As a result of the Group's continued growth in recent years, we are delighted to inform you that Challenge Group has signed a significant MOA (Memorandum of Agreement) with the Israeli Aerospace Industries (IAI) Aviation Division to convert eight passenger aircraft to full cargo freighters.

Four B767-300BDSF aircraft and four B777-300ERSF aircraft will be converted. The total investment in the acquisition of these 8 aircraft and the conversion program will amount to several hundred million. This move will triple our fleet and is in line with our growth strategy.

The conversion of the B767-300BDSF aircraft will take place during 2022 at a conversion site of IAI. We expect to take delivery of our first unit during Q3 of 2022, with the remainder being delivered by the end of 2023. The B777-300ERSF aircraft will be converted in a second phase during 2025-2026 and will increase the group's fleet to a total of 12 aircraft within the next 5 years.

In addition, we are in the exciting process of establishing another new airline – the third within our group - this time in Malta. Following a very warm welcoming meeting recently with the Director General, Captain Charles Pace from the Malta Civil Aviation, we have now officially submitted our application for the Air Operator’s Certificate (AOC).

The Maltese Airline will form part of the already existing entity, Challenge Air Cargo Limited, which up to now has acted as a virtual airline, charter-broker, and cargo GSA. This addition will allow the Group to expand its commercial capabilities by increasing the number of frequencies to both China and North America, and will also serve as a gateway to Africa and other new destinations. The new airline is planned to receive the fleet of converted B767-300BDSF aircraft.

Challenge Air Cargo Limited has nominated Captain Mauro Porta as the Accountable Manager to spearhead this project. Mauro Porta brings along a great deal of experience being himself a pilot in addition to a number of years in various managerial and nominated positions with different carriers. Mauro has also successfully set up a number of new airlines, and has all the necessary attributes to take this new airline to the skies.