Okay. Well, good afternoon. Gentlemen, first I wanted to congratulate you and the team on an exceptional quarter. You're going to get into all the details, but it's quite monumental. Or look at where you were just a year ago and the quarter you just completed, September 30th, so exceptional growth. With that, I'm going to introduce Ed Wegel, who is the CEO of Global Crossing Airlines, and Ryan Goepel, the CFO and Executive Vice President of Global Crossing Airlines, with this third quarter update. With that, gentlemen, I am going to turn it over to you.
Great. Thanks, Grant. Good afternoon, everyone. Thanks for joining us for this Q3, third quarter update on our earnings and a preliminary look at our fourth quarter and some of the other events that we've got coming up. As Grant said, we had a good quarter. We had projected a year ago that we would be profitable by our fourth full quarter of operations. The third quarter of 2022 is, in fact, our fourth quarter of full operations. Our very first quarter was a short quarter, only about six weeks. So we've reached profitability in our fourth quarter of operations, third quarter of 2022. We had projected. You can go to the next slide.
We had projected at the very beginning of the year before Omicron and some other issues that hit the entire world, hit us as well, but we had projected $90 million of revenue for 2022. We are reaffirming that base case of revenues of $90 million-plus. We are at $64.6 million through the nine months. We expect revenues at least equaling what we achieved in the third quarter, which was $30 million. We feel very confident that we will reach $90 million, probably closer to $93 million or $94 million for the year. We feel very good about that. That validates the business case and our business model that we can put A320s and A321s to work in this U.S. charter market and gain our fair share of that market
Our revenue for the quarter was $30.1 million. Our EBITDA, which is earnings before interest, taxes, depreciation, and amortization, was about $1 million. Our EBITDAR, which is also taking out the rent expense for our aircraft, which levels the playing field as we look at airlines across the U.S. Some airlines own all of their airplanes, some airlines lease all of their airplanes like us, and some have a mix. To compare us to other airlines, we use an EBITDAR ratio, and that's $5 million for the quarter. That's a very strong number for us. EBITDA, again, was $1 million. Operating income, about $800,000. Then we had interest expense and amortization and depreciation, which brought our net income down to about $163,000.
The two numbers we're really focused on are EBITDAR at $5 million and EBITDA at $1 million. This was a good quarter for us in terms of getting the seven aircraft online on the certificate, fully crewed and operating, which is the metric that is so important for us to get to profitability. We reached profitability in this quarter. Moving forward, we again anticipate project revenue at least equal to quarter three in quarter four. In fact, we will probably beat that number, but for now, we are reaffirming our case of $90 million+ for the year. With that, let's go into some of the specifics on Q3, and I'll turn that over to Ryan.
One of the things I wanted to compare or kinda highlight is the difference between Q2 and Q3. One of the reasons we're really excited about the results that we achieved is this demonstrates pretty clearly how our model works and how it validates the returns. What you'll notice is we had a significant increase in revenue as it was the first quarter in which we had seven aircraft fully functional, fully crewed, which we've always said was a key benchmark for us to get to profitability. As you see the increase in revenue from quarter -to -quarter, you see certain items go up with it and certain items do not. You know, fuel will go up as we fly more. Ground handling will go up as we land in more places.
When you look at salaries, when you look at maintenance, when you look at travel or insurance and aircraft rent, they stay flat. That's really the point we wanna drive home. As we continue to add aircraft, as we continue to add revenue, this dynamic will continue to be built and will continue to drive the results that we expect to see in Q4 in 2023. Next slide. This is just a graphic representation of what we've done. I know sometimes it's hard to conceptualize, even for myself, where we were in Q3 of last year when we did this call and how fast we've grown. This is an 885% increase quarter-over-quarter.
As Ed said, Q3 last year was a stub quarter, but it does demonstrate the volume and our ability to drive customer growth. I think as we look forward to the fleets in which Ed will cover in the next slide, it's important to note our average revenue per aircraft on the passenger side has grown from a low around $800,000 in Q4 last year to almost $1.5 million per aircraft in Q3 of this year. We expect that trend to continue as we continue to add aircraft to the fleet. As you try and think through the future and where we're going with this entity, that's a key metric for you to look at is how much revenue we're generating per aircraft we put to work.
Looking at the fleet growth, I'll pass it on to Ed really quick.
We will continue our growth through the fourth quarter and then into 2023. We'll take two freighter aircraft, A321 freighters, this quarter. The first one should be online on our certificate by the third week of November. The second freighter should be online on our certificate and generating revenue sometime in the mid-part of December. These are a little later than we had projected, delays coming out of the MRO conversion shops as we've talked about before, but we are now at the point where these airplanes will start generating revenue for us. We're finishing up our certification efforts with the FAA and finalizing DOT and FAA approvals. The first aircraft should be here in mid-November out of paint for conformity and then into service.
We're very excited about bringing these airplanes on. They are going to drive a large portion of our growth into 2023, because of the number of hours that we can put on our cargo aircraft and the contracts that we are putting in place. Again, the 321 freighters will drive a big proportion of our growth into 2023. We'd always talked about being a 50 -aircraft airline at the end of 2025, so that's 25 passenger aircraft, 25 freighter aircraft. As you can see here, we've built up for you how we anticipate getting there. At the end of 2022, we'll have nine passenger aircraft. We have seven now. We're taking an A321 passenger aircraft on a pure Power -by -the -Hour basis, which is an exceptional deal for us.
We're taking an A319 with 150 seats at a very exceptional lease rate and economics for us. That airplane has already been almost fully booked because of the economics of that aircraft. At the end of this year, nine passenger aircraft and two cargo aircraft for a total of 11. In the first quarter of next year, we will take another freighter aircraft, another A321 freighter, a second A319, and we agreed on terms today for another A320 coming out of Alaska with full Wi-Fi. That aircraft has already been booked with a VIP customer for the balance of the year. At the end of 2023, we anticipate to project 14 passenger aircraft, nine cargo.
2024, that grows by another five passenger aircraft to 19, another six cargo aircraft to 15. Then by the end of 2025, we'll have 25 passenger and 25 cargo aircraft. We're on track to meet these goals. Certainly we'll meet them for 2022. 2023, the airplanes have been lined up on the cargo side. We're still looking for two A320s for the second half of 2023. We don't anticipate any problem in identifying those aircraft and getting them on our certificate. We've got good growth. We've got good growth in our client base. We've got good growth in the number of clients that we service, good growth within each of the client categories of the number of block hours that we fly for them.
We are developing a reputation for being an on-time and reliable charter airline with modern aircraft, A320s, some of them with Wi-Fi, all of them, well-equipped. The interiors are in great shape, and we are getting more than our fair share of the business. We're very pleased with where we are in our fleet growth, in our ability to sell the hours on those aircraft. Let's talk about some of our key achievements. Profitability within one full year of operations. First quarter was a stub, that and quarter three of 2021. As we look at the last four quarters, we've reached profitability. We have $6 million in debt.
When you look at the amount of capital that we have raised, equity plus debt, to get to where we are today, I think that proves that we are very prudent and very frugal in how we spend our money to get to profitability with seven aircraft, two more freighter aircraft coming, as well as another A321. What we're trying to do as we look at 2023 and the uncertainty in the economic environment that we're in, we know we will enter a recession. Every expert has told us that. We are focused on charter clients who are largely recession-proof in their flying. Those are sports teams, colleges and universities, especially Division I, that we fly, will fly, whether there's a recession or not.
We do a lot of U.S. government flying, and we anticipate being certified to fly Department of Defense or military flights within about 60-75 days from now. Obviously, those flights are recession proof as well. A lot of what we do, and we estimate about 90% of our current charter base, is recession-proof. We fly to Cuba. Those flights will continue. We fly to Santo Domingo and other points in the Caribbean. Based on the parameters of that clientele, we know that those flights are needed and will continue in a recession. We feel very good about our business base going into 2023.
Given what we have been through, COVID, Omicron, pilots, other issues, all of which we have weathered through our first year and gotten to profitability, we look forward to 2023 with a great sense of optimism about our business and what we can achieve. Our first cargo aircraft, as I said, will be here in Miami by mid-November. We are working very hard to put that into revenue service by the fourth week of November, so we will start flying revenue this month. Second and third aircraft. The second aircraft will be, as I said, here in Miami about mid-December, depending upon some last-minute adjustments in the conversion. But that will be operating certainly by Christmas. That aircraft has been contracted.
Our third aircraft, freighter, 321, will be here sometime late February, and that aircraft as well has a contract ready to sign on it. First three aircraft are fully booked. The next five aircraft in 2023, we are working very diligently on contracts, and we anticipate being able to place all of those aircraft in service with long-term contracts by the end of January, beginning of February of next year. We're very optimistic about our cargo business. That drives our growth along with our passenger business and also diversifies our revenue streams into both cargo and passenger. Those are our achievements. We had a good quarter. We look forward to the balance of the fourth quarter and this year, and we look forward to reporting those results sometime in early February.
With that, Grant, I'll turn it back to you, and we're ready for questions.
Thanks gentlemen. Just a reminder, folks, the bottom of your screen there's a Q&A button. Would you please submit your questions through that? Just to put something in perspective while the questions are loading, just going back and having a look at when this company started trading in late June of 2020 compared to where you are now. Again, in late June of 2020, that was a year plus before you even had certification. Your market capitalization when you started trading close to its high point was about 4x what your market cap is today, which shows you how much of a disconnect there's been, psychology in the market, and as you know, things have been pretty topsy-turvy in the world and in the market over the past eight months in particular.
You've done a hell of a job and it was a pretty good day for Global on the market based on volume and about a 28% increase or so on the price. We're gonna start taking questions with that. The other thing is that based on what you've laid out, what you've achieved, I think it's becoming easier and easier for people to track the future of this company because you keep delivering, so you're getting many more check marks. We'll leave it up to people to draw their own conclusions as to what 2023 could look like here.
Okay. Do you wanna read the questions, Grant, and we'll-
Yeah. I'm getting into them now.
Okay.
First, from John Chamberlain, given the current administration's approach to reestablishing relations with Venezuela, how does that affect your opportunities for South American operations?
Well, that's a good question. If the current administration opens up nonstop flights again by U.S. airlines to Venezuela, and Venezuela continues in Category 2 with the FAA, that would bode very, very well for GlobalX. I would anticipate we would almost immediately start, for some of our clients, a daily nonstop, Miami-Caracas, and perhaps one other city in, Venezuela. We probably would have two daily flights, and that would increase, I would guess, to three daily flights, very quickly after that's established. All in all, it would be very good for us.
Next one, Neil Wilson. What's the status of the Fort Lauderdale facility?
Our designer-developer builder, which is a subsidiary of Oaktree Capital Management, has finalized their lease agreement with the Broward County Aviation Department. They're completing their environmental studies to see what mitigation might be needed in the soil. We anticipate breaking ground on that facility within the next 60 days. We still hope to be in that facility by the end of 2023. We've already been approached by some airlines to rent out some of the hangar space for their own needs at the airport. Some very major airlines have already approached us. This facility will be one of the hottest investments at the Fort Lauderdale Airport. It will be the largest hangar there. It can take an A330 or three A320s.
We have parking on the ramp for up to six airplanes. This will be a great facility for us. We'll be part of the South Florida aviation community and being able to offer that facility to all of the airlines that operate down here, which will help us with our strategic alliances and our relationships. Again, the short answer to your question is we will be in that facility as soon as we possibly can, and we think that's 13-14 months from now.
From Axel Braun. Congratulations on the quarter. I don't know how far you wanna grow, but do you expect profitability again in Q4? Second part of that was, what is the status of a Nasdaq up-list?
Can we talk about Q4?
Sure. Go ahead.
We anticipate a profit in the fourth quarter. That's about as much as I'm probably allowed to say, maybe too much from what I'm allowed to say, but quarter four should be a good quarter for us. Status of the up-listing to Nasdaq will require us to have more assets on the balance sheet. Given our now profitability and as we see in the share price today, the movement up, we think that our ability to get additional financing, which would give us the assets which we need to up-list, will be forthcoming here very shortly.
We've always said, and I think we've said it multiple times, we wanted to demonstrate four quarters of revenue growth. We wanted to demonstrate profitability, and we wanted to demonstrate freight or cargo operations up and running before we anticipated any sort of up-list opportunity. With November, we'll have ticked all three boxes.
Sorry, the question just disappeared on me. Please walk us through the individual components of the $3.3 million working capital inflow experienced during Q3.
I don't necessarily think I can do that off the top of my head, but by and large, that was driven by as we grow our business, keep in mind, we get paid in advance. We get paid deposits, which is a big contributor to generating cash. We also generated a profit, which also allowed us to generate more cash for the company. Also as we get bigger as we relate to end of quarter with revenue, you do have some payables that have grown a bit, but that's in proportion to revenue.
There's another question here. Looking forward, I don't expect your answer to be any different, but could you please comment on your expectations for future growth and profitability and cash flow and thank you and great quarter.
For future growth, well, we've outlined how we get to 50 aircraft by the end of 2025. 2023, we add, we basically double in size, the size of this company. And along with that goes the cash flow. Basic rule of thumb in this business is you need six to seven airplanes to get to at least break even, so that you cover your fixed costs.
We have fixed costs in terms of our operations control and staffing, finance, all of the various departments that are needed as part of the infrastructure of this airline. Once we have covered that fixed cost, which you do with seven airplanes, then everything after that increases the percentage that goes to the bottom line. Our plans to increase our cash flow, our plans to increase our share price, our plans to increase the size of the company are all driven by adding additional aircraft units, both passenger and cargo, to our certificate. That drives our growth, that drives our profitability, and that should drive our share price.
Will deferred costs related to aircraft deposits be returned once the aircraft are delivered to GlobalX?
Yeah, that's not exactly how our financials are set up. Airplane deposits paid to lessors is an asset, which we would, at the returning of the aircraft, be part of the reconciliation on the return. When we look at customer deposits that are paid to us for the flights that we fly, they are factored into either they are used as part of to pay for their flights, or they're returned once we settle up with the customer that they've covered all their costs. That's sort of how it works on the balance sheet.
Could you address the potential addition of the B717 aircraft? The various media sources reported potential addition of 10 of the B717.
We are looking at that aircraft. The 717 is the best regional aircraft ever built. I will say it is the best regional aircraft ever built. It is based off of the MD-80 series aircraft, eventually became the MD-95, and then the 717 when Boeing bought McDonnell Douglas. Delta operates 90 of them. Hawaiian operates 20 of the airplanes, the 717, and Qantas operates 20 of them. That has proven to be a very good aircraft for both Delta and Hawaiian, as well as Qantas.
We've looked at that aircraft because what we have seen in this charter market is that about half of the clients that we talk to, work with, need an aircraft that can fly for three hours and carry 60-80 passengers. The seven one seven fits perfectly within those parameters. It is for us would be a very cheap aircraft to operate. There are also a lot of MD-80 qualified pilots which would ease the strain on our acquisition of A320 pilots. Now, the airplane, as we've looked at the various deals proposed to us, would be a very cheap aircraft for us to operate. We haven't made any decisions on that. We analyze a lot of things all at the same time.
We're analyzing this airplane, we're analyzing this versus more A319s, and we're analyzing this versus perhaps going immediately to A330s. But if we had this airplane in our fleet right now, it would be an exceptional performer for us. We balance that against the complexity of operating two aircraft types within a small airline like GlobalX. We're weighing the pros and cons. We're very, very interested in the aircraft. We are probably the only U.S. airline that could take these airplanes that are starting to come out of the fleets. Now Volotea has gotten out of the fleet because they couldn't get more of them. Short answer is, we're very interested in the airplane. We're doing a lot of analysis.
We've briefed our Board, and they've given us some mandates in terms of the questions that need to be asked and more analysis that needs to be done. We'll have more on this in the future. It's a very real possibility, but no decisions have been made.
The next one's about Canada Jetlines, and just for the people who are attending who may not remember or have forgotten, in July of 2021, GlobalX spun out Canada Jetlines. If you own two shares of Global, you got one share of Canada Jetlines as a dividend. Canada Jetlines started commercial operations this past September. The question is, today Canada Jetlines received approvals to operate flights to the U.S. Can GlobalX leverage that and start connecting Canadian cities with the U.S.?
Well, I'm gonna ask Ryan to answer that question. Ryan is our representative on the Board of Canada Jetlines. Let me just first say that we're very proud of Canada Jetlines and what they did to get certified from Transport Canada. They went through probably more hoops than they should have been required to go through just because of the economic environment that we're in. We're very proud that they have their first airplane and now signed for their second airplane and have started some scheduled service. So we have constant dialogue with Jetlines to the extent that we can, since as a U.S. investor, we can only have so much influence about what they do.
Ryan, again, is on the Board of Jetlines and is up to speed on our discussions with them. Why don't you, sort of highlight some?
Sure. As you know, Canada Jetlines has announced flights to Calgary and Toronto-Calgary and Toronto-Vancouver, which they're gonna use with their initial metal. We're looking at destinations once they get their ability to sell into the United States. Today's announcement is a big part of that. The ability to sell in the U.S. would dictate flying through the U.S. Global Crossing has made our aircraft available to fly for them. Basically, Jetlines can be bigger, faster, which is really in the game of scale. That's a key component. We are working with a commercial team to identify which areas make sense, what the economics make sense. Yes.
The idea always has been for Jetlines to leverage the relationship with GlobalX to get bigger faster, because really that's what it is about airlines. They will be working on announcements as come. Again, what they've been focused on is getting permission to do it, and then secondly, getting the key to that, you know, given they're more of a charter model, kind of a mixed risk, is their ability to sell tickets and get the distribution, the relationships in place. We wanna make sure all of that is in place and effective before we commit to the cost of flying south.
The European summer flights ran into complications due to permitting this year, and it says your Q3 results suggest that you were compensated due to contractual obligations. Can you provide any further detail, and do you expect to be flying in Europe during summer 2023?
I'll take the first part of that, and then Ryan will talk about flying in the future. He's just worked out some deals in Europe that are very, very favorable to the company. Let me just talk about the issues in Europe this summer. As you know, we had a contract with TUI, which is one of the major tour operators in Europe. They advised us that the approvals that they had received from the Dutch authorities, the Dutch CAA, for us to operate were sufficient for the operations that we would conduct for them. We thought otherwise, but they assured us that the Dutch authorities had cleared all protocols within EASA and that we were cleared to fly.
That wasn't the case. EASA required us to stop flying and to meet the requirements for what's called a TCO, or Third Country Operator authorization within Europe. TUI, a very stand-up organization, well-run, and very ethical, continued to pay us through about the mid part of August. At that point, we felt it prudent to bring our airplanes home while we went through the final phases of the TCO process with EASA, the European Union Aviation Safety Agency. The amounts that they paid us wasn't a windfall because they were paying us for ACMI, so Aircraft, Crew, Maintenance, and Insurance.
About 90%-95% of what they paid us, we had to pay out in lease costs, in crew costs, daily maintenance costs on our airplanes and the insurance for the aircraft. Any of the flying that we would have done in Europe, all of the other expenses would have been paid directly by TUI, so we never would have received those revenues. In effect, we received and paid out as much as we would have paid out had we flown the flights. We have established an excellent relationship with TUI, primarily because of Ryan's discussions and negotiations with them. They saw how we operated with them, getting our crews and our airplanes to Europe to start the operation.
They saw how well we maintained our operation while we were waiting to get our TCO and worked with them. They came to us quickly after the end of the summer and said, "We would like to establish a long-term relationship with GlobalX. We've seen your airplanes. We've trained some of our flight attendants to fly with you. We've seen your flight attendants and cockpit crews and how they conducted themselves in Europe for about six weeks. And so we want you to be our partner for the years to come." I'll let Ryan talk about the negotiations, discussions really with TUI and what we project to do with them over the next three to five years.
As Ed alluded to, we'd like to think we have a great working relationship with them. They see the need for our aircraft and our services for a significant number of years. We've come to terms on a three-year agreement with rates. We're working through the details of the contract before anything formal can be announced and booked. But there's a strong demand for our services over there. We're well-positioned to support them in their operations. They have a need for it pretty much every summer. We're looking forward to an incredibly long relationship with TUI and any other charter operators, airline operators in Europe in the summers.
With our TCO in place, with the aircraft type we have, and with our ability to execute on the work, we believe there's significant opportunities in Europe, not only in 2023, but 2024, 2025, and 2026.
We've actually discussed with them at their suggestion that we establish our own AOC in Europe, probably a Malta AOC, which would allow us to increase the number of aircraft we could operate for them in the summers from two aircraft to up to as many as four or five aircraft. We're analyzing that and discussing that with them, see if that makes sense. We're looking at the expense of that. There is an opportunity to greatly expand our relationship with TUI in terms of the number of aircraft that we operate for them and obviously the revenue base.
More of a comment here. Someone would love to see you on BNN and CNBC. We all would. It's not a question you can answer at this point, but we wanna see you there someday. From Neil Wilson, what are your primary hubs?
We don't operate as a scheduled airline, as you know. We're a charter operator. Our hubs are somewhat fluid. It depends on where our charter clients are based. It depends on time of year. We're starting to settle down into a couple of areas or a couple of cities, I should say, that in geographical areas where we know we will have a high concentration of charters that originate. Obviously, Miami is our home base, our main base. We do a lot of flying out of Miami into the Caribbean, into Latin America, into Cuba, and into Mexico. Miami is our primary base. It's where our current maintenance base is. It's where our operations control center is and, of course, our senior management staff.
We've established a base in San Antonio with both maintenance and flight attendants. We do a lot of government flying that originates in Texas, and San Antonio is a great place to position a hub. It's also a great place to recruit staff that we need, both in maintenance and cabin crew. We will probably establish a cockpit crew or pilot base there in San Antonio. Cost of living in Texas and San Antonio is lower than here, it is here in Miami. We're actually looking at, perhaps, we're still studying this, moving some functions of the airline to Texas, and we're analyzing some other locations in the country. We have a base, a flight attendant base in Las Vegas.
We're going to be doing more and more West Coast flying into Las Vegas, flying into Phoenix, flying onto the West Coast. We've established a beachhead there in Las Vegas with flight attendants. As we get more aircraft, we anticipate basing one or two aircraft permanently in Las Vegas, and as we grow our business in the West. We maintain a base in Atlantic City with our relationship with Spirit there for maintenance. It is a place where we often ferry airplanes after they complete their charter flights in the Northeast as they're waiting for their next assignment. We wanna continue to build the Atlantic City base. That would give us Atlantic City, Miami, San Antonio, and Las Vegas. That covers the country for us.
As we grow larger and get more aircraft, and we can more specialize in certain areas of the country, we may look to put something up in the Northwest. But we certainly wanna stay as much as we can below the snow or freezing line in the U.S., where we keep our aircraft.
Question in and around financing and how do you envision financing in this environment?
I'll let Ryan speak about some specifics, but given our growth, given one of the primary assets of this company, which is the deals that we have put in place for a fleet of A321 freighter aircraft, and given what we've done so far on a very small budget in terms of our financing to date, you can imagine that we have had many inquiries about being able to invest in this company, so we've got options. None of which we have decided on. We are continuing to grow our aircraft fleet. We wanna grow our profitability, and we hopefully will see a concurrent rise in our share price, which makes the potential for selling equity a bit more attractive for us, right?
Now, it's not attractive even at today's stock price, even with a 20% gain. We will need additional cash as we take on additional aircraft to get to 50 aircraft. We certainly could not do it on the equity base that we have today. We hope and expect that we will be able to raise equity at higher share prices in the future. I don't know if you wanna...
Yeah, I think I'll reiterate. You know, I think if anything we've demonstrated over the last two and a half years is a reticence to give equity away, and we really haven't. We've been really disciplined about when we've raised money, how much we've raised, as indicated in the last raise in March when we raised $6 million in debt with some warrants. I think our inclination at this stage is not to raise in the form of equity, given the price point. A convertible or something with a warrant is much more palatable and makes a lot more sense. But again, we see a pretty big disconnect between the level of activity, our projections and our ensuing share price. I think this is a fluid situation that changes every day. What we focus on is executing.
We focus on growing the revenue, growing profitably. We have the ability to grow with our existing resources. Again, if we wanna get to 50 aircraft in two and a half years, there will be a need to bring in extra cash to accelerate it, but it's not required. It's not a survival issue. It's a speed of growth issue. We're gonna continue to execute on our plan and just as we have been when every other decision we've made, be incredibly optimistic, right? When we see aircraft are really cheap, we go get it. When we see a great asset that makes sense, we go get it. When we see routes we can go fly, we fly. When we see customers who need help, we go help them.
Our approach has been pretty disciplined over the last two and a half years, and I don't see that changing.
Speaking of assets from a longtime shareholder, Mike Harrison. You mentioned that you're anticipating putting capital assets on the books. Does this suggest that your strategy of acquiring aircraft may be different than on the first seven planes?
Well, I think what you're driving in your question there is would we buy aircraft as opposed to leasing them. We still see incredible deals leasing aircraft in this market. The aircraft leasing market is starting to firm up, and aircraft lease rates are not as soft as they were, say, a year ago, although we're still driving some very good deals. As we look ahead, we think Europe will have a difficult time over the next year. We think that airline growth in Europe will slow down, and there may be some airlines that cease operating. We will be particularly opportunistic for additional A320s over the next year, as Europe and perhaps certain parts of Asia will continue to have some issues.
We look to drive very, very good deals on leased aircraft. That also means that there'll be aircraft for sale. We certainly don't have the equity on our balance sheet to go buy aircraft. We have talked to certain financing sources about creating an aircraft acquisition facility for us, where we could put in a very, very sliver piece of equity, and they would finance the bulk of the aircraft so that we either put the aircraft on a finance lease or some way that we could acquire the aircraft. We'd love to put some aircraft assets on our balance sheet. We obviously don't have the capability currently to do that, but we are constantly looking at ways to do that.
Any questions in and around people? Can you give us some insight on your ability to hire pilots and mechanics? The other one related is, I know that you have a new pilot class starting every three weeks. Are you having any issues in recruitment or retention at this point, given the competitive nature of the airlines today? Great quarter.
We've been actively recruiting pilots since over the last 18 months, certainly well before we received our certificate. We've gotten very good at it. We've got a couple of different sources where we draw pilots from. We obviously go to all of the pilot recruiting conferences. We have signed an agreement with OSM Aviation Academy here in Fort Lauderdale, which is owned by the owner of Norse Atlantic Airways. We've gotten our first four first officers from that program with another six in training. In terms of captains, which is really the most important of the two positions, we have been very successful in recruiting U.S. qualified pilots who are flying overseas. They're flying in the Middle East, they're flying in Asia, and they wanna come home.
They're at an age, let's call it mid-50s to 60, where they don't wanna go to United or Delta or American and sit in the right seat for the last part of their career, and get the less favorable flying assignments at those airlines. They'd rather come to us where they become a direct entry captain. We are competitive in pay. We are more than competitive in lifestyle in terms of South Florida, and the types of flying that we do. We have been successful so far in ensuring we've got enough captains to crew our aircraft. We've got enough FOs now that have been with us over the past year. We can now start upgrading to captain and backfill those FOs from the OSM Aviation Academy, and from other sources.
For now, we feel very, very good where we are with pilots. It is a constant battle out there. We're battling the majors, we're battling Spirit and Frontier and Allegiant and JetBlue. We offer certain elements of a lifestyle here that is different from flying for those airlines. We're attracting very experienced, very qualified captains who see the potential here. They see the growth. They know that their pay will be increased in line with what our competitors and even what Allegiant and some others are paying as we grow in our profitability. Right now we feel comfortable, we feel confident.
We think that the hiring in the U.S. will slow down next year for various reasons, and we think that we will be able to retain the vast majority of the pilots that we have recruited, hired, and trained as we move forward. In terms of maintenance personnel, we have some relationships with some of the maintenance schools here in Miami. We've not had a difficulty in attracting maintenance technicians and maintenance staff because of the type of fleet that we operate, the A320, A321, and we think eventually the A330. They wanna come here because they see growth. They can come as maintenance technicians, then they become, you know, line ramp supervisors, then they become maintenance controllers, and they continue to move up the chain.
They can't get that necessarily with other charter airlines in the U.S. right now because those airlines are not growing. So far, no issues getting pilots, no issues getting maintenance technicians. We feel as we grow and grow in profitability, we will continue to be able to attract good talent to the airline.
Can you elaborate on the Eviation potential? Do you think there are safety issues regarding lithium batteries that might cause passengers to shy away from using e-airplanes?
I think our take on that is let's let them work that out. You know, I think they're going through their certification process. They're going through their acceptance. I think it's up to them to prove that out, and when they're ready to fly, we'll be here to work with them.
Those airplanes won't deliver to us for another five years. We wanted to get in line with an order position. That also allows us to talk, you know, frequently with the manufacturer of the airplane so that we can help in the design, to help shape what we want to see in the airplane for the types of operations that we want to operate with that airplane. Those discussions are ongoing, both on the aviation side with the Alice aircraft and with Eve, which is the eVTOL aircraft. For essentially no money down, we now have a place in line for both of those aircraft, and it gives us a seat at the table in terms of being able to shape the aircraft development and what we wanna see in those aircraft, for our particular operation.
You had and you've addressed this in part, since you had some unique circumstances during COVID in acquiring aircraft. How has or what's the climate now, and can we maintain this competitive advantage going forward?
Well, as I said a moment ago, we are seeing the aircraft operating lease environment turning a bit back towards the lessor. Although we still have a significant advantage here. Significant numbers of A320s, A321s, A319s that are on the market. We get probably 12 calls a day into our aircraft acquisition team offering us more airplanes. Our next A321, which will be here in two weeks, is a tremendously favorable deal for us. It's all Power -by -the -Hour, and that aircraft will eventually be converted to freighter. All of that has been financed and built into the leases that we signed for that aircraft. We agreed on terms today for, as I said, another A320 coming out of Alaska Airlines.
Excellent terms. Maybe just a little bit more than what we're paying for some of the earlier A320s that we acquired, but not really a material amount of increase in the lease rate. In fact, this airplane, in terms of its age and where it is in the maintenance cycle, is probably better, probably the best A320 we will have in our fleet. We think this situation will continue for at least another 12 months, as the excess aircraft either remain in storage or sent to be disassembled, or perhaps absorbed back into some airline systems. We don't see any new airlines starting here in the U.S. Europe will have difficulties next year. I doubt many airplanes will be taken out of storage to go into European airlines next year.
I think the reverse is going to happen. I think we're still in a good part of the cycle, and we're gonna take advantage of that and tie up as many airplanes as we can over the next 12 months, to fuel our growth.
Raise the next question, but what it comes down to is whether or not you have sufficient number of pilots to staff the current seven aircraft.
Yes, we do. That's why we are seeing the increases in block hours and the increase in revenues. We have classes, as was earlier stated, starting about every three weeks. We've just started one. We've just recruited for our December class. That's already got five captains in it, and we hope to get to six or seven before we close that out. Right now we have a sufficient number of crews per aircraft, and we have a sufficient number of crews in training, first officers being upgraded to captain, to be able to crew the first two freighters as well as the next two passenger aircraft. We are keeping up with the demand for our services, both on the aircraft side as well as in the cockpit crews.
Questions related to the JET.B shares. Part of it is, why is there such a disparity between the JET and the JET.B and are causing confusion among new retail investors? You've discussed this before. When can you get rid of the JET.B shares?
Just a bit of history for those who are new to the story. The JET .B shares were created in order for us to be compliant with the Department of Transportation's ownership regulations, which stipulates 75% of all voting shareholders. 75% of all voting shares need to be held by U.S. citizens. As a byproduct of our initial formation or merger with Canada Jetlines, we had a significant foreign shareholder base, which is primarily Canadian, which forced us to push to create JET and JET. B. The features of the JET.B Is it has the exact same economic rights as the Jet shares, and they are convertible to Jet shares on a one-for-one basis at any time.
As far as getting rid of the JET.B, we would have to be able to prove to the Department of Transportation that 75% of the JET shares are owned by U.S. citizens, which is a little difficult because we, there's no report I can go to find out who owns all my shares. We have 9,000 shareholders, 8,000 shareholders owning less than 1,000 shares, and getting passports for all those shareholders is a difficult task. That being said, I think over the course of since we first launched in June of 2020, we've seen a significant uptick in the acquisition of shares by U.S. citizens.
I don't think we're at the point now where we can collapse the B shares into the common, but we, by no means, have a desire to maintain that any longer than we have to.
Get through the remainder quickly. Congratulations for not raising equity. This price appreciates the discipline. Thanks for all you do. How has the acquisition of Flügy benefited the airline?
It's actually benefited us in a number of ways. We've just signed three more contracts at Flügy with Soho House, and that's driving some significant material revenue for us. We haven't focused on it as much as we have focused on driving the airline to profitability. Our media and ad agency has continued to do work on developing the brand. We're talking to more and more similar type companies like Soho House to develop the product. We're talking to a couple of investors about taking a piece of Flügy and spinning that out.
We would maintain a significant stake in it, and all of the charter flights that come out of Flügy would come to us if we could fly them, and bringing in outside investors with experience in the travel space, the online travel space, which would accelerate the growth of Flügy, and we would want our equity stake to increase in value as well. It's led to five flights so far for us on a relatively nominal investment that we've made. We've positioned it with our social media, a website and also with our outside agency for a significant growth that we can see in the product.
We wanna bring in some new experts who understand the online space extremely well, and get this product positioned for new investment and an expansion of their capabilities.
When growth plans up to 25 cargo aircraft, do you see partnerships with any major freight forwarders?
Yes. We talked to all of the package carriers. We're in discussions with them on a weekly basis. They understand what we are doing. They understand the capabilities of the aircraft. The A321 freighter is the replacement for the 757 freighter, which on average are over 30 years old. It also competes extremely well against the competing product, which is the 737-800. The A321 freighter carries more than 40% more than what a 737-800 freighter will carry. All of the freight forwarders and the package carriers like Amazon, DHL, UPS, they understand the economics of that and what that extra 40% means. We're in discussions with all of them.
We've got some very, very good contracts being lined up with airlines to fly this airplane for them, with a launch operator of the A321 freighter. We've got 15 of them now under firm LOI or lease, which is a significant size that is very attractive to the larger freight forwarders and the package carriers. I won't say much more than that, other than to say that we have the best narrow-body aircraft freighter. We've got more than 15 of them, and we operate the airplane already with the A321 passenger aircraft. We are very, very well positioned to take this aircraft and drive significant growth and profitability, operating it in the U.S. and throughout Latin America.
Closing. Congratulations. Well done, Ed and Ryan. With that, gentlemen, that'll be the end of the questions.
Thanks very much, Grant. Thanks everyone on the call for your support. I know many of you have been following us since June of 2020. It's a great day for us to be able to announce that we're profitable. We appreciate you hanging in there with us, and we promise to continue to do what we are doing, which is to work extremely hard with our shareholders' money to create a profitable airline. Thanks again, Grant. Thanks, everyone. Everyone, have a great day.
Thank you.