Global Crossing Airlines is a fledgling charter airline still struggling to gain a foothold in the U.S. market. The company has joined forces with an Asian private equity group to set up an airline in Australia that aims to provide dedicated cargo and passenger services.

The joint venture, which has not yet been named, will apply for an Australian Air operator licence to provide charter and contract flight services to other airlines or large corporations within Australia and in key Asian markets. The company intends to use standard specification Airbus A321s and modified freighters.

Company executives plan to begin operations by the end of 2025, subject to regulatory approval, and have a fleet of 10 aircraft by 2030. Global Crossing President and chief Financial Officer Ryan Goepel told FreightWaves that the initial fleet will consist of two leased aircraft.

ATB Investment & Partners, a fund established in Vietnam in March 2023, is providing support for the Australian joint venture. The partners said the new airline aims to capitalize on the rapid growth of air transport in Asia and Oceania, where the charter market size is estimated to reach $6.8 billion annually, according to a market research report they cited. A big opportunity for regional airlines that need extra capacity during the peak travel season is flights.

In an emailed response to the cargo business case, Goepel said: "The Asia-Pacific market has embraced the capabilities of the Airbus A321 passenger conversion platform and many operators of such aircraft worldwide are concentrated here. We see this as an excellent opportunity to provide complementary airlift to existing A321 freighter operators in the region and to cultivate a strong temporary and scheduled charter business."

With a capacity of up to 25 tonnes, the narrow-body A321 freighter is "well suited to the cargo flying needs of the Asia-Pacific region, which makes the customer base very large", Goepel added.

Airlines operating the A321 freighter in Asia include Japan Airlines, Sichuan Airlines, Qantas Airways and Teleport (part of the AirAsia Group).

The A321 competes with the Boeing 737-800 converted freighter in the small freighter category. While it can accommodate small containers on the lower deck, while the 737-800 can only accept bulk cargo below deck, it is unclear how many airlines use this option. Repair shops that specialize in retrofitting A321s for main-deck cargo transport have touted the aircraft as a natural replacement for the Boeing 757, but so far there have been few, if any, instances of airlines replacing older 757s with A321s.

ATB Investment & Partners moved its headquarters to Melbourne, Australia, this year. The company was founded by Eric Dang, who led Bamboo Airways from 2016 to 2022 and will serve as chairman and CEO during the initial phase of the new venture. Bamboo Airways began operations in 2019 and recently resumed regional international flights after a year-long hiatus as it restructured its fleet in response to the financial crisis.

In the charter business, customers usually arrange before the flight and pay an all-inclusive price that includes fuel and landing fees. Under long-term transport agreements, companies such as GlobalX provide the aircraft, crew, maintenance and insurance, while customers pay for fuel and bear the risk of selling the cargo hold. Carriers are paid based on the number of hours flown each month.

GlobalX operates a fleet of 18 A321s in the United States, Caribbean and Latin America, including four freighters converted from passenger aircraft. The company is the only operator of the A321 converted freighter in North America.

Goepel said GlobalX may move existing aircraft from its fleet to help the Australian carrier operate, but would replace any aircraft in the joint venture with additional leased aircraft.

GlobalX began operating the A320 family three years ago, providing charter services to airlines, cruise lines, casinos, sports teams, concert Tours and hotels and resorts. The company began offering dedicated freight services in the summer of 2023. The company originally planned to have 15 A321 passenger conversion aircraft by 2026, but it put the expansion of its freighter fleet on hold early this year as it struggled to attract new customers in order to focus on lucrative passenger flights.

Given the current state of GlobalX's cargo business, freighters are likely to be the first aircraft on the transfer list. Establishing an entity in Australia will allow GlobalX to redeploy underutilised freighters to markets where demand is higher, while expanding its presence in the US.

In addition to challenges in attracting old customers and excess narrow-body freighter capacity in North America, GlobalX has been hit by the loss of a U.S. Postal Service contract as part of the mail company's broader cost-cutting drive, which includes shifting major routes to cheaper ground transportation.

Due to postal Service flight cancellations, the utilization of cargo aircraft fell 77 percent in the quarter, from 450 hours to 101 hours. In response to the downturn in its cargo business, GlobalX said it opted to buy two A321s from leasers instead of freighters in the second quarter and delayed the delivery of two more freighters until 2025.

Goepel said in a brief interview last month that GlobalX's freight business picked up this quarter.

The company received temporary work from Amerijet while one of its Miami-based Boeing 767 aircraft was grounded for an overhaul. IBC, the Caribbean interisland carrier, subcontracts more flights to GlobalX when cargo exceeds its capacity. In mid-November, GlobalX added a fourth weekly flight to Airblox between SAN Juan, Puerto Rico, and Chicago. Airblox, a mid-contract wholesaler of air cargo capacity, began working with GlobalX in October to offer charter services aimed at providing pharmaceutical and other shippers with a direct shipping option that eliminates the need for long-haul trucks to transfer products between the Upper Midwest and air hubs in Cincinnati or Miami.

GlobalX remains confident that once some of the excess capacity is removed, the A321 freighter will prove its strength in the North American, Caribbean and Central American markets.

"We will keep this option open until the market recovers because we are the only company with this metal (A321)." If people really believe that the 757 is going to start to be phased out, and this is the replacement aircraft, we're going to have a very good start, "Goepel said in an interview last summer.

Revenue in the third quarter increased 23% year-over-year to $52.4 million, thanks to higher rates and flight activity. Operating loss widened slightly to $2.5 million, attributed to a series of maintenance events that grounded more than a third of the passenger fleet for nearly two weeks, coupled with higher costs resulting from a 15 percent increase in aircraft flying time. In its earnings report last month, GlobalX said severe weather events in September damaged two grounded aircraft, three different aircraft were struck by birds and a maintenance provider severely damaged one aircraft during a routine inspection. GlobalX said it expects insurance to cover a portion of the $2.7 million in repair costs, but the $2.3 million in lost revenue also had a significant impact.

The first nine months of the year turned around, with an operating loss of $4.6 million compared to $14.6 million in the same period last year. In addition, third-quarter earnings before interest, taxes, depreciation and amortization nearly doubled to $15.4 million. Due to the high cost of aircraft rental, EBITDAR is a common measure of the financial health of the airline industry.

In early February, GlobalX replaced CEO and Chairman Ed Wegel, assigning his responsibilities to Goepel and board member Chris Jamroz.