Q4 2021 Chorus Aviation Inc Earnings Call
[music].
Good morning, ladies and gentlemen, and welcome to the course Aviation Inc. Fourth quarter 2021 financial results Conference call. At this time all lines are in listen only mode.
So in the presentation, we will conduct a question and answer session. If at any time Youre discovery quite immediate assistance. Please press star zero for the operator. This call is recorded on Thursday February 17th 2022.
Now like to turn the conference over to Nathalie <unk>, Vice President Investor Relations. Please go ahead.
Thank you operator, Hello, and thank you for joining us today for our fourth quarter and year end 2021 conference call and audio webcast with me today from course are Joe Randell, President and Chief Executive Officer, and Gary Osborne, Chief Financial Officer.
By giving a brief overview of the results and then go on to the 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 statements and information, which are subject to various risks uncertainties and assumptions that are included or referenced in our management's discussion and analysis of the results and operations of course Aviation Inc. For the three months and year ended December 31, 2021, yes, it looks section and other sections of our MD&A respect statement.
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 I will now turn the call over to Joe Randell.
Natalie and good morning, everyone.
2021 was a very productive year.
I am pleased with our accomplishments, especially considering a prolonged pandemic.
We started the year by revising our capacity purchase agreement or a CPA with air Canada.
Enhanced jazz its position as the exclusive Air Canada Express operator of 70% to 78 seat regional capacity until the end of 2025.
And we added 25, Embraer 175 to the covered fleet.
We are now the sole provider of Air Canada Express services.
And the relationship has never been stronger.
A reminder, our CPA with Air Canada continues to 2035.
We strategically managed our liquidity through successful capital raises and reduced our net debt by approximately 240 million to.
To recharge our financial flexibility.
We continue to generate positive cash flow and have the resources required to focus on profitable growth.
While airlines around the world are still challenged to return to pre COVID-19 profitability, our fourth quarter yielded positive returns of 6%.
And net earnings per basic share or 12.
On an adjusted basis.
Our employees have shown tremendous resilience throughout this crisis.
Have provided safe and high quality services to our customers.
I am deeply grateful for their perseverance and dedication.
<unk> had a record year in 2021, having secured new contracts that expanded cargo operations with pure later and develop new relationships with blue chip customers like transport, Canada, The Canadian Armed forces and general dynamics missions, Canada.
Team is executing very well and the momentum gained in the year, we will continue to positively impact earnings throughout 2022 and beyond.
Last month <unk> entered into an agreement with Sabina techniques to provide onsite service support a dash eight 400 aircraft through voice <unk> XL program. This agreement extends our parts provisioning business into Europe , a key target market and we're very pleased to welcome Sabina to our roster of high quality customers.
I also extend my congratulations to the team at jazz for being recognized again this year for being named one of the best places to work in 2022.
By Glassdoor employees Choice Award.
This is an award that is based solely on the input of employees, who elect to provide anonymous feedback about their job work environment and employer.
Given the challenges and stress many of our employees have endured over the last two years. This is an incredible testament to the positive and can do attitude of our people.
The accolades don't stop there jazz was also recognized in January is one of Canada's top employers for young people for the 10th consecutive year.
Congratulations to the team.
The chorus aviation capital team has done well in a very challenging environment to support our customers and in remarketing, All 13 aircraft repossessed and 2020.
Quarter over quarter, we saw improvements in the overall utilization of our lease fleet and collected 83% of lease revenue recognized in the fourth quarter up from 77% from the previous quarter.
We view this as a positive sign that air travel demand is rebounding, particularly in the domestic markets, where most of the lessees operate.
Restrictions are gradually being lifted worldwide as more people become vaccinated and cases of Covid decline.
The easing of travel and border measures announced earlier this week by the federal government is a positive step for our industry, however, more needs to be done.
Thank you for listening and now I'll turn the call over to Gary. Thank you, Joe and good morning.
Here's how the fourth quarter of this year compares to the fourth quarter of 2020.
We generated adjusted EBITDA of $90 5 million, an increase of $8 $5 million over the prior year adjust.
Adjusted net income was $21 5 million in the quarter, an increase of $13 8 million $2 12 per basic share.
The rail segment adjusted EBITDA increased by $5 9 million due to additional aircraft, earning lease revenue and a $3 $6 million lower expected credit loss provision, partially offset by lower lease revenue related to negotiated lease amendments and decreased earnings due to a lower U S exchange rate.
The <unk> segment's adjusted EBITDA increased by $2 6 million.
The fourth quarter results were impacted by an increase in other revenue due to the increase in third party MRO activities part sales and contract flying it.
An increase in capitalization of major maintenance overhauls on owned aircraft from $2 8 million.
And an increase in aircraft leasing revenue under the CPA.
Offset by a decrease in fixed margin of $2 4 million in accordance with the CPA and.
And an increase in general and administrative expenses attributable to increased operations.
Adjusted net income of $21 5 million for the quarter, an increase of $13 8 million due to a five eight.
$8 $5 million increase in adjusted EBITDA as previously described.
A decrease of $5 million, primarily due to a decrease in unrealized and realized foreign exchange losses.
A decrease in depreciation expense of $3 5 million and an increase of $1 $7 million related to gains on property and equipment and asset backed commercial paper offset by a $3 $8 million increase in adjusted income tax expense and an increase in net interest costs of $1 1 billion.
Net income increased $1 million over the prior period, primarily due to the previously noted increase in adjusted net income of $13 8 billion a decrease in impairment provisions of $27 million.
Offset by a decrease in net unrealized foreign exchange gains primarily on long term debt of $35 4 million and a decrease in income tax recoveries on adjusted items of $3 2 million.
Now turning to liquidity.
As of December 31, 2021 of course is liquidity was $188 5 million, including cash of $123 6 million and.
$64 9 million of available room on its operating credit facility.
Liquidity decreased from the third quarter of 2021 by $69 6 million, primarily due to the redemption of $85 million principal amount of the 6% debentures, which was partially offset by a reduction in restricted cash.
During the quarter of course generated cash flow from operations of $48 9 million other key liquidity changes during the quarter include.
Items that increased cash flow are as follows an increase in security deposits and maintenance reserves of $20 1 million a decrease in restricted cash of $14 9 million items that decreased cash flows are as follows scheduled debt repayments of $50 2 million repayment of the Pryor facility of 30.
Capital expenditures of $18 4 million.
And an increase in working capital of $17 $4 million driven by an increase in receivable from air Canada offset by accounts payable.
As of December 31, 2021, the controllable cost guardrail receivable was $44 9 million. The amount was paid in Q1 in accordance with the 2021 CPA amendments.
As of December 31, 2021, CICS gross lease receivable was $84 million. The gross receivable may increase to approximately $90 million by the end of 2022 due to rent relief arrangements and potential delays in payments.
Leverage decreased year over year due to an overall reduction in net debt of approximately $240 million, partially offset by lower adjusted EBITDA of $18 million.
Adjusted net debt to adjusted EBITDA ratio went from $5 eight at the end of 2020 to $5 four at the end of December 31 2021.
Before opening the call to questions from the analyst community I would like to acknowledge the continued outstanding efforts of our team during 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 star followed by you want on your Jeff Stonestown Uli.
<unk> thousand from Airlines and request from your questions will be bold in there that you have received should do we should the collapsing the building process lease space, Jeff I would like to if you are using a speaker phone. Please lift the handset before pressing any keys.
One moment. Please for your first question.
Your first question comes from <unk> Gupta with Scotia capital. Please go ahead.
Thanks, and good morning, everyone.
So question is good morning, My muscles question is on <unk>.
<unk> ability to re price.
Any diesel contracts.
Perhaps annually on a shot as interest rates increase and the market conditions improve so can you speak about.
The kind of the terms of the pricing terms you can renegotiate that.
Or really talk with clients.
Hi, it's Gary here on the aircraft leases.
They are generally locked in once you sign the lease and as you can note in our disclosure about 98% of our debt is fixed overall. So it's all walked in works together. So once you sign the lease though it is locked in for the term incentives.
We do expect with in an increased interest rate environment.
Lease rates will rise accordingly, so generally speaking there is certainly a correlation between lease rates and <unk>.
On interest rates.
Makes sense. Thank you.
And then you talked about gross lease receivable increasing again this you've got assets really measure it is kind of still continue.
I'm just wondering if you can provide any visibility as to when do you think that needs to see the bulk of the peak will that will be end of this year and what CR.
Visibility for when do you expect that receivable to be collected.
Great.
Yes, so it's Gary here.
The receivables you can see our disclosure on that we still have some deferral agreements that run into next year, a little bit and Thats why youre seeing that.
That guidance.
On the the value will come down over time, it will take several years distinguished Theres no question about that but we're not giving longer term guidance other than this year and then it will take several years distinguished receivables.
That's all my questions. Thank you.
Thank you. Your next question comes from Matthew Lee with Canaccord. Please go ahead.
And congrats on the quarter.
I'd like to first ask about the options you've got to expand the leasing portfolio. Specifically do you have a preference between acquiring assets saw any individual agreement or maybe buying competitor in the space.
Yes.
Generally speaking we've been focused more.
A new sale and leaseback type of opportunities.
But we're certainly not totally focused on that we look at all opportunities including.
Midlife aircraft.
And in some cases older assets.
We do have options as they come to end of life with our.
Our diversified business et cetera.
We continue to talk with airlines other leasing companies in terms of sourcing potential opportunities, there where they're looking to.
Diversify or to divest a part of their portfolio et cetera. So.
We have a broad spectrum.
And so we'll continue to we'll continue to do that.
That's great and then maybe can you unpack the opportunities youre seeing in cargo obviously, the purolator contract is a great start but.
Do you see that becoming a more meaningful part of the business going into 2022 and beyond.
Yes, we certainly look to for that to be a growing part of the business I think we're very pleased with our relationship with purolator.
It's been going very well.
So we see that as an exciting opportunity for us.
We have converted some of our older dash eight passenger aircraft into freighters and we do have a number of them available to do so.
But again, it's it's.
Related to the demand that we see but we do see this as a.
Growing part of our business and certainly opportunity there and we're making good progress it's not a huge part of our business, but we will continue to pursue it as a growth opportunity.
Alright. Thanks.
Thank you. Your next question comes from David Ocampo with <unk> Securities. Please go ahead.
Thanks, and good morning, everyone.
Good morning.
Okay.
On your future leasing revenue kind of assuming no no no new assets here should we see growth in the upcoming quarters as repossessed aircrafts are redeployed or is this going to be offset by.
The leases that you renegotiated specifically aeromexico comes to mind.
It's Gary here, David I think you'll see it be pretty steady maybe a modest increase.
But it should be pretty steady most of the aircraft for backup now.
As you know the remarketing during the course of the year. So there's a little bit of a time lag that you will see throughout there and aeromexico has now emerged from bankruptcy or very close to it and we should see a small uptick there so city to a smaller cake.
Okay, and you guys noted the bankruptcy of Philippine Airlines and coming out of chapter 11.
Kind of when you look at your remaining customers are you aware of any other airlines that maybe on the breaker.
In financial hardship right now.
No I think I think the whole environment has improved frankly.
Frankly around the world with respect to carriers.
We've redone agreements with most of them and those agreements are sticking.
There are still a couple of areas of the world, which are struggling a little but.
We certainly believe that the worst is behind us.
Sure.
No.
Of course, we've taken some provisions as you know in our financials et cetera, which we think very well cover us in terms of where we are.
Yes.
Okay, and then my last one years for Gary when I take a look at.
The leasing businesses operating expenses. Thank you.
Strip out those one time costs it looks like it only came in at around $2 million in the quarter.
And thats lower than basically anything.
That you guys have done over the last eight or 10 quarters or so I was just curious if there's any one time benefits in there or is this a new number that we should expect going forward.
Theres nothing that sticks out I think when you look at the quarter, you're starting to see the <unk>.
Benefits of getting the aircraft back on lease and whatnot. So when you look at the overall results I think.
Quarters, now that's taken off spot, particularly with the revenue and whatnot. So.
And I guess in the past Gary you guys had mentioned that you target like in SG&A percentage of revenue I forget what the number was it is seven or 10%.
Is that still the right number going forward.
Well I think if you look at where the SG&A is year to date, it's going to be higher as a percentage just as we briefly.
<unk> repositioned our fleet and then as we grow we would want to get below 10% sure.
In the next number of quarters, but its going to take time to grow into that but the infrastructure is still there. It's just.
If you go back and look we've taken some hits on the revenue we've adjusted now for that and moving forward as we grow we will get back to something more normal.
Okay. That's it for me thanks, so much.
Okay.
Thank you. Your next question comes from Tim James with TD Securities. Please go ahead.
Thanks, and good morning, everyone.
Yes.
Question on the Kennedy to trade receivables was <unk>.
I realize it fluctuates around quarter to quarter.
You are a bit more than it was at the end of 2020 is there a particular reason for that.
And the guard rail was it's Gary here, you've got rail was pretty significant there in the quarter as you saw in our disclosure. So as you know, it's a $20 million. Okay. So group a fair bit in the quarter and that's with the bulk of that would be that you saw.
And then of course that was paid here in Q1, and so reset itself to zero.
Okay.
And so just so I understand correctly. The guardrail receivable is included in that disclosure that you have on the total I guess total air Canada trade receivables is that right.
I believe so.
If youre looking at the financial statements in the back or.
Yes, yes, just the number I think it was.
I mean it was certainly include must include more gleeson.
<unk> receivable, but I'm just wondering.
It should be include matters.
Did that significant change in it from year end to year on would be related to the gargoyle component of it specifically.
Yes that certainly built up in the ended the quarter. The other thing is it normal receivables that make their way through there.
They may be so related to the operation.
Guardrail is the significant component of it.
Okay. Okay.
My next question just on your new aircraft acquisition plans for 2022, and you've indicated kind of $300 million to $400 million.
I'm just wondering if you can comment at all on any particular aircraft types that you think.
Look, particularly attractive this year or where there may be opportunities, whether it's by OEM whereby jet versus turboprop.
Any kind of defining characteristics that you see as you look out to the balance of the year.
Right.
<unk>.
We've been saying all along that we find the larger regional jets to be particularly attractive.
And sort of a crossover aircraft, which are the <unk> hundred <unk> I think the E twos in particular.
The turboprops are taking a while to pick up the surplus that's in the market. Although you may have seen recently.
<unk> is going to be upping, its production and actually moving more into the freighter side as well, which is which is interesting.
So.
And of course, the 75 seat Jets are generally still in good demand, especially in the U S et cetera. So.
But of course, those would be primarily used assets.
Et cetera, but.
I think what's particularly interesting are the new.
A new generation regional jets.
On the larger side.
100 seats.
Maybe if I can just follow on to that just in particular, the <unk> hundred <unk>, there's been more and more activity.
The demand for new aircraft recently.
<unk>.
Of course their toe in the water there with a few aircrafts do you.
You think that is something.
That continues to grow in proportion or have an increasing contribution to lease revenues recourse or is it a bit of a more competitive market or is there any dynamic that maybe it makes it less attractive.
Well, it's certainly a competitive market and.
There's no question about it but I do see it becoming a larger part going forward.
And when you have these mid range airlines that are operating and looking to move to these newer technology larger regional jets and.
This would be in particular in our target group.
When you look at huge buys from large carriers.
Quite often.
The ground, but the larger leasing companies plan, but in this particular market I think will be more of a niche player. But there are clearly carriers that are moving in that direction that would fit the type of carrier profile that we would target.
As you can see we have five airplanes with air Baltic Theyre and Theyre Baltic is.
A great example.
A niche player.
<unk> been very successful very supported in its home market et cetera. So.
There are other opportunities such as those that we would pursue.
Great. Thank you very much.
Okay. Thanks, Tim.
Thank you. Your next question comes from Walter <unk> with RBC capital markets. Please go ahead.
Yes, thanks very much good morning.
Everyone and congratulations on those recognitions I know in the airline industry, it's a tough.
Tough one through Covid to get recognized that way so so congratulations.
Hi.
Two questions and really I have to and they're core to kind of our view on on your company and the first one is that.
As we go through.
What I hope is the tail end of Covid.
We are going to see a pickup in.
In activity.
And it's going to be first and foremost in the short haul regional friend and family.
On your results of fourth quarter suggested that but now your guidance on Q1, obviously, you're down due to omicron.
My sense is you know what I <unk>.
Hope that <unk> is kind of just you know.
Temporary aspect in your financials and that the second quarter and forward in fact come back.
Along the lines of what we're seeing last fall when you look at your Youre booking curve.
Is that supportive or contradictory to that view is my question.
Okay. That's a very good question.
Walter.
Our equivalent to a booking curve as the number of block hours, we fly.
Because.
We don't have as you know air Canada has the commercial side of the business in terms of load factors in bookings et cetera, and that all translates to us in terms of block hours flown and.
I think I do have some numbers, but I can share with you that I think clearly demonstrates pretty much. What you were talking about in the fourth quarter last year when you compare it to pre pandemic in 2019.
We operated at about 75% of the block hours, we did pre pandemic.
It was definitely up the fourth quarter was going well et cetera, and then omicron struck.
And it looks as though from what we've actually phone and we're starting to see some pickup numbers even in March.
The first quarter now we will be at about 60% of where we were pre pandemic.
<unk>, obviously fall in.
And when we look at our numbers that was the impact of the pandemic of the almond crop I shouldn't say and then though when we look at the second quarter of this year, we're looking at actually the hours that we're planning on right now are about 87%.
Pre pandemic. So you can see that while there is a drop in the first quarter as a result of them Omnicom I think Theres reason to believe that now things are going to pick back up and we're going to get to where we were pre omicron.
So I think those numbers will give you some indications.
In terms of our outlook first quarter, not so great because of these block hours, but definitely in recovery and the other thing.
People are as well is that workday to fix them out.
It really doesn't matter, how many block hours and of course while.
We watch this carefully because it's it's sort of a bellwether of how the industry is going.
It doesn't necessarily all manifest itself in our results.
Which are which are generally fixed.
Okay that is excellent.
Excellent information I think exactly what I was looking for so thank you for that Joe.
Perfect.
The second part of our view and again I'll kind of frame. The question the same way, it's our view that.
Stretched balance sheets, among airlines will not allow them to go out and.
And kind of buy up aircrafts left right and center and perhaps leasing will be an opportunity to use.
Perhaps likely in the early early months and quarters and years.
To ramp up quickly.
To be able to ramp up at all quite quite frankly, given they're stretched balance sheet.
Obviously, you got to get your collections back first in the trend there is good.
We have seen in the last three quarters.
<unk> highlighted a few wins here, but I guess my question is the same thing is when you look at your sales channel in that in that segment.
Are we getting to a point, where you can look down the road and say Hey that is true airlines are going to be leasing a lot and probably perhaps and likely more than they did pre pandemic.
And is there any visibility that you have that could confirm or deny that kind of that kind of view.
Okay.
Yeah, I think I think what you're saying is very true I think more airlines will do this with their damage balance sheets et cetera, a lot of them have been pretty cautious in terms of adding new aircraft or capacity et cetera, and there are some aircraft to absorb in the marketplace that we're grounded as a result of.
As the pandemic I think what we're seeing though is we've seen more or less.
Especially in the regional side, maybe not totally on the narrow body wide body, but in the regional side. There has been I think a little bit of a shoring up over this last little while on some of the lease rates that we're seeing out there and some of the reports that were saying shows that you know.
It has in fact bottomed out so I think we're going to see the increase and this is barring any unforeseen.
Another variant or world crisis, or something like that.
There will be that uptick uptake or uptick.
And we are getting inbound inquiries from from Airlines now looking to do.
More leasing business et cetera, so so very good signs of recovery in the market.
Okay, that's great information, Joe I really appreciate your time.
No problem. Thank you.
Thank you. Your next question comes from Cameron <unk> with National Bank. Please go ahead.
Thanks, very much and good morning.
Obviously theres been some press reports out there regarding potential M&A I appreciate that youre not going to comment specifically on those reports, but maybe a bigger picture.
Question for you just with regards to what if you were to pursue the M&A route to grow your portfolio.
Potential synergies do you see or strategic advantage would there be for your leasing business to have that greater scale than maybe just comment on sort of the more generically on what the potential upside could be to the business. If you were to pursue that route.
Yeah like we said you know, we're not going to respond to speculation in that sort of thing. However.
I think it makes sense that.
More scale brings advantages in terms of a larger leasing platform with manufacturers with financing larger orders.
Things of that nature.
There is there has been dislocation in the market.
For sure with some of the larger lessors.
There's still a lot of assets out there to be picked up.
There's no shortage of rumors and speculation.
But.
And we're certainly keeping our eye on all of these things and looking for opportunities.
Makes sense per course, and we'll continue to do that but.
And through that we would bring and look to bring in some of the advantages that could come from.
From any possibility. So we continue to look at it no comment at this point because there.
There's a lot of speculation, but we will just keep it at that.
And do you think it matters to an airline who they're leasing from I mean is it do they do they prefer to deal with the bigger lessor versus maybe a smaller player or does it make any difference to them.
I don't think it makes a lot of difference obviously larger lessors can do bigger deals in some cases larger airlines don't want to do a whole bunch of small deals, but we have leases with large airlines as well. So a lot of it is relationship based.
No.
Oh in the industry and getting in there and getting in.
In the competitive process.
So a lot of it is driven by that but.
Our focus has been primarily not on the very very large carriers.
But on the mid to smaller side and we're quite comfortable in that niche.
Okay, Great maybe just a quick second question.
You've got a number of aircraft are there that will be available for part out I'm just wondering what youre seeing in the part out market I mean, obviously airlines around the world are turned to fly a little more I mean is there is there some acceleration of demand for part out opportunities here.
Yes, there has been some acceleration of demand and we continue to part out aircraft. So we're very pleased with that business.
And we see it as.
As a good part of our business going forward and it really.
It really helps when we look at the whole lifecycle of the aircraft, which is what we've been talking about for a while and we do have a number of older airplanes sitting there and we look at each part of the opportunity and we have done a number and we will continue to do it. So there is good demand in that area and we see that recovering.
Recovering as well.
Okay perfect. Thanks very much.
Thank you.
Your next question comes from Kevin Chiang with CIBC. Please go ahead.
Thanks for taking my question.
Just looking at some of them.
Some of the growth spend looking at within the within your leasing business.
I guess how much of this is as is.
You looking at.
On a more sustainable recovery in the aviation space.
Versus.
Maybe taking advantage of from.
A market that seems to be a little bit more advantageous for us like Nordic aviation seems to be facing significant issues is it like a market share grab opportunity here that that those windows opened in and that's and that's driving may be more aggressive.
A more aggressive stance for you to take advantage of maybe one of your competitors today.
Yeah, well market share for us as a secondary.
We do as we look at each deal in terms of the.
The financial aspects of the deal the creditworthiness of the customer and of course, what we've been balancing that all against who's our own liquidity.
As we move through here and their own balance sheet et cetera. So.
While market share is nice to have.
We've seen some large lessors with major market share that have not been successful.
No.
We're being very prudent and very careful that's the best way I can describe it I think.
And is it.
I think they for lack of a better word.
We had a buyer's market for you for example ignored.
I think they wrote down with a third of their asset portfolio I think that's going to look to sell planes, which I suspect.
We're not in a great negotiating position.
Buyer of these aircraft or are you finding.
That could be more compelling from an economic perspective, so that even though lease rates might be a little bit challenge here youre still getting back row.
That you typically target.
Yeah, well you know whenever there are buying opportunities you have to look at the asset you have to look at the deployment of the asset because if.
If you buy these assets and you don't have a home for them then it ties up a lot of cash and there are a lot of surplus assets out there right now.
In each case you also have to look at if youre coming with leases attached.
Long the Liza is quality of the carrier again and there are some credits that are out there that have very.
Much struggled and continue to do so so we need to be very very careful and wildly RFID opportunities. What we don't want to do is take on.
Some of these opportunities and then they become problems we want to make sure whatever we act on something like this that we have we have a plan.
Maybe just last one for me when you think of when you think of growing the portfolio.
I think of.
Maybe a strategy pre pandemic it was it was.
And to be diverse across <unk>.
Geographies across aircraft type of cross sell across customers and obviously that makes sense when you're building portfolio, but I think there's going to be.
Just take the officers will be uneven recovery in the aviation market. When you look at region by region does that does that kind of.
Shape, how you want your portfolio to be like and try to limit.
Across that.
Your exposure to maybe Asia Pacific, which is expected to lag. The recovery is your preference to put more planes until let's say North America, and Europe , where the recovery might be faster.
It depends a little bit more thoughtful in this cycle and I don't think thoughtfulness, but is there maybe a little bit more more focus on maybe what geographies you want in your portfolio what is the overall market recovers.
Yes generally speaking.
That's great diversification that's wonderful.
All things being equal, but all things are not necessarily equal in terms of geographies and carriers. So.
We're cautious if something is struggling and you know.
It looks as though it's going to take some time, then we'll look at that extra carefully.
But of course, if it's a geography or a carrier that is robust and that's come back pretty quickly.
No.
We'll look at that opportunity more favorably.
In the short term as the World has an uneven recovery of carriers are uneven.
Will will tend to go more to where the real.
The floor is there and we're comfortable with the investment.
And as I said some of these continue to struggle. So we're not parts of the world are certainly not out of it yet I don't think the world is but.
It's headed in the right direction.
That's that's very helpful. For me. Thank you very much for taking my questions.
Thank you, ladies and gentlemen, as a final reminder, if should you have any questions. Please press star one.
Okay. Operator, it seems there are no questions. So we will conclude the call.
<unk>, everyone for joining us today, and we look forward to speaking with you again soon.
Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and ask that you. Please disconnect your lines.