Miami-based startup Global Crossing Airlines will temporarily cap growth in its new freighter fleet so it can focus limited resources on the more lucrative passenger charter business, a process that began Monday with the removal of founder Edward Wegel as CEO and chairman.
Global Crossing (GlobalX) began freighter operations last summer and now has three Airbus A321 cargo jets in service. The used aircraft were converted from passenger configuration to carry containers on the main deck, with two more deliveries around the corner. After that, according to the new leadership, the company will pause fleet expansion.
Ryan Goepel, who was elevated to president in addition to maintaining his position as chief financial officer, told FreightWaves the airline is taking a more measured approach toward cargo because the market is soft and rental demand for its passenger service is soaring.
“The path to profitability and the path of least resistance right now is passenger. The faster we get in passenger aircraft the stronger our balance sheet is, and it gives us time to develop the freight business,” he said.
Global Crossing Airlines (OTCQB: JETMF) said Chris Jamroz, the former CEO and chairman of Ascent Global Logistics until it was sold in December, is the new executive chairman. Ascent Global Logistics was one of the airline’s early investors.
Jamroz is a serial logistics entrepreneur and turnaround specialist who heads less-than-truckload carrier Roadrunner Freight. He previously led STG Logistics, Emergent Cold, Garda Cash Logistics and on-demand freighter operator USA Jetlines. He also holds a significant investment position in GlobalX.
A small company trying to scale up two distinct airline operations at the same time faces reputational and financial harm if it can’t deliver the service customers expect, a risk Jamroz separately said he didn’t want to take.
“I see a tremendous risk of execution. I’m not ruling out returning to grow the cargo business in two years time, or so. But for now, I really want all the energy around bringing in as many aircraft as we can on the passenger side because we really cannot keep up with the demand. And that is where we have developed a core competency of deploying revenue-earning aircraft in a very fast and effective way,” he said.
GlobalX entered revenue service two years ago with A320-family passenger jets and now has 11 aircraft providing charter flights for cruise lines, casinos, professional and college sports teams, government agencies, tour operators, and resort destinations, as well as supplemental capacity for other airlines. Its planes have flown stagehands and entourages for Bad Bunny, Foo Fighters, Lady Gaga and Harry Styles concert tours.
The new leadership pointed to several factors that are fueling interest in their passenger aircraft, including the upcoming college basketball playoffs, known as March Madness; European airlines’ need for extra jetliners for the busy summer season; and the contamination of powdered metal in Pratt & Whitney geared turbofan engines that will result in airlines grounding hundreds of narrowbody aircraft for lengthy inspection and repair.
Executives credited Wegel for GlobalX’s success so far but said his vision of quickly expanding in multiple arenas — large Airbus A330 freighters, an operating subsidiary in Colombia, certification for long-haul flights over water and electric flying taxis — had spread the company too thin.
“It works as long as you have unlimited resources and unlimited capacity of people that do stuff, but in reality people can only do so much at once,” Goepel said.
Goepel is GlobalX’s first employee and has served as CFO since February 2020. He worked hand in hand with Wegel to build the company, taking a lead role in securing capital, acquiring aircraft and developing a marketing strategy.
GlobalX said it has mounted a search for a new CEO.
Cargo rethink
Management as recently as last fall was touting its intention to have 15 A321 converted freighters by 2026 at a time when other cargo operators were retrenching because of a recession in freight transportation that saw airfreight volumes fall for nearly 18 months, with rates tumbling up to 50%. The goal now is not to have too much capacity during a down cycle.
The two aircraft wrapping up the retrofit process were originally scheduled to arrive in December. Supply chain and labor issues have slowed work at conversion facilities the past two years, but that is less of a problem for GlobalX under the new measured approach.
Flight-tracking sites show two GlobalX freighters have not been active for several months and a third last flew more than three weeks ago.
GlobalX has preliminary agreements to lease five more freighters this year, but the company is not obligated to do the conversions. Goepel said the airline may consider taking A321s previously designated for cargo and operate them in the passenger fleet for a period of time before sending them to an airframe overhaul specialist.
Monday was also the first day on the job for Arthur Brown, GlobalX’s new vice president of cargo sales, Goepel said. The position has been filled on an interim basis since last spring by David Dow, vice president of charter sales, whose experience is in passenger airlines. Brown previously led charter and postal affairs at Miami-based Amerijet, which recently lost a major portion of its U.S. Postal Service contract. He joined Amerijet from Delta Air Lines’ cargo division in April 2022.
Wegel is a veteran airline executive and entrepreneur who previously relaunched Eastern Air Lines. He will continue to serve on the GlobalX board of directors.
“It has been a great privilege for me to have helped build GlobalX over the last four years. As I step down from day-to-day operations, I look forward to working with the board in the future to provide strategic advice and industry knowledge, and help continue the growth and development of the airline,” Wegel said.
GlobalX is the fourth North American cargo airline that has changed CEOs in the past three months. Amerijet’s private equity owner pushed out Tim Strauss in early October and replaced him with Joe Mozzali, who was hired as CFO earlier in the year. Air Transport Services Group in November terminated Rich Corrado and replaced him with former CEO and board member Joe Hete. Both moves were made because of questionable investment decisions and financial underperformance. Canadian carrier Cargojet recently carried out a planned succession under which founder Ajay Virmani stepped down as CEO, with his responsibilities now shared by two of his longtime lieutenants.
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Contact reporter: ekulisch@freightwaves.com