Q3 2020 FLY Leasing Ltd Earnings Call
Gentlemen, thank you for standing by and welcome to the fly leasing third quarter 2020 earnings Conference call. At this time, all participants are in listen only mode. After.
After the speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone keypad if you.
You require any further assistance.
During the conference. Please press Star Zero, and an operator will be happy to assist you.
I would now like to hand, the conference over to Matt Dallas with Investor Relations. Thank you. Please go ahead Sir.
Thank you and good afternoon, I'm, Matt Dallas, the Investor Relations manager at fly leasing and I'd like to welcome everyone to our third quarter.
After 2020 <unk> earnings conference call.
Fly leasing, which we will refer to as fly or the company.
Issued its third quarter earnings results press release, which is posted on the company's website at fly leasing dotcom.
We have a slide presentation that accompanies todays call.
Which is available to participants on the webcast if.
If you are not accessing the webcast you can find a copy of today's presentation in the Investor Relations section of our web site on the events and presentations page.
Representing the company today on this call will be column Barrington, Our Chief Executive Officer.
And Julie rule, our Chief Financial Officer.
This conference call contains forward looking statements within the meaning of the private Securities Litigation Reform Act of 1995.
Forward looking statements include but are not limited to statements regarding the outlook for the Companys future business.
In financial performance.
Forward looking statements are based on the current expectations and assumptions of Flys management, which are subject to uncertainties risks and changes in circumstances that are difficult to predict.
Actual outcomes and results may differ materially due to factors that are summarized in the earnings press release.
Yes, and are described more fully in the Companys filings with the SEC.
Please refer to these sources for additional information.
An archived webcast of this call will be available for one year on the company's website.
And with that I would now like to hand, the call over to Collin Barrington, the CEO of fly.
Column.
Thank you, Matt and welcome everyone to this mornings call and thank you all for joining us.
As you all know the last six months has been a time of great difficulty for the entire global aviation industry due to the continuing spread as the COVID-19 virus, an increasing restrictions on travel.
Really since the loosening of government restrictions on travel the difficult environment is likely to continue into the winter, which in any event is historically the low season for airlines.
Fortunately, many governments, who recognize the importance that traveled to their economic recoveries and to save as many jobs as possible.
Have extended support to their airlines.
That now totals more than $160 billion worldwide.
This government support has taken place alongside the measures taken by airlines themselves to conserve cash and enhanced the liquidity during this very challenging period.
Meanwhile.
Our green shoots.
In particular, the long awaited prospect of a viable vaccine now appear to be getting much closer.
And hopefully it will be will be having a positive impact maybe in a limited way by year end and secondly, as we proceed through 2021.
This should have a positive impact and.
Global traffic as it encourages governments to lift restrictions and gives consumers confidence to get up and go again.
Even without a vaccine domestic travel is gaining momentum in several jurisdictions.
Reports suggest that traveled with in major markets, such as China, and Russia is now back at or close to.
Learn thousand 19 levels.
While in the United States TSA Daily Records for October show that more than 1 million people traveled the first such daily total since March.
While this is still less than 50% of passenger volumes compared to the prior year. It is a positive trend.
These.
Tilted trends are being supported by an increasing number of airlines and airports is now offering acceptable COVID-19 tests so to avoid the requirement for long periods of isolation for travelers.
Airline passenger survey show that there was still a strong desire to travel, particularly among families that have been separated now.
For nearly a year.
Hopefully this desire along the measures just mentioned will be reflected in the upcoming Thanksgiving and Christmas holiday periods.
From Flys perspective, while the current environment is certainly a challenge we believe is improving airline traffic trends will support the leasing industry generally.
Really.
Applies mainly narrow body fleet will particularly benefit from the allium earlier improvements in domestic and short haul traffic.
Optimism for the future among our airline customers is reflected in the fact that flies collect more rent in Q3 as compared to Q2.
In addition.
In recent months fly has signed six lease extensions and three new leases with airlines seamlessly with one aircraft representing less than 1% of our net book value to remarket This year.
We're also finding there is a market for aircraft sales, we have recently signed contracts to sell to.
Well the aircraft by year end and.
And expect to complete further sales in early 2021.
That will reduce some of our legacy exposures and enhance our liquidity.
Lastly.
October we closed a new $180 billion five year secured term loan.
Which was well supported.
But in the financial community.
We have already used some of the proceeds of this loan to repurchase approximately $77 million of our 325 million dollar unsecured notes due in October 2021, then.
We intend to use the balance of these funds and a portion of our free cash to call the balance of these.
By year end.
Slide benefits from the prudent business model, which provides us with levels the protections of the current adverse conditions.
For several years, we've focused our fleet in the most popular narrow body aircraft types in particular, Airbus Athree hundred Twentys and Boeing 737.
An ngs.
These types comprise 86% of our fleet by number and 67% by net book value.
We expect that the demand for relatively newer midlife athree hundred Twentys, and 77, Ngs, which form the core of our fleet will be the first to recover.
As they satisfy domestic.
No regional airline operations.
Demand for these types of growth, we strengthened by continuing lower fuel prices.
Also it should be noted that the two Boeing triple Sevens in our fleet. Our freighters are leased to flag carrier was performing well in this current on their payments.
The airfreight market.
He has remained buoyant throughout the period of the pandemic.
Slides 2.1 times debt to equity ratio at the end of September equal.
Equals the record low for the company.
And reflects our strategy of aggressively selling aircraft during the last two years, but market for aircraft sales were very strong.
Following repayment of our 2021 notes later this year fly will have no significant debt maturities until mid 2023.
Fly is no aircraft orders from the manufacturers.
Flys consistently issued making speculative aircraft orders on the basis that is in.
Cyclical industry, we can't predict the demand and lease terms for aircraft that would be delivered several years out so the financing environment at the time of delivery.
In addition to the new 180 million dollar facility just referred to will continue to focus on enhancing liquid.
Through management of rent to Ferros pursuit of additional aircraft sales and opportunistic liability management.
Slide benefits from the experience of the BBM team, which is more than 30 years of experience and has managed aviation assets through several industry crises.
I see them as a full service global lease manager with strong and positive relationships with most of the world's airlines and financing institutions.
Be them as a strong partner to help fly navigate through the present situation and.
And the alignment of interests applying p. them is greatly enhanced by the fact that BBAM shareholders now will more than 20.
Tend to fly stock.
By far the largest inside the holding of any publicly traded aircraft leasing company.
Like all lessors, we've received requests for rent deferrals from most of our lessees and are working closely with our customers in this regard.
Today.
To date, we have granted total rent the perils of $60 million to 14 airlines covering 35 aircraft.
Of this total we've agreed to defer $11 million in quarter four.
Nearly $2 million at fair deferred rents have been repaid to date and approximately 50% of.
Preferred amounts are shed yield to be repaid by the end of 2021.
However, there are still some airlines that require financial assistance and we continue discussions with several of them regarding further lease restructurings.
In the third quarter fly produced a.
Net loss of $8.1 million on total revenues of $60.1 million.
This loss is the result of non recognition of revenue for about $23 million of which $7 million as due to the reversal of some of the prior quarter's rents.
And Julie will explain this in more detail in her remarks later.
Year to date flies reporting positive net income of $39.6 million or one dollar and 30 cents per share.
It should be noted that our financial results for the quarter for without the benefit of any aircraft sales gains, which have recently been a significant contributor.
Our EPS.
EPS loss of 26 cents in the quarter reduced our net book value for share marginally. However.
However, our net book value per share still stands at $29.28.
At the end of September slide cash and unencumbered assets of $714 million.
Including unrestricted cash of $285 million and unencumbered aircraft $429 million.
And at quarter end, our financial leverage equaled its all time low of 2.1 times net debt to equity a sharpened positive decline over the preceding 12 months.
Following.
The completion of the new $180 million secured term loan.
On a pro forma basis for September 30th side, a total of $655 million, the unrestricted cash and unencumbered assets.
Of which 454 million with unrestricted cash and $201 million was unencumbered.
That's.
Our net debt and net debt to equity ratio remained at 2.1 times.
Fly has a prudent business model that will position us well for the recovery to come.
We have long dated financing and following the expected repayment of our 2020.
The one secured notes, we have no near term financing or refinancing needs.
We have zero capex commitments and no aircraft orders with the manufacturers.
As a result, we have no cash tied up in pre delivery payments.
And we have proven financing flexibility with a strong track record of.
Diversified financing sources.
With that I'll hand, you over to Julie to take you to the Q3 financial results in detail Julie.
Thank you Carlos.
Finds reporting a net loss of $8.1 million or 26 cents per share for Q3 2020.
Sustain and Annette.
Unprecedented impacted the cobot pandemic on the airline industry is causing airlines continued financial distress and this heightened stress has no effect on our topline due to the non recognition of revenue for certain machines.
During the quarter by also granted 5 million and lease restructuring $2.5 million, which impacted revenue for the quarter.
The further and year ago quarter included 39 million of sales gains while there were no sales in the current quarter.
Flys net spread suffered due to the revenue decline coming in at 3.8% for the quarter.
Despite lower lease revenue Q3 cash receipts were up sequentially over Q2.
Unrestricted cash.
Cash balance was 285 million at quarter end, which was bolstered by an additional cash infusion post September thirtyth from the new $180 million five year term loan.
We have used approximately 77 million of cash since quarter end to repurchase some of Flys 2021 unsecured notes on the open market and plan to call. The remaining outstanding 2021 notes before the end of the year.
Well no aircraft sales were completed in Q3, we expect to complete some aircraft sales in the next few months and will consider additional appetite opportunistic aircraft sales in the near term, which would further enhance flys liquidity position.
Turning to the comparison to the prior year quarter five operating lease rental revenue in Q3 2020 decreased.
54.3 million driven by the non recognition of revenue for certain lessees, because we do not believe collection as probable.
As well as our smaller fleet size.
To provide a bit more granularity on the decrease in operating lease rental revenue. This chart bridges from Q3 2019 revenue to Q3 2020 revenue.
As I noted a moment ago, the distress being felt by airlines has caused fly to no longer believe the collectability of revenue from four airline customers leasing a total of 11 aircraft is probable and therefore, we placed these airlines on nonaccrual status in Q3.
This means that fly only records revenue to the extent of cash receipts inclusive of cash security deposits.
More information regarding non accrual accounting is contained in the attend the seeds to the presentation.
Non accrual lessees accounted for a 22.8 million drop in revenue in Q3 as compared to Q3 2019.
This amount about 7 million relates to periods prior to Q3.
Aircraft sold where the next large.
Driver of the revenue decline at $18.5 million, followed by lease extensions restructurings, and remarketing, which contributed a $4.7 million decrease.
I've got $2.5 million of the $4.7 million relates to lease restructurings granted in Q3.
The last category driving the decline is the decrease in LIBOR.
George which is offset by lower interest expense and other items.
With all of these decreases being partially offset by 6.4 million increase due to revenue recognized from aircraft purchased in the last year.
Total revenues for Q3 were 60.1 million, which includes $6.3 million of end of lease income about half.
Which was related to the early return of an aircraft due to the airlines bankruptcy filing.
And as I noted earlier, there were no aircraft sales in the quarter as compared eight aircraft sold in the year ago quarter.
On the expense side Q3, depreciation and interest expense, both decreased as compared to the prior year quarter due to aircraft sale.
Sales.
In addition to the lower leverage driven by aircraft sales interest expense also declined as a result of a lower weighted average cost of debt.
As she and expense decreased point $3 million in Q3, 2020 as compared to Q3 2019 due to the smaller fleet, partially offset by primarily unrealized foreign currency losses alert as well as.
As higher general corporate costs.
Also in the current quarter, we recorded an additional allowance for uncollectible operating lease receivables of 1 million.
In Q3, 2024, I recognized an unrealized loss of $2.3 million to write down marketable securities to estimated fair value.
This relates to Flys investment and the equity tranche of aviation.
EPS vehicles, commonly referred to as the notes.
Following this write down flies investment you notes is 3.2 million as of September 30.
I'll now take you through some information regarding flies rent deferrals.
In Q3 fly collected 53% accretive for pre deferral contracted Brent and improvement from 40.
And 1% in Q2.
Through the first nine months of 2020 fly had approximately $40 million Brent deferrals of which about 35 million is included in our receivables at September 30.
Deferral for the fourth quarter are expected to be approximately $11 million or about 4% of trailing 12 months operating lease rental revenue.
The table.
On slide 16 provides the details of rent deferrals and scheduled repayments by period based on executed deferral agreements.
Note that the aggregate amount of deferrals presented as less than the amount presented last quarter. As it is now based on executed deferral agreements, whereas last quarter in an effort to be transparent. We included expected deferrals based on discussions with our airline customers.
Please note that fly continues to work with lessees regarding rental payments and as a result, these amounts may change over time, including in some cases revisions to previous deferral agreements or lease restructurings that may be granted.
Based on contracted deferrals today, the amount of rent being deferred steps down in Q4, and then steps down substantially in 2021.
It was about half of deferrals due to be repaid by the end of 2021.
I will turn it back to call them now for his closing remarks.
Thank you Julie.
So in summary.
Fly has many defenses against the current difficult industry conditions.
We have an attractive fees comprised predominantly of the most popular now.
Our body aircraft.
Secondly, we have no near term capital expenditure requirements no commitments to aircraft manufacturers no pre delivery payments tied up with them.
Thirdly, we have low financial leverage of 2.1 times net debt to equity.
Fourthly, we have cash and unencumbered assets totaling 650.
$55 million pro forma following the raise VR AR.
Our term loan desks, and finally with the world's leading aircraft lease management from DBM to disclose scale of airline and financing relationships and its shareholders significant interest in Flys stock.
While we will undoubtedly pays for.
The turbulence over the coming months there have been some positive developments with the success with the successful vaccine trials the rising demand in the domestic aircraft travel as well as more airlines and airports, providing acceptable cobot testing to allow travelers to bypass quarantine requirements.
Weekly.
Leave it flies well equipped to benefit from the improved conditions ahead.
With that we will now take your questions.
Ladies and gentlemen, if you have a question at this time, Please press star and the number one on your Touchtone telephone.
If your question has been answered or you wish to remove yourself from the queue Prince crack per pound key.
Our first question comes from the line or Catherine O'brien with Goldman Sachs. Your line open.
I don't hear talk to them.
If your phone is on mute please UN mute.
Our next question comes from the line of Jamie Baker with.
JP Morgan your line is open.
Hey, good morning, everybody.
So slide seven you mentioned working with a handful of airlines.
On further restructurings, how should we think about that or those airlines that you are having first time conversations with are the ones that you've already helped.
And they're trying to double dip now.
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And also how does the ask from this group of airlines compare to the requests that you got early on are they any different in duration is it skewing towards power by the hour any additional color there would be helpful.
Julie do you want to take this one.
Sure Hi, Jami Thanks for the question.
It's a mix I think most of them are airlines weve been in discussions with and have been granted some previous deferrals.
And the discussion is now moving toward extending the deferral period.
Gary perhaps going to power by hour.
So it's a it's a mix, but yes it's.
Okay. It's just that the same group of customers that weve been.
And in discussions with and in some cases, I said as I said granted previous deferrals to GAAP.
Got it.
And then Collyn. This is more of a long term question, but you know some of your competitors. You know this this earnings season have spoken about the potential for increased global leasing demand you know whats airlines trying to become more variable in their cost structures. There has been discussions about.
What happens to lease duration in the future I am I am not fall.
Good thing Youre your deck or your prepared remarks today.
And you certainly identified some of the current green shoots but.
There.
Isn't much on the long term is it you have a differentiated view or you just.
We're trying to make that point right now I just.
Just want to make sure that the lack of longer term optimism isn't driven uniquely by anything relative to what we've heard from some of the other lessors.
Well, perhaps JV, we haven't tried to divert from.
Hi difficult market conditions that exist today.
But I could answer.
Hi, [laughter] I agree that things are pretty bad with there I didn't see right now, but we do see as I say the green shoots I think of the medium to long term I can't see any reason why airlines should move away from their sort of 40 odd percent of their aircraft of their feet that are.
At least.
And particularly as we've seen quite a lot of retirements, particularly of the bigger aircraft. The Athree AC some of the 740 sevens and so on so if as we hope and believe.
Once the vaccine and works and the pandemic and.
Dissipates.
We think that will be a real boost in traffic again.
Probably towards the middle of 2021.
And if if history is anything to go by that.
That would be when airlines will certainly want to spool up their fleets again.
And so thats always a parent too so why.
I think the very good prospect that in the medium term that will be good demand.
For leased aircraft.
Secondly in.
Yes go ahead airlines.
A lot of airlines have had to take on additional liquidity to keep keep themselves going so the balance sheet will be balance sheets, we bit bloated with.
Yes, so I do think there will be prospects again.
In the medium to long term for airlines, taking on more leased aircraft rather than going back to the financial markets.
And if I could just sneak in a third and this is revisiting sort of a pre pandemic theme that you've been willing to discuss but well.
What do I tell clients when they ask me why should fly even stay public company BBAM has more than adequate access to capital.
The equity market has spoken.
Is the public market really the right place for fly just given this persistent you know.
Discount to book and discount relative to peers.
It's kind of a throw back on what we are what youve been asked in the past, but I'm wondering if you have any new thoughts on it. Thank you.
Yes, I don't suppose if any new thoughts, we've certainly been frustrated by the company's market valuation for many years.
The share price has been significantly discounted and.
And that's been in both full and their markets.
Absent cost today is no different.
And we have been focused on us.
Strategy of trying to unlock per share value.
Been cutting overhead we've been lower.
Lowering borrowing costs, we've been selling assets for substantial gains to that book value.
And you.
Producing very good earnings.
But all with a view all of the due to expanding our are we.
And.
Making the business more profitable however.
You know the market has still.
Lagged the market value of the shares are still lags the book value. So we're open.
BD strategy that will unlock the value on a per share basis, and including potential sale or some time in the future.
If that makes sense.
That's great. Thanks for letting me ask so many questions appreciate it everybody take care.
Good talk to Jane Thanks, Tom.
Okay.
And our next question is from Catherine O'brien with Goldman Sachs. Your line is open.
Hi, everyone apologies.
Back office growing pains, I, just hung up and sort of unmute. It myself there. Thanks.
Thanks.
So coming back to me.
So a couple for you this morning.
Just a couple on the cash accounting I guess first can you share some color on what drove the need to move to cash accounting are all of the impacted.
Aircraft, others, although still with airlines that are operating and then have you had any discussions with these airlines and the likelihood of them continuing to operate these are.
Okay. Thanks, a couple of more after.
Julie you want to take that yes.
Yes.
So.
In the further for the airlines are put on non accrual in the quarter and none have actually filed bankruptcy proceedings that they are all operating continue operate.
Our next the factors that we considered and putting them on non accrual primarily payment history, and having some discussions about possibly researchers lease restructurings.
And we have had specific conversations about whether or not they're going to keep the aircraft I think things are evolving situations.
We don't have.
From answers on all of those yet, but I think.
It's a lot to say an evolving situation.
We're going to get to we'll continue to evaluate.
Understood Thanks for that.
Then maybe one a little more forward looking so it seems like there's a lot of airlines looking for a sale lease back.
Financing over the next couple of years I guess first do you think the terms of the sale leaseback RFP is are likely to be more attractive to less stores than they have been over the last couple of years and if so are you. The view that your balance sheet is well equipped to potentially capitalize on some of these opportunities or would you want to raise additional funding.
Or perhaps wait for operating cash flow to cover a bit more to love to know your thoughts on sell sell leaseback market in general and and if you know you guys are poised to participate thanks.
Yes, well, it's all a bit speculative Katherine at this point in time, because I think Pete airlines tend to be focused on the liquidity, although we have seen some airlines doing.
Being say leaseback transactions to generate liquidity.
Certainly we will look at further say leaseback transactions over the coming years provided to the asset to good provided the credit is reasonably good I suppose in the current environment and from where we are today provided we can raise financing.
To cover a substantial portion of the capital cost of the of the assets, but certainly no fly is still open for business. We hope to continue to sell some of our older aircraft and we hope to continue to purchase aircraft in the sale and leaseback Mark newer aircraft the sale leaseback market.
And huh.
Hopefully.
No the.
Present conditions will put manner than some of the heavy industry.
They want to bid down prices bid up prices or whatever that they would have made these as competitive as they've made in the past. So there will be more transactions that make sense for us.
At this time I, just want to copy Jamie and ask a quick third one.
For your 12 scheduled lease expirations next year, what are conversations looking like on those any any ballpark idea of how many of those are likely to be extended or or our conversations on extensions happening later, just given uncertainty and that's it from me. Thank you so much.
Okay.
Yeah, Kevin is probably still a little bit early you know as you know.
Operating leases tend to get extended at relatively short notice.
So while we are certainly having discussions with some of the airlines, there's nothing really to report on any of those at this point in time I don't think that's particularly the case.
Now, where you know that was like more uncertainty than it was a year ago. So we really won't have much to report on those until we start getting closer and into 2021.
Understood. Thanks, so much for the time.
And our next question comes from the line of Helane Becker with.
Jason Your line is open.
Thanks, very much operator, hi, everybody and thanks for the time, just maybe two questions for me. One is you have to to triple seven freighters and.
Obviously, the freight markets gone from not being great to being fairly.
Well.
Would you consider.
Getting into that business in a bigger way.
And you know we look when we look at every opportunity.
You know it could be one of the reasons why the freight business Air freight business is very good at the moment is that.
Because there's so little a passenger so few for a reduced number of passenger flights. So there wasn't as much belly capacity traveling around the world. So freighters have become more attractive will that trend lost for good I don't know, but we would certainly look at that.
At opportunities, but I don't.
I think you will see fly taking on a significant portion of its portfolio and freighter aircraft in the future.
Fair enough and then the other question I had on the.
I understand why you wouldn't need to write down the triple sevens, because they're freighters, but on the Athree hundred Thirtys can you just talk about.
You know the fleet and the I mean, I know you talked about the book value of being what it is but I think one of the issues for for for investors is that.
Concern that when you go to selling aircraft, it's maybe not worth what you're carrying on the books for and that's why the sockets marked out I mean, I don't disagree with you in June.
Jamie that maybe the discounts a little aggressive right now, but I think that's one of the Pushbacks I get on the company is well what about write downs on.
On fleet, so little long winded question, but wonder if you could just talk about the way you're thinking about that.
Well Julie.
Julie has been very much involved in all of that analysis. So Judy would you like to respond to that one.
Yes, Hi, Helane how are you.
So we have three athree hundred thirtys in the fleet and one of them is nearly 20 years old which has been impaired previously than prior years. So.
So the book value and that's pretty low.
The other two April thirtyth or about six year old six years old each.
And they along with the rest of the entire fleet has gone through our robust impairment review process. This quarter again this quarter.
And as a reminder.
Got you S. GAAP requires that we look at a discounted cash flows versus.
Book value.
So what Weve you know we utilized.
If I could cash flows appraised values for for lease rates on residuals on these and you know at this time, we havent recorded in any write downs on those but you know it doesn't mean that we could sell them for that.
Much today because of the GAAP requirement to use undiscounted cash flows.
So you know something we're going to continue to watch.
As we move forward.
Okay. That's helpful on Hilli and all the more general basis I'm. Just wondering you know the ones traffic rebounds again, considering all the aircraft that have been retired particularly.
The the larger aircraft Athree Asia is the 747 as I referred to earlier I'm, just wondering will there be a good strong demand for Athree hundred Fiftys 780, Sevens and Martin Athree thirties.
In the future so I wouldn't be as negative about athree turkeys that I might have been before and again because of the retirees.
Of them have older very large aircraft.
Yeah, I don't disagree with you. Thanks call. Thank you very much that's helpful. Thank you. Thank you Lynn.
First.
Your next question comes online of Pushkal, Tom Ford Keybanc. Your line is open.
Hey, good morning, guys.
Just on the non accrual accounting just prompted this question are there any cash flow related debt covenants, which you may face reaching.
Or is there anything that concerns you there.
Julie do you want to take us yeah.
Yes, yes high cost.
Yes.
We have one facility that has a debt service coverage ratio requirements, but it's you know it doesn't result in a default.
And that it's just going to it just puts the facility into a cash sweep and so that means there's no like any excess cash.
Cash to the company based on cash coming in each each month each quarter.
For that that's it there is only just there's just the one facility that that that could affect.
Understood and then just as a follow up could you just give us an update on.
Your exposure to the Air Asia Group and anything that you know investors might want to be privy to their just.
No because.
It's a complex situation I think that that is involved in many different jurisdictions, some of which should provide a government supporting some of which happens. So I'm just wanted to get your take on that.
Well, our predominant exposure is to.
Our Asia, and Malaysia and Thailand.
Both of whom have received and support so we are comfortable enough to those two airlines will be with us for some time and as you know airasia has in.
Formed the market that this will be taking any new deliveries at for quite some time so.
We we don't see our exposure there increasing in the near term. So we're reasonably comfortable where we are with the Airasia group as a whole.
Okay, great. Thanks, a lot guys.
And I'm not showing any further questions I'll now turn the call back over to Mr. Dallas for closing remarks.
Thank you everyone for joining us for our third quarter earnings call. We look forward to updating you again next quarter you may now disconnect.
Ladies and gentlemen, this does conclude the program. Thank you for participating have a wonderful day.
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