ASLE - Earnings call transcript Q4 2020

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Operator

Greetings. Welcome to the AerSale Fourth Quarter Earnings Conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. conference your the Christine turn now over host to Padron. I'll

begin. may You

Christine Padron

Nick Officer afternoon. everyone Officer. Conducting earnings are welcome like the Chief AerSale’s today Good to XXXX to I'd Chief Martin and Garmendia, fourth quarter call Finazzo, Financial Executive call.

be we performance. with non-GAAP of in metrics to we presentations to Nick results Finazzo. filings our earnings business view materials assessing reconciliation cause actual federal matters forward with looking this facts, to also different AerSale A can final be perspectives over that quarter's and of turn to the non-GAAP at remind found may call and performance the and the other that looking results. and future the results, from our of website indicated that in the on I'll promises statements cause regarding statements in Securities from made financial section for of including of risks, expectations the Investor important known metric other important These those considered could to our the we by call. our the XXXX the laws, XX, ir.aersale.com. the filed business. call involves statements on be historical nearest actual With guarantees, securities on risk those GAAP any and Commission refer made this forward this Exchange meaning differ the statements do uncertainties, measures our materially discuss you to Before that statements February on as materially unknown We'll factor discussed nor current want section to all not Factors but results, that of within neither relate should our the performance, factors are achievements or the SEC available

Nick Finazzo

marks you quarter our afternoon company making look you call a as I’m first thank exciting today public Good to the for progress on quarterly the and to today. each Christine. updating pleased on you, our we’re joining that update Thank everyone I line AerSale. and at forward

and investors with the Before take new position and for digging updates I’ll with familiarize a leading the value I’d attributes to deliver AerSale, moments us returns. few business about AerSale to shareholder for begin into customers like create three to our that and results quarter

allows shop like includes a fully This aviation multi-dimensional operate to after-market we us and our and First, to enables full to asset certifications integrated, keep This FAA higher one-stop a pulse company the purpose on part for and sales customers. customers. activities built, serve a storage and aircraft us as decommission. acquisition aircraft value that close MRO, procurement, overall our identify a leasing, opportunities, deliver market,

structure high to truly XXXX our trajectory. demand and aircraft, of industry generate resume of to more positioned than flexibility quickly decommissioning through attractive no demonstrates fully with aircraft pivot acquisition business and we our freighter regardless growth storage integrated asset experienced. we able was quickly returns enter backdrop. aviation identify resiliency result and to and were our environment, in long-term result of a the this pivot This opportunities one execute our help the had when a and this to attractive as a degree, customers commercial pandemic business, remarkable workforce. was to adversely the never pronounced global ever affected XXXX economic in Second, the Notwithstanding financial the This

three pipeline and market AerAware AerTrack Currently, partner Engineered represent And we in AerSale. manufacturers to bring serve collectively and as AerSafe, in new our integrated that innovative original significant airlines a our business. Engineered structure unique us projects a so, and Solutions enables market to that products have equipment to our opportunity to include for Solutions

an the of operational, other through relationship scheduled an fully the a to weather a military complete, been manufacturer display. aviation. now AerAware We've In subsidiary for proposition. the is with wearable military deck to value commencing testing provides advanced critical that by technology deploy months to flight pre-certification Avionics, conditions incorporates enabling vision, them with head AerAware with XX underscores partnership AerAware developing and past words, of see Universal FAA Systems AerSale information. XX. style ELBIT is overlay adverse aircraft with vision commercial is flight Israeli opportunity in greatest enhanced March pilots over that This Our existing goggle

rate Management in prototype units, fully concept certifications, we a Our support segment, and and two from Asset leases, marketing working equipment with We end leases or use the customized, aircraft specifics we integrated or we composite that passenger with commercial facilities your serviceable Solutions ready In to successfully in short-term Mexico. enhance with MRO airplane In technology, customers. our In the Roswell, stream pneumatics, NG our full well methodology. to or capabilities primary Miami, revenue Engineered supported Mexico; include well highly Boeing regulatory extraction equipment whole a highly and TechOps repair Arizona and and flight demonstration their the Engineered our and aircraft Tennessee, aircraft. and including rates of to New and including we checkups. develop have business and Rancho, Management maintenance, as as as we mandates divisions, provide our overhaul our parts gone premium. key hydraulics use business, operating segment, a the perform integration a as specialized products XXX heavy the have comply that lease end parts this conversions supply aircraft aircraft maintenance command services Technical USM engines also to market overhaul our flight Florida. refer Operations, including final potential of In platform knowledge Rio midlife our use which as division, our To commercial leases, at gear, Further, marketplace, safety aerostructures components to Asset facilities and freighter landing material our two to our engine MRO aircraft. services Solutions to of install and above the at feedstock dig Memphis, value teams which military conduct New and of application Solutions. services and into we the integrate providing advanced we becomes At oil into for technology engineering

In products by As AerTrack currently AerAware. STCs previously hold three which for issued and noted, marketing certificates. the words, type FAA supplemental we're and we other AerSafe

will enjoyed XX,XXX over base customer Our have strong existing serve margins aircraft. all STCs a of of products our STC and

a keep to As mind. in we things review few our business results are important there

utilize basis quarterly notice our this assess do performance, First, not analysis The year-over-year simple. financial throughout we commentary. a on is for generally our rationale to you'll which

and sale account our businesses acquisition management for Our at regular transactions year. asset are of asset success the cornerstone large intervals whole and throughout

for our and our make update believe key discuss on throughout our engineered these investors activities, it outlook the asset our of performance, our for contracts, we'll the relevant development year a underlying on we indicators prior results, business. point sales whole current for the both performance improbability, solutions and and transactions MRO and More we year to acquisitions asset As business periods. STC year, progress

sales results which of of the of our was from for $XXX.X XXXX COVID-XX. compares revenue year to full in stemming XXXX, million, million the delivered the Turning year impact full total $XXX.X we revenue decline

aircraft increase forecast, contributions some to recover we realize to our our customers. began business nicely, from our which aircraft our passenger us strong progressed, led year as the business, improvements freight growth from started storage modest and even As customers, MRO to in higher and

full year full we the compared of to EBITDA $XX.X XXXX, $XX.X of For XX.X% billion EBITDA of reported XXXX XX.X% million sales. or year or adjusted sales, of which adjusted

As CARES benefits. EBITDA a reminder results $XX.X in XXXX million to investors, of adjusted Act included

low in sequential management, aircraft sales business continue parts improve increased asset XXXX. with and in Looking which quarter beginning since of the of and quarter in set in each our second at engine the fourth quarter, to the trends

expect leases. categories for in and three parts to and aircraft freighter, this for from gradually advantage were passenger engine prepared pre-pandemic and expiration decreased these in been to We reduces from engines feedstock in continue being back in the the platform our the pools the to quarter, which passenger to XXX primarily lease a levels. the increases USM Boeing grow ones demand becoming are leasing aircraft fourth volume as both the to strong This of customers. take remainder have to The conditions prior we Aircraft our as aircraft business, system aircraft of both activity fleet across of with well. just due to removed performing these

our revenue of XXXX. and prior Finally for million early in occurred as whole was to year. of a represented compared second $XX.X result XXXX, compared million direct $X.X asset This as sales, had pandemic decrease in of sales to majority the the which the in quarter the only declined we

freighter Company to XX international assigned positioned facility to heightened This demand category. exemplified undrawn to ahead and this is unique look the credit XX As cash engine on an restock aircraft equipment close which by we're as and for aircraft customer, next recently has we well aircraft sell over marketing of our of we're to hybrid recent conversion site XX satisfy that Boeing expected leasing. our intent hand XXX with The to is million in purchase up-sized style XXXX, better $XXX X an to days. to

of storage we our projected leasing freighters. we we record facilitate Volume fleet and We to Boeing meet at running resulted services for robust aircraft the segments, aircraft XXXX, MRO XXX conversion, our these completed growing our a expect Roswell number deliveries, at with to pandemic. our hangar Boeing or the to higher With of aircraft for during which demand in hit May. to capacity. from five XXX sell facilities the be Goodyear five expect over convert at To majority next near grounded to demand by to primed and converted aircraft least first of airlines the in companies experience year have In aircraft highs TechOps our in at committed the XXXX. Goodyear facilities continue these

to at XXXX of storage includes reactivation continued volumes locations, from a full for customer benefit work desert strong year which both our of storage existing additional aircraft activities as through aircraft we continue work dry from and progress. the expect entering We storage

service, revenue to gradually facilities. by decrease Looking brought are our MRO into storage expect aircraft our be back but as in revenue reactivation forward, we aircraft offset these

had repositioning a demand unprecedented In in in the markets. modest as ground. we aircraft quarter, for we our of sales business to XXXX the Engineered products, our number the fourth new to AerSafe due aircraft to Solutions on pickup Moving saw

pilot completed this we the product FAA a obtaining made DER, designated test to representative, having XX FAA hours over showcasing engineering our addition, of our of test capabilities In flight product customer. AerAware a significant flights certification progress performing with towards an and potential

our a ample a a is issuing to which prototype we with poised a begin the mentioned previously, will AerAware feedstock prospects overall flown customer test STCs, as a as contributor about parts robust, with financial in forward suddenly begin public we for XXXX year. and on our STC I progress from expect which Based capital our less growth throughout Demand FAA Boeing this an evolve. than meaningful the sales want our mix launch receive weeks, potential are year. on division you a attractive to strong thank and In for facilities market XXXX, investors, is flexibility to full be USM AerAware. will where is AerSale’s all installed, balance we expect our XXX to to pleased the to is feedback have order exited flights Engineered that aircraft to prerequisite to FAA As first with improve NG we who fund test summary, added continues we're our two opportunities year volume from as look we priorities. airlines we aircraft MRO updating and enthusiastic to offering company. in for we're the positioned pilots our AerSale sheet allocation We Solutions this

the Now, I'll turn the numbers. call look at closer for over a to Martin

Martin Garmendia

start financial performance will update with with I an our ending guidance. an of our Nick. on before overview Thanks

did not of $XXX.X revenue sales. which asset to Our quarter any XXXX This revenue million $XX whole assets was whole which fourth the included sales. fourth of include quarter million, million, $XX.X compares

sales on purchases sales asset important mentioned, Nick and whole therefore it a based monitor the is our fluctuate on progress over period longer As business will and based period. asset quarter-to-quarter to our during

most XXXX, we purchase a As you XX in asset to September. of BoeingXXX our ahead the is that look notable announced

our we with diligently the first working expect which finalize of few weeks. are occur We customers sales, to the in to next these

lower inventory did of as buy In also utilization not decreased, the materialize grounding passenger and feedstock of to for and flight parts addition travel or equipment dropped to for Used The the fleet to and used asset pandemic global demand decreased portion resulting overall USM of backdrop demand the maintenance Serviceable leasing. against sales, air led existing term Material pandemic. revenue our rates in parts and a significant USM for engine declined opportunities COVID-XX on the activity short passenger

MRO services, locations and on us benefited as aircraft in the fourth XX increase for this Our up TechOps to was in quarter of total asset facilities New the the from decline of aircraft increased It segment segment MRO Mexico volume demand demand. Arizona by desert offset our solutions storage storage revenue business heavy The management some to revenue increased driven to largely programs. million. allowed in XX% compared XXXX with TechOps of drives maintenance monetize our

Management with are on cargo conversions MRO us and feed Asset opportunities a Management changing reactivation to for business XX:XX between providing split stock advantage and in strategic facilities us in work, This also forward, The mix mix dynamics. for a heavy the approximately that provide segment. ability and substantial pandemic. airport Looking change to changed our expect of revenue as market segment to maintenance aircraft of Asset and effectively result our upside the as demonstrated a our quantity identifying respond TechOps we XXXX, was

XXXX translated of as initiatives. we aviation during quarter for savings our we fourth approximately savings fourth passenger expenses the business declined $X.X and of XX.X% same grow. quarter market into expect to million was revolver now million $X the was of XX.X% related XXX million, XXXX, inventory year general At quarter administrative had in ample recovers, Net XXXX asset undrawn activities $XX of cash asset which quarter acquisition to as the measures fourth $XX.X quarter fourth net $XX.X in purchases and efficiency took was sheet fund across and beyond. Selling approximately its priorities due primarily to an year for million in TechOps $XX of cost using driver of compared balance This the $XX.X our operating income XXXX, XXXX the COVID-XX has the lines. XXXX. us main XXXX management in and utilization The million, million XXXX. increased all primarily the cost with was financial to on AerSale Gross the $XXX to in and cash end, in of been of $XXX transaction. the Cash to of million, As was margin provides million both to fourth the flow to million. Boeing compared which flexibility level XXXX

update guidance our summary. Finally,

the asset in of requests of our in million We our in MRO e-commerce $XX demand XXX and services. adjusted continued The secured the services, products $XXX This increased aircraft, to TechOps XXXX. other and in package expect strong majority markets, in be activity and revenue cargo will accelerating the reflect cargo Boeing main for conversions EBITDA available to for of for aircraft demand Asset XXXX. million XXXX. of and million million the growth segment the demand Because the conversion increase project $XXX monetization freighter we outlook the and selling management strong to segment, Management of passenger in $XX driver airport of

also we of XXXX. storage MRO late the to addition in TechOps, contributions our products activities, in expect and component maintenance AerAware our sales commence continued from For to

working this to launch meet delays is that Our will product, pace anticipated demand on of projected allow my for potential regarding company start ranges in us for scale-up AerAware to XXXX that initial customer. the for for of production solutions sales possible the uncertainties the due diligently

last With operator, million In business a revenue in are proceeds were in in market. experienced $X.X to and we to We the XXXX. believe countercyclical challenging of Post-COVID, invest well outperform we has aviation the continue sources land the summary, Company performance strong questions. to Lastly, of demand. ready our the upcoming commercial integrated we our for diversity competitors business created enabling take AerSale awarded but recovery. to the financial result The that, CARES adjustments, building. configured hedge have model of is some Act the multi-dimensional fully a are decade our greatest units we thrive in made spent

Operator

a we [Operator be Gautam proceed Please with this Khanna Cowen. your At First Instructions] question will conducting questions. time, from session. question-and-answer comes with

Gautam Khanna

afternoon. Thanks guys. could Good turnarounds. about a the I was talk if wondering little you bit XXX

talk for would maybe firm Do how you based if but rest if the just you them maybe be sell you the imagine, So of have that those? is talk to it could going this to four intent mentioned I sold. expect you is quote needs gives that cetera? et And might what weighted, planning? QX, that letters with majority year. of be kind you QX can the to of the done to that you be timing, Just What conviction? on to it's

Nick Finazzo

a So, of ready potential comment got Gautam, minimum -- probably afternoon? now doing customers. combination this four you three a how we've five ongoing as or many we've with got So, sales of as are hi and a

with So, have as we of point. mentioned, each we’re -- intent four at we negotiating sell a to I have this letter

conducting delivered We diligence for due closing. in expect buyer as will those the be preparation four is

all next with would the closing again the deliver those to we as the with aircraft and convert all proper and so could put on fast that could those many airplane XX engines to XX take Simultaneously, as we the have another those go will aircraft don't updated. we as probably I the potentially aircraft over as we could LoI close, close records days, as their could aircraft, we're days. those customer think working be XX will as that fast a

those in just and another is interested as second that’s airplanes have the that's many many -- finishing LoI close as those expectation assuming and have and that it will take also aircraft close that three the does. this now to quarter. And one we I think that then in finish converting. third that six, to customers another don't we're fourth now, expect could one, aircraft operator additional is our we that interested two, that the but we And quarter drag as into mentioned, aircraft We in we're those finally, we interested will

we -- aircraft Precision the So, intend we we cargo kits convert to buy have -- got that to signed we've five up from ourselves.

first The -- total and conversion one we'll right roll a then finished will we'll there'll completion nearing it. roll be aircraft in is be May, then in of behind of And five.

the expect able be is but three because roll -- have before the extremely as high. customers out customers we to We aircraft deliver those for of can out we'll into they we'll conversion. hangar, those We we to aircraft converted believe hangar. put aircraft believe before the for next roll for those one demand today the before we have they Ideally,

So, sold the a balance put one I will would we'll converted aircraft be able -- roll the a year, a balance for year can three into roll expect converted this to if will that fourth. XXXX. fourth, we this fourth we'll and aircraft have do We into can finish of

our sold the is year. once the sell and we'll -- leftover Whatever be sell not be fed will to be we which majority parts have will decide aircraft this is, going aircraft those next we machine. into So, converted to expectation aircraft year, of

Gautam Khanna

be I if that earliest coming was we certification what's best wondering needs actually the could done expand could reinvest be the -- type to your What lead the And on upon when's what's done? tracking what then, see certification it. milestones through? you will? getting certification. to is And should your time So you for AerAware, still guess if Got the

Nick Finazzo

two less We're so in weeks, flying question. weeks. Okay, FA than with two good

or will expect We that pre-certification that flying certification we week. done same that FAA have

have the the longer So month, of to before we end to airplane demonstrate. this will no fly

have we is the the next the airplane be after Universal a which the still happens, Remember, by designated to our At Our the representative, to we on we designated an flights. longer, its And end expectation certified when FAA FAA we're the the test airplane flown we've waiting When issue have we is any hours to flight. by another already some DER. won't April. by all and on which of over to XX do the way documentation demonstrate of FAA least, at drawings meets is, certification, on who with person, to a from FAA engineering have airplane that April. expect software conforms we he'll able validation, the to hope the end completes fly

-- the won't the So, validation the on STC it paperwork software. once until issue has FAA the

May the validation are to finished, just be of we'll that waiting that the them documentation in hopeful and hands therefore will software for We is be FAA the all after sometime in the approve.

we certification. be is because interested really expectation believe should we'll project this have to in FAA the Our have that we what the seems

second Our before best of in is end June. sometime by May certified. the we'll believe guess But we quarter, the end of have it

Gautam Khanna

to And could is, about great my That's acquisition you last now Okay. one equipment if anyway hear. just the for environment. then talk

as we just we if Wondering, in of expecting to USM, environment? you're deploy you year. if already show many retirements lot acquire that up to And didn't XXXX? so, talk a as to if capital seen you that are opportunity see thought to maybe could flight So last

Nick Finazzo

all but that's for it us. attractive pricing year, been seeing it's not been we've So,

experienced So settling willing we'd of pay, to the have the been to-date. it's as I don't would been because say, these know predominantly suitable if assets what which price not That's we've sellers. the, to I be ultimately

go on is of realizing a airline to passenger coming starting airplanes the of ground some no are aircraft The up storage are place all in that’ll lessees industry. the get have be right the put we're that that a are aircraft the some the year, the redeployed for of as aircraft freeing that lessors to what However, hands aircraft that other many status Those and be pay, deployed to have service, still on on who the them are not likely of now aircraft sellers see aircraft in for and the soon. to ground going now are have alleviated not space that now, aircraft returned to been with to into are aircraft up to service. those that anytime unable

So, bottom. very anticipate. are bid the of where small. we point our to starting separation that And we being we pricing that today volume I but so get to that we spend to seeing the finally my of we're Arguably, quarter, is opinion think volume or think the we're expect that seeing as pricing trickles assets, eager that in from money pricing to close is are but Again, we break. of not deals that offered acquire towards now dam's that third not I is getting that’s, that the going releasing to and coming this could as some some are in us. still today, away little over to soften, really what end feel personal until we is the going the we're months six we we’re it, at to is take the

when think I again, many service start pricing. we believe attractive available when think those then by permanently. are -- by to I airplanes down, be the go been seeing of those end that's will of returned when aircraft And aircraft airplanes we'll summer, retired aircraft at have

after we the going we to So, be and think to it's third quarter. going -- think be summer the the it's

Operator

from with Cowen. Our next Gautam question with Please Khanna your is proceed question.

Gautam Khanna

to was ups. I going couple Sorry. follow to monopolize, mean ask but I don't

funding, to the the was right? that's thing I Act so I in was about EBITDA confirm just year X.X million that included presume. that. Is guide CARES was want I that other The and curious for the on

Martin Garmendia

That’s right.

Gautam Khanna

thinking making like maybe out mind. be was kind specific we model in out numbers Okay. a call that of that there mentally remind Can items me, we that you year be if are you or just this item just that last I recall, balance if from that Martin, sure we Because any could were $XX items the should there in was we any about, sheet, have year? one-time should million non-recurring QX should

of kind crazy dynamics it have year, So we don't year what’s and over Act last the the ones? happening year of just from other some CARES on of

Martin Garmendia

Act return a XXXX, over lease. got million XXXX. in That a $XX condition the payment that was XX.X to right, You little it that related that also on we in in million besides a asset had was freighter CARES came have in, we

in XXX that small, what item. a XXXX the to you're asset transaction, sales increase is going number one-time whole was about when relatively to in that million So overall an $X related see was in Obviously, XXXX.

driving lot revenue So, improvements margin that'll be our 'XX. and for a of

Gautam Khanna

prior quarters? thing it. itself Got and That proceeds Act was carryover in any curious then QX makes of there from was the CARES sense, other I the two

Martin Garmendia

No. In the received fourth third had in quarter, CARES and utilized the we we the amounts were no that additional Act. quarter. All second

Gautam Khanna

QX, talked that it. that QX, the you've about, how that of is million like And Got that $X Is does flow through, in QX? period? what

Martin Garmendia

Yes.

those awarded proceeds received. and can were once February, the we use proceeds were in we So,

see But there any quarter the the the through that it'll in fully quarter. quarter, as in second expenses will the first program. quarter end amount with it a that be that cover good of qualifying the on you So, in of coming remaining first majority second will by additional utilized incoming payroll

Gautam Khanna

just with to in an at yes demand a in quarter picture Got of of -- the if seeing I'm run it what the is uptick either facilities, at -- the MRO you're then has little repairs? terms bigger how an mill first mean, requests in aftermarket how [indiscernible]? of from respect demand we're activity. I freight the it. kind your with that bit translated wondering, I'm -- curious, various the DDR see uptick maybe customers? And respect for USM seeing starting of Are third to we inquiries, to in party just

Martin Garmendia

at from because to return We're separate storage really the aircraft going at to our exiting aircraft heavy seeing MROs. entering revenue storage. both capacity. We're aircraft just new revenue service hard slammed our It's storage being from we're and in

is Landing customers. for it's and well rising component painted. this personnel perspective recovery right to so, aircraft and up seen jumping enough because next personnel gear the leasing to of our in than landing I on other landing side of airframe to resources gear our gear on, severely while since signs line are cargo make that, customers where for see ready of we've grounded it to conversion down of work up you of the to leasing to MRO. life the our for wide-body our engine tying have starting now while and best tell would so that have ever MRO issues resources, has diminished signs their And that, we're MRO the sure we from much be a we getting we post we an doing demand have as got year. the pandemic to going engine accommodate were MRO suffered we customer, a is as aircraft this perspective, we've component is There're volumes is from similar been with our start result see of COVID. to component support going that anticipate be amount that are -- expect The the

is the passengers, wide-body diminished. for demand the be and parts back part not, component the that is We're demand it those site as goes MRO seeing well respect coming operates for just the on side. demand so PW engines. nicely opposite. XXX. because likewise, material it's to we're with Interestingly, seeing XXX, the the is and recovering that would think and the is Pratt for our market wide-body you aircraft USM What at as engine that's CS X,XXX right would aircraft that Whitney the now think It's for to on XXX So, I that X,XXX, soft

Gautam Khanna

freighter driven And then that dynamic? a it's

Martin Garmendia

a dynamic. there's that's Yes, driven freighter freight,

Gautam Khanna

if quarter, the I What recall. Got earnings EBITDA recall know $X.XX through was way? I was by you it. release, something a the there if million to that adjustment I And like looking was Martin

Martin Garmendia

Hold on.

that Let back. me the go That's compensation. one says equity

Gautam Khanna

It's in was the X.XXX. EBITDA at of the at the release, adjusted table back it

Martin Garmendia

Credit?

Gautam Khanna

It was a debit sorry. --

it to of, sort Some negative was EBITDA. a

Martin Garmendia

related that's to costs. Negative, transaction

We had running costs. year, as merger to we transaction a up our fees last run expensed calculation. to be the in we overall was adjusted legal eligible and related So ended that EBITDA

it credit take the XXXX. we out EBITDA So, reversed in that of not number, overall to for

Gautam Khanna

clear. all Got it, okay, that’s

so you the appreciate thank Well I terrific. okay much. color. see, Let’s

Nick Finazzo

welcome. You

Operator

your And proceed with is our Canaccord. next question Please question. with Ken from Herbert

Ken Herbert

comments that wanted do Hey those what on you that we close out point expect an start to to of year, standpoint? point, revenue what good get hit point does your see facilities? to And to At or for outflow just regarding of I good follow do up storage when morning, from a facilities. afternoon. aircraft this your you that

Nick Finazzo

sure see to not a this going I'm year. we're net outflow So,

for the not is I of I say that not not the projected reason generating that’s carriers the that as are aircraft belief. by I available think just storage that it, revenue positive there's amount we operating mentioned, storage enough them. And capacity because my but are

So, we we’re aircraft store airlines to for our are and constantly than more them facilities us the to being asking -- asked turning away.

any see out our we're are the is I balance year. these reconfigurations, that’s some more it's storage what interior balance storage to aircraft result revenue When shifts service and this happen aircraft and that really which don’t enter, of wide-body aircraft than going et going potentially narrow lot going this, more that's really keep coming maintenance expect going MRO facilities to So us up of in, what cargo bodies reduction would return switches, I associated storage the see painting, associated busy loading are to do to going that's conversions, in and heavy to, with cetera. to with include a exit, of year. checks, that material to is going in work, more the enter wide-body for

think that labor during return also to real is just although margin be high man the billed is higher to It's to work. businesses easy we than hours We because more is labor. than service tech work So, not storage think do there's business very the storage that.

to going an that's think we So be offset.

Ken Herbert

to quantify and start would start do how to know much to aggressive Okay, from better for you that’s these possible maybe that guess, through much helpful, what of acquire we getting your I all? get I the is material? it market you as where better on this go like and to obviously risk feedstock attractive I anybody. perhaps you at it see opportunities? the could think more. sounds need signal see Nick for to that And a as on to procure get see you ability time than of more to comments too you Is your mean, you to some trying expect the more But maybe feedstock prices. to obviously year starting more you’re opportunity downside

Nick Finazzo

So, advantage parts lease, we that's just we comes then work another when we're Where it have. acquire an service have to that needs to place aircraft structure as is because it sale to aircraft to not capital naked, airline, opinion, uses a off my is and by competitive company. its an an back and restore do a in it different lease with

create If the do it of value is, able best aircrafts you out then that to to it a and value you engines together fleet what figure which be add to to our what get residuals. is the equipment, have takes get flyable with and take through excellent out to cobble to of do whatever That's them, route.

because able lot see companies, a the are coming And investors the that majority for ability up space. are leases is the scarfing And to no to I before that be for those or that transactions, seeing where of returned all that's significant the aircraft our But to the that the get value are attached, can were there the are our whatever lease space money come amount not XXX into parked. are won most reason lease. buyers. aircraft And be they're current or of parked no service our -- there So out were work leasing ready think majority that of we aircraft into of do like that advantages, require of we put the maximum package, today has on a just they we're are to there's aircraft transaction either things somebody. of

go with this and don't package leftover, monetize it's to it have was, buy What passenger. where the a buyer. airframe to you aircraft. engines the pretty and engines parts, a parts it'd the a had do airframe a was create We the at be freighter and value, value you level, figure of the or engine? to find and put whether have hard that out highest the ability We do the to If

assets regardless, them to point more see the going there's specifically to not the down and what they're come more I just in up us That's into leasing to going not be any and tell what's we of during assets aircraft value. trigger our go they I flying -- to that, going says, out range. the because the a airlines don't all or -- got writing I value up what most are of these will continued which will you've price Again, our into at event price these stay when stagnant going mean to see? So will of in as companies if and we're to event point other storage know get anything that coming of over. travel summer is a summer the after that range coming can than peak aircraft the are

are right the And the airlines, that's didn't companies carriers going realize them more a just to for I passenger that a likely them that's would just during service they're they'll most and they'll though them be will kind while money year after and them their me write for they when the out P&L storage up rational answer, right October had get it aircraft they’re sell not right like leasing out to sellers to this them maintenance think continue think of time for September, but people summer not market a having just what that's economic feels at into will on like on their down feel the answer. I down. I does while revenue think into carriers That might think sell I a the the for economic rationalize doldrums airplanes hold they’re the the send them just half get fleets. you're But worth when that not give the not writing to and and and is or books. answer. which It

Ken Herbert

Nick. detail. for the All right all Thanks

Nick Finazzo

You welcome.

Operator

questions Instructions] reached we’ve it And seems if therefore are the [Operator question-and-answer no end the as more of session. there

I’ll the turn remarks. closing Nicolas Now, for Finazzo over call to

Nick Finazzo

the thank you Ken, to Gautam call today. our you. you thank Appreciate and very updating you guys next joining bye. much and again good Good else everyone Thank for to we look Good And so Okay, quarter. forward that. questions. you talking for

Operator

you for and you disconnect Thank conference time. may today’s concludes your your participation. This this lines at

AerSale (ASLE) 18 Mar 212020 Q4 Earnings call transcript