Startup stories

How a canadian startup became a US airline

Today’s startup story has an uncommon history as GlobalX, a new airline based in Miami, Florida, started as a Canadian corporation

The new green, blue and white livery is shiny and give a great view of the airline. However, this is not why I’m talking about this specific airline today. This company is interesting as it didn’t start as an American company. The first iteration of this company was to create a ULCC airline in Canada named Canada Jetlines. Isn’t this interesting? let’s see what happened

Ultra-low-cost airlines are the last new big thing in the airline industry. This business model is the one on which most new airlines use today. Think of Spirit, Ryanair, EasyJet or Frontier. All of these airlines are successful. Investors are more willing to invest their money in a project that follows the same model.

That’s why investors created Canada Jetlines in Vancouver in 2013.

The initial plan of Canada Jetlines was to operate flights between cities that were not or poorly connected. To finance its creation and growth, the company entered the TSX Stock Exchange of Toronto in 2014. The funding allowed the company to order a fleet of Boeing 737 Max 7. Canada Jetlines expected a fleet of up to 40 aircraft six years after its first flight.

Unfortunately, none of its plans materialized yet in Canada. Having attracted American investors, the company pivoted from its initial objectives and focused on another market. In 2019, Canada Jetlines Ltd decided to relocate to Florida, the USA, change its name into Global Crossing Airline, and target the charter and AMCI market.

During 2020, the company was busy implementing the various steps needed to be in a position to apply for an AOC.

The arrival of the first aircraft is one major step in the startup. It is now all set to complete the final part of the certification by the FAA.

The company identified a market opportunity on the charter market where clients have limited options with mainly old aircraft. The economic downturn effect in the aviation industry has pushed the lease rate down, and it’s an opportunity for a new airline establishing its fleet at a reasonable rate.

The solution of GlobalX is to offer charter services with newer aircraft both for passenger and cargo business.

US charter market has indeed seen a reduction of players over the last decade with a series of bankruptcies, merger or purchases. Considering the previous few years, Xtra airlines, Miami Intl or the second version of Eastern airlines, disappeared from the skies. Swift air LLC (now Iaero) is the winner of this concentration.

Newer aircraft mean higher fix cost, and charter airlines avoid them for this specific reason. If you are unsure if your plane will fly with a steady schedule throughout the year, the aircraft’s higher fix cost is a pain. On the other side, operating older aircraft while building up the business does not hurt much. The variable expenses are higher (fuel and maintenance) but don’t add up when your plane is not flying. Few charter airlines succeeded with new aircraft at startup for that reason.

GlobalX does not close the door to the Canadian market, however. The company is on the TSX Venture Exchange under the JET symbol, and there is a plan for Canadian operations. A travel agency will use the “Candian Jetline” brand with a focus on Florida and the Caribbean. Part of the flights to be operated for Canadian Jetlines customers will be with GlobalX aircraft.

Finally, the airline recently confirmed an agreement with the Venezuelan airlines Elastar for three weekly flights from Miami to Caracaras.

The first flight is expected soon. We can only wish all the best to this new global venture.

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