Q2 2021 Chorus Aviation Inc Earnings Call
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Good morning, ladies and gentlemen, and welcome to the course aviation incorporated second quarter 'twenty, One 'twenty 'twenty One earnings conference call. At this time all participants are in listen only mode. Following the presentation, we will conduct a question and answer session if it.
Any time during this call you acquire immediate assistance. Please press star zero for the operator. This call is being recorded on Thursday August 12th 'twenty 'twenty, one I would like to turn the conference over to MIT to Natalie Mcgann, Vice President of Investor Relations. Please go ahead.
Thank you operator, good morning, and thank you for joining us today for our second quarter 2021 conference call and audio webcast.
Today from course are Joe Randell, President and Chief Executive Officer, and Gary Osborne, Chief Financial Officer.
Let's start by giving a brief overview of the results and then go on to questions from the analyst community because some of the discussion in this call may be forward looking I direct your attention to the caution regarding forward looking information and statements, which are subject to various risks and uncertainties and assumptions that are included or referenced in our managed.
<unk> discussion and analysis of the results and operations of Chorus Aviation Inc. For the period ended June 32021, the outlook section and other sections of our MD&A, where such statements appear. In addition, some of the following discussion involves certain non-GAAP financial measures, including references to EBITDA adjusted EBITDA.
Adjusted EBT and adjusted net income.
Please refer to our MD&A for a discussion relating to the use of such non-GAAP measures.
Now I'll turn the call over to Joe Randell.
Thank you Natalie and good morning, everyone.
The Covid 19 pandemic continues to negatively affect the aviation industry. However, there are encouraging signs of recovery.
Increasing rates of vaccination are contributing to the lifting of travel restrictions in many markets and.
And the evidence is there people are returning to air travel when they feel safe and free to engage in public.
These are unprecedented times and unchartered territory.
And despite that we've managed our business well through this period and have consistently reported profitable financial results as evidenced by our second quarter net earnings of <unk> 12 per basic share or six on an adjusted basis.
We continue to generate positive cash flow from operations.
We successfully raised capital reduce overall debt and created additional flexibility by increasing the level of our unsecured debt.
We've maintained healthy liquidity levels and worked with substantially all of our customers to further strengthen relationships for the long term.
At the same time, given the Covid 19, complexities and uncertainties, which vary by region, we are realistic and that we have.
That we do have airline customers continuing to struggle in some countries.
That are still severely impacted by the pandemic.
And this has continued to impact our results.
As Gary will explain in more detail our second quarter earnings were negatively impacted by off lease aircraft lower lease revenue due to certain lease amendments, which include a term extensions and the 2021 CPA amendments.
Lower foreign exchange rate over the same period last year.
As shared in our last report out we hit important milestones that further strengthened the foundation of our business.
Such as revising our contract with Air Canada to our mutual benefit.
We've also expanded our reach into cargo operations, and the aerospace and defense sectors and put our repossessed aircrafts to good work with new customers are long term leases.
These accomplishments are commendable given this very challenging environment, but not at all surprising to me when we when you consider the incredible talent and expertise of our team.
Yes.
We have now placed all of our repossessed dash eight four hundreds with three new customers being connect airlines Sky Alps, and Cobham, bringing the number of us off leased aircraft down from 13 at its peak to eight.
I'm proud of our team's collaborative efforts in finding opportunities in delivering integrated solutions to place. These assets you may recall that we repossess. These aircrafts in 2020 and reconfigured them for returned to service at our facilities in North Bay, and Halifax, again, demonstrating our ability to manage every stage of an error.
Crafts lifecycle.
We're managing our leasing business prudently and are maintaining close contact with our customers in the quarter, we collected approximately 67% of lease revenue up from 62% in the first quarter.
So as the recovery continues to gather pace around the world. We should also benefit from further increases in our collections.
While we do see new leasing opportunities, we're maintaining a cautious approach and we will be very selective until there's more certainty and passenger travel demand.
We are expanding our reach into cargo flying through our three year contract with pure later and we'll look to grow this relationship.
Our new agreements with transport, Canada, and the Canadian Armed forces have broadened our work in the aerospace and defense industries, we've already begun to upgrade and modify transport Canada's National area surveillance program fleet of Dash, eight and dash seven aircrafts with new surveillance equipment.
And our partnership with General dynamics Mission systems, Canada to provide in service support for Canada's manned airborne intelligence surveillance and reconnaissance program is in the initial stages as we spool up for the first aircraft deliveries scheduled in the third quarter 2022, with the expectation of being fully on.
Operational by the end of that quarter.
These are exciting developments for us the impact of these long term contracts will begin to positively affect the lasers earnings throughout the second half of 2021 and beyond.
On the CPA front, we now have all 25, Embraer 170 fives on property and will have been adopted all of these aircraft into the jazz fleet by the end of this month.
As vaccination numbers in Canada approve improve and the spread of Covid 19 subsides.
<unk> is flying activity is increasing with this expected increase we've started to recall some of our frontline and administrative employees and we'll continue to do so as operations ramp up as.
As previously mentioned our fixed fee compensation is set under the CPA and does not vary based on flight activity.
I extend my gratitude to our employees for delivering another good quarter, especially in this challenging environment and for doing so safely.
We have been very successful to date and mitigating the impact of this crisis on our business and remain confident in our team's ability to manage through the remainder of the pandemic.
Thanks, very much for your time and I'll now pass the line over to Gary.
Thank you Joe and good morning, Here's how the second quarter of this year compares to the second quarter of 2020.
We generated adjusted EBITDA of $76.9 million and adjusted net income of $11.4 million in the quarter with decreases of 2014 to $10.3 million respectively.
<unk> and adjusted EPS of <unk> versus <unk> 13 in the second quarter of 2020.
This was primarily due to the continued impact of Covid 19 on our results the effects of the recently negotiated CPA amendments.
<unk> express, 70% to 78 seat operation.
Consolidated within jazz as well as reduction in earnings due to lower U S dollar exchange rate.
<unk> segment, adjusted EBITDA decreased by $9.4 million, primarily due to lower lease revenue attributable to the continued impact of Covid 19 on results related to off lease aircraft negotiate amendments to certain lease agreements, including extensions and lower earnings due to the lower U S dollar exchange rate.
Partially offset by additional aircraft, earning lease revenue.
As mentioned earlier tacs negotiated significant lease extensions with some of its lessees and exchange reductions to its original lease rates, thereby strengthen its partnership with its customers into our mutual benefit despite our near term reduction in lease rentals.
These lease amendments result in reduced revenue over the remaining term of the original lease term as they are accounted for as a new lease from the effective date of the amendments with revenue recognized on a straight line basis over the remaining term in accordance with <unk> 16.
The RASM the RASK segment's adjusted EBITDA decreased by $4.8 million. The second quarter results were impacted by a decrease in fixed margin of $2.4 million in accordance with the CPA contract and.
An increase in general and administrative expenses.
Offset by an increase in other revenue due to an increase in third party MRO activity and contract line.
And an increase in aircraft leasing revenue under the CPA <unk> 3 million, primarily due to nine incremental <unk> nine hundreds.
Offset by the removal of the Dash eight 300 fleet and lower earnings of $3.7 million due to lower U S dollar exchange rate.
Our quarterly earnings were negatively impacted by lower U S dollar exchange rates, which decreased by more than 11% moving from an average rate of approximately 139.139 in Q2.2020 to $1.23 in Q2.2021.
It's important to note the majority of our aircraft leases leasing revenues are.
For both rail and RASK R&D dollars, and we paid principal and interest payments in the same currency, thereby effectively hedging our currency exposure.
Adjusted net income was $11.4 million in the quarter, a decrease of $10.3 million.
Due to the $14.2 million decrease in adjusted EBITDA as previously described.
An increase in net interest cost of $2.6 million primarily related to the 6% unsecured convertible debentures issued in April 2021, and the increase in Denver's under credit facilities added in the second quarter of 2020.
And a $1.4 million increase in adjusted income tax expense.
All set by a decrease in depreciation expense of $3.7 million, a decrease of $2.2 million related to foreign exchange and an increase in gain on property and equipment of $2.1 million.
Net income decreased $7.6 billion over the period due to the previously noted decrease in adjusted net income of $10.3 million a reduction of net unrealized foreign exchange gains on long term debt of $10.7 million and a decrease in income tax recoveries on adjusted items of $3 million.
<unk> by a decrease in impairment provisions of $9.5 million in the rail segment and a reduction in net lease repossession costs of $5.3 million now.
Now turning to liquidity.
We ended the second quarter with $177.9 million in liquidity, an increase of $6.6 million from the first quarter of 2021 due to the positive cash flows from operations of $15 million the.
The receipt of the net proceeds from the 2021 capital raise of $138.1 million an increase in cash related to changes in restricted cash and security posits of $18.8 million.
Offset by additions to property and property and equipment of $10.6 million, primarily arising from investments and reconfiguration of off lease and re leased aircraft.
Debt repayments of 150, $454.7 million related to scheduled repayments of $49.1 million early repayments of the <unk> term loans on six aircraft totaling $71.7 million and the repayment of all deferred amounts owing under aircraft loans of $33.9 million.
Other key liquidity movements during the quarter include the increased receivable from air Canada of $20.1 million, primarily related to the controllable cost guardrail and increased flying and other activity.
Increased rale lease receivables by $2.6 million and decreased accounts payable of $20.2 million due to the semiannual repayments on aircraft leases and interest owing along with reductions in journal trade payables.
As of June 30, the controllable cost curve rail was $10.2 million over the recap of $20 million and the excess amount was paid last month in line with the CPA agreement.
We have seen Canadian air travel begins to spring back to life here in the second quarter with that we expect the current level of working capital requirements to continue throughout the remainder of the year as a CPA operations ramp up very quickly.
As Covid impact varies by region and our series C portfolio is global in nature, we anticipate the tacs gross lease receivable at $56.3 million U S. At the end of the second quarter could increase up to $60 million U S. By the end of the fourth quarter of 2021, which is consistent with our overall shared last quarter.
Sure.
Planned capital expenditures in 2021, including capitalized major maintenance overhauls are estimated to be between 19 and $29 million.
This estimate includes between 8% and $12 million that will be included in the controllable costs and paid by Air Canada.
Planned aircraft related acquisitions are expected to be between 41 and $50 million in 2021.
Actual spend at June 32021 was $40.6 million.
While there are no further significant capital growth expenditures forecast for 'twenty, one 'twenty 'twenty one at this time, we continue to prudently evaluate new transactions, while also remarketing our off lease aircrafts.
We are also focused on creating additional flexibility in our capital structure by paying down our adjusted net debt.
By the end of the second quarter, we successfully completed a capital raise with gross proceeds of $145.1 million and reduce it reduced our adjusted net debt by $153.6 million.
We also increased our percentage of unsecured debt to approximately 14% of total debt and brought our unencumbered asset pool to approximately 110 million U S.
We anticipate continuing with our debt reduction while evaluating growth opportunities over the course of this year.
Before opening the call to questions from the analyst community I would like to like to acknowledge the continued outstanding efforts of our team during the first half of 2021, and a challenging and evolving operating environment.
That concludes my commentary. Thank you for listening operator, we can open the call to questions.
Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by the one on your Touchtone phone, you'll hear at the retail profit acknowledging your request and your questions will be pulled in the order that they received.
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Your first question comes from Kevin from CIBC. Please go ahead.
Hi, Ed.
Morning, everybody. Thank you for taking my question.
Maybe if I can just answer a question on FX.
First of all.
Year over year, maybe just quarter over quarter. So if I look at.
Just the underlying trends.
Look to improve from.
From Q1 into Q2, but.
But I guess in both segments on a sequential basis, adjusted EBITDA was down roughly $3 million.
Income from both of our segments. So just wondering if you had to frame it like how much of that sequential decline was due to the strengthening sequential CAD versus.
And some of the other moving parts you highlighted.
Yes, I think if you look at the evidence Gary here.
When I look at the.
The year over year decrease.
If you look at Q2 this year versus last year was almost a 16% decline, which is about 11, 4% or 11 and a half. So you can see it was pretty significant in the quarter and throughout the MD&A. There. We do show show the impact of the various units.
And with that.
We did have a pretty substantial impact year over year. If you look to last quarter, which was kind of a level setting period for us as.
As you know because we did the CPA amendments and there was a lot of the a.
A piece of the plane is a good proxy even just from last quarter. We saw nearly a <unk> <unk> decrease in the average rate and that impacted us by almost $2 million across the business I think around one eight if you. If you look at the average exchange rate. So you can see in our disclosure we put in the average exchange rate in the.
<unk> table.
And just to highlight that while we don't have foreign exchange exposure per se in the sense, we pay that in the U S. We earn revenue in U S. We do have that translation issue and we just wanted to highlight that for everybody.
As we move ahead. So that you can look at your modeling and your fingers and adjust accordingly, because we are seeing some short term volatility in that U S dollar amount.
That makes sense.
I apologize if it's in your disclosure here.
Do you have like a rule of thumb in terms of I appreciate youre naturally hedged throughout the P&L, but just from an EBITDA or even an operating income perspective every.
Penny move in the CAD.
X dollar EBITDA or operating income as a rule of thumb, we should be thinking about here for sure.
I think when you look at the foreign exchange exposure on to adjusted EBITDA, you should be looking at the revenue.
For the leases under the CPA that was about $35 million in the quarter and four rallied the adjusted EBITA is all in U S funds as a U S based.
Entity. It does have some euro loans under there, but it is a U S consolidated entity into Canadian that was about $25 million and adjusted EBITDA.
If you use that those two as your proxy for the impact you would look at a one cent change in the exchange rate you would have a go to half a million dollars roughly in the quarter, so annually by $2 million.
That is super helpful. Thank you.
And maybe just turning back to the ramp up here maybe first.
As you as you bring.
Labor back on as you rebuild the network to reflect the improving outlook for domestic travel can you remind me how the Cta covers this it does seem like if you look at south of the border some of the airlines are having.
Some issues, bringing this on to the extent that there is some level of let's call. It inefficiency. It is covered by the CPA or do you have to kind of predict is pretty pretty accurately in any.
Any any miss kind of gets borne onto your P&L.
So back to the amendment with the CPA, we are exposed only by the $2 million plus or minus on the guardrail.
What ends up happening Kevin as we ramp up here.
What we're seeing is we're investing obviously more training and startup costs. Those are covered under the CPA and that's why you've seen the a bit more of an investment around $10 million in the quarter and that we expect to see that investment continuing along so our exposure is limited to the plus or minus $2 million on the guardrail. Despite the start up so.
Look at it.
There is no P&L impact other than the $2 million, it's a working capital investment will make over the balance of the year.
Okay. That's helpful and just last one for me kind of on the same along the same vein there just as you're calling people back are you seeing any issues in terms of labor availability or aren't even bottlenecks in terms of training or has it been pretty seamless.
No other ramp up its been very fast.
We've been adding a lot of capacity for Canada.
But generally.
There are there is an occasional hiccup, but it's going well people are coming back to work et cetera. So.
Before too long things should be very very even in and settle down.
But obviously when you have an operation that's coming back as quickly.
It can be challenging on any given day operationally, but.
But overall I have to say things have been going well.
Excellent.
As a travel returns here I'll leave it there thanks for taking my questions.
Thanks, Kevin.
Your next question comes from Cameron from the National Bank. Please go ahead.
Thanks, very much good morning.
A couple of questions on the I guess, the the aircraft leasing business.
You know we've done a pretty good job of.
Remarketing. The Q4 hundred set you repossess just wondering if you could talk a bit about the prospects for the eight remaining aircrafts that are off the off lease.
Yeah.
Well, we hope to have positive things to say about this soon but we are making progress we're optimistic.
So stay tuned.
I think the team has done a great job of reaching out in the market and finding opportunities. So.
We are optimistic about placing the majority of the remaining airplanes.
In the not too distant future.
Okay, No that's that's great to hear and.
And I guess secondarily is.
Assuming you do get those aircraft back on lease.
Given I guess, the renegotiated rates you've had with with some of your customers in return for some some lease extensions.
Is this can this be a profitable business again going forward or do you is there something that's changed at all fundamentally.
Or do you actually need to have all those aircraft back on lease to get back to net profitability.
Well.
The lease rates are lower there is there is a surplus of airplanes that have come out as a result of the pandemic. The market is now absorbing some of that as it comes back so the lease rates for those repossess. The airplanes are certainly lower than the original lease rates.
And I expect that will probably occur on repossessed airplanes for the next little while but.
The outlook on the business is actually pre.
Positive because we believe that as the market comes back and there will be a good demand for regional air travel and more carriers will be interested in leasing airplanes then.
Where previously because their balance sheets have been hit by this as well.
So.
I think the business is going to come back there is no question, but the big question for everybody is exactly when and.
As you can see in the media every day, one day, you're optimistic the next phase.
Somebody range on the parade and it's.
It's challenging but.
It's going to take a little while.
We've worked to keep the aircraft that we have with our customers in place and productive and you know while we are.
We've worked with them in terms of their payments.
The good news is that we're extending term and that.
Which we.
We'll get this fleet back will be extended into the future. So.
You know.
It's tough right now but.
We're optimistic that things will come around.
Cameron as Gary here I think a couple of things to note. We've had 13 aircraft off lease we will get those back to work. So the revenue will start to come in for those aircrafts. We are also as you know.
Dinner disclosure paid down just over $70 million of debt down below in rail. So that will certainly help from that side and I would also point out that some of the costs in an expected credit loss that youre seeing.
We hope over the course of time those will come down. So you combine along those things that we do expect to return to some level of profitability here as we move ahead.
Okay.
Helpful and maybe just lastly for me just a quick modeling question just around around depreciation expense because it's moved around quite a bit in recent quarters. There has been.
Some unusual things happening as well I'm just looking at the sort of the Q2 depreciation number is that a kind of a good run rate based on the current fleet size that you have right now.
Yes, I would think it would be.
It's.
We've gone through a few adjustments as you know with the CPA and with all of that I think it's a pretty reasonable run rate will be in India.
Perfect Alright, I appreciate the time.
Thank you.
Your next question comes from Shawn Levine from TD. Please go ahead.
Thanks, Good morning, maybe.
Maybe just touching upon.
Cameron's question.
If we look at the leasing segment, obviously, a sequential decline there in revenue in U S dollars from Q1 to Q2.
That's despite some of the Q4 hundred starting to generate revenue we get in.
I mentioned in the prepared remarks that there were certain lease amendments I'm wondering if you can expand on those lease amendment a little bit perhaps.
Perhaps touching on how this could impact to other customers.
And just seeing lease rates are coming down.
Oh.
So it's sort of scary here so in the quarter.
We came down and U S revenue and when you convert it over into Canadian obviously, the foreign exchange was in there and then we had the lease modifications in there.
For those who are the lease amendments when you look at the aircraft. We just placed at a minimal impact in the quarter because they got placed during the quarter. So there's not a large impact from those but moving ahead, we're going to look for win win situations with our leasing clients.
And look too.
Great value.
When we look at it it could have some impacts like you saw but we continue to try to minimize those as best we can and create the most value.
Okay. Thanks.
And then just looking at the.
The dash eight aircraft that have.
Originally been removed from the CPA with Air Canada.
I know, there's a number of options available to use for those aircraft.
Including just selling them leasing party algorithms used for cargo I'm. Just wondering if you can update us on how conversations with potential customers are going for the monetization of those assets.
Yes, we're continuing to assess the market and.
It's time dependent as well because.
We need to be careful and entering into any type of an agreement to sell or lease. These assets at very very depressed rates. When you feel the market could be coming back and being stronger, which we do believe it's the case.
So we are looking at different options for the airplanes.
A number of them into the CPA that they are being operated and will be operated.
You know until probably the end of the year, a slightly into the new year. So.
So would you did or the aircraft are active et cetera, but we continue to see these assets as being very valuable and it depends though on the timing and.
Exactly what we do so it's a work in progress.
But I really can't tell you more than that other than we believe these dash eight three hundreds are very valuable. The 50 seat airplanes are there's only one manufacturer, it's very expensive new ATR 42.
These aircraft have a lot of life as you know we've put the life extension program into these airplanes to extend their life.
By another 50% over the existing life and.
We believe that as the market comes back there will be good demand and as well, we're making progress in the cargo business as we talked about there and we've converted a number of the dash eight one hundreds and they are looking to do more of that and these are assets that we have as well that.
Presently idle so.
You know I think we've got good leverage going forward in terms of how we use these gassy classics.
Relate through our Voyager operation.
Great. Thanks for the color I'll pass the line.
Okay.
Your next question comes from Matthew Lee from Canaccord. Please go ahead.
Hi, good morning.
Maybe I'll just.
Rephrasing, a similar question to my peers here.
On a constant currency basis with all the puts and takes in the leasing business are you expecting constant currency revenue growth sequentially in Q3 and Q4.
Yeah.
When we look out over the next number of quarters it.
It would be very modest.
Three aircraft based on what we have announced today those three aircraft with a very modest impact so it would be pretty flat.
Alright fair enough and then maybe on the <unk>.
<unk> side can you maybe just discuss any onetime SG&A impacts that may have acted the quarter I think.
Even though it was a little bit lower than it's been over.
Over the past four quarters and I'm, just trying to figure out if there was anything that <unk>.
Pakistan.
Yes.
There is nothing out of the ordinary we do have plus or minus a couple million dollars that go through in any given quarter.
When I look back even.
Over quarter Q1 of this year to Q2 this year.
It doesn't take much to move the needle, but we just have small amounts that make their way through sometimes they manifest themselves a little more in one quarter than another so.
I don't think.
I don't think I would.
Read much into that other than that piece.
So that's on the <unk>.
Right.
And then just lastly for me the $65 million that you quote in terms of valuation for the dash eight is that.
But they would be currently valued at what you would consider depressed level. So I mean, there's upside from that number.
<unk> continues to grow.
Yes, so the way that works is when you assess them you have to look at the current market value of what you think the aircraft are worth and when we assess them. It within the current environment. So the answer is it's based on where we see it today.
Can't comment on where it will move in the future other than we feel those assets are.
Yes.
Fairly valued and we think there's going to be a market for them moving ahead.
Alright, Thanks, I'll pass the line.
Yep.
Your next question comes from Walter from RBC. Please go ahead.
Hi.
Good morning, everyone.
Good morning, you're a little muffled Walter.
Okay.
Yes.
That's a little better.
Okay, Okay, sorry about that.
So my first question just with the.
$155 million being put towards debt reduction during the quarter. It is just not that.
A material change in euro and yen.
Okay.
Maybe even medium term plans to procure new aircraft and grow the leasing business.
Sorry, I didn't get the full question I get the $155 million in debt reduction Youre very muffled.
Sorry does that market change in your and your plans to procure new aircraft and grow the leasing business.
No we continue to look and assess for prudent and accretive transactions in the leasing side.
The pay down and that was our way of certainly bring down our adjusted net debt and right sizing the balance sheet in that so it doesn't impact at all how we're assessing the market and how we're moving forward. We continue to look forward for good transactions.
Yeah.
Okay. Okay. That's helpful. And then just a quick question on the Delta there Anthony I, just thought that left to come out and do some they reduced their.
And near term outlook.
Have you seen.
It's not gonna open to bolt on activity at some of your regional.
Has it been pretty muted thus far.
No I think I got the question, you're a little muffled, but I think it's the effect of the Delta variants in the utilization on the fleet and our leasing customers.
The utilization of the fleet by our leasing customers continues to improve.
Which is a good sign.
So.
Each of these countries is in a different place certainly, but you know as.
We've said before especially in some of these developing countries, where they have some of the greatest challenges.
Our fleet provides essential services in terms of remote areas and things of that nature. So.
The utilization is increasing but still has a ways to go.
Okay. Okay. That's it for me thanks.
Your next question comes from David from Cormac Securities. Please go ahead.
Thanks, Good morning, everyone.
Good morning.
I just wanted to circle back on the regional leasing.
And third party leasing revenue.
And get a sense on how many of the 52 leases that you have outstanding had been negotiated lower and how many are still in negotiation today.
So.
We won't go into the existing customers, we've been working through those but the three aircraft that got placed or certainly lower than where they started.
If that answers that question, but we can't go into the existing customers.
Okay.
And we expect more pressure on that revenue line item going forward.
Right now we're seeing it is flat, but look the reality is the covid variance in the industry is still.
Making its way through it so there is possibility that there could be.
Some more noise in that as we move ahead, but it's certainly we're looking for the win win in this situation.
<unk>.
Right. So that's the way we've been that's the way we're approaching I think it's probably best to look at it right now.
Well, you don't want to be super optimistic or Super pessimistic as that it's steady as it goes.
We have some customers that have not have.
The lease rate.
The lease agreement continuously in full effect and others that have been challenged so it's really a mixture and as we mentioned in the quarter.
Once we strike one of these agreements with the new agreement indicates accounted for the revenue based on that new agreement over a straight line basis. So if new agreements come up you could still see more of that but we continue to work with our clients to recover as much of the original lease as we can and obtain the best benefit we can.
Okay, and then the planes that you guys have remarketed and it might be entirely coincidental that theyre all Q4 hundred since the same customer.
But is there a preference that youre seeing in the marketplace between the aircraft types like Q4, hundreds may have more demand versus the ATR is in CRE James.
No material difference.
It was just that the customers that.
We placed those airplanes with CAD specific circumstances that made the dash eight 400 more appealing, but the ATR continues to be a.
Marketable asset.
And they continue to manufacture the <unk>.
<unk> of course.
Dash eight 400 manufacturing is.
On a pause.
So you know.
I think.
Because there are no new airplanes that may help with some of the placement of the older ones there but.
It's hard to say both assets are really very well accepted.
And the majority of what we have left of the.
Of the aircraft we have left we have six eight year.
70, twos and <unk> nine hundreds so but again.
On the turboprop side.
This is a market that we feel is is resilient and will be and demonstrate that I think as it comes back because of the special geographies in conditions that this fleet operates in.
Okay. That's helpful. That's it for me thank you.
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