On January 30th, Global Crossing Airlines Group (GlobalX) announced that it had secured a $5 million loan from investors to help support the airline's operational expansion. The announcement comes as the airline has recently received its first freighter aircraft.
Small loan
While $5 million is no small sum of capital, in the airline industry, $5 million is considered a relatively small loan as even used airliners cost far more than that. However, this loan is not only meant to help the airline secure new aircraft, but it will also give it the working capital it needs to operate the airplanes it is bringing in.
The loan will be split into two $2.5 million portions, with the first being advanced after one business day. The second $2.5 million will come after the airline delivers a draw-down notice. The loan is unsecured and non-convertible, with an interest rate of 20% per annum.
GlobalX recently took delivery of its first freighter aircraft, which it will use for its cargo charter operations. The airline plans to utilize the loan to help operate this and three additional aircraft, which are scheduled to be delivered by the end of this quarter. The Chair and CEO of GlobalX, Ed Wegel, stated the following concerning the new loan agreement,
"GlobalX is fortunate to have a committed group of investors who continue to fund and support the expansion of our operating fleet. We took possession Tuesday, January 26th our first freighter and expect to take delivery of an additional three aircrafts over the next 45 days, and this facility will give us the flexibility needed to continue our investments in crews, aircraft and operating systems required to deliver our targeted 2023 revenue,"
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Expanding operations
The recent agreement is a part of the charter airlines' expansion plans. Since it launched in 2021, GlobalX has operated passenger charter flights across the US, Latin America, and the Caribbean. The airline currently operates a fleet of Airbus A320s and A321s. It is awaiting delivery of multiple A330s and one last A321 freighter. While the airline is planning on expanding its passenger services, this recent loan is part of its plan to break into the air cargo industry.
GlogalX placed its first order for two A321 Passenger to Cargo (P2F) conversion aircraft nearly one year ago. The first of these was delivered this past Tuesday, and the second is scheduled to arrive by early April. The airline anticipates that these two airliners will be the first in a large fleet of freighters. It has shared that it chose to utilize this aircraft because of its larger capacity and increased efficiency compared to what it could get from a Boeing 737.
The new A321 P2F will feature the ability to carry 55% more containerized volume than the 737-800, as it can hold 14 upper deck and ten lower deck shipping containers. It can also carry 14% more containerized volume than the Boeing 757-200 while burning 19% less fuel reducing operating costs and carbon emissions. GlobalX has shared that it plans to utilize the plane's efficiency and 3,500+ range capabilities to become a major player in the air cargo market over the next decade.
What do you think of GlobalX securing a new loan? Let us know in the comments below.