FTAI Aviation (FTAI) 24 Jul 242024 Q2 Earnings call transcript

Company Profile

Participants

Alan Andreini	executive
Joseph Adams	executive
Joshua Sullivan	analyst
David Moreno	executive
Hillary Cacanando	analyst
Giuliano Anderes-Bologna	analyst
Kenneth Herbert	analyst
Brandon Oglenski	analyst
Stephen Trent	analyst
Brian Mckenna	analyst
Myles Walton	analyst
Sherif Elmaghrabi	analyst

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Second Quarter 2024 FTAI Aviation's Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would like now to turn your conference over to Alan Andreini, Investor Relations. Please go ahead.

Alan Andreini

Michelle. you, Thank to Second like all the to I XXXX welcome Earnings Aviation Quarter Call. FTAI would you

Joining me David here Officer; today are Joe Adams, our Operating Financial Chief Angela our Chief Officer; our and Moreno, Officer. Nam, Chief Executive

being to have mode please release our press call note webcast. to if that website, and already and not open you on you encourage this an have presentation the we done We listen-only posted download our is public investor in which so. is Also,

will those we non-GAAP comparable measures the addition, found some In be EBITDA. financial be directly during discussing including in today, The most supplement. the GAAP can the measures call measures reconciliation earnings of to

statements in future to and statements, the I over made I earnings. call will certain and statements Before Joe, non-GAAP including materially actual the by differ quarterly be uncertain you to encourage These forward-looking the are like their review report nature, disclaimers to statements, regarding review would filed to and measures turn release our from contained today financial risk may point with the results. that in out press factors our regarding presentation and We SEC. investor forward-looking

turn to like over would call I Now Joe. to the

Joseph Adams

paid August XXth date start August pleased record today, be you, our Thank To XX Alan. a shareholder to dividend announce based a of public consecutive since on I'm per inception. will $X.XX share our dividend as on XXnd and company XX. Dividend of

for is let's the Now key EBITDA. adjusted turn to The us numbers. metric

of XX% QX $XXX.X to XXXX, XXXX. $XXX.X in with this of QX QX million XX% EBITDA $XXX.X of compared adjusted is We year in up million which compared and year. strongly continued the to in million up

Products the number our and of $XXX.X Other. segment quarter, million Aerospace negative million $XX.X was second from comprised from from X.X% and EBITDA our the Corporate During Leasing Segment, $XXX million

at quarter, of a $XXX leasing. $XXX million to now had leasing in component million came million Leasing QX versus in for the The QX EBITDA. $XXX of pure posting $XX great million XXXX. approximately for Turning of QX

value million. demand for million. a book our EBITDA XXXX, the we million in million versus $XX summer $XX.X continuation of which sold generate exceptionally million gain strong we to Hemisphere Northern in expect $XXX of on season, a in assets travel robust gains Additionally, now asset $XXX for prior includes assets of estimate of $XX and With sales

Aerospace with $XX.X general Products million EBITDA excellent had growth from seeing of margin We're our raising up feel the in to million estimate for about products in in yet $XXX quarter overall XXXX $XXX EBITDA $XXX prior aerospace to an good at XX%. of business estimates aerospace products million. another EBITDA tremendous million, and of our

for at are and CFMXX demand We Montreal cases, costs. XXXX estimate $XXX to our looking EBITDA versus ahead, expect not Aerospace experiencing between two we million, high, modules is Miami now Overall, while of counting and very our expansion also and aviation remains Products our in lowering engines $XXX increasing million. to million to refurbished in efficiencies other or, corporate original million be $XXX facilities $XXX maintenance controlling as margins some annual for in

leasing X billion aerospace And $X of of corporate XXXX, EBITDA, about generating of from finally, in million $XXX ago, outlined financial products. we first goal years from comprised $XXX our and million

resetting this through So the ahead period halfway time we're we're that now and target. of plan,

million EBITDA and of EBITDA. in Products XXXX leasing $X.XX new Aerospace $XXX million of $XXX comprised goal billion Our of is EBITDA of

With to back Alan. turn that, call I'll the

Alan Andreini

the may you Michelle, call to Q&A. Thank now you, open Joe.

Operator

from The Jason first question Stanley. comes Holcomb ] with [ Morgan

Unknown Analyst

be and XX%. could great grow to surpass could about margin engines. CFMXX continue you last quarters, speak if you The VXXXX how It as path the that we've may where you Within margin it to Aerospace talk EBITDA Products, you of you've seen great would here the historically target between you target. see around would from that mentioned if and differ be couple the you both Also, going margins develop that business. of

Joseph Adams

are we and question. it's mentioned Great. going are flat as in Yes, trending Thanks It's revenues the up, up remarks, our margins -- expenses we seeing fairly our down. I -- and or are for either the are basic.

so the revenue is in side And where, realize, is supply. as can the really you demand-based equipment short

are Turn shops times maintenance longer. at getting

So on engine available. premium having prebuilt or it a puts that a module means

significant do people higher controlling prices that the So engine and by to for actually same higher more teaching in basically own and We're get At labor a we're do facilities, through controlling the that we can we have with generate it customers. high-volume running we cost the savings and slightly in time, facilities. manner. -- still costs the our specialization on

So curve do process get learning it's and you more where more frequently. at you a and is better better it it

it. going to of part demand. to material, going we when And we're about getting repairs is Where it our that's need needed, So be done smarter advance. used the forecasting it, also in are getting serviceable

-- we're we're used about more efficient using So smarter using and materials.

the up, both margins. on expenses sides that we is really of equation, it's revenue growing down So see

see We we Lockheed close will savings on Martin. when also increased

we we so do experience with more generate as will get facility well, better to that XX%, And and we continue the think grow see we towards that and trending margins that, volume. and as more

coming and today the So future also years. near for for the outlook a positive pretty for

engines, would the versus engines I the good margins, for would times through not to say seeing high. your turnaround VXXXX getting also I other will on shop. dilutive to And we Whitney CFM, question continue seeing deal we've good Pratt have We're say & and demand be that on those said we're extremely Pratt that. -- very on

good that as expect be the same than CFM So or as that, or we will continue to side. better the

Operator

from Jefferies. comes question next The Sheila with Kahyaoglu

Unknown Analyst

[indiscernible] This is Kyle for on Sheila.

Joseph Adams

Hello.

Unknown Analyst

watermark. kind not and really trending like is It's but the EBITDA half the of nice first quarter of margins Aero in here growth, XX% said, the Very products. kind you towards just now

Lockheed that throughput facility is comments, modules. within for opportunity productivity, deal the drilling that the opportunity the second the to So thinking there the in Piece-Part kind of and close on means what as in and facility. the it the about just are going maybe for margin Joe, half you about your How

Joseph Adams

Yes.

good So question.

that operations. about CFMXX. once savings think million I on the annum initially Overhaul indicated $XX just per on close we of we've we expect on

that took really So we Miami quite add when percentage see the yet, X to think facility. X but that should that points from of efficiency, I to haven't Then in improvement the did closing. an we control just we margins the baked

a increase We've person. significant throughput per seen pretty in

we don't our it. hands expect trend have on we that although facility, So yet a similar in

time, see fully accomplish it before. we've done is something then because don't repair there's in lot and think for we've quite which really capability was Lockheed business, it's lastly, we any So reason able developed. we'll about be the of to a And that incremental to Martin not Piece-Part and some facility talked we the that

Piece-Part then going development of the we'll repairs we repairs. our parties develop accelerate to new repairs we more So the for are engines, business, own third do and for

indicated, XXXX you from And to of on EBITDA million expect incremental that. so probably I've not potentially generate there, over starting then $XX an probably from until we'll growing to really but and update we that that $XX million

look we millions But at we see new, engine dollars find the of on look at every lying we floor. something -- time and we the this

-- are that it's big dollars. we so So there's pursue many that can opportunities

we'll said what we're we're keep. This So And of that going always years. we've improvement our the X near last -- is to optimistic we're continuous the as list of over nowhere opportunities. end very X,

Operator

The comes Benchmark next The Company. question witH from Josh Sullivan

Joshua Sullivan

this airline for is here. quarter relative What the versus an point? factory module the time market the on at or open turnaround or using Congratulations lease the

David Moreno

I can This Yes, David. is that. take

So XXX the from turn seeing typical days XXX we're days. time is industry what anything to

XX on time days. to do module, -- from build to actually right? And turn that anywhere depends the about days module module actually a XX to X Our modules XX execute module to is is on to then

module X versus reasons, So and from And times industry we're to they're up swap Miami. days the customer's in a predominantly in are longer. XXX in that Number seeing XX right? again, getting I we long days. And is turn better capacity and in four think much doing position to one a for we're Montreal have XXX perspective,

is service program. three to mentioned repairs use parts. Number capacity we at Number access have have two can Lockheed, where access we So have the Joe is and via AAR to our we what repair is material workforce. the we

the we since our four, mixing, as number well flexibility have of modules it's planning. And matching fleet as

of times modules the down So key than see more one of into as for a go accelerating and more [indiscernible], MRO. demand is attributes faster we because traditional modules product it a is turn think I

Joshua Sullivan

then inorganically And an organic see opportunities the it. that expansion. repair follow-up Is bolt-on Piece-Part on a you Or Montreal? at do effort? business to as Got just

Joseph Adams

Both.

last of might some lot parties the base conversations that with we've another our X at in is case for alternatives. that in industry. is working business be different of we think but which years been there organic, And a have the organic player two, looking with plus the engaging different that combination I

takers. So spent Piece-Part there's year, industry It's would we enough think million that -- we operations realized us to support, on at we'll $XX whatever a no it's math look with and big the are is and of and not had on all third as take buyer we open-minded -- marketed And the and ever globally. us. always and pretty parties in we're we order called a services -- last It's over where I one the flexible care it. the a repair product capacity amazing. business

are of very there's grow very, and that business we at a things -- increase of that. do to lot that we're just think So the can beginning that we

Operator

Cacanando The Bank. Hillary next question comes from Deutsche with

Hillary Cacanando

this mentioned had would million. internalization You about be from previously year savings $XX that

from that could expect you're XXXX we And beyond? think you that given number for number that XXXX? internalization now And raising about for does more guidance, and should change? how savings So

Joseph Adams

expectations yes, go the year this and our for -- XXXX. of for we've increased out We -- up will it year as

time million and of will that $XX indicated higher years than to we had or do internalization that at the So and $XX annually, year, this that. next of save that $XX the we we which the potentially we'll in least million number grow think million would at couple

a it's of are couple -- I expected months we're numbers we very -- that a mean ago. we'll what save the that So what than had we confident thought better

Hillary Cacanando

Okay.

$XX year million then in higher So of XXXX? million like then assume purposes of terms should year assume then savings? this to $XX trending million modeling and maybe even $XX and upward maybe probably we Had next in like is for probably

Joseph Adams

Yes.

Hillary Cacanando

segment, Okay. ten Slide in leasing the says And #X performed you then for aircraft that Perfect. exchanges in year-to-date. leases it engine

you do first time the XX them in you is module those ]? contracts what one-offs? exchanges exactly engine Could exchanges Jemma I have ten all over And the is? number are discuss engine sold that this with included these lessees just if Or think [indiscernible]. you [ exchanges with the to with engine and

Joseph Adams

David I'll walk through that. let

David Moreno

So in the the answer to is addition XX.

manage So on exchanges. portfolio, is shop we aircraft our via the entire it

engines exchanges ahead is of written. these which providing doing So lessees visits, we're of instead shop contracts and manufacturing typically are removals how

reason the contract because to it's The value like So why for every cycle a it per charge flown. we're add. able rates in is OEM we hour

then those less. a able for entrants And to lot we're manufacture

engine they So like can part, maintenance have the airlines why they that because on as -- very surprises. zero our revenue through be margin during to typically, an all reason able negative well lease they'd on to the for up which as period, financial is don't to visits, the most so they're that turn going responsible interim are it expensive time. major have show they shop is avoid statements. The

it So be over would shop if typically, overruns, the that charge in is above. of airline the and

like they a service, that of and as our part add So leasing it's aircraft business value really

Joseph Adams

business the we're are and they engine we our -- about on the in the Most to Yes. it are in the to the avoidance It business. force business, basically opposite. when lessors model maintenance goes we talk is maintenance and airline,

we maintenance, to the business we're and the better to maintenance we of do airlines want So at because get the out want it.

particularly good airlines manage opportunity which part, So shop most the it's are to we're for an outsourced at. not visits, providing for have to -- not airlines the really most

Hillary Cacanando

talking something potential lease selling that right? do pitch you to exchanges And as probably we well. if a when I'm like as to point. sure is And Like continue fees, well, this you're that's potential

Joseph Adams

them lease. Yes. money and eliminating the a saving possible negative in and we're time surprise major

Operator

with from The next Compass comes Bologna Point. Giuliano question

Giuliano Anderes-Bologna

business. incredible the another on product quarter, on Congratulations of especially side the

strongly, the forward. especially looking curious, continue at business, outperformance on of core what the pretty that drove a you expect side leasing As the and question, first even be leasing that's I'm going curious we outperformed I'd the should on trend to leasing.

Joseph Adams

are and drivers big slowing. two The Yes. hours rents

very lot It's equipment with particularly up. is both older for that the probably those of demand own airlines we so And aware around you -- obviously rent not giving are engine Boeing extending world GTF-powered -- quite or time. can't high back market equipment, get aircraft, is they the they can't leases given deliveries that the from can't and those a get of on fly they and

older old for really very because the is very those for for then quarters second -- demand quarter equipment quarter and typically, related the are So the airlines utilization third the flying. high. there engines and the demand And to is high

So it in as revenues we see maintenance well. the

So are rent it's reserves up. both and maintenance

Giuliano Anderes-Bologna

will that That's for very opportunity how normalized industry lot I'm about the mean of a of there, look or industry that? FTAI chain helpful. you that or take storage -- until XXXX, pretty supply there normalize like somewhere leaders for what And about far suggested a on a few out would issues means won't then the and engines I it's normalization the so good thinking are what the that are and out, globally a that XXXX the run-rate pretty late between realize side here. think also and curious have

Joseph Adams

Yes.

unexpected This we've business is we just an So assuming to thought got. gift run always that our normalization.

we also to environment an business but that, So would be well. everything that difficult is where I project, in out a functionally a even -- have point and smooth is and we going to think it's the great Having cliff. not it running said

You're good. not to sudden, up wake everything a all and in XXXX is going of

chain. as gradual period you time part fixing it is that return and some a very hiring chain extended normalization of to So entire over negatively affect chains, supply because only supply of it back will see, lengthy process, people takes a be one supply to the

what it the So in probably -- extremes will everybody the not generally, somewhere I think middle. right. are be It's

but it's not Somebody XXXX, in a middle, normal, gradual the something return a event. all it's a says of bright a line said sudden -- probably XXXX, to it's

Giuliano Anderes-Bologna

looks one. kind the That's very for telling curious about And the fourth about CFMXX the backlog quarter helpful. relative think and And pipeline and us? Thinking in the pipeline second product like segment how I'm is what and or or demand quarter? last we quarter the should VXXXX. then already to the that one what order of third indicated

Joseph Adams

So where talk X-year getting mean, or we're we have I you some X- to WestJet have long-term contracts locked like LATAM deals -- Avianca, about we in. if and

on have type we So that visibility very good of business.

people is have transactional we of said, to we The plan David visibility. give when other X- equipment to to can more getting us a they're can forecast X-month can -- probably that material, We're need we we going as order earlier better. so

can have modules ready. the We

you're So profile a it. when it visibility it. and us encouraging is airlines experience and -- your now business once and your we're going like ago, our I they the program longer give okay, product -- getting it's give say, be your even tasted and to they've really say year give And "Well, all us than they us would need and to

visibility, everybody time So going ready continue to that. to benefits more from for more programs, and get to longer we're I push think

Operator

comes next Ken from question RBC. with The Herbert

Kenneth Herbert

wanted customer. customer with did you What percentage working operator you just global that And frame quarter. a time And you universe think are been that of with? of modular may sort the comes swaps quickly about a ask that of I as an today not is expanding? how have becomes sort the on to XX you, and going airline this everything currently ultimately what you CFMXX to

is of cycle sales how Sort that compressing?

Joseph Adams

when module $X forecasting sort XXXX. if for -- math you back question. start But aspects just factory. and that out now rolled you Lots have were in you think we we we And XX our in of indicated getting of our billion, off by we to that XXXX, if $XX customers of million

at So we're XX% XXXX. in now

happens So when in things changing receptive are something, people they're crisis moving quickly. And business what more then part of is to their a need model.

to is we what Those people's which XX represent outsourcing offering would total accelerating customer. current so see And that the environment transitioning engine maintenance, XXX the say, maintenance, we're potential. we what is

getting a So of not of and with base, getting people's the exceptions, we're business couple not X/X of XXX% we're yet. -- operator maybe we're

to because money, any eliminate save It's why like realize need we we we're don't people they -- negative hard do But surprises. see tell they you reason they save time to aspiring once what and shouldn't how you. else

something, argue we're it's And the in So a XX%. than I roughly less think universe, doing through or about facility a it's whether or maintenance still X,XXX It's growing. somewhere XXX, The if visits about huge you and that's total XXX, X,XXX you world can modules X,XXX per think market. shop year. talking still year X,XXX, a but X,XXX it's moving

of XX%. half It's

we're anywhere So Montreal own is capacity, the in And visits where XXX could do our year, think which not we modules. in XXX a is XXX penetration we have shop can XXX to. which near modules. we get maintenance And Miami,

So that we module X,XXX we capacity have own rebuild now.

you if for XX% about keep can good we and handle that. to pretty penetration, that's based X% think a we own what on shooting XXX, today growing in we're market is XXX So position what we're

haven't anybody didn't again. use the had it product to that We that do want

maintenance have X have weeks, talk in the would we how done of they word-of-mouth people to the test so their foster we're one So it me, that hadn't and I facilities, people a that's have is I about that. Instagram and accounts like up engine swap did LPT I in to is [indiscernible] just spreads, for experience, X That, the and good put in is months people if trying say, of been that they and photos great what main this like testimonials an and shop

marketing to the even those accelerate are we're more. the using kind where So of viral that things

I if there elements I missed of them, don't but -- but... know lot got I your to are a have all So question, of might

Kenneth Herbert

just great. obviously, the obviously buy follow-up. fulfill that's If for mean throughput? other No, new also turnaround buy, the a lead you're extension on demand that And to I has but times on some material, been benefiting material disruptions of headwind you maybe material chain times OEM from and you in could I to a side? of USM parts supply to one waiting seeing while and and Are or stuff. the we're you're looking an PMA even material the lot

Joseph Adams

about about the talk part. I mean in the and the there's two There's part parts. I'll CFM CFM, Talking Pratt Pratt.

David Moreno

Sure.

So on say, are delay seeing parts. the side, yes, CFM a let's repairing for, we

we So we're to positioned carrying them of because with are ahead XX have the think ahead time. recall of well AR. I inventory down to We're year time, and XX able use those parts right? engines we per

the having is then planning, USM it's two available really, So number and right?

So comes and before process the in we kitting module a understand time. shop, of have we ahead

So we in what the is that kit exactly produce needed module.

able third-party to show a limited time. very step that's happen be to right? happening what we're all is So an ahead in and in that engine work, of have you're amount react ahead right? So parts, you'd order one process, in that engaging would of Typically, would up time

feel our why and turn been impacted. that's times have not So like we well positioned, we're

Joseph Adams

say, we high some VXXXX confident, parts but had are, some mean, of they in on just about sort And we material and I they're priority we're turn times, they're on the and VXXXX, week, very I with confident. delays customer. top mean of talking and earlier They're time a this we of would material, very now. and it year, last of I spent the producing -- availability Pratt

us So to order XXX -- the put of visits we shop of list. they're with get the an top at going

that the on It's in we're was confident that they've our from and to. that whatever shop and very point helpful their they can to what going So in they orders view deliver turn [indiscernible] don't want of times the into as shops it's they're can indicated they're engines fill put helpful network have very XX-day flexible, that. that also -- very -- those they use our because the And to enough...

Operator

with comes Barclays. question Brandon Oglenski from next The

Brandon Oglenski

generating I for for of challenging margins better swap the mean, appreciate know the guidance now, new business. when with is, acquisition costs, this makes you're I more outlook though, that this engines, viable? get guess longer-term updated Or ahead? I market aspect so the tight especially year think Joe, but this looking we and how is on does I it

Joseph Adams

in the Yes, excel at that's reason shop engine main need visit or a been great a I pretty question. the near of to is engines. And future. think sourcing in when good tend we immediate We've an is

and visit them. So buyers shop to a do they if when aircraft the they a up, months, model, you most about next portfolio comes to think an huge XX, it's and or XX do negative to X in have their a

know shop one we like, of we're when few can visit that the because we'd this we're to, future, for A, great. see generate by a the B, less we than So other visit this we love we can hospital in sometimes actually do module swaps. buyers other people shop people going can't of can we value. time can is generally near the We -- some that we can optimize repairs, also and, more shop green doing off can the do we're burn

So deal we there better maintenance virtually else ways into on. do now business. a a didn't win engines during have of that to lot out any disproportionate that many anybody people there's that of COVID, a make that And we than so

of opportunities. our one of acquisition of run-out lot a that good sourcing pipeline a engines. very core is seeing And -- we're So is strengths

then option you're you're is too love because the you also that's to good then run the first of we model, exchange exchange up of engines, them. out them fix to them, which and that's lease business back solving it all or we again. part engine at buy then do we another a some And them So because problems our get very these sell then generally out getting run over price and

virtuous So circle for in sourcing. us a it's

Brandon Oglenski

[indiscernible]? where the on Joe. should to transition the cash to appreciate business I investors sheet in in how then leverage you about products, mix aviation other you think Okay. guess, see term, I do the on And balance as flow earnings that, more And business? want free maybe

Joseph Adams

Yes.

we second our this is million goal agencies the the range. BB that to X.Xx by an bonds $XXX X in up. debt traded just at all and and high-yield strong to question, we're the be deal, total we have quarter, have to So EBITDA indicated did And

I think in at the the future. like this we're strong pretty is near something we a achievable moment. And much think that's trading year BB

So to rating. we're going and that maintain leverage that

free EBITDA, we what then of corporate CapEx, interest, take do to maintain can engines terms we maintenance flow, invest of to use the we what need subtract maintenance each number at $XX is -- so that CapEx. cash In for and we and between a they what forever we would be And infinitum. the year fly million year million that number a to tends $XX and use

a we turning cash. those XXXX, when and from generating buying of is equipment, So not lot in run always get be perpetual cycle you flow near as hundreds a free And that's more set will in remember our -- it millions targets when back of the of you you of then cash future. to generate goal but -- math, the just when since faster

Operator

next The question from with Citi. Stephen comes Trent

Stephen Trent

called in being commented the you And recall about to time, attractive previously footprint I sought you that you've Southeast sort on footprint. of believe your wondering, seen first, global Asia for elements example. your The what since I market you had reinforcing was an might expand, geographically. and that be I out that view And opportunities

David Moreno

This question. that take can I David. is Stephen,

fleet maturing visit. that engines shop a the newer. And important It us. XXXNG are time, has AXXXs So yes, it's typically, with has and now Asia of a Southeast been region high is for and concentration very

keenly we're on. focused that area an it's So

we module started facility. an Recently, swaps by hangar all at their with working airline doing

light have hanger as So they a do air framework engine work they well. and where

offering program we doing business. a we then then also that And So third-party started that on started we've have so large module as a airline. LPTs, swaps recently with

we module module and is now those in the aircraft in for to engines coming -- have performing the days. swaps in So aircraft air need airline that XX for going XX that have that we airlines back are with swaps those

operating it's a pitstop. So like

in customers, presence So excited with we that Asia. Southeast a started to we're few and grow very third-party

Stephen Trent

just helpful. a Very And as David. the that, appreciate follow-up on I side. M&A

term, done larger I acquiring seem putting a a MRE guys and potent you. know like consider competitor story be to your You acquisitions Long and really you've turn have on you ever quick own what you? together would

Joseph Adams

Well, to very that's mean it's -- we're shareholders. I the always -- We're shareholder-oriented. up

own not the So a interested, just lot if right was came an and individual a call, entertain -- that's And That's stock. we would offer we also somebody all so. of it. board-level certainly in

Operator

from The question comes JMP. Citizens McKenna with Brian next

Brian Mckenna

Great. have been But returns be on an capital All great investments to asked. assuming are it right. Most management. I'm questions high. update just would today get on quite new

So priority walk you longer-term new growth. it back and for investments, for dividends is deleveraging the M&A into and investing business I your top further suspect can relates your capital to just then buybacks? But priorities through capital today as strategic

Joseph Adams

Yes.

first Xx to priority to -- EBITDA. we So, at the debt maintain to X.Xx and debt which achieve is maintain total strong BB rating, I mentioned, and

the in zone that. expect of that be in QX, We're and course. year by in on end we to the we're that solidly So

number acquisitions. We mentioned, good Priority priority pipeline is that's investments. you number one. of have do So a two, as

engines quicker. turning are also that and We by selling modules

year. our So net a not goal owned in assets huge have this is increase to

the of count did year. we $X.XX We're of end the engine year million ] our XXXX Having beginning with well year, ] this program, beginning about to now. we expected on at way. VXXXX roughly [ said by the increase the to XTV [ of the [ at $XXX this We're to million indicate ] $XXX that, million from our

adding engines engine adds so about capital. being average so, that or an million you $XXX XXX And expect think of to achieve And $X of if we million that.

VXXXXs, [ we that's to So a to engines is XXX year significantly. this But focus grow ] [ XXX and achieve, to XXX been number XXX VXXXX. don't once need ] having to have the that CFMXX we

it that, a be the buybacks stock shareholder after dividends So for would becomes and priority. third returns and then question

Brian Mckenna

more for one Okay. Joe. And Great. you, follow-up then Helpful. just

macro over Just of is given past business within somewhat to environment between And to there opportunity how splitting on the some segments? broader opportunities emerging here an has much just related, lean couple are hiring how grown you the the given of in aerospace in then time accelerate growth years, two the the products. the further your managing

Joseph Adams

is XXX% on spend my of I Well, whatever FTAI, time needed.

provide So dream do people not is said we product. your maintenance as of I've as I think do go calculation. one we "Look, We don't engine will having the airlines to like you think say, of this that day, do as to integrated it And people, sum and splitting. of can my it." the we without an parts to a you

provide lot And a we'll have it always and outsource our save You we'll of an for you. engine you flexibility. And money you pitch. to and and that's us, time

And we then buy do to offer them, either a engines, we an so what exchange we rebuild an a go we is runout or airline. sale lease, can and

spoke, you but it's And X that the one need" having ability wants leasing the of to and think flexibility is to one one I somebody we what an airline want so gives the I because know important "Well, years, is say, I'm what going just else only arm years. X offer, what,

will customize that whatever the for want, And you so ability to deliver and you. say have you

product integrated is that extremely powerful. And

is this engine of we'll people the We in outsourced think way, is stop don't it engines -- for report great that for the it will is two they'll businesses. -- doing product. we hopefully, of and business the an some This world. popular as say this So a just parts a different aftermarket most but maintenance someday,

Operator

from Wolfe Myles Walton The with next Research. question comes

Myles Walton

hundred elsewhere third-party of million and PMA maybe $XXX PMA had plus wondering The of the And million million, million was VXXXX? think, of remainder's the drop-through business better business. of $XXX same better couple and EBITDA you previously, the $XX in at the the a in module is if the 'XX. Joe, parts million about $XXX I could decompose contribution I

Joseph Adams

Yes.

So $XXX million and we've VXXXX each added then are USM, volume on higher $XXX million just CFM and between then for program. similar about the probably TMA And rest there $XX margins and million is modules. more the

Myles Walton

that the margin was to the that that required margin? PMA PMA selling to higher is need that for robust Is point the CFM you sort volume of higher market don't now through? because that that get drop on Or so

Joseph Adams

We're going get to it.

the increase come, as it margins. will I and the will don't PMA So of that Think

think increasing margins without going increase on margins. we're we're to and but PMA, even PMA planning PMA I definitely,

Myles Walton

yields where news running into of conservation questions And weak in you there's about that are Are have if business cyclically where lot your against we go them, containment. durability has points finding you are cutting. are strengths into that airlines a sometimes this Okay. cash cost and market they're and airlines. about working airlines been with that clearly, Where more more your happens cost that a mode

Joseph Adams

providing, cost Yes, it said, help And as us. does we're savings. I

items told when pops at as that that the never one maintenance a get one be So to everybody line up seem always the One P&L, of down. look engine to they big it item every go line as is to in able to and

out that savings. flattening a in provide of can we So

types people do so these And goes demand outsourcing of and is activities that for -- of intense when have goes savings an on the cost focus up. up,

So we're reduction. happy when that's in -- are on people focusing what but expense providing particularly any we're is management environment,

Operator

with Elmaghrabi BTIG. The comes from next question Sherif

Sherif Elmaghrabi

How first and PMA. approval please? engine on for part? with part timing the there, can start through industry within is does second the And you an update acceptance your going to what for PMA want talk I

Joseph Adams

specific we've on the than we Yes, fronts forecast that. quarter. don't -- closer shortly. done all many said we're We timing obviously, good is progress very made we We've -- were timing, last but on today

very confident. So we're

engines. flying a very issues, the no is [indiscernible] The first been and product with high-quality acceptance installed another have going to with we It's -- and we always think industry part, airline as in it's grow. XX

if on airlines for thought more -- school PMA, part. There that they're of one want they put is many to than a going

just supply airlines -- element are an parts. approved. robust. It's in in which you up And available, availability, there's not also today are then in will take cost once the industry be for that a also chain to good can't more color. savings availability wait cards those if manner, quite we until So it's additional get the expect there important there's That's PMA is that you timely another alternative have OEM is that

Sherif Elmaghrabi

nicely. intervention well on vessels the the of now and that it both side, up are rate charter, like corporate melted looks the their on earning has then And

are there And any these you of sense you a they're sale progressing can of how you vessels? valued? to give the recent how So on us point are transactions

Joseph Adams

Yes.

of met, will few a that end is vessels be right. on think going for improving years, The have it's strong we close the handshake today. we of conditions market. both has we nicely, expect So by next subject expect but deal the to a the market strengthened we to which you're be year, market the couple and a to

we're So and $XXX we approximately code. million, EBITDA gone originally We thought the in and values vessels have that we would well, generating get ZIP up. are both on charter are said doing the

close. very end chapter So is that we're that with happy of the

Operator

call I turn Andreini this like show no the at over now time. further for would back remarks. closing I questions to Alan to

Alan Andreini

conference to all for in look you QX. today's participating updating Thank We call. you after forward

Operator

call. Thank participating. This today's you conference concludes for

now disconnect. may You

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.