GlobalX Airlines accuses shareholder of undermining cargo business

GlobalX earlier this year indefinitely parked two of its four A321 converted freighters because of severely limited demand that made it uneconomical to operate them. USA Jet Airlines has eight active McDonnell Douglas MD-88 narrowbody freighters, with an average age of about 35 years, one 36-year-old MD-88 and a 45-year-old Boeing 727-200, according to aviation databases. 

Ascent, which was spun off from Roadrunner in 2020, is owned by H.I.G. Capital. It is the 35th ranked domestic transportation management firm based on gross revenue, according to Armstrong & Associates. In an intriguing twist, GlobalX Executive Chairman Chris Jamroz was the CEO and chairman of Ascent Global Logistics when the contract with GlobalX was executed and when the company was sold to H.I.G. in 2023. 

In May 2023, GlobalX appointed Ascent as its exclusive broker for expedited ad hoc business in the North American manufacturing sector and agreed to refer any business opportunities to Ascent, which in turn agreed to refer charter work to its partner. Ascent awards hundreds of charters per month worth between $10 million to $15 million, but has only referred about $1 million in charter flights to GlobalX over the past three years, according to the complaint.

Between March 2023 and August 2024, Ascent only provided GlobalX with 24 expedited ad hoc cargo charters. In the same time period, Ascent fulfilled about 400 expedited flights using its own airline.

Under the arrangement, Ascent initially provided a $2.5 million prepayment to GlobalX to perform air cargo flights for its customers. GlobalX, for its part, agreed to credit 50% of the amount billed for each flight toward the prepayment until the prepayment was paid in full, after which Ascent was required to pay the full amount of any undisputed invoice.  

GlobalX viewed the prepayment, which essentially was a loan, as a way to incentivize Ascent to award charter business to the airline. The contract, however, effectively boxed out the airline from the cross-border automotive charter business unless Ascent gave its consent.

Although Ascent didn’t make any minimum volume commitments, GlobalX said it “reasonably expected that Ascent would provide reasonable opportunities to GlobalX while acting as GlobalX’s exclusive broker — particularly given the fact that GlobalX was referring business opportunities presented to it to Ascent. The entire purpose of the contract hinged on this tradeoff.”

Efforts to find a formula for sharing cargo business with GlobalX were largely ignored by Ascent, according to the complaint. On July 26, 2024, after repeated discussions, Ascent then-CEO Paul Martins agreed in an email to modify the agreement by committing to give GlobalX one flight per week when there is a need for aircraft similar in size to the A321 and pricing is competitive, yet Ascent failed to follow through, GlobalX alleged.

GlobalX said it subsequently forwarded business opportunities to Ascent that GlobalX would have been qualified to fulfill, but Ascent didn’t refer any of those charters to GlobalX and never attempted to meet the new commitments under the volume amendment. From August 2024 until the agreement terminated in May, Ascent only awarded GlobalX nine more charter flights.

The agreement and volume amendment constituted a valid contract, according to the lawsuit.

Financial harm

GlobalX alleged that Ascent used its dominance in the on-demand charter market and the prepayment agreement to effectively “choke off” GlobalX as a competitor, which was most notably accomplished by Ascent not providing the airline access to its proprietary bid board. In addition to awarding jobs to USA Jet, Ascent gave work to other air carriers.

The bid board is a web-based freight marketplace that allows carriers to bid on freight moves, while allowing shippers multiple quote options. 

Ascent did a disservice to its primary customers, such as General Motors, Ford Motor Co., John Deere, Polaris, Nissan and Stallantis, by denying them access to GlobalX bids.

“Ascent Global Logistics is no longer a shareholder of Global Crossing Airlines, and we believe the claims made by Global Crossing in its lawsuit are without merit. Our priority and our focus remain, as always, on our customers, providers and partners,” the company said in a statement provided to FreightWaves.

Ascent is now demanding the remaining $1.94 million balance of the prepayment, which GlobalX characterized as a sign of Ascent’s “predatory intent.”

GlobalX said it incurred $30 million in damages from the breach of contract, including profit it would have made from Ascent flights as well as losses from maintaining a fleet to meet its obligations to Ascent. In one month alone, GlobalX claimed it lost hundreds of thousands of dollars by having to keep aircraft and crews on standby for Ascent flights that never materialized, which often resulted in GlobalX having to adjust its schedule or turn down other opportunities for its cargo aircraft.

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

Write to Eric Kulisch at ekulisch@freightwaves.com.

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