{"url_path":"/sec/jetbf/10-k/2026/item-7","section_key":"item-7","section_title":"Item 7 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS","topic":"sec","document":{"doc_type":"10-K/A","doc_date":"2026-06-10","source_url":"https://www.sec.gov/Archives/edgar/data/1846084/0001193125-26-265739-index.html","accession_number":"0001193125-26-265739","cik":"0001846084","ticker":"JETBF","issuer_name":"Global Crossing Airlines Group Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1846084/0001193125-26-265739-index.html","primary_entity_key":"0001846084","primary_entity_name":"Global Crossing Airlines Group Inc."},"word_count":5542,"has_tables":true,"body_markdown":"ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\n\nThe following discussion and analysis should be read in conjunction with the Financial Statements included in Item 8 of this report. This Item 7 contains forward-looking statements that involve risks and uncertainties. Undue reliance should not be placed on these forward-looking statements, which speak only as of the date of this report. Actual results may differ materially from those expressed or implied in such forward-looking statements. Factors which could cause actual results to differ materially are discussed throughout this report and include, but are not limited to, those set forth at the end of this Item 7 under the heading “Cautionary Note Regarding Forward-Looking Statements.” Additional factors are found in Item 1A under the heading “Risk Factors”.\n\n \n\nBackground\n\nCertain Terms - Glossary\n\nThe following represents terms and statistics specific to our business and industry. They are used by management to evaluate and measure operations, results, productivity, and efficiency.\n\nACMI:\n\nService offering, whereby we provide outsourced cargo and passenger aircraft operating solutions, including the provision of an aircraft, crew, maintenance, and insurance, while customers assume fuel, demand and price risk. In addition, customers are generally responsible for landing, navigation and most other operational fees and costs.\n\nBlock Hour:\n\nThe time interval between when an aircraft departs the terminal until it arrives at the destination terminal.\n\nCharter:\n\nService offering, whereby we provide cargo and passenger aircraft charter services to customers. The customer generally pays a fixed charter fee that includes fuel, insurance, landing fees, navigation fees and most other operational fees and costs.\n\nNet Available Aircraft:\n\nThe number of aircraft available each month reduced by (netted) days the aircraft is unavailable due to various maintenance events or deliveries during a month.\n\n2Y Check:\n\n“Heavy” airframe maintenance checks, which are the most extensive in scope and are generally performed every two years and can take from 20 – 40 days to complete.\n\n6Y Check:\n\n “Heavy” airframe maintenance checks, which are the most extensive in scope and are generally performed every six years and can take from 45 – 75 days to complete.\n\n12Y Check:\n\n“Heavy” airframe maintenance checks, which are the most extensive in scope and are generally performed every twelve years and can take from 60 – 100 days to complete.\n\nHeavy Maintenance:\n\nScheduled maintenance activities that are extensive in scope and are primarily based on time or usage intervals, which include, but are not limited to 2Y Checks, 6Y Checks, 12Y Checks and engine overhauls. In addition, unscheduled engine repairs involving the removal of the engine from the aircraft are considered to be Heavy Maintenance.\n\nLine Maintenance:\n\nMaintenance events occurring during normal day-to-day operations.\n\nNon-heavy Maintenance:\n\nDiscrete maintenance activities for the overhaul and repair of specific aircraft components, including landing gear, auxiliary power units and engine thrust reversers.\n\nUtilization:\n\nThe average number of Block Hours operated per day per aircraft.\n\n \n\nBusiness Overview\n\n \n\nGlobalX operates a US Part 121 domestic flag and supplemental airline using the Airbus A320 family of aircraft. GlobalX’s business model is to (1) provide services on an ACMI basis using wet lease contracts to airlines, whereby we provide aircraft, crew, maintenance, and insurance to customers, and (2) on a Charter basis whereby we provide passenger aircraft charter services to customers by charging an “all-in” fee that includes fuel, insurance, landing fees, navigation fees and most other operational fees and costs. GlobalX operates within the United States, Europe, Canada, the Caribbean Islands, and Central and South America.\n\n \n\nFocused on becoming a market leader with differentiated, value-creating solutions\n\n \n\nGlobalX intends to become the best-in-class U.S. narrow-body, ACMI charter airline, operating both passenger and cargo charter aircraft while recruiting and maintaining a dynamic team of customer-centric flight crews, ground and maintenance teams and management staff.\n\nGlobalX operates its A320 family aircraft for government agencies, airlines, tour operators, college and professional sports teams, and incentive groups. It is our goal to deliver best in class on time performance and dispatch reliability, expand existing relationships and develop additional relationships.\n\n20\n\n \n\n \n\nBusiness Developments\n\nDuring the twelve month period ended December 31, 2025 the team devoted efforts towards our stated goal of creating the largest narrow body charter operation in North America with an aim of generating sustainable, long-term profits. To achieve this goal, GlobalX continues to invest in its three key assets– certifications, aircraft, and crew.\n\nFrom a certifications perspective GlobalX, in the twelve month period ended December 31, 2025, received approval from the Australian Civil Aviation Authority to allow flights into and out of Australia.\n\n \n\nFrom an aircraft perspective GlobalX, in the twelve month period ended December 31, 2025:\n\n•\nEntered into lease agreements for four A319 passenger aircraft.\n\n•\nTook delivery of one A321 passenger aircraft, one A319 aircraft and one A320 airframe.\n\n•\nLeased two engines for the delivered A320 airframe\n\n•\nPurchased one A320 passenger aircraft, which had been previously leased by GlobalX.\n\n•\nExtended leases of one A320 aircraft and one A321 aircraft each of which is currently in our fleet.\n\n•\nReturned one A319 aircraft to the lessor per the terms of the applicable lease.\n\n•\nCompleted nine heavy maintenance events and forty-two non-heavy maintenance events.\n\n \n\nFrom a crew perspective, GlobalX in the twelve month period ended December 31, 2025, increased its pilot headcount from 142 to an all-time Company high of 154.\n\nIn short, the twelve month period ended December 31, 2025, was a time when GlobalX invested in its people, prepared for its growth, and established a robust infrastructure for its future.\n\nReducing Operational Costs\n\n \n\nTo control costs and maintain a competitive cost per Block Hour flown, GlobalX:\n\n•\nFlies only one aircraft family (A320).\n\n•\nMaintains focus on continuous financial discipline and strict departmental budgeting.\n\n•\nHas implemented and utilizes digital operating methods for both flight and maintenance operations, using best in class aviation software operating systems from leading suppliers including dispatch (Navblue), maintenance (Trax) and training software (Mint). By capitalizing on the latest software, GlobalX can effectively eliminate most manual processes and operate effectively with fewer people than a comparably-sized airline using older software systems.\n\n•\nPromotes organizational culture of efficiency and high productivity.\n\n•\nIn late Q3, GlobalX initiated several actions to reduce headcount and salaries to better match our revenue projections. Headcount in December was reduced to 661 from a high of 727 in July.\n\n \n\nMarketing Plan\n\n \n\nGlobalX plans to achieve its revenue goals by flying charter operations for a variety of client groups:\n\n•\nScheduled airlines that have short-term or long-term capacity needs to supplement their existing routes or fleets.\n\n•\nMajor tour operators that require airlift above and beyond scheduled service to meet their occupancy needs.\n\n•\nProfessional and collegiate sports teams\n\n•\nCharter brokers representing a variety of interests, including the entertainment industry, dignitary travel, political campaigns, and government programs.\n\n \n\nThe Cargo Charter Market\n\n21\n\n \n\nGlobalX added the A321F aircraft to its operating certificate during the first quarter of 2023. The Company believes that the A321F will eventually be a highly sought-after cargo aircraft as a replacement for the aging and retiring Boeing B757 freighter fleet. During the twelve months ended December 31, 2025, we had four cargo aircraft operating. In 2025, GlobalX saw a 55% increase in Block Hours operated compared to 2024. Despite this increased activity level, the cargo charter market continues to be a significant drag on earnings. This is primarily due to the low rates being offered by brokers and customers and the relatively low utilization rates on a per aircraft basis, relative to the rates offered. We expect this dynamic to continue into 2026, and consequently, we are exploring all options to mitigate future losses, including, but not limited to, leasing out engines, parking aircraft, and or returning one or more of our freighter aircraft to lessors.\n\nThe Passenger Charter Market\n\nUnlike the cargo charter market, the passenger charter market continues to demonstrate strong demand and served as the economic engine for GlobalX in 2025. There are several macro factors, including the supply of aircraft, reduced direct competition, increased reliance on air charter by college sports teams and general increased customer demand, which are driving increased demand for our services. GlobalX anticipates the high level of demand will continue into 2026. To address this demand, the Company has prioritized the passenger charter market over the cargo charter market, devoted sales and operational resources to develop long-term relationships with key customers and looked to expand the markets served as opportunities arise.\n\nGlobalX Aircraft Fleet\n\n \n\nCritical to GlobalX’s business model is a fleet of modern and cost-effective aircraft. To achieve this objective, GlobalX has selected what it believes is the best overall single-aisle aircraft family to operate. This approach differs from traditional airlines, which purchase a variety of aircraft, often from different manufacturers, to achieve their operational flight sectors, resulting in increased training, operating costs and maintenance costs. GlobalX conducted research to determine the best aircraft to fly in competition with other narrow-body charter airlines in the single-aisle seat market and after such research GlobalX selected the A320 aircraft family.\n\n \n\nThe following factors support GlobalX’s choice to operate the Airbus A320 and A321 aircraft versus the Boeing-737 family of aircraft:\n\n \n\nCost and Operating factors: lower fuel burn, and better aircraft and cockpit crew pool availability.\n\n \n\nOperational Capability: the A320 has a range advantage over the 737-800 and can fly non-stop from Miami to most airports throughout North America, South America and the Caribbean, and between most major destinations in Europe. The A320 has excellent maintenance dispatch reliability and strong availability of spare parts and components, making the A320, in management’s estimation, the most popular aircraft among low-cost airlines.\n\n \n\nPassenger comfort: wider seat width, larger cargo bin volume for carry-on baggage and larger cargo hold volume.\n\n \n\nAircraft Maintenance\n\n \n\nHeavy maintenance checks are expected to be outsourced to FAA-approved service providers. The 6Y and 12Y Checks will be primarily paid for using funds from the accrued maintenance reserves paid to lessors under operating leases.\n\n \n\nStrategy to Address Competitive Response\n\n \n\nWe expect the existing charter operators based in the U.S. to respond to GlobalX’s entry into the market by lowering their pricing to customers. The expected competitive response typically includes lowered ACMI rates for key contracts. We believe GlobalX’s existing relationships with potential customers and the underserved demand in the U.S., coupled with our newer planes allowing for a more cost-efficient operation, will allow us to address and respond to competitive pressures and grow our business.\n\n \n\nExperienced management team\n\n \n\nOur management team has extensive operating and leadership experience in the airfreight, airline, and aircraft leasing, maintenance, and management industries at companies such as Virgin America, American Airlines, US Airways, Atlas Air, DHL, Eastern Airlines Express, Emirates, North American Airlines, Miami Air, Spirit Airlines, Continental Airlines, Pan Am, and Flair Airlines, as well as the United States Army, and Air Force. In addition, our management team has a diversity of experience from other industries at companies such as KBR, Teladoc, Halliburton, Lehman Brothers, and the Burger King Corporation.\n\nResults of Operations\n\n \n\n22\n\n \n\nYears ended December 31, 2025 and 2024\n\nOperating Revenue & Statistics\n\nThe analysis of GlobalX results for the years ended December 31, 2025 and 2024 requires an understanding of how the Company fundamentally evolved during that time period. 2024 was our third year of full operations and was a period where the Company was focused on securing additional customers, entering new markets and flying to additional locations; primarily in the domestic and Caribbean markets and within the European market. As a growing company, we were also focused on operating effectively and efficiently.\n\nIn 2025, GlobalX continued expanding existing governmental agency relationships, acquired new partners, secured long-term cargo contracts, expanded operations in the European ACMI market and continued its operations with existing airlines. Our key metric is Block Hours flown and Block Hours flown per available aircraft, which is the measure by which we track commercial activity. While other airlines discuss available seat miles and revenue per available seat mile, cost per available seat mile, these metrics are not germane to our business model as an ACMI and Charter operator. GlobalX charters the entire aircraft, does not take fuel risk, and does not take third party risk therefore our results are evaluated on a Block Hour and Utilization basis.\n\nThe following table compares our Operating Fleet (average aircraft equivalents during the period) and total Block Hours operated:\n\n \n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOperating Fleet\n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\nInc/(Dec)\n\n \n\n \n\n% Change\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nA319\n\n \n\n \n\n0.6\n\n \n\n \n\n \n\n1.0\n\n \n\n \n\n \n\n(0.4\n\n)\n\n \n\n \n\n40.0\n\n%\n\nA320\n\n \n\n \n\n10.5\n\n \n\n \n\n \n\n9.2\n\n \n\n \n\n \n\n1.3\n\n \n\n \n\n \n\n14.1\n\n%\n\nA321\n\n \n\n \n\n7.9\n\n \n\n \n\n \n\n6.2\n\n \n\n \n\n \n\n1.7\n\n \n\n \n\n \n\n27.4\n\n%\n\nTotal Operating Average Aircraft Equivalents\n\n \n\n \n\n19.0\n\n \n\n \n\n \n\n16.4\n\n \n\n \n\n \n\n2.6\n\n \n\n \n\n \n\n15.7\n\n%\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNet Aircraft Available\n\n \n\n \n\n16.0\n\n \n\n \n\n \n\n13.8\n\n \n\n \n\n \n\n2.2\n\n \n\n \n\n \n\n15.8\n\n%\n\nTotal Block Hours\n\n \n\n \n\n33,013\n\n \n\n \n\n \n\n26,628\n\n \n\n \n\n \n\n6,385\n\n \n\n \n\n \n\n24.0\n\n%\n\nAverage Utilization per available aircraft\n\n \n\n \n\n2,062\n\n \n\n \n\n \n\n1,930\n\n \n\n \n\n \n\n132\n\n \n\n \n\n \n\n6.8\n\n%\n\n \n\nThe following table describes the revenues (in thousands) generated by the Charter, ACMI, and Other operations of GlobalX’s business as well as the number of Block Hours serviced by the Charter, ACMI, and Non-Revenue operations of GlobalX’s business.\n\n \n\n23\n\n \n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n \n\n \n\n \n\nRevenue\n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\nInc/(Dec)\n\n \n\n \n\n% Change\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCharter\n\n \n\n$\n\n62,258\n\n \n\n \n\n$\n\n95,456\n\n \n\n \n\n$\n\n(33,198\n\n)\n\n \n\n-34.8%\n\nACMI\n\n \n\n \n\n175,770\n\n \n\n \n\n \n\n123,061\n\n \n\n \n\n \n\n52,709\n\n \n\n \n\n42.8%\n\nOther\n\n \n\n \n\n8,318\n\n \n\n \n\n \n\n5,234\n\n \n\n \n\n \n\n3,084\n\n \n\n \n\n58.9%\n\nTotal\n\n \n\n$\n\n246,346\n\n \n\n \n\n$\n\n223,751\n\n \n\n \n\n$\n\n22,595\n\n \n\n \n\n10.1%\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nBlock Hours\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCharter\n\n \n\n \n\n4,213\n\n \n\n \n\n \n\n6,030\n\n \n\n \n\n \n\n(1,817\n\n)\n\n \n\n-30.1%\n\nSub-service Charter\n\n \n\n \n\n367\n\n \n\n \n\n \n\n1,552\n\n \n\n \n\n \n\n(1,185\n\n)\n\n \n\n-76.4%\n\nTotal Charter\n\n \n\n \n\n4,580\n\n \n\n \n\n \n\n7,582\n\n \n\n \n\n \n\n(3,002\n\n)\n\n \n\n-39.6%\n\nACMI\n\n \n\n \n\n28,067\n\n \n\n \n\n \n\n19,899\n\n \n\n \n\n \n\n8,168\n\n \n\n \n\n41.0%\n\nSubservice ACMI\n\n \n\n \n\n184\n\n \n\n \n\n \n\n640\n\n \n\n \n\n \n\n(456\n\n)\n\n \n\n-71.3%\n\nTotal ACMI\n\n \n\n \n\n28,251\n\n \n\n \n\n \n\n20,539\n\n \n\n \n\n \n\n7,712\n\n \n\n \n\n37.5%\n\nNon-Revenue\n\n \n\n \n\n733\n\n \n\n \n\n \n\n699\n\n \n\n \n\n \n\n34\n\n \n\n \n\n4.9%\n\nTotal\n\n \n\n \n\n33,564\n\n \n\n \n\n \n\n28,820\n\n \n\n \n\n \n\n4,744\n\n \n\n \n\n16.5%\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nRevenue per Block Hour\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nCharter\n\n \n\n$\n\n13.6\n\n \n\n \n\n$\n\n12.6\n\n \n\n \n\n$\n\n1.0\n\n \n\n \n\n7.9%\n\nACMI\n\n \n\n$\n\n6.2\n\n \n\n \n\n$\n\n6.0\n\n \n\n \n\n$\n\n0.2\n\n \n\n \n\n3.3%\n\n \n\nCharter revenue for the period decreased $33.2 million or 34.8%, from $95.5 million in 2024 to $62.3 million in 2025. This reduction was primarily driven by a reduction in Charter Block Hours of 28.1%, decreasing from 7,582 Block Hours in 2024 to 4,580 block hours in 2025, which resulted in a $36.2 million reduction in revenue. This reduction was partially offset by an increase in the rate for Charter flying of 4.8% from $12,590 per Block Hour in 2024 to $16,594 per Block Hour in 2025, resulting in a $1.0 million increase in revenue. The decrease in Charter Block Hours was due to an intentional focus on an increased level of flying on an ACMI basis and the Company’s exit from the Cuba-based charter market.\n\nACMI revenue for the period increased by $52.7 million or 42.8% from $123.1 million in 2024 to $175.8 million in 2025. This increase was driven by an increase in Block Hours from 20,539 in 2024 to 28,251 in 2025, an increase of 37.5% or 7,712 Block Hours. This increase in volume accounted for 86.3% or $45.5 million of the revenue increase. The average revenue per Block Hour increased $257 from $5,992 per Block Hour in 2024 to $6,222 per Block Hour in 2025 and accounted for $7.2 million or 13.7% of the revenue increase. The primary driver for the rate increase was related to our ability to negotiate higher rates with key customers underpinned by strong market demand and a shortage of supply.\n\nOther revenue for the period increased by $3.1 million from $5.2 million in 2024 to $8.3 million in 2025. The increase is primarily driven by more ancillary services provided to our customers.\n\n \n\nOperating Expenses\n\n \n\nThe following table compares our Operating Expenses (in thousands):\n\n \n\n24\n\n \n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nOperating Expenses\n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\nInc/(Dec)\n\n \n\n \n\n% Change\n\n \n\nSalaries, Wages, & Benefits\n\n \n\n$\n\n80,505\n\n \n\n \n\n$\n\n67,787\n\n \n\n \n\n$\n\n12,718\n\n \n\n \n\n \n\n18.8\n\n%\n\nAircraft Fuel\n\n \n\n \n\n15,258\n\n \n\n \n\n \n\n23,828\n\n \n\n \n\n \n\n(8,570\n\n)\n\n \n\n \n\n-36.0\n\n%\n\nMaintenance, materials and repairs\n\n \n\n \n\n19,111\n\n \n\n \n\n \n\n13,210\n\n \n\n \n\n \n\n5,901\n\n \n\n \n\n \n\n44.7\n\n%\n\nDepreciation and amortization\n\n \n\n \n\n11,963\n\n \n\n \n\n \n\n6,271\n\n \n\n \n\n \n\n5,692\n\n \n\n \n\n \n\n90.8\n\n%\n\nContracted ground and aviation services\n\n \n\n \n\n18,227\n\n \n\n \n\n \n\n19,599\n\n \n\n \n\n \n\n(1,372\n\n)\n\n \n\n \n\n-7.0\n\n%\n\nTravel\n\n \n\n \n\n9,500\n\n \n\n \n\n \n\n11,174\n\n \n\n \n\n \n\n(1,674\n\n)\n\n \n\n \n\n-15.0\n\n%\n\nInsurance\n\n \n\n \n\n5,212\n\n \n\n \n\n \n\n6,189\n\n \n\n \n\n \n\n(977\n\n)\n\n \n\n \n\n-15.8\n\n%\n\nAircraft Rent\n\n \n\n \n\n57,422\n\n \n\n \n\n \n\n57,677\n\n \n\n \n\n \n\n(255\n\n)\n\n \n\n \n\n-0.4\n\n%\n\nOther\n\n \n\n \n\n20,243\n\n \n\n \n\n \n\n19,144\n\n \n\n \n\n \n\n1,099\n\n \n\n \n\n \n\n5.7\n\n%\n\nTotal Operating Expenses\n\n \n\n$\n\n237,441\n\n \n\n \n\n$\n\n224,879\n\n \n\n \n\n$\n\n12,562\n\n \n\n \n\n \n\n5.6\n\n%\n\n \n\nSalaries, wages, and benefits increased $12.7 million or 18.8%, from $67.8 million in 2024 to $80.5 million in 2025, primarily due to an increase in the overall headcount in late 2024 and early 2025. In late Q3 of 2025, several actions were initiated to reduce headcount and salaries in response to aircraft delivery delays and subsequent revenue projections. In December 2025, headcount was reduced to 661 from a high of 727 in July, which will continue to yield operational savings in 2026.\n\nAircraft fuel decreased by $8.6 million or 36.0%, from $23.8 million to $15.3 million. Approximately 68.6% or $5.9 million of this decrease is attributable to the reduction in the amount of Charter and Non-Revenue Block Hours and approximately 31.4% or $2.7 million is attributable to a reduction in the price of base jet fuel.\n\nMaintenance, materials, and repairs increased by $5.9 million or 44.7%, from $13.2 million to $19.1 million. $3.2 million of the increase or 54.2% was primarily due to the volume of Block Hours flown which increased 6,389 or 24.0% from 26,628 to 33,017 Block Hours. In addition, rate per Block Hour increased $83 per Block Hour or 16.7% from $496 per Block Hour to $579 per Block Hour resulting in an additional $2.7 million of expense. This is primarily due to significant price inflation in both labor and parts.\n\nDepreciation and amortization increased by $5.7 million or 90.8%, from $6.3 million in 2024 to $12.0 million in 2025, primarily driven by aircraft deliveries secured on capital leases, the purchase of an A320 aircraft, and an increase in rotable parts owned.\n\nContracted ground and aviation services expenses decreased by $1.4 million or 7.1%, from $19.6 million in 2024 to $18.2 million in 2025. This was primarily driven by the reduced number of charter hours since contracted ground and aviation services are not associated with ACMI services.\n\n \n\nTravel expenses decreased $1.7 million or 15.0%, from $11.2 million to $9.5 million. This decrease was primarily driven by a conscious effort of management to focus on reducing travel expense through the creation of local bases tied to flight activity and contract rate negotiations. We are happy with the improvement in 2025 and will continue this focus into 2026.\n\n \n\nInsurance expenses decreased $1.0 million or 15.8%, from $6.2 million to $5.2 million, primarily related to a favorable renegotiation of our insurance rates.\n\nAircraft rent expenses decreased $0.3 million or 0.4%, from $57.7 million in 2024 to $57.4 million in 2025, primarily driven by a $7.8 million decrease in the number of sub service hours required in 2025 versus 2024. Adding to the savings was a decrease in base rent expenses of $1.1 million or 3.7% from $29.5 million in 2024 to $28.4 million in 2025 driven by a decrease in the average number of aircraft on operating leases in the fleet from 14.2 in 2024 to 13.8 in 2025. Offsetting the savings, was an increase in supplemental rent expenses of $8.6 million or 48.7%, from $17.7 million in 2024 to $26.3 million in 2025 driven by a year-over-year increase in Block Hours.\n\n \n\nOperating income (loss) improved $10.0 million, from an operating loss of $1.1 million in 2024 to an operating income of $8.9 million in 2025. This marks the first time in our history that GlobalX has delivered positive operating income. Operating (loss) income as a percentage of revenue improved by 4.1% from (0.5%) in 2024 to 3.6% in 2025. This improvement was a result of GlobalX’s ability to grow its revenue faster than its cost structure as the airline works towards achieving scale and profitability. Three factors drove these results: rates, utilization and scale. The Company’s ACMI rate for the period grew 3.3%, from $5,992 per Block Hour in 2024 to $6,249 per Block Hour in 2025. The Company’s average utilization per available aircraft grew 6.8% for the period from 1,930 Block Hours in 2024 to 2,062 Block Hours in 2025. The Company’s increasing scale also contributed to this positive result, for example, there were savings on a per block hour basis in travel and insurance, which combined with the other factors to drive the improvement.\n\n25\n\n \n\n \n\nNon-Operating Expenses\n\n \n\nThe following table compares our Non-Operating Expenses (in thousands):\n\n \n\n \n\n \n\nYear Ended December 31,\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nNon-Operating Expenses\n\n \n\n2025\n\n \n\n \n\n2024\n\n \n\n \n\nInc/(Dec)\n\n \n\n \n\n% Change\n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\n \n\nInterest Expense\n\n \n\n$\n\n11,505\n\n \n\n \n\n$\n\n8,955\n\n \n\n \n\n$\n\n2,550\n\n \n\n \n\n \n\n28.5\n\n%\n\nLoss in Canada Jetlines Operations Ltd.\n\n \n\n \n\n-\n\n \n\n \n\n \n\n1,300\n\n \n\n \n\n \n\n(1,300\n\n)\n\n \n\nN/A\n\n \n\nTotal Non-Operating Expenses\n\n \n\n$\n\n11,505\n\n \n\n \n\n$\n\n10,255\n\n \n\n \n\n$\n\n1,250\n\n \n\n \n\n \n\n12.2\n\n%\n\n \n\nInterest expense, increased $2.6 million or 28.5% from $9.0 million to $11.5 million driven by the increase of aircraft on capital leases from 2.2 to 4.7 equivalent aircraft, and the financed purchase of one aircraft.\n\n \n\nLoss in Canada Jetlines Operations. The bankruptcy of Canada Jetlines resulted in a payment of $1.3 million by the Company to a lessor associated with an aircraft lease for which GlobalX had provided a guarantee, there were no further payments owed or made in 2025 pursuant to this guarantee and none are expected to arise in the future.\n\nNet Loss\n\nNet Loss for the period, due to events and circumstances noted above, improved by $8.8 million or 77.2%, from a net loss of $11.4 million in 2024 to $2.6 million in 2025.\n\nLiquidity and Capital Resources\n\n \n\nThe consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. As of December 31, 2025, the Company had a working capital deficit of $60.5 million and retained deficit of $73.6 million. The Company began flight operations in August 2021. Without ongoing income generation or additional financing, the Company will be unable to fund general and administrative expenses and working capital requirements for the next 12 months. These material uncertainties raise substantial doubt as to the Company’s ability to continue as a going concern.\n\n \n\nAs of December 31, 2025, the Company had approximately $16.7 million in unrestricted cash and cash equivalents and approximately $3.8 million in restricted cash, an increase of approximately $4.4 million and $2.1 million, respectively, from December 31, 2024. The changes were primarily due to new aircraft deliveries, customer deposits, and cash flow from operations.\n\nThe Company has significant fixed and noncancelable lease commitments of aircraft, equipment and related maintenance checks. As of December 31, 2025, the Company had a total of $24.6 million due in the next 12 months of future minimum lease payments under finance and operating leases. As of December 31, 2025, the Company had a total of $100.1 million due after 12 months from the balance sheet date of future minimum lease payments under finance and operating leases, respectively, and approximately $40.5 million in notes payable included in the non-current liabilities presented in the Company’s Consolidated Balance Sheets. The Company finished 2025 with sixteen passenger aircraft and four cargo aircraft and expects the fleet to increase to twenty-one passenger aircraft and remain at four cargo aircraft by the end of 2026. To achieve the number of aircraft deliveries in 2026, the Company currently has three aircrafts under lease with partial or total deposits paid and two aircraft under binding agreements that are subject to execution of definitive lease documentation and fulfillment of certain closing conditions.\n\n \n\nIn 2026 GlobalX will continue its business growth by (i) providing services on an ACMI basis using wet lease contracts to airlines and non-airlines, and (ii) on a Charter basis providing passenger and cargo aircraft charter services to customers by charging an “all-in” fee that includes fuel, insurance, landing fees, navigation fees and most other operational fees and costs, (iii) extending GlobalX current operations within the United States, Europe, Canada, Central and South America and continuing recruiting and maintaining a dynamic team of customer-centric flight crews, ground teams and management staff, (iv) Increasing GlobalX’s passenger aircraft fleet to 16 and GlobalX’s cargo aircraft fleet to remain at four within the next 12 months, and (v) projects an increase in total revenue.\n\nThe Company expects to improve profitability during the year 2026, mainly as a result of GlobalX’s strategy and ability started in 2024 of developing and implementing growth in its revenue faster than its cost structure. There are a few factors management expects to drive\n\n26\n\n \n\nthe improved margins. The Company expects to continue securing higher rates for both ACMI and Charter contracts and the increase of passenger aircraft from 16 to 21 along with improve seasonality on Cargo aircraft contracts.\n\nThe ability of GlobalX to execute its build-out and growth strategy and achieve operations will depend on acquiring substantial additional financing through debt financing, equity financing or other means. Failure to obtain such financing may result in the delay or indefinite postponement of such growth strategy or even impact the ability of GlobalX to continue as a going concern.\n\n \n\nThere can be no assurance that additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will be favorable to GlobalX. If additional financing is raised by GlobalX through the issuance of its securities, shareholders may suffer significant dilution. If additional financing is not available, or if available, not available on satisfactory terms, then this could result in a material adverse effect or could require GlobalX to reduce, delay, scale back or eliminate portions of its actual or proposed operations or could prevent GlobalX from continuing as a going concern.\n\n \n\nGlobalX may also need to raise capital by incurring long-term or short-term indebtedness in order to fund its business objectives. This could result in increased interest expense and decreased net income. Investors are cautioned that there can be no assurance as to the terms of such financing and whether such financing will be available. The level of GlobalX’s indebtedness could impair its ability to obtain additional financing in the future on a timely basis to take advantage of business opportunities that may arise.\n\n \n\nThe Company regularly assesses its anticipated working capital needs, debt and leverage levels, debt maturities, capital expenditure requirements and future investments or acquisitions to maximize shareholder return, efficiently finance our ongoing operations and maintain flexibility for future strategic transactions. The Company also regularly evaluates its liquidity and capital structure to ensure financial risks, adequate liquidity access and lower cost of capital are efficiently managed. Management is actively assessing various options to procure additional funds, including exploring opportunities for additional equity or debt financing to the extent it determines such financing is necessary or appropriate. Management is confident that the augmented cash and cash equivalents, coupled with the anticipated rise in sales linked to the Company’s strategies to attract more funds, will adequately address the Company’s liquidity requirements.\n\n \n\nThe most significant liquidity events during 2025 were as follows:\n\nOperating Activities. For 2025, net cash provided by operating activities increased $20.0 million to $28.1 million, consisting primarily of $31.4 million in noncash adjustments for depreciation and amortization of fixed assets, operating lease right of use assets and debt issue costs, $11.9 million of increase in accrued liabilities and other liabilities, $4.7 million in interest on finance leases, $2.7 million of share-based payments, $1.3 million of increase in accounts payable and $0.5 million of credit losses. These were partially offset by $19.6 million of decrease in operating leases obligations, $2.6 million of net loss, $1.3 million of increase in prepaid expenses and other current assets, and $0.5 million of increase in accounts receivable. For 2024, net cash provided by operating activities increased $9.5 million to $8.1 million, consisting primarily of $21.2 million in noncash adjustments for depreciation and amortization of fixed assets, operating lease right of use assets and debt issue costs, $5.3 million of increase in accounts payable, $3.2 million of decrease in accounts receivable, $3.1 million in interest on finance leases, $1.7 million of share-based payments, $0.4 million of decrease in prepaid expenses and other current assets and $0.5 million of credit losses. These were partially offset by $14.4 million of increase in operating lease obligations, $1.3 million of decrease in accrued liabilities and other liabilities, $0.4 million of increase of assets held for sale and $11.4 million of net loss.\n\nInvesting Activities. For 2025, net cash used for investing activities increased $4.3 million to $14.3 million, consisting of $11.6 million of Purchases of property and equipment, partially offset by $2.7 million of decrease of deposit, deferred costs and other assets. For 2024, net cash used for investing activities decreased $3.3 million to $10.0 million, consisting of $7.2 million of Purchases of property and equipment and $6.3 million of a decrease of deposit, deferred costs and other assets.\n\nFinancing Activities. For 2025, net cash used in financing activities increased $5.6 million to $7.3 million, consisting primarily of $5.6 million of Principal payments on finance leases, $1.5 million of Principal payments on note payable, $0.5 million of Noncontrolling interest dividends paid, and $0.2 million of Debt issue costs, partially offset by $0.3 million from Proceeds on issuance of shares. For 2024, net cash used in financing activities was $1.7 million, consisting of $1.8 million of Principal payments on finance leases and $0.2 million of Noncontrolling interest dividends paid, partially offset by $0.3 million from Proceeds on issuance of shares.\n\n \n\nOff-Balance Sheet Arrangements\n\n \n\nAs of December 31, 2025, the Company had no off-balance sheet arrangements.\n\n \n\nCritical Accounting Estimates\n\n \n\n27\n\n \n\nThe preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts and related disclosures in the financial statements. Management considers an accounting estimate to be critical if:\n\n•\nrequires assumptions to be made that were uncertain at the time the estimate was made, and\n\n•\nchanges in the estimate or different estimates that could have been selected could have a material impact on our results of operations or financial condition\n\nWe base our estimates and judgments on our experience, our current knowledge, our beliefs of what could occur in the future, our observation of trends in the industry, information provided by our customers and information available from other resources. Actual results may differ from the estimates under different assumptions or conditions. We have identified the following policies and estimates as those that we believe are most critical to our financial condition and results of operations and that require management’s most subjective and complex judgments in estimating the effect of inherent uncertainties: allowance for credit losses, determination of IBR for leases, estimates related to going concern, and deferred tax valuation allowance. See Note 2 of the Company’s consolidated financial statements for significant accounting policies.\n\n \n\nRecently Issued Accounting Standards\n\n \n\nIn December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The standard requires public companies, on an annual basis, to provide enhanced rate reconciliation disclosures, including disclosure of specific categories and additional information for reconciling items that meet a quantitative threshold. The standard also requires public companies to, among other things, disaggregate income taxes paid by federal, state, and foreign taxes. ASU No. 2023-09 became effective for this Annual Report on Form 10-K and was applied using a prospective approach. The standard only impacts required disclosures and did not impact the Company's financial position, results of operations, or cash flows. See note 15 for the Company's income tax disclosures.\n\nIn March 2024, the FASB issued ASU 2024-01 – Compensation-Stock Compensation – Amendments. This update aims to improve GAAP by adding an illustrative example to demonstrate how an entity should apply the scope guidance in paragraph 718-10-15-3 to determine whether profits interest and similar awards (“profits interest awards”) should be accounted for in accordance with Topic 718, Compensation-Stock Compensation. The amendments in this update are effective for public business entities for fiscal years beginning after December 15, 2024. The Company adopted the provisions of ASU 2024-01 as of January 1, 2025, which did not materially impact the Company’s financial statements.\n\n \n\nIn November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures. The standard requires disclosure of certain prescribed costs and expenses within the notes to consolidated financial statements. ASU No. 2024-03 becomes effective for the Company's 2027 Annual Report on Form 10-K. The standard only impacts required disclosures and will not impact the Company's financial position, results of operations, or cash flows. The Company is currently in the early stages of evaluating the impact of ASU No. 2024-03 on its disclosures.\n\nIn July 2025, the FASB issued ASU 2025-05 – Financial Instruments—Credit Losses. This update provides all entities with a practical expedient in developing reasonable and supportable forecasts as part of estimating expected credit losses. All entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. This update will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. Management expects no significant impact after adoption of the new standard."}