SCHEDULE: Galloway Capital Boosts Stake in Global Crossing Airlines

Galloway Capital Partners, LLC has increased its stake in Global Crossing Airlines Group, Inc. to 8.10%, believing the company is undervalued and has significant growth potential.

Summary

• Galloway Capital Partners, LLC and its affiliates have increased their ownership in Global Crossing Airlines Group, Inc. to approximately 8.10% of the outstanding shares.
• Galloway Capital views Global Crossing as a fast-growing charter airline company that is profitable and trading at a significant discount to its intrinsic value.
• They estimate the company has the potential to generate at least $30 million in EBITDA and approximately $90 million in EBITDAR this year.
• A comparable transaction involving Sun Country Airlines suggests an enterprise value for Global Crossing in excess of $600 million, equating to approximately $9.50 per share, compared to the current trading price of around $0.56 per share.
• Galloway Capital believes recent market concerns about rising fuel costs are overstated due to the company's business model, which allows it to pass fuel expenses to customers.
• The current valuation does not adequately reflect the company's improving financial profile, expanding contract base, and long-term earnings potential.
• Galloway Capital intends to engage constructively with management and the Board to enhance shareholder value and increase market awareness.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this filing positively due to the significant stake increase by an activist investor who believes the company is undervalued and has strong growth potential, supported by detailed financial projections and a clear valuation argument.

Positives

• Galloway Capital has increased its ownership to 8.10%, indicating strong conviction in the company's prospects.
• The company is described as one of the fastest-growing charter airline companies in the United States.
• Global Crossing Airlines Group, Inc. is reported to be profitable.
• Estimated potential to generate at least $30 million in EBITDA and approximately $90 million in EBITDAR this year.
• The business model allows for passing fuel expenses to customers, mitigating volatility.
• The company has an improving financial profile, expanding contract base, and long-term earnings potential.

Negatives

• The stock is trading at a significant discount to its estimated intrinsic value, with a substantial disconnect between market price and underlying value.
• Current market concerns around rising fuel costs, although deemed overstated by Galloway Capital, exist.

Risks

• Potential for the market to continue undervaluing the company despite its growth and profitability.
• Future market concerns or economic downturns could impact the airline industry.
• The company's ability to execute its growth strategy and achieve projected financial targets.

Future Outlook

Galloway Capital believes Global Crossing has significant potential for growth and value enhancement, estimating substantial EBITDA and EBITDAR generation. They see a disconnect between the company's intrinsic value and its current market price, suggesting a strong future outlook if the market recognizes its potential.

Management Comments

• "We believe Global Crossing represents a compelling investment opportunity and is one of the fastest-growing charter airline companies in the United States."
• "The Company is profitable and, in our view, currently trading at a significant discount to its intrinsic value."
• "We estimate that the Company has the potential to generate at least $30 million in Ebitda and approximately $90 million in Ebitdar this year."
• "Applying a similar valuation suggests an enterprise value for Global Crossing in excess of $600 million, which equates to approximately $9.50 per share."
• "With the stock currently trading at approximately $0.56 per share, we believe there is a substantial disconnect between the Companys market price and its underlying value."
• "We also note that recent market concerns around rising fuel costs appear to be overstated, as the Companys business model allows it to pass through fuel expenses to customers, limiting direct exposure to fuel price volatility."
• "In our view, the current valuation does not adequately reflect the Companys improving financial profile, expanding contract base, and long-term earnings potential."
• "We are supportive of managements efforts and would welcome the opportunity to engage constructively with management and the Board to help enhance shareholder value and increase market awareness."

Industry Context

StockSavvy.ai notes that Galloway Capital's assessment positions Global Crossing Airlines Group as a high-growth player within the charter airline sector, potentially outperforming peers like Sun Country Airlines based on growth characteristics. The comparison to Sun Country's acquisition by Allegiant at a 6.9x EBITDAR multiple highlights a significant valuation gap that Galloway Capital aims to address.

Comparison to Industry Standards

• Galloway Capital cites the sale of Sun Country Airlines to Allegiant at approximately 6.9x EBITDAR as a comparable transaction.
• They note that Sun Country exhibited slower growth characteristics than Global Crossing.
• Applying a similar 6.9x EBITDAR multiple to Global Crossing's estimated $90 million EBITDAR suggests an enterprise value exceeding $600 million, or approximately $9.50 per share.

Corporate Governance

Stakeholder Impact

• Shareholders: Potential for increased share value if Galloway Capital's advocacy leads to improved performance or market recognition of intrinsic value.
• Management and Board: Will need to respond to Galloway Capital's engagement and consider their proposals for enhancing shareholder value.
• Employees: Potential impact on job security and company direction depending on strategic changes pursued.

Next Steps

• Galloway Capital intends to engage constructively with management and the Board to enhance shareholder value.
• They may from time to time acquire additional securities, retain or sell shares, or explore strategic alternatives.
• Galloway Capital may consider, explore, and/or develop plans related to the Issuer's performance, operations, management, governance, capital allocation, and strategy.

Key Dates

Recommendation

While Galloway Capital presents a strong case for undervaluation and potential upside, this filing is primarily an ownership disclosure and a statement of intent to engage. It does not contain new operational or financial results that would warrant a strong buy or sell recommendation. A 'hold' is appropriate as investors should monitor management's response and any subsequent actions or disclosures from Galloway Capital and the company.

Keywords

Global Crossing Airlines Group, Galloway Capital Partners, Schedule 13D, SEC Filing, Airline Industry, Charter Airline, Investment, Shareholder Value, EBITDA, EBITDAR, Stock Valuation, Fuel Costs