ASLE - Earnings call transcript Q1 2021

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Operator

Greetings. Welcome to the AerSale First Quarter 2021 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. the to turn Padron. host, now will conference your over Christine I you. Thank

You may begin.

Christine Padron

like to Nick welcome XXXX morning. Chief to Good I everyone Officer; Martin Conducting call Financial Officer. Executive earnings the AerSale’s today Chief are: Finazzo, and Garmendia, call. quarter first

but made Factors the in earnings made metrics website turn the this the performance company’s to at cause over of that statements SEC securities materially With be matters forward-looking I’ll with the Risk can facts, as view and to for be involve guarantees, the address other of this call. nearest Securities of call Form we other of of also that be and important performance. on discuss its the GAAP our discussed IR.AerSale.com. Factors to its statements Exchange ended unknown XXXX, available Nick March from AerSale events statements Investors you do section These our regarding are SEC, on We’ll our assessing identify the those the statements These those on Report for filed that our forward-looking or and metric considered meaning refer including important to the reconciliation federal to with results, we uncertainties, measures be the results historical SEC. XX, laws, actual filings quarter’s indicated any could the and materially Before call other of within section materials March want from this future for filed filings achievements Finazzo. year nor in the in that risks report we non-GAAP may to December different promises Commission, known business. XX, uncertainties remind expectations all on the the XXXX results. statements quarterly factors that, presentation actual on relate XX-K Form including to the and XX-Q risks, XX, on neither and Annual by cause to results, and performance, the not should ended A current XXXX business period non-GAAP with differ important that found the and financial

Nicolas Finazzo

programs for morning Good then call and Christine. today. on turn the to updates, Thanks, comments everyone the I’ll begin the by of overview a major operational AerSale line joining followed with look I’ll you initiatives. the for and our thank numbers. quarter, and and to call about strategy, at over brief an on progress our closer Martin

keep the of to higher and unfamiliar includes pulse that fully-integrated For our and attractive on we storage to certifications, part This with aircraft and opportunities, a every part multidimensional allows operate us leasing, customers, deliver those aircraft a market, overall sales MRO, AerSale, aftermarket we of close FAA procurement, decommissioning. a touch and identify as cycle. purchase you aviation flight maintenance asset equipment flight purpose-built model the value

even COVID-XX effective, in as during very demonstrated under we’ve pandemic. proven the has model the extreme tested battle Our stress industry,

and decline storage As airlines, with aircraft at our our gained sales. XX USM serve XXX Used the freighter resulted helping and part last maintenance of the the cargo from specifically coming out our our a to Further, massive aircraft performed pivot decommissioning allowed aircraft in COVID of year facilities routine through Material, Arizona of announced storage market, of effects the feedstock fleet offset efforts demand in to Boeing quickly the MRO to us to filled Goodyear that quickly throughout reduction flight insight MRL. our passenger high identify Serviceable to remained capacity work observation us to aircraft pandemic. expansion This of of has much in firsthand by service allowed up passenger and revenue conversions opportunities acquisition being freighter work

precision We first are cargo aircraft later currently month scheduled lease U.S. completion to kit, with preferred X, the operator. LOI aircrafts industry for Conversions also and operator. acquired and X expected to documentation in the X with Canadian conversion cargo of X convert this sale the under under using contract phase cargo the are the a and

We’re of for with completion customers our conversion, scheduled with Xth quarter in the multiple XXXX. in additional cargo discussions first

only more original As leaving engines, option more purchase to we fleet through to up of XX, aircrafts we conversion XX have repair with aircraft X the XX precision modify an acquire cargo partout. X or potentially to kits for

a acquire equipment. cargo on outlet the our and cargo converted fleet find aircraft, conversion aircraft cargo yet kits, to secure spec capacity of precision flight another and from for peers us revenue customers differentiates company’s for conversions, perform provides Our high-margin the large coveted

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

quarterly on businesses one throughout our large assess financial regular at times for notice sale for management, analysis year. performance, commentary. are rationale year-over-year you’ll which First, our The is this the transactions our cornerstones simple, of and account our we and don’t equipment flight to throughout focus of asset the generally acquisition success,

these we’ll As the current periods. we prior-year and discuss point to key it update transactions our for results, our a year on make investors both

of $XX.X in leasing strong flight by in demand storage, aircraft the consolidated mind, part underlying STC for the been indicators throughout the sales business importantly, With lower combined sales have which million, and acquisitions business. performance, XXXX, and million. prior pressure. on in that expected for USM by flight and XXXX levels million is MRO still progress asset performing performance and with maintenance development well under lease activities, pandemic equipment year, of our supported volume, has More with equipment for contracts primarily MRO of engineered believe outlook we’re first in our we $XX.X as sales our sales relevant quarter solutions, was with which whose and continued from Sales offset sales, aircraft, expired, the demand, related $XX.X year lower

Turning sales period are margin year. prior quarter compliance restrictions. included to sales, was EBITDA mix. cost in our the or Higher quarter excluded, $X.X margin the to XXXX first prior gross because in we grant costs Act adjusted to and not adjusted year EBITDA and occur which million the of period compared XX.X% reduce million Act million or associated in not attributable was $X.X proceeds, CARES for during XX.X% to controls also did strong this $XX.X profitability, remain The of labor with CARES higher cannot the of

to create segment, dig specific quarters the with CARES Management. lift On margin a into beginning To Act proceeds, Asset it specifics does by performance. that and include the

sold and representing equipment airframe; of for engines sale engine Boeing Pratt quarter, Whitney we PWXXXX $XX.X million & cargo During operators; and X Pratt flight of parts. PWXXXX & to X the X Whitney the NG XXX-XXX

engines As purchasing USM we of dynamics there support needs. took advantage market whole in interest strong of where in was

coincidence. we become our strong this removed and airframes as they XX parts we and and concluded Electric down invest our leasing extensive Our business, The whole feedstock decided to aircraft year added in This serviceable have and parts. reduction as advantage been as a returning in to all operators. passenger aircraft value engine just our Boeing lease is aircraft reduces was Whitney platform revenue airframe freighter, that X demand USM expired. ones and performing aircraft take a cargo as fleet pool, XXXs. X aircraft General to X lease which service, the Pratt have have engines, compared not and needing fleet these portfolio been X – aircraft, from X for engines not engines engine a This of prior the repairs to of will We from of result passenger and the this to the leases Of higher XXX USM well.

post-COVID, forgive Over pure-play a our order keep in we’ve aircraft market the anticipating we strategically aircraft have years, lease. several and leasing been have aircraft not had to on to downturn Unlike past rent leased the fleet. been reducing companies’

of sheet to plenty as debt our recovers. keeping our add As such, an with industry our portfolio, to more amount flight flight the generating clean equipment all revenue, of balance assets no equipment acceptable capacity of and is

We continue levels their to resume requirements. can of and service asset airlines fleet in are once back believe market become XXXX, more purchases opportunities attractive assess for to more normalized and able will mark better to the that half

acquisition Regarding as anticipated good aircraft we’ve In fleet XX first from our the overall balance progress of Boeing But up still summer. down lease uptick a or our sales levels. Asset stronger an XXX for made aircraft. we’re of program, volume USM sale seeing on XX carriers gear part pre-pandemic business, either the is the Management in

limited this in challenged attractive also We’re business feedstock prices. availability at by

favorable will we over the next this dynamic However, XX more expect months. become

remain recommission storage aircraft to has were quarter driven MRO business. offset begin do demand at as sales Aircraft lower and strong even Turning for will Engineered product vacancies aircraft. an with specialized far the and the fill some with extended mandates we parts our volume business. high locations, a facilities demand recovery to to the TechOps other Solutions, recommissioned regulatory highly capacity, our by storage Total safety aircraft. products that along maintenance Reviewing our airlines exceeded produce to expect of of full pandemic-related quite our We storage for demand continued some aircraft in comply as strong with in to are been as development enhance any has continue and/or time. commercial side

issued AerTrak for the customer over which including of hold products STC Sale aircraft. by existing type base have of of X XX,XXX marketing STCs FAA. our STCs margins, serve currently netted and we We’re will our certificates, products AerSafe all and strong a supplemental

of potential we completed made tests expected to with any towards flight Regarding customer the which during launch approval is the AerAware, STCs, STC largest market a substantial our period. additional addressable of progress have and gaining

reviewing with public our In our flights test we we’re both engineering the to a prototype as be. full anticipated Boeing and FAA we continue quarter test summary, XXX-XXX We where using NG after performing our in would first aircraft. data exactly work company, proprietary

to look into quarters. a are the about pandemic, have MRO our forward to our dynamic facilities year continues operating resiliency. support enthusiastic performance and in employees and updating very remain future and full a We diversified our the in business great portfolio shown the environment. Our our flexibility coming Over investors

created the Our commercial Martin and to But in the back decade performance is moments. building. strong diversity at result our has I’ll for counter we I’ll a spent hand questions thrive business sources revenue cyclical financial model last it be hedge, over the challenging fully a integrated to their dedication for multi-dimensional the of AerSale answer of a few now, The aviation numbers. in enabling a look market. to and

Martin Garmendia

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

compared million. revenue $XX.X of or revenue to quarter $XX.X Our in first XXXX was million, quarter first the

monitor to our our equipment noted, based the purchases sales quarter-to-quarter Nick over may therefore, from on is business asset As progress flight sales fluctuate on long-term. based and, important and year-to-year it and

Looking purchased Boeing to we announced finalize the the the sale rest customers XXXs, to XXXX, our we ahead in who’s September. to of continue work XX with of

pleased note key commitments these sell, aircraft to converted very or under that facility. our aircraft to lease, being including lease, competitors. We down than break we generate to our at Goodyear are for to Passenger-to-Freighter of flight for have This sale completed higher and or our equipment ability into contracted letters is X of margins intent ability convert XX parts

Asset in Management $XX.X was to quarter AMS Solutions of revenue first $XX.X XXXX. quarter the million, First or compared million

first of feedstock, margins shift the has we from quarter partially for pandemic, from serviceable COVID-XX used declines demand a the was because rates existing these COVID-XX of expected is in material note our XXXX equipment. timing was inventory flight beginning. flight or lower when saw from the the fewer income. to USM revenue AMS the just lower and impact of start equipment which drop opportunities the Since of buy USM, offset compared to positive the On declined utilization on sales, increased revenue and to net pandemic Aside

demand air fleet. As you’re short-term and for declined grounded and significant passenger overhaul airlines aware, travel of engine the a global passenger dropped USM activity leasing portion

rise beginning overhaul as the in especially demand and grounded back to airlines summer, should activity recovery parts to bring for as benefit we USM from air approach maintenance their for travel strengthening the fleet consumption and begin we portions However, of with passenger online. increase, the

Asset to XXXX, quarter our million. of Our with TechOps total segment in increasing the compared to revenue Solutions segment decline first volume offset some of $XX.X of the XX.X% Management

demand Our groundings MRO pandemic. resulted maintenance that from the from increased continue from the facilities benefit the fleet to

sales from at reactivation our feedstock the from recovers as remain Looking in million sales. facilities. being general, period the increased income conversion XXXX. This in and million, compared aircraft passenger $XX.X given the of will confident $X.X CARES to have million, Gross to maintenance prior XXXX the of well This compared XXXX, forward, is $X.X $XX.X we was during XXXX. that a Act flight quarter market the than equipment the or maintenance margin increased operations quarter to $XXX,XXX taken cargo million of up of X.X% expenses costs measures first efficiency by as in $X.X in benefit XXXX Net was on-airport quarter last $XX.X first first which and administrative from the segment corresponding of large higher XXXX of XXXX. number we in a XX.X% public quarter have demand and were is lower result year. savings for XX.X% year. of Income offset Cost advantage Management of recognized incurred company as first strategic work, or million the Selling, in amount million in sales, was and of MRO the heavy same Asset of storage quarter contributions commercial XX.X% to the helped quarter a first about quarter. offset for activity higher identifying and during

in or First primarily prior Payroll EBITDA adjusted sales, to sales Adjusted $XX.X million from XX.X% up higher the was due was of $X.X EBITDA XX.X% Support or the EBITDA quarter $X.X contributions. adjusted in million, Program year. corresponding million, the period of of

have storage the benefit been contributions lower after would support payroll revenues. from EBITDA offset even adjusted However, higher, equipment excluding sales leasing flight and activity as

AerSale the $XX expenses the Support of $XX.X first numbers, out cash our period. Program do of was we receipt operating acquisition are million driver transaction. ample fund $XXX of flexibility embedded $XX associated on beyond. equipment, are prior-year of priorities these quarter Flow the its of As activities of cash acquisition proceeds and At Payroll and in used cash related quarter of provides had main Nick costs in the This quarter as was The our XXXX there then utilization XXXX, flight with financial in adjust of required million flow revolver the primarily asset million. end, to our XXX provided the Cash Boeing during us the that not sheet, proceeds. for million in compared to in noted, operating balance approximately undrawn corresponding to

summary. in Finally, our guidance update

XXXX. e-commerce of $XX to demand in to and expect other $XXX activity adjusted and an demand services. TechOps We continued management continue This accelerating products increase in and $XXX revenue and reflects outlook increased requests of million our freighter conversion asset in to million for for services, million, passenger segment, cargo EBITDA $XX markets, million in and strong on-airport MRO to

segment strong selling We growth aircraft XXX we of Because be Boeing available the the package expect the of conversion to cargo the main for asset the in majority in of of management the driver demand XXXX. project to XXXX. secured monetization continue aircraft, the

we XXXX. commence sales component are our in product storage, activities, MRO late AerAware in TechOps, continued track to and of on contributions For our from addition the maintenance to

do ranges uncertainties activities. pace AerAware, the regarding of factor in sales for for production the due in a possible XXXX to Our start delay initial of projected of scale

diligently We us on work demand product our continue solutions potential meet will launch this to that to anticipated from customer. for allow

In Rescue Lastly, CARES Plan. XX, in since of American $X.X we Act result the XXXX employees a year operating are employees, proceeds fourth have March in the awarded shown addition us awarded extends These and be which in summary, resiliency. the in XXXX, were compliance agreement. pandemic, year required on quarter of million $X.X costs with and higher to flexibility into we under This over our results the of to XXXX full grant proceeds XXXX. our the restrictions great related proceeds to million retention associated company reported award on grant could to

the Our fully dedication strong decade the multidimensional model, integrated have financial performance as of spent we a result and last building. and business

in The beginning in recovery We to Our enabling gains as that, in demand months outperform commercial AerSale to are questions. to is a countercyclical we pay diversity positioned operator, investment we revenue off. competitors greatest our continued a ahead. take sources our steam to believe aviation the hedge, some of has challenging the units the market. ready well experiencing created thrive are With business

Operator

a state Our At [Operator from conducting session. we Please be question of your this question. Gautam Instructions] will is question-and-answer time, Cowen. first Khanna

Gautam Khanna

Yeah, so thanks. of Good questions. morning. I a had couple

First, I do that? How if you was selling curious, this available majority many be will define year, we aircraft, when the you talked how available, of about the will? XXX

Nicolas Finazzo

morning, Well, This hi, Gautam. is Nick. good

engines last enough have We the all we that transaction basically believe total have We market announced purchasing don’t we’re XX package XX to aircrafts that aircrafts. in we in year.

we the consists that basically are to of – selling X XX think XX we and selling, aircrafts. first or in So we’re sold have enough airframes or

transaction engines We repairs have that serviceable first that it through XX we’re to serviceable either XX making the of that were as part engines those aircrafts. or on supply

Additional were for aircrafts additional require in which acquiring. will the engines market

So major available is have of benefit a excessive. for overhaul this the time package a that is Cost engines. overhauls that what were we RBXXX to major significant to able up contingent engines pick spend on. to don’t of an we is have aircrafts us of number serviceable And we on

Gautam Khanna

maybe And or sense. over you equipment if the a bit acquisition you’re the characterize bids seeing? could past you could about environment that months? have you it’s Do acquisition out That makes environment, any X X how talk there little changed and

Nicolas Finazzo

really We still in. It perspective the that our feel coming substantially. is changed doesn’t feel from tide it’s

more leasing expected next think to X have be going I’m as remain it’s we but for aircrafts, that more at and comes for are We aircraft take we’re of the have yet one – current basically be are equipment, hold companies before said companies that to determine available equipment that there the the because levels sell those or leasing aircrafts or they volume, acquiring leasing an companies, might this and bite continue value. at Having unserviceable aircrafts whether We the the this are think that, coming out their not level that and – they to seeing aircrafts to prices. would of not available pricing of of As sorry, feel have leasing parked. engines, that at attractive that their are which out and/or require and companies the not keep to increase should going bullet that engine we are to to what return of months we’re that aircrafts is higher holding to the significant It’s maintenance which sale engines airframes, XX it’s finding costs an in aircraft they’re tide to equipment the volume unserviceable engines, on The purchase. would book significant far fully disposing airframe, the time. in service. maintenance beyond that require that’s continues because available can at to and us or coming on comfortable

for airframe monetize. and what and refurbish see us, or side to the So because out engine unserviceable both that’s the the part been built we’ve on side, we opportunity

figure airlines what be travel. it’s market out aircraft [indiscernible] out the should though believe, Now, we depressed, have the to the in more – maintenance with And focused service improving. performing really believe put remain focused have what plans back – in to they to fleet the need respect the that airlines, surge into what a the I don’t future service. into continues even their They’re this to to believe, recovering will continues their sell. aircrafts on trying are. storage, to remain them point the the putting all summer market passenger severely The figure at And on what back put they air remain been to focus they airlines

AerSale become the disposition marketplace acquire of to aircrafts the would that on sense seeing recover also not of fleet will feel to and airlines we’re to redistribute will at the our can’t because amount the using for their aircrafts we We out from the airlines, as focus expected available their will to make be and they on have have time market So it. that yet starts that machinery. that come needs, the excess then fleet to or airlines more prices focus

Gautam Khanna

second AerAware, to potential it for sense. makes then, those? last the could quarter. expected one mentioned on And update some you one elaborate supply on certification still the in me any timing, And constraints, is That you if

Nicolas Finazzo

Okay.

side, my conversation to make we at that of concern at required And the already counterpart produce and that. issue. result potential alleviated. nice with supply the have is customer. as needs not can assured face place Universal. I was I’ve been we’re over the anyone Elbit/Universal else. company all supply our infrastructure take a to put launch From that whatever equipment to gearing the supply constraint had be value We’ve very respect our their kits is for launch potential their our with I side, parent the And, no a customer discussions that So for that. control side basically with necessary going up an on to do AerSale supply in to

quarter. with this for reason any to discussing or fully choose we is, that complicated the unrealistic Elbit one, modifications of With stage The we the time to I could the out. point we this subcontractors, the to it’s to get complete think, respect FAA software our material, say certification we because was to it AerAware, end development the the didn’t at We’re of assume, didn’t and system. that at subcontract do work I second understand of by how appreciate, availability fully

consuming flight modify supplied For the us in deck be time that from aircraft correctly the the head in make Elbit software symbology that to sure is to comparison incorporate components all that flight to the conversion extract the deck kits prepare to displays to the – modify out the comes difficult us. difficult to display. wearable how is it appreciate didn’t we didn’t what the – the seem the to of That to the data

long; of good business have take a I think appreciation just this in for that course ordinary to we it’s for them we’ve it. didn’t the learned

and dozen the FAA – off we the our There as timing were a that different fix a that move that’s in minor to the came able be projections as business. thinking did they on we takes were that to to Elbit modifications we that won’t to won’t different a were FAA, few set to our And with be get their the are about And retest we with won’t to until people simple testing be they X to fix. take give fast X weeks move. FAA, first do airplane. we’re long software completed items to testing, to to had the we But going those finish process. is When aircraft, this able system. of think going certification any up testing more and able Elbit/Universal add would the software it’s fix. able it the complete It until But until not to So to process, complete we completed. we to which to flight

the So I certification. third end very at FAA the think of fourth the to quarter beginning the best of in quarter the that more receive we’re case, looking at potentially and

Gautam Khanna

the launch the a will does the [advance, Or you [ph]? actually And customer order Okay. in place so have – contingent they an order ability] something – customer order follow that certification?

Nicolas Finazzo

in having advance. by believe contingent I order we’ll the approved a to this FAA subject get

Gautam Khanna

Thank you much, very guys.

Nicolas Finazzo

welcome. You’re

Operator

from Skibitski Advisors. Please Global Our next question state of your is Alembic Pete question.

Pete Skibitski

your to So, goal, in going depth would is XX just downturn? be the of downturn presumably, I question second than of worst to goal that over acquire would of just you I level that the similar feel morning, your Gautam’s Hey, And guys to your presume forward roughly to get the the through like guys of kind commercial understanding large to a question. had expect months? to probably over do – more buy in pricing assets kind good the timeframe? place number a of Hey, history. guys. you perspective, kind guess, of because improve you financing I assets top buy wanted have, you ever Nick,

Nicolas Finazzo

millions And necessarily have acquire yes. the The answer is do financing hundreds that assets, of fleet of available we not a all dollars. of of large to

would the However, financial billions to financial to that our buyer it, a take use hundreds of therefore, manage playing acquire of are dollars piece own would kind in expect capital, parties the package. millions, with by assets, not, in resources on acquire we we of returns receive work permitting to do we parties typically with if to would, capital the and discussions financial they space. do outsize would that where multiple still their we to an their those we that We receive couldn’t have us of our would of it, this and return

Pete Skibitski

Okay, okay…

Martin Garmendia

Just to in million that $XX quarter. to of revolver, the with $XXX add the we of sat have the we do million at available cash end

XXXs the the We’re actually monetizing be period. to of got remaining in the

So we’re period. going to have cash coming in during that overall

[indiscernible]. So it will give sources us additional additional capital to be in able to redeploy

Pete Skibitski

monetize longer, color. trying guys play an I assets great XX It’s think – but or these could how cycle, out? I entire it. so I’m over know, – I that’s just you years other very to Okay. just because sometimes over helpful, appreciate So the

Nicolas Finazzo

to as we’re also – replenishing more we portfolio. assets also And we the expect have we our as requirement further hold I’ll add,

adjusted will value facility credit a to aircraft carrying of on lease. higher Our reflect be engines and

Pete Skibitski

guys. Okay, okay. Thanks,

Nicolas Finazzo

welcome. You’re

Operator

Our question Ken your next [Operator is state Please Instructions] of from Herbert question. Canaccord.

Ken Herbert

Good see clearly coming positive risk out conversions previously? to to the strength belly sort the morning, more markets you structurally high do extent comes Nick capacity the cargo and potential of that COVID incrementally And and cargo than you are the what view of as Martin. level you’ve your comments different markets or with positive seen Nick, at back market, some else. everything the cargo like in Do sounded recent online?

Nicolas Finazzo

consider market today discussing been What’s different being past again Again, we’ve different. what e-commerce – yes, lack booming fostering is the if or being decade. on actually, of evolved I structurally don’t freight structurally see it the that’s the – the capacity over aircraft. something you is that’s the than, exacerbating market passenger belly

market wide-body expect market, So, as e-commerce booming has for passenger normalcy more the severely airlines been to carrying wide-body wide-body greatest recover. the as the the market down. has remain carrying cargo is cargo. traffic that to passenger of one the COVID-XX, about we market do will one been amount the the the market But return And that by adjusted way continues market wide-body the thinking impacted

be the our there’s years. the going that follow and the COVID. which majority boom don’t for free the the for recovers several any to resolution be going market or world until international that It’s being And a of to in we to of continue in of cargo see a So wide-body airlines. pandemic significant vaccinated opinion will change

and will that as it doesn’t side. the with today. to business. of refocus our or equipment we many on before, side selling the we’re us, our mentioned didn’t the to freighter the But matter customers freighter passenger whether changes deal as shift, we Previously, are I’ve side Now, we passenger strategy

from As we’ve the of you’ve that shift very business. that focused now the heard side the is announced, transactions on freighter

the ability industry, cargo our what’s move to or booming. side. in whether is and side side to or – pivot the is happening segment, to freight kind of makes booming, it’s the is agnostic side business really which passenger passenger from cargo So side us X the the It the

Ken Herbert

growth quarter. terms the USM, to either of that the I sequential about seen in trends the MRO or we’ve Okay. limiting seeing? quarter lack fourth you unmet about Can businesses? calendar from in talk the the the fourth the requirements you the quarter you’ve talked saw is to USM Very demand first and feedstock helpful. the maybe of Are quarter from but you there, know first

Nicolas Finazzo

has I uptick are we in mentioned, still for previously attractive seeing as been I demand As scarce Availability material. discussed. prices, at an

typically feels that out. different demand point. One like get material our used days repair of sending have for used the at this for serviceable is of the serviceable is can’t material the some some used It the that things at out is we it’s therefore, serviceable we XX shop. side, doubled And engine for time this cycle – parts material but on

repair. material shops we’re the experience market back and material, employees, availability ability or recover So going until to the those component in those of the put and to serviceable parts engine used to our lag a that used their post bring continue shops serviceable between

it but by slowed uptick, demand lead-time for long being seeing are parts is re-servicing. the we So

Ken Herbert

of you’re a a think depending within up, get easier, could just USM, airlines to pricing from little airlines upon or what a pricing little summer? go standpoint we sense at the a more we or some where are you the urgency summer, finally, USM trends the you pricing spring the And and pricing the be in into that utilization just get as on see a be situation do might when seeing about

Nicolas Finazzo

change We been don’t in Pricing see pricing. significant consistent. has a

haven’t people to in parts reduction any seen significant We that the buy. need

you tell see expect that the quickly. material that or can’t in seen So generally pricing to we’ve significant I moves

going move repair, it’ll effects with if in what anything not it pressure not on, that we some would more and onto consistent done that oh-by-the-way material value put as seeing as continue it’s cost believe increasing that demand, there’ll to of is to and sorry, expect consistent. to exceeds material move. material we’re continue pricing aircraft not I but subject of there’s is the Now, they But material see of strong and yet, see comes it the as we seeing be And pricing, pricing, to pricing, the that the the demand staying some supply The for more If repairs, typically the to aircraft would expect availability. time. because at down. point, soften, down stuff COVID recover demand. market, we not more – on industry, recovers, continue flying for go to anything on I’m that will at as will the – stuff moves parts. over And industry as upward pricing

of kick up, cost So go eventually cost cost inflationary seeing not of which up, go to is yet repair to material if we’re will in. going going material is

So we we expect expect do and expect don’t eventually pricing a to see to softening a pricing see – we in will hold escalate. contrary, the pricing. To see to

Ken Herbert

you Thank very time. much for the Great.

Nicolas Finazzo

Ken. You’re welcome,

Operator

closing have the question-and-answer We call reached remarks. end the Finazzo to back for I the session. Nick of now will over turn

Nicolas Finazzo

Ken. and you speaking to for gentlemen, next from to morning Pete We again. our the you great look all and quarter. forward listening thank Gautam, for Again, to call ladies Thanks, this and questions

Operator

concludes conference. This today’s

and disconnect at for day. this Thank time. you your a may have lines great You your participation

AerSale (ASLE) 7 May 212021 Q1 Earnings call transcript