit. We're doing a lot of work with our balance sheet in order to make sure whether we own aircraft or we have the right debt at the right price. I think as we add capacity with the platform we've built, you know, when I look at open positions and what I'm hiring for, I'm looking to add you know, we've talked about adding 5-6 passenger aircraft, and I'm adding, you know, outside of crews, because you add crews with aircraft, but on the overhead side, five-10 people, not 50-100, right? Right. I think that operating profit per tail is. I think we're really in the right place where we're growing. The other thing to really keep in mind is a lot of companies who grow this fast will just spend, and they'll lose track of spending really quickly. I think we've established that discipline with cash that, you know, $10 hurts, right? Like, you know, you'll get emails from myself or my finance team. You know, if you're sending $1,000 here or you spent, you know, $125 on a meal that didn't make sense, that we look at that stuff. Because you can't. Just because you're now dealing in millions versus thousands, you can't just ignore the dollars, right? Maintaining that discipline is everything as you're growing this fast, because it can get out of control really quickly if you don't do it. All right. Perfect. Well, Ryan, we will leave it there. Thank you very much for your participation here in the Lytham Partners Summit. Thank you to everybody here, of course, for watching as well. If there are any questions, or you'd like to schedule a meeting with the company here, reach out to their investor relations team there, or I'm happy to help coordinate if I can as well. I have additional presentations, Fireside Chats coming up, so please stick around for more. Again, Ryan thank you so much for your time today. Really appreciate it. Anytime.