Q2 2025 Air Lease Corp Earnings Call

Good afternoon. My name is Regina, and I will be your conference operator. Today, at this time, I would like to welcome everyone to the early second quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you'd like to withdraw your question, press star 1 again. We kindly ask that you limit your questions to 1 question and 1 follow-up. I will now turn the call over to Mr. Jason Arnold, head of investor relations. Mr. Arnold, you may begin the conference.

And President Greg Willis, our Executive Vice President and Chief Financial Officer, earlier. Today we published our second quarter 2025 results; a copy of our earnings release is available on the investor section of our website at www.aircorp.com. This conference call is being webcast and recorded today, Monday, August 4th, 2025, and the webcast will be available for replay on our website. At this time, all participants in this call are in listen-only mode.

Before we begin, please note that certain statements in this conference call including certain answers to your questions are forward-looking statements within the meeting of the private Securities. Litigation Reform Act, this includes without limitations statements regarding the state state of the airline industry, the impact of aircraft and engine delivery delays, our aircraft sales Pipeline and our future operations and performance. These statements and any projections as to our future performance represent, Management's current estimates and speak only, as of today's date. These estimates involve risks and uncertainties that could cause actual results to differ materially from expectations. Please refer to our filings, with the Securities and Exchange Commission for a more detailed description of risk factors that may affect our results.

Air lease Corporation assumes, no obligation to update, any forward-looking statements or information in light of new information or future events. In addition, we may discuss certain Financial measures such as adjusted. Net income before income taxes adjusted diluted earnings per share before income taxes and adjusted pre-tax return on equity which are non-gaap measures a description.

Of our reasons for utilizing these non-GAAP measures, as well as our definition of them, and the reconciliation to corresponding GAAP measures can be found in the earnings release and 10-Q that we issued today.

This release can be found in both the investors and press section of our website at airless corp.com. Similar to Prior quarters, given ongoing litigation, we won't be able to take any questions about our Russia, Fleet insurance claims.

Lastly is a reminder unauthorized recording of this conference call is not permitted. I'll now turn the call over to our chief executive officer and President John plugger, John.

Thanks Jason. Good afternoon, everyone and thank you for joining us today.

In the second quarter, a lease generated revenues of 732 million and 3.33 and diluted earnings per share.

Results benefited from our new aircraft deliveries, healthy gain on sales, increasing portfolio, yield, end-of-lease revenue, and another quarter of significant Russia Fleet insurance proceeds.

Fleet Network value and book value per common. Share, reached all-time record levels in our company's history as a as of the end of the quarter.

Expanding on our Russia insurance recoveries, we recognize a net benefit from insurance settlements of $344 million during the second quarter and expect to recognize an additional $60 million net benefit in the third quarter.

To date, I'm very pleased to say that we have recovered or signed agreements to recover 104% of our initial Rush of Fleet right off.

We purchased 12 new aircraft from our order book. During the second quarter, we added approximately $890 million in flight equipment to our balance sheet and sold four aircraft for $126 million in sales proceeds.

The weighted average of our Fleet Rose slightly quarter over quarter to 4.8 years while weighted average. Lease term remained unchanged at 7.2 years.

Fleet utilization remains 100%.

As of mid-year, we've delivered about $1.7 billion of aircraft out of our expected outlook for full year order book deliveries of roughly $3 billion to $3.5 billion.

At this point in time, we believe we are likely to hit the upper end of our full-year expected range.

We are anticipating around $600 million of deliveries for the third quarter, and will provide a fourth quarter. 25 delivery Outlook update for you on our next earnings call.

moving on to the aircraft sales, our intent is to continue the pace of aircraft sales to maximize available capital

To that end, our sales pipeline is sizable at 1.4 billion up relative to last quarter and all at an attractive gain on sale margins.

We continue to expect around 1.5 billion of aircraft sales for 2025 in total and are projecting 300 million of sales for the third quarter, with a balance to close in fourth quarter of 25.

This quarter is particular. Sales volume came in below our expectations due to the timing of anticipated closings, which fell outside the quarter.

Our gain on sale margin for the quarter was high at approximately 16% reflecting continued. Strong aircraft demand in the secondary Market.

Robust, and our order book placement activity reflects this strength.

Lease rates in turn remain strong as well.

Aircraft supply constraints continue to persist, perpetuating the strength of lease rates and aircraft values, and are expected to remain this way for several years into the future, as we've highlighted many times in the past.

Our order book is 100% placed through 2026 with only a modest number of placements remaining for 2027.

Le extension activity also remains high with nearly all customers choosing to extend rather than let aircraft go to competitors or other airlines.

And the lease rates we are garnering on, these extensions are strong higher than a year or even 8 months ago, including recent widebody extensions of A330 in Boeing Triple 7 aircraft in various regions.

Looking at our order book, we did cancel our order for 7 a350 freighter, aircraft

We think the a350 freighter is a terrific freighter, but since we made that order in December of 2021, we simply decided to stick with new passenger, airliners versus venturing into new freighters.

Contractually the majority of our a350 freighter aircraft were more than a year late.

This cancellation frees up more than 1 billion dollars in forward capex. Commitments making that Capital available for other alternatives.

On that note regarding capital deployment, let me just say that we are very disciplined buyers of aircraft. As we have shared in prior quarters, we still do not view the pricing of new aircraft orders to be attractive.

We are entirely focused on doing what's best for our shareholders, which includes both a commitment to our long-term stock performance and maintaining a strong balance sheet.

We’re pleased with our Russia insurance recoveries and liquidity position, including just now, getting back to our leverage target.

With our enhancement Financial flexibility. We are carefully considering opportunities to return Capital to shareholders.

It's important to note that despite tariffs, geopolitical and macroeconomic uncertainties, conversations with our customers remain positive, with some continued note of caution towards geopolitical uncertainties.

On a positive note for the backdrop of airline operations, further declines in fuel prices have been very supportive of airline profitability as a whole. Additionally, U.S. dollar weakness has been beneficial for the profitability of international airline carriers in particular.

On Friday, the luanza group reported a 27% rise in second quarter adjusted. Operating profit, due to Loyal oil, prices strong us, demand and robust performance of its cargo at mro units.

Similarly, last week, Air France-KLM, our largest European customer group, reported an operating profit up 44% year-on-year due to strong yields and gains on its premium offering.

Globally, passenger traffic continues to expand at a good pace overall of around 5% year-to-date, according to the latest IoT data.

Recent commentary from several US carriers reflect optimism. That demand Trends are reversing course to the positive in the second half of the year.

As most of you know, about 90% of our airline customers are outside of North America.

We were very pleased to see 040 tariffs on Commercial aircraft and parts in the US. EU tariff agreement announced last week.

The impact of a major approach. Acted us EU tariff battle on the overall Aerospace industry. And supply chain could have had significant impact on manufacturers Airlines and their broader macroeconomic environment as well and would be particularly tough on a sector that has already dealt with plenty of disruptions over the past 4 or 5 years.

So, very good news that a negative outcome has been successfully averted, particularly given the scale of the aerospace industry within these two markets.

We believe a clear precedent has now been set globally for exemption of commercial aircraft from high magnitude tariffs. I will also remind you that as part of our lease agreements tariffs are the responsibility of our customers and that our purchase agreements with the oem's limit, their ability to increase prices via escalation caps.

In conclusion, we continue to see bright skies ahead for our business portfolio. Yield on our Fleet are set to Trend higher. Primarily as a, as a product, a strong lease rates, on new deliveries strong, extension rates, and Co restructuring maturities,

We've received significant insurance proceeds as I've highlighted and fixed rate Market financing, uh, rates have continued trending lower as the yield curve continues to slowly normalize.

I'll now turn the call over to our CFO, Greg Willis, to offer more detail and color on our financial results. Greg.

Thank you, John, and good afternoon, everyone. During the second quarter, our lease generated total revenues of $732 million, up 9.7% over the prior period.

This increase was driven by a 13.5% increase in our rental Revenue driven by the growth of our Fleet and increased and ended at least revenue and our portfolio. Yield

As we've gotten in the past, we continue to expect that our portfolio. Yield will will remain on an upward trajectory due to the roll off of Co era leases the seasoning of our existing Fleet and Lease extensions, despite the effects of selling aircraft at higher yields, which I'll address in more detail in a few minutes.

In prior periods, we included maintenance revenue in the rental revenue line item. However, going forward, we will now break out maintenance revenue as a separate line item on our income statement for increased clarity.

Maintenance revenue in the quarter was up $16 million, driven primarily by end-of-lease income received during the period.

And the lease revenue is highly dependent upon the timing of returns.

Given the current high demand environment that we are in, we do not expect to receive significant amounts of NWS income in the remainder of 2025 as a vast majority of our leases are set to extend with the current operators.

As a reminder, extending leases at market rates further enhances the value of our aircraft, and we typically capture the value of end-of-lease income in the ultimate disposition of the aircraft.

sales proceeds for the quarter total of 126 million from the sale of 4 aircraft, this compares to the prior period, where we sold, 11 aircraft totaling 530 million in proceeds

Aircraft sales volumes were down this quarter due to the timing of aircraft sales. As we have said, in the past, it is difficult to forecast, when aircraft sales will ultimately closed due to a host of Airline customer legal and jurisdictional matters.

However, these sales generated approximately $17 million in gains, representing roughly a 16% gain on sale margin, which is at the top end of our performance in recent history.

Beyond gains on sales, we also benefited from an increase in our management fees and other income.

Turning into our aircraft sales pipeline. It it currently sits at 1.4 billion with healthy, gain on sales, margins above our historical, average of 8 to 10%

It's also worth noting that the aircraft in our pipeline are carrying asset yields that are significantly lower than where they existed in prior years. Therefore, this should help dampen the impact of aircraft sales on our portfolio yield trajectory.

This is driven by several factors including our bases, in the aircraft, which directly benefits.

From our discipline approach to aircraft investment, the types of aircraft in our Fleet and improve it and Improvement, in underlying credit, quality of our customers, as well as improvements in the interest rate environment for our buyers.

Moving on to expenses interest expense Rose by approximately 19 million year-over-year and driven by a 29 basis, point year-over-year, increase in our composite cost of funds to 4.28% and quarter rent. However, relative to the end of the first quarter, our composite cost of funds. Rose only 2 basis points.

Higher financing costs and debt balances were the primary contributors to the year-over-year increase in interest expense. At the end of the second quarter, roughly 77% of our borrowings were at fixed rates versus floating, inside our 80% target.

We continue to benefit from our largely fixed rate financing structure, which has meaningfully moderated. The impact of an elevated interest rate environment at the front end of the Curve.

Depreciation expense continues to track the growth of our Fleet turning turning to sg&a and stock comp, we recognize the majority of our of the non-recurring expenses, related to Steve hazy's retirement in the first quarter.

Resulting in meaningfully lower SG&A and stock compensation expenses this quarter. I do want to point out that this quarter, as we previously mentioned,

We have an additional 2.2 million in stock-based compensation expense related to Steve hazy. Steve hazy's retirement which in the last which is the last of these worth time related expenses.

Sgna is a percentage of Revenue was flies compared to the as compared to the first quarter. Excluding the non-recurring retirement expenses and was flat as compared to the prior years quarter at around, 6.8% of Revenue.

We expect this number to trend lower over time as the fleet continues to expand and legal expenses related to our Russia fleet litigation wind down.

As John noted earlier, we recognize a net benefit of $344 million in Russia. Fleet insurance settlements and total represent approximately $2.43 per share in the quarter, which, in addition to the operating results, both boosted our book value per share to $65.53.

Stands at approximately 104%.

Moving on to our financing activities. As we highlighted, the last quarter, we believe that we are largely able to self-fund our order book with expected, operating cash flow and sales activity. Therefore, the primary financing needs remain that remain are related to the roof financing of our existing debt.

While the front end of the curve remains elevated, we have seen market financing rates improve measurably on term debt issuances within our typical targeted maturity range.

We remain opportunistic in our approach to refinancing needs.

So, we will continue to monitor the capital markets for attractive entry points.

We also maintain well, positioned. We also maintain well positioned for further normalization of the yield curve. We leave our patients have served us. Well, our debt to equity ratio declined, at just below 2.55 times Target following the recognition of additional insurance settlements and our operating results of this quarter.

We anticipate having more financial and capital flexibility over the next several years. The cancellation of our A350 freighter order further reduces our capital needs for financing new aircraft deliveries in future periods.

as always, our strong liquidity position of 7.9 billion 31 billion of unencumbered assets and 29 billion dollars of contracted rentals, continue to continue to remain key, pillars of financial strength for our business,

To wrap up, we were very excited about the Tailwind. We foresee great potential for our business at present.

Which we see which we see as propelling us forward with EPS growth and Rising profit margins and Roe ahead with that. I'll turn the call back over to Jason for the question and answer section of the call.

Thanks, Greg. This concludes our prepared commentary and remarks for the question-and-answer session. We asked each participant to limit their time to 1 question and 1 follow-up.

Operator, please open the line for the Q&A session.

To remind everyone, in order to ask a question.

Terry ma with Barclays. Please go ahead.

Hey, thank you, good afternoon. Um, I just want to start out with Lisa's expirations and maturities. Um, you guys had Quantified about 5 billion of lower yielding leases um that are expected expired next 2 years. Um, and that should help kind of contribute to a 150 to 200 basis point Improvement in yield. So I was just hoping, um, maybe for Mark to Market of where you are in that process, how much that 5 billion has kind of been extended or renewed um and kind of what the trajectory is for Lucio. Just kind of going forward from here.

Sure, Terry, I'll take it. Um, right now we're making, we're tracking exactly along the same path that we had set forth back in q1. Uh, when we put forward those those uh, those numbers. I don't have an updated number of what percentage of the 5 billion dollar roll off where we are currently. Um, but I will say that our guidance of 150 to 200 basis point Improvement is still valid. In fact, actually the with the change in Dynamic of our sales pipeline coming in with lower yields on those assets is actually helping. But we're going to hold off any further on updating guidance on further yield improvements at the current time.

Got it, okay and then maybe just on Capital allocation you guys are you know now within your leverage Target, you expect um some additional recoveries in the third quarter and you also mentioned um the additional billion dollar Capital kind of freed up from the trader cancellation. Uh maybe just kind of talk about how you evaluate the relative attractiveness of kind of BuyBacks um to your other kind of opportunities.

Yeah, hi. This is John. I'll take that. Yeah, look BuyBacks are a very uh attractive looking uh form of capital allocation. As we've mentioned in the past our point about just reaching our debt equity ratio is simply that we are building, uh, a very, very strong balance sheet with excess Capital such as any Capital moves, we or Capital deployment. We we might make uh,

Will be meaningful, uh, at the same time, uh, give us the ability to retain a very strong balance sheet, with no threat at all to our rating. Uh, our investment grade ratings,

Okay.

Our next question will come from the line of Katherine O'Brien with Goldman Sachs. Please go ahead.

Hi. Good afternoon everyone. Um,

Pretty high on the list. But just we kind of love like the punch list for what looks the most attractive to you guys now. And, and, and thoughts on if there's more Capital to deploy stuff. Thanks sure, sure. Look, uh, the evolving landscape with, with customers, um, and, and their perspective, own order books. Um, are always there and we always do consider that. However, um, as I mentioned in my remarks, um, continued strengthening of our available Capital with a view towards our shareholders, uh, is equally if not more so attractive at this time. And so we continue to build capital on that basis.

That makes sense. Um, and then maybe just on Russia, I know you're limited in what you can say, but I guess with the $60 million settlement, is there more or less like, are you expecting? You still need to go to court this fall? Or, I guess, just trying to get a sense of like what's still outstanding? Thanks so much. Thanks, Kate. It's John again. Uh, listen, we I think we've indicated $60 million for the third quarter, but we are still in litigation in London and I'm just simply not able to comment further.

Okay, got it.

Our next question will come from the line of Moshe Orin, Buck with TD Cowen. Please go ahead.

Great. Thanks, and I guess we'll go 3 for 3 talking a little bit about Capital, maybe just to frame the question slightly differently.

You know, your returns are improving, and they're expected to improve. Sounds like they, you know, Greg, they could be improving a little faster, even if the yield, you know, kind of steps up at a faster pace.

Can you relate, you know, for us how you think about like how much of the capital, you know, or like how much excess capital you could be generating and how to think about that in the context of kind of improving returns.

Yeah I I don't think we can we're not prepared to give a number of how much excess Capital we have over the next several years. I mean very clearly a lot of its dependent upon uh our sales activities which currently are very strong. I think you are going to want to see us continue to execute upon our sales pipeline as well as of course, new additional sales around those levels to create more Capital but as a reminder, we just got back down to our debt, to equity Target. And I think it just takes a little bit of time to build the capitol to be in a position to evaluate what to do with that excess Capital that, that everybody's forcing us having motion. Let me just reiterate, uh, 1 of my comments in that.

uh, you know, 1 of the most important considerations uh when you're asking sort of directly about size is that whatever we do in capital employment, it's meaningful whether to shareholders or or anything else and uh at the same time,

Uh, to be able to, as I said, retain a very strong balance sheet in the view of our bondholders and the rating agencies. So just, uh, we're trying to exercise our best judgment. But anything we do, uh, is going to be meaningful.

I I certainly appreciate that, maybe maybe to kind of uh follow up on the the comments about a aircraft sales you know the sales this quarter were lighter but you've got a you know an expectation of that picking up, you did cancel some orders as well. And so you know like maybe just if you sort of could you could you outline for us, how you're thinking about how much of the fleet you will put up for sale? Obviously, we know what your plans are for the back half of this year, but but as you think about it in 2026, you know, is there a way to kind of Dimension that for us? Yeah, I mean, we're targeting a billion half this year and I think we're targeting about the same levels for the next several years, which should create additional capital. And I will point out the a350 freighter, cancellation mainly, impacted 27 and 28 in terms of capex needs. So, I think those all are coming together and and um,

We'll continue to execute and update you on where we are from an Access Capital perspective. In other words, just keeping the same pace, Moshe, where we've been. We're very comfortable with that. We think we can execute it from a sales perspective, and the bottom line is that it just maximizes our opportunities. So we don't see accelerating sales beyond that.

Circumstances could change, but I certainly don't see it. However, at the same time, we love the building of capital from that level of sales, so just expect that to continue.

Thanks very much.

Our next question comes from the line of Hillary Kokando with Deutsche Bank. Please go ahead.

Uh are you expecting end of lease revenues to you know kind of go down again next year, um, due to like higher extension rate, or do you expect it to like reverse next year or or the year after like how you're thinking about that?

I think you probably should expect a sort of the same levels that you saw on 25 is in 26. Assuming the environment Still Remains strong. I think that's probably a fair number and not every single lease will extend because maybe we don't want to extend with the underlying carrier. And that case, we take the airplane back and, and take end of lease income. So I, I think it's a bit of a balance, but I think, probably what we've done this year, is probably fair for next year.

Have a similar level. Okay? And then, um, I think last quarter you mentioned that, um, you know, obviously you mentioned it again that the rates on the extension to a higher than the original rate and then last quarter you actually said there were some as much as 50% higher than the original rate. Are you still seeing like, you know, high accentuates like that. Um, you know, are you still seeing that level? And then, um, in terms of like the the rent are they, you know, 5 or 6 years or are they are they much shorter?

The extension rates that we're doing again, this quarter were higher than what they what, the, the previously carried. So, we're still feeling very good about that, and that's why we're still feeling very good about our overall portfolio. Yield trajectory, uh, the market remains really robust, especially, as we take out a lot of these Co there are leases

And are they are they long in terms of are they like 5 or 6 years in length or yeah they're they're they're they're standard extensions from 4 to 6 years. Um, sometimes longer sometimes shorter but on average they're in that that area.

Got it. Oh, just what what what is good to see is that the widebody extension?

Uh, we are pointing a little further to longer extensions in the 4 to 5 uh area range. Uh, that's pretty much a slam dunk for single-aisle, but the wide bodies are now at that longer extended term length as well.

Great, great to see.

Helpful, thank you very much.

Our next question comes from the line of Jamie Baker with JP Morgan. Please go ahead.

Oh, good afternoon, gentlemen. So just 1 question from us and, um, I guess it sort of Builds on Katie's question. Um, she referenced the air cap call the topic of sale East backs came up. And obviously, they're there, haven't been a ton of transactions in that space as of late, and what recent deals have gotten done. It sounds like the economics are skewed more in favor of the airlines rather than the, uh, the sponsoring less source. So, basically, are caps view is that as OEM production rates increase, it could actually improve to strengthen economics. So, that's the basis of our question and

Production rates begin to rise. How do you, I guess, how do you try to gauge the impact that that will have on the sale leaseback market, the extension of current leases, and your order book dynamics at Air Lease? Thanks.

consider is that even with production rate increases even with those increases which have not all been achieved by any certain

There is still a shortfall in supply for the next 3 to 4 years, and that assumes those production rate increases. So, we do fully expect those production rate increases to go into effect as to how it will impact the sale-leaseback market.

Remains a little unclear. But our litmus test really is very fundamental and hasn't changed. We know what we pay for aircraft, we know we get for leases. Mhm, we're happy to take a look at any sale lease back opportunities.

But I don't think.

At least sitting here today, it's hard to see that there's going to be a material shift in that marketplace.

Versus the order book Marketplace. I think that sale at least I Mark Marketplace. Will still tend to be uh, overly competitive uh, and will probably still return a lower release. Having said that we are completely open on that aspect as well. If we find a unique opportunity with an airline uh, perhaps to do a sale lease back on a certain percentage of its orders in connection, with placing our orders. We're very happy to do that.

Okay. That'll do it. Thanks a lot, I really appreciate it. Take care.

Our next question.

Just a quick question, and then a quick follow-up.

Are you starting to see, um, reasonable?

Um,

production stability out of the Oe.

Ron, Sean. Um,

Well, I would say yes in the following sense. Um,

November of 24. We got our last forward, our last delivery projection Outlook from Boeing. I must say that they've lived up to that and the quality has been good and high.

Uh, now that clearly they've not stepped to 42, I think that they have projected that for the end of the year, I think they will do.

On that time frame if they are ready. But I also think that if they are not ready they will not

Um, Airbus there has been no further slippage since February March, where we were notified quite much to our surprise of of an, another Year's delivery and most of our single aisles.

Going on in Q2 and Q3.

Uh, there has been no change there either, but I would just remind you that Airbus today and a single line of production rate is, it is a much higher rate than Boeing.

So just by that, I would say that there perhaps is still a bit more risk in the Airbus production rate, I could be wrong. This is just I'm just giving you my gut feel here.

Um, so that's the best way I can answer it.

Got it, got it. And then maybe if we just sort of,

Focus a little bit more on the quarter.

And when we think about kind of the the recovery here, you know, understanding that you know the co error contracts, pressured yields and they last for a while. But I think you guys got it for yields to Trend higher over the course of the year and it and it does seem like we backtracked a little bit in the quarter and is that just because some aircraft with some higher yields on them were sold or, you know, how how should we think about that?

Increased during the quarter. Um that that's the numbers we're seeing and we're happy to share with you the details. But if you look at it on an average asset basis,

Uh, they actually increased this quarter, and we expect them to continue to track upward over the next several quarters.

Okay, great. All right, yeah, thank you. No problem.

Our next question is a follow-up from the line of Katherine O'Brien with Goldman Sachs. Please go ahead.

Hey guys, thanks for the extra time. Um can I just was wondering so you know. Um, can you just give us an update on on demand from Airline customers, obviously with the extension rate and some of the commentary? Um, you made for some of the, you know, strong results of European carriers. Um, and the prepared remarks, you know, sound sounds like it's business as usual was there. Basically, no impact around the tariffs outside of, maybe the US that you've seen over the last couple months. Um, I just, I just guess I'd love to hear like, how conversations about, um, growth and taking new deliveries, and demand for orders are founding with the Airlines versus where they were in January and April, if there was a difference between January and April. And now, thanks so much, that's Katie. Uh, well very clearly, I can say that. As for the passenger commercial aircraft, there's really no change at all in, uh, the positive, uh, um,

momentum that we're seeing and and and aircraft demand overall, um, in fact, you know

It's the same, or perhaps even a little greater in certain aircraft types, such as the A321neo.

Where I do think there has been an impact though, uh, from tariffs has been in the cargo markets.

Um I think the freighter markets have had a little bit more fluctuation in in this in this era that we're current. The last, you know, several months, uh, in the Tariff era as I would call it and that kind of remains to be seen. Uh and for example, that was 1 of the things that that we thought about referencing our age of 53 or order.

So I would say, uh, again there has been a little bit of temporary caution, but primarily it's been on the cargo side. Not that we are a huge provider of cargo aircraft; I need to be very clear. But our sense is there has been a little bit of caution on the cargo markets. But really not the passenger aircraft demand.

Got it. Really helpful. Thanks for the extra time. Sure.

And there are no further questions at this time. Mr. Arnold, I turn the call back over to you.

Thank you all for participating in our second quarter, call. We look forward to speaking to you again, next quarter, Regina, thank you very much for your help, and please disconnect the line.

This concludes today's conference call. You may now disconnect.