Global Airlines is grabbing plenty of attention of late, notably for its acquisition of a few A380s as part of plans to launch long-haul services. But behind the scenes the company has also been working to raise money for its operations. A review of a financial pitch deck from 2021 raises far more questions than it answers, especially around partnerships and basic math skills.
The company is the dream of James Asquith, famous mostly because he’s flown on planes a lot. But a large social media footprint does not translate into the business skills required to get an airline off the ground. And there are a few areas in which the business plan presented in an investor pitch deck simply do not add up.
Asset valuation
A key claim made in the investor pitch is that the company will be able to acquire A380s for its fleet at pennies on the dollar. The low CapEx enables the company to “remove the 27% depreciation and 19% interest costs” from its budget.
Once acquired, the planes will undergo a full interior retrofit. Global Airlines expects to fly with five classes of service on board. On top of the traditional First, Business, Premium Economy, and Economy class cabins the company intends to add a new 15-seat “Gamer Class” option for passengers to play while in flight.
This full retrofit is expected to cost just under $4 million. That number is dramatically lower than typical industry costs for a full cabin retrofit with new seats. It is unclear how the company arrived at this number. Perhaps it is possible with used equipment, but that is counter to what the company is pitching.
The most impressive claim, however, comes as the company converts these aircraft from inexpensive acquisitions to top-dollar assets. An aircraft that cost just $8 million to acquire and retrofit is, by Global’s reasoning, fairly valued at $60 million in its balance sheet. The company offers zero justification for this appreciation in the value of the aircraft. It also appears to drop their value to just $15 million as the fleet grows to 90 frames. Again, no explanation is offered for this dramatic shift.
It does, however, claim to have backing for $50 million in loans, backed by three aircraft. There is no indication that the loan was ever drawn, mostly because until just a few weeks ago the company did not own three planes.
Operating Certificate Confusion
The very first page of Global’s pitch deck clearly states “Air Operating Certificate and License secured.” That is an impressive accomplishment for such a new company, operating without any owned aircraft at the time. That claim is repeated on the second page, adding in that slots to serve JFK were secured. Alas, none of that appears to be true.
On slide 28 of the deck the company states it is “negotiating our Air Operating License (AOC) through several companies…” The goal there is to save time in the process. But given the elapsed time since and still no indication of a valid UK AOC to carry passengers or cargo, the company appears to have missed that goal.
Moreover, launching a new AOC in the UK comes with certain additional post-Brexit challenges. These include access to international route authorities. Despite claiming it secured rights to fly to JFK, no airline could do that before the AOC is issued. Even once it is issued regulators on both sides of the Atlantic would have to approve its plans to operate internationally. While the US and UK have a treaty that generally makes such approvals an eventual sure-thing, it still takes time. And Global Airlines does not appear to have ever even applied on the US side. And it cannot until the AOC is issued (or very, very close).
Perhaps using leased aircraft, as suggested in the later pages of the pitch, could help. But Global is buying the planes cheap and retrofitting them cheap. Would it then sell or lease them to an AOC-holder to operate the services? That’s a lot of extra complexity that is likely to raise an eyebrow among regulators.
Pitching Partnerships
Like most influencer-based businesses, Global Airlines aims to deliver its product by having other people pay for it. Crew uniforms will be developed by “one of the world’s largest fashion brands…in a huge, free marketing collaboration.” The company specifically names Samsonite, Starbucks, Dolce & Gabanna, Zandra Rhodes, and Microsoft as potential collaborators. It name drops Chase, American Express, Flight Centre, Disney, Kiwi, Momondo, and easyJet on a page labeled “Industry Partnerships” despite not actually having yet established partnerships with any of them. And, in several cases, not intending to.
Some of the seats shown in the cabin interior pitches are real, though a relationship with Global Airlines is disavowed by the product manufacturers. Other seats shown are concepts almost certain to never take flight, and with no clear manufacturing partner even implied.
Recaro is listed as a likely supplier for the “Gamer Class” seats, with Global Airlines claiming to be in “advanced discussions” for that cabin. A Recaro spokesperson disagrees, noting “We are not in a business relationship with Global Airlines; they are using our brand name without our consent.”
The business class seat shown is a Collins Aerospace product (that is not certified to fly on the A380). That manufacturer, too, confirms it is not a supplier to Global Airlines.
Do & Co is listed as a catering partner, though it is misspelled as Do & Do. Indeed, the document is littered with typos, repetition, conflicting details, and incomplete thoughts.
It will paint planes for advertisers (“Free livery paid for more money saved,” whatever that means), leaning on plane spotters (apparently 120 million, worldwide??) to boost the branding.
It will create “pre-ticket sales frenzies that will create a global consumer buzz.”
Messed up math
What should Global Airlines be worth? The pitch deck is littered with charts showing hockey stick trajectories for nearly everything other than costs.
The company aims to sell “golden tickets” for $1 million at a $100 million valuation, giving the holder a 1% ownership stake and also free first class flights for life. That is not a sustainable business model, even if those passengers are tapped in to the social media world.
The pitched timeline shows a private offering at a $120 million valuation in January 2022. Just two months later Global projected a SPAC offering at a $500 million valuation. Much like the plans to invest $8 million in a plane and claim it to be worth $60 million, there’s no clear reasoning offered for this incredible and rapid jump in valuation, save for some oblique references to social media audience size – maybe 18 million, maybe 55 million, maybe 85 million – that will make the brand compelling.
The company predicts $7.6 billion in revenue for 2025 in one slide, operating 75 A380s. Another slide shows the same number of planes with revenue of just $5.4 billion. The P&L table predicts revenue of $9.3 billion when operating 65 A380s.
The company intended to “literally create the demand” by leaning into Asquith’s other recent endeavor, Holiday Swap. The deck shows a prediction of 10x increase in users to target over two years, topping 10 million in 2022. In early 2023 Holiday Swap issued a release noting it has just over 1 million users.
None of the numbers make any sense at all.
Oh, and once the company is established it intends to “place large and discount orders for aircraft at amazing low value deal Boeing/Airbus for a big order!” Putting aside the grammar challenges, there’s no way the company can reasonably get the A380s into service and build a successful operation on that structure, then immediately pivot to new planes. Nor is there a reason to believe Boeing and Airbus are going to cut an amazing deal for Global.
Or to believe any of this is really real.
Update: Director of Corporate Affairs Liam McKay now confirms that the “Gamer Class” product is no longer part of the company’s business plan. When pressed for additional details about the other issues with the pitch he declined to further comment on the 2021 document, noting instead “things, and the world, have moved on.”
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Ah yes, Holiday Swap Limited with £0.01 in assets and listed as a dormant company, or the parent company Holiday Swap Group Limited with modest accounts until they sold £9million of shares last year.
Thanks Seth for having exposed the steaming pile of bull crap this whole scheme is. Hello USGlobal Airways, formerly known as Baltia Air Lines with a Brit accent.
I think we all know hiw this will end…in a crappy documentary with interviews from prison and a Most Wantes poster featuring a $1mm reward for this con man’s capture. He’ll be found in Malta and extradition will take years, ultimately ending with his death due to “undetermined circumstances “.
Love these stories and if anyone does invest, buy pre sale tickets, or believes the hype, you’ll be a great interview for the documentary which everyone laughs at for being such a fool. They’ll probably get some third rate celebrity like Megan Markle or Pamela Anderson to make a public advertisement pitch for the airline to try to add legitimacy. Heck, maybe they’ll even score Snoop Dogg or Martha Stewart. They will be paid in “shares” and future profit sharing and be able to claim they were victims themselves in all this.
What a story! I’ll start making the popcorn. Oh, i wonder if you can preorder meals creates by a 7 star Michelin chef at a discount even if you don’t have a ticket!? I’m sure the menu items are lovely…like a cheese sandwich on white bread served in a styrofoam box. Can’t wait for the inaugural flight. Those tickets are on sale soon, I hope.
Oh, look, another fuckwit with a crystal ball predicting the future! Con man, prison, Malta, death – did you pull that out of a hat or your ass? Your sarcastic bullshit about pre-order meals and celebrities is just the cherry on top of your stupidity cake. Stick to making popcorn, it’s probably the only thing you’re good at.
I’ve been so curious about this because it really seems like something is off here. The logo looks like dated clip art and there are many typos on their website. HolidaySwap is known to bully and block anyone that tries to share negative experiences they had. It’s hard to tell if any of the positive reviews are authentic – I travel extensively and I’ve never met anyone that has used it. Lots of red flags. Thank you for your detailed report.
Ah, the curious investigator with a penchant for conspiracy theories and sensationalism. The ‘dated clip art’ and typos are a far cry from a ‘scam,’ my dear armchair detective. Keep weaving your web of fiction while the world moves forward.
It was always suspicious seeing airline titles applied to a stored A380, in fact in one photo, you can even see that the “L” in global was stuck over the tape sealing the cabin door. Amazed that this joker was given any traction whatsoever.
I’m a CPA and it’s fraud to book assets at more than their acquisition cost. Agree this is a Theranos re-do.
Raising questions about valuation methods is a legitimate aspect of business discussions. However, let’s remember that financial intricacies often require context. Instead of rushing to assumptions, let’s encourage transparency and informed conversations. Misleading assertions can inadvertently harm an entrepreneur’s reputation.
Some of you may be wondering why I’d approve the expletive-laden comments and attempts to pretend that presentation was not, in fact, an impressive collection of lies interspersed with other details.
The answer is that I’m mostly amused that someone has now taken to pretending to have multiple different personas as they attempt to build credibility for the company in the comments of my website. Fortunately from the admin side of things I can see that this is very much the case. So it is entertaining to me.
Hmm, that’s intriguing about the aircraft valuations. I’ve always been curious about how companies price their assets. Did Global release any detailed info on how they came up with those numbers? And the drop in value as the fleet grows…maybe there’s a bulk deal or something behind the scenes? It’s always a puzzle trying to figure these things out, isn’t it? Would love to dive deeper into this!
It’s called marketing and creating buzz. Ever heard of it? Companies name-drop potential partners all the time in their early stages. It’s about setting a vision and working towards it. It’s pretty naïve to just dismiss it outright without seeing how their strategies unfold. Let’s give them the benefit of the doubt and see where they land with these collaborations.
They didn’t name drop potential partners. They claimed advanced relations with companies they’d never talked to. I do not grant the benefit of doubt for such egregious lies.