GlobalX Airlines to open cargo lane between Chicago, Puerto Rico

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Global Crossing Airlines will operate scheduled cargo service between Chicago and Puerto Rico utilizing a fleet of Airbus A321 converted freighters. (Photo: GlobalX)

Startup carrier Global Crossing Airlines has struck a unique partnership with a digital freight exchange to launch cargo service between Chicago and Puerto Rico, filling a market need for direct, affordable containerized transport while providing the airline’s fledgling cargo business a welcome jolt.

Under a deal announced last week, Airblox, a startup airfreight capacity wholesaler for medium-term contracts, will have primary responsibility for feeding shipments to Global Grossing Airlines (OTCQB: JETMF) and sustaining the route. GlobalX, as the airline is also called, said it will fly an Airbus A321 converted freighter three times per week between Chicago O’Hare International Airport and San Juan, beginning Oct. 10.

The service will be exclusively available to freight forwarders through the Airblox platform, which is essentially operating as marketing partner for Global Crossing.

Global Crossing, a fast-growing passenger charter operator based in Miami, operates 18 A320-family aircraft, including four A321 used jets converted to freighter configuration. It has struggled to grow cargo business since entering that market in mid-2023 because of lukewarm regional freight demand, overcapacity in narrowbody freighter segment and greater customer familiarity in North America with the incumbent Boeing 737-800 converted freighter.

Industry sectors that are keen on easy, consistent airfreight access to Puerto Rico include automotive parts, pharmaceuticals and medical supplies.

“Our customers have told us that there is an opportunity in the market. There is no widebody capacity for skidded cargo. There’s no freighter capacity between San Juan and Chicago, particularly for express service. Everything flows through Cincinnati [DHL hub] or Miami,” and trucking in the winter can take several days, said Airblox board member Neel Jones Shah in a phone interview. “There’s a lot of demand in the Midwest, going into Puerto Rico and coming out of Puerto Rico to the Midwest. Hopefully we’ll have this airplane sold out very soon, then we’ll be able to add even more flights.”

Chicago also opens the door for expanded trade between Puerto Rico and the rest of the world because GlobalX can arrange interline cargo transfers with other airlines at O’Hare airport, a major gateway for international flights.

Three-quarters of U.S.-made pharmaceutical products are exported out of Puerto Rico, and drug companies have major R&D and production sites in the Midwest. Indianapolis, for example, is a large pharmaceutical hub and only two and a half hours from Chicago by truck. Abbott Laboratories is headquartered in Illinois.

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Rotate Group, an air cargo consultancy, forecasts a 24% year-over-year increase in Puerto Rico’s life sciences exports during the next three years, highlighted by 30% annual gains in temperature-controlled medicines. Exports of medical devices are projected to grow 14% on an annual basis.

Health care exports are up 8% from a year ago, according to Rotate tracking data of movements to and from the island.

“There’s a lot of recurring traffic in this market. It’s a market where people are sending medical components down to be assembled into final goods, day in and day out, or they’re sending automotive parts, or forklift parts, because there’s automotive factories and Toyota has a big forklift factory in Puerto Rico,” explained Jones Shah, a veteran air cargo executive who recently left logistics provider Flexport after more than seven years as global head of airfreight and chief customer officer. “A lot of people in this lane segment need regular, reliable capacity, right, where they can get one-to-three-day transit times depending on the day of week the freight is ready.”

Initial plans are to operate the flights through the end of the year and to continue service if demand is sustainable.

GlobalX and Airblox also hope to attract businesses from freight forwarders that handle household goods shipments, which the Transportation Security Administration restricts from passenger flights because cargo owners are unknown shippers, he said.

How Airblox works Chicago-based entrepreneur Edip Petkas launched Airblox in 2022 as an electronic marketplace with a fintech overlay where airlines can sell future blocks of cargo space, or even entire aircraft, to freight forwarders that need stable, reliable capacity on a consistent basis for certain customers. The system also allows logistics companies to seamlessly tap into a lender network to finance any transportation purchases, as well as insurance.

The Airblox platform is geared to small and medium businesses looking to lock in prices for shipments 30 to 120 days before departure and that don’t have the scale or relationships to access the contract market. Those companies are typically relegated to the highly transactional spot market, where bookings are traditionally made within seven days of a flight departure and rates can be volatile.

Airblox runs forwarders’ historical data through its algorithms to look for patterns on where they ship the most via the spot market and recommends how they can aggregate loads with other intermediaries on certain routes to make a unified offer on future capacity. Airlines benefit from the certainty of advance bookings and the fact that medium-term pricing typically provides better yields than long-term contracts. Capacity is traded in a blockchain infrastructure to secure transactions.

Larger forwarders can electronically bid on their own for blocks of cargo capacity on single or multiple lanes. Carriers sharing bulk capacity on Airblox include National Airlines, Avianca, Norse Atlantic, Cargojet and Coyne Airways.

Global Crossing waits for cargo pickup GlobalX entered revenue service three years ago with A320-family passenger jets providing charter flights for airlines, cruise lines, casinos, sports teams, concert tours, and hotel and resort destinations.

The company saw second-quarter revenue increase 83% to $57.5 million thanks to a 29% increase in passenger aircraft utilization and several contracts that were renegotiated at higher rates. Earnings before interest, taxes, depreciation, amortization and rent, a way to measure operational performance by removing variable lease costs for aircraft, increased from $500,000 to $18.7 million year over year. The airline turned a small net profit of $300,000 compared to a $7.5 million loss the prior year. During the summer, GlobalX began operating passenger flights for the U.S. Department of Defense and was awarded a five-year subcontract to support U.S. Immigration and Customs Enforcement’s deportation of illegal migrants.

GlobalX originally planned to have 15 A321 passenger-to-freighter aircraft by 2026 but early this year paused expansion of the freighter fleet because of challenges attracting new customers so it could focus on lucrative passenger flying. It is the only U.S. airline so far to operate the A321 converted freighter, which has a larger payload capacity than the 737-800 and is cheaper to operate than older Boeing 757s.

Cargo utilization fell 73%, from 613 hours to 161 hours, per aircraft during the second quarter, partly due to the loss of a U.S. Postal Service contract, which is shifting more parcel volume to trucking. To minimize financial exposure, GlobalX said it canceled two aircraft deliveries and deferred two others from lessors by taking them as passenger aircraft instead of moving ahead with cargo modifications.

The airline will consider exercising options for cargo conversions when demand picks up, President and Chief Financial Officer Ryan Goepel told FreightWaves.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

Twitter: @ericreports / LinkedIn: Eric Kulisch / ekulisch@freightwaves.com

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