GlobalX Airlines, a charter operator, has ended its feud with Ascent Global Logistics, its largest shareholder, by dropping a $30 million breach-of-contract lawsuit and terminating their exclusive brokerage agreement.

Source: s.yimg.com

A Complex Saga Ends

The dispute between the two companies has been a significant factor in GlobalX’s persistent difficulty in generating business for its cargo fleet. The Miami-based airline sued Ascent Global Logistics on June 4, alleging that the former investment partner failed to honor an agreement to steer air cargo business its way and instead assigned charter work to USA Jet Airlines, its expedited on-demand freighter subsidiary with a large roster of automotive clients.

Signs quickly emerged that GlobalX got cold feet over fighting a larger partner, but an agreement to drop the lawsuit and settle differences wasn’t made official until last week. The companies said they have ended their 2023 exclusive brokerage agreement. GlobalX has also agreed to payment terms for amounts owed to Ascent, according to a joint news release.

Payment terms were not disclosed, but it was publicly known that Ascent demanded the remaining $1.94 million balance of a $2.5 million prepayment to GlobalX to provide cargo flights to its customers. GlobalX claimed that Ascent, headquartered in Belleville, Michigan, only referred a handful of flights over a three-year period.

Most of GlobalX’s business comes from contract flying for professional and college sports teams, the Department of Homeland Security, and other groups. However, the startup company also controls four Airbus A321 narrowbody converted freighters that have never been able to deliver consistent cargo business, partly due to Ascent’s efforts to stymie GlobalX in the North American regional market.

Impact on GlobalX’s Cargo Business

In March, GlobalX parked two of the A321 freighters because slow business made them unprofitable to operate. During the second quarter ended June 30, cargo revenue dropped $2.9 million, or about 50%, year over year, according to earnings released Wednesday.