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Canada Jetlines Ltd. announced that it has entered into a letter of intent with Global Crossing Airlines (GLOBALX) with respect to a business combination of Jetlines and GLOBALX. GLOBALX is a developing United States based charter airline and is financially backed by two Miami-based private-equity firms.
GLOBALX is a Delaware corporation in the pre-revenue stage with its head office located at Miami International Airport. GLOBALX plans to operate a U.S. 121 charter airline using the Airbus A320-200 aircraft. GLOBALX’s business model includes the intention to provide ACMI and wet lease contracts to airlines operating within and to the United States and develop aircraft interchange with leading European charter/tour operators. GLOBALX is currently in regulatory certification and is led by an operating team with a combined 140 years’ experience — including the former head of maintenance for two major U.S. based A320 low-cost carriers, and two retired principal FAA inspectors with specific experience in the new safety management systems and quality assurance.
In addition to the core business of GLOBALX, the combined entity will continue with an operating plan for Canada. This includes continuing to advance the air operator certificate for Jetlines through the continued refinement of the Jetlines operating manuals and maintained in submission-ready status. The resulting issuer also intends to initially operate charter operations in concert with major tour operators from Canadian cities to major leisure destinations in the United States. It is intended that GLOBALX aircraft will be used to operate these flights — branded as Jetlines, operated by GLOBALX.
Jetlines has determined that the transaction provides the best opportunity at the present time to maximize value for the company. The current intra-Canadian airline market is in a state of flux with consolidation ongoing at the major carriers, as well as at least three currently operating or planned market entrants in the ultra-low cost carrier segment. There is also no certainty regarding when the Canadian Competition Bureau will complete its investigation into WestJet and Swoop, or what the results of that investigation may be. The transaction provides Jetlines with an opportunity to fly cross border with support from strategic partners who can provide lift, crews, marketing, sales, and capitalization. It also preserves the longer-term opportunity to continue with an intra-Canadian airline operation.
“While Jetlines made significant progress in building out a management team, advancing the airline licensing process, establishing systems, securing routes and obtaining financing commitments, ultimately current market conditions necessitated a change in strategy. The GLOBALX plan preserves Jetlines strategy long term and provides a more immediate opportunity to commence airline operations. I am resigning from Jetlines at this time in order to facilitate the GLOBALX transaction and its plans to restructure management,” said Mark Morabito.
The transaction is subject to the execution of a definitive transaction documents, approval of the TSX Venture Exchange, approval of the Jetlines and GLOBALX shareholders and other conditions customary for a transaction of this nature. There can be no assurance that the transaction will be completed as proposed or at all.
