Chorus Aviation Inc.

Thank you, Michelle. Hello and thank you everyone for joining us today for another quarter 2021 conference call and audio webcast.

With me today from Chorus are Joe Randell, President and Chief Executive Officer; and Gary Osborne, Chief Financial Officer. We’ll start the call by giving a brief overview of the results and then go on to questions from the analyst community.

Because some of the discussion in this call may be forward-looking, I direct your attention to the caution regarding forward-looking information and statements, which are subject to various risks, uncertainties and assumptions that are included or referenced in our management’s discussion and analysis of the results and operations of Chorus Aviation Inc. for the period ended September 30, 2021, the Outlook section and other sections of our MD&A where such statements appear.

In addition, some of the following discussion involves certain non-GAAP financial measures, including references to EBITDA, adjusted EBITDA, adjusted EBT and adjusted net income. Please refer to our MD&A for a discussion relating to the use of such non-GAAP measures.

I’ll now turn the call over to Joe.

Thank you, Natalie and good morning everyone. Many airlines, including Air Canada are reporting their strongest results since the onset of the pandemic and are optimistic these positive trends will continue.

Our experience is no different. Changes in the air and our industry has arrived at an important inflection point.

Throughout this crisis, we've made significant strides to secure liquidity, strength in our balance sheet and our customer relationships, and to prepare as best we can to seize opportunities. The regional aviation sector is leading the recovery of domestic air transportation in many parts of the world.

Improving market conditions are evidence this quarter by the significant increases in fleet utilization, by both our Air Canada express operation and our portfolio of lease aircraft. Starting with the CPA operations, all aircrafts have been removed from storage and returned to service.

In the third quarter, we carried more than double the number of passengers we carried in the first half of this year. For the balance of this year, we are projected to operate approximately 75% to 80% of our fourth quarter 2019 flying activity.

As such, we're very pleased to have welcomed back substantially all our frontline and administrative staff and our recruiting additional team members. Jazz is compliant with federal COVID 19 vaccination regulations.

Approximately 98% of our employees are fully vaccinated. The employees who are not vaccinated or do not have the medical or permitted exemption are on paid leave.

Additional indicators that regional and domestic air travel is recovering are found in our leasing business where leasing revenue collections increased to 77%, 10 percentage points over the previous quarter. Our portfolio of lease aircraft, excluding those off lease operated at approximately 75% of their pre-pandemic average flying hours in the third quarter of this year, compared to 2019, a remarkable improvement given the industry has was essentially grounded at the height of the pandemic.

Since our last report out, we successfully executed agreements to lease eight off lease aircraft with two new customers. We're pleased to welcome Emerald Airlines of Dublin Ireland and Connect Airlines of Boston, Massachusetts to our portfolio.

We now have only two remaining aircraft to be remarketed and we're in discussions with the potential operators. Going forward, we believe airlines will increasingly look to operating leases to finance their fleets, whether to conserve capital or to support their efficiency and sustainability initiatives.

Growth in the middle class markets was driving rapid pre-pandemic growth in emerging markets and we expect this growth trajectory to resume. Demand for regional aircraft in the 100 to 150 seat range, primarily the new generation Airbus A220s and the Embraer 2s now commonly referred to as crossover aircraft present exciting opportunities.

Turboprops continue to be an integral part of regional networks worldwide, given their ability to properly match market demand in unique markets where there was flying at the height of the pandemic, it was with turboprops. These aircraft offer greener credentials than jet aircraft and major airlines are considering how they replace 50 seat jets.

And this could be with Dash 8-400 and ATRs. Electric and hydrogen propelled engines are being explored and we're watching developments closely.

Given the changes to our industry and the emerging opportunities, we continue to believe that we're in the right sector of the business. Our ability to manage the entire lifecycle of a regional aircraft is a major strength that differentiates us from the competition.

New contracts recently awarded to Boiser, demonstrate the ingenuity and expertise of our team. By the end of this month, we'll be fully operational under the pure later agreement and we're hopeful to grow this book of business.

Our facility in North Bay is extremely busy and we're very pleased with the exciting work happening there. So I'm optimistic the worst is behind us, and I couldn't be more grateful to our employees for their steadfast commitment to safety, the wellbeing of our customers, the company and one another.

The good work we've done together throughout this crisis provides a solid foundation that will deliver value to our stakeholders. Thank you for listening.

And I'll now turn the call over to Gary.

Thank you, Joe and good morning. Here's how the third quarter of this year compares to the quarter of 2020.

We generated adjusted EBITDA of $78.1 million, which decreased by $7.8 million related to the 2021 CPA amendments and the reduction in foreign exchange rate from the prior year. Adjusted net income was $15.3 million in the quarter, an increase of $4.4 million which resulted in adjusted EPS of $0.09 versus $0.07 in the third quarter 2020.

The increase was primarily due to a reduction in interest expense, resulting from the repayment of amortizing term loans and lower depreciation expense. The RAS segment adjusted EBITDA was essentially unchanged from the prior quarter due to additional aircraft earning lease revenue offset by lower lease revenue attributable to restructured leases and lower earnings due to lower US dollar exchange rate.

The RAS segments adjusted EBITDA decreased by $7.7 million. The third quarter results were acted by a decrease in fixed margin of $2.4 million in accordance with the CPA, an increase in stock-based compensation of $1.5 million, an increase in general and administrative expenses attributable to increased operations and a decrease in incentive revenue of $0.6 million offset by an increase in capitalization of major maintenance overhauls on owned aircraft of $2.1 million, an increase in other revenue due to an increase in third party MRO activity in part sales and an increase in aircraft leasing revenue under the CPA of $0.3 million, primarily due to six incremental CRJ 900s offset by the removal of the Dash A-300 fleet and lower earnings of $1.8 million due to lower US dollar exchange rate.

Adjusted net income was $15.3 million for the quarter, an increase of $4.4 million due to a decrease of $5.7 million due to changes in foreign exchange, a reduction in net interest cost of $2.8 million, a decrease in depreciation expense of $2.1 million, a $1.3 million decrease in adjusted income tax expense offset by the aforementioned $7.8 million decrease in adjusted EBITDA. Net income decreased $34.5 million over the prior period due to an increase in net unrealized foreign exchange losses, primarily on long term debt of $40.8 million an increase in lease reposession costs of $2.8 million primarily related to refurbishments, offset by a decrease in impairment provisions of $4.8 million in the RAL segment and the previously noted increase in adjusted net income of $4.4 million.

Now turning to liquidity. We ended the quarter with $258.1 million in liquidity, which was an increase of $80.2 million or over the second quarter of 2021, primarily due to the issuance of the unsecured Series C dementias or net proceeds of $80.9 million.

Of these net proceeds $29.8 million -- $29.8 million is currently held in a restricted cash account in exchange for a conditional waiver of the 35% repayment obligation under the unsecured revolving credit facility. The net proceeds from the US issuance, including the related restricted cash will be used primarily or sorry, partially redeem or repay existing indebtedness, including the 6% debentures which may be redeemed on or after December 31, 2021.

Liquidity excluding the net proceeds from the Series C to ventures and related restricted cash increased by $29.1 million over the second quarter of 2021 due to positive operating cash flows of $82.8 million offset by scheduled debt repayments of $45.5 million in additions to property and equipment of $9 million. In October, 2021, Chorus repaid $30 million under its operating credit facility and subsequently entered into a new three year committed operating credit facility on October 14, 2021.

This new facility provides Chorus with a committed limit of $75 million plus a $25 million uncommitted accordion. Other key liquidity movements during the quarter included increased cash of $46.9 million due to higher accounts payable resulting from operations and commodity taxes relating to the timing of cash payments, increased cash of $11.5 million due to the increase in security deposits and maintenance reserves, decreased cash of $45.5 million due to scheduled debt repayment, decreased cash of $42.7 million due to an increase in restricted cash, including the aforementioned $29.8 million held for the conditional EDC waiver, decreased cash of $13.8 billion due to an increase in the accounts receivable from Air Canada of $4.7 and an increase in RAL's gross lease receivables of $9.1 million, decreased cash of $9 million due to investments in property, plant and equipment.

As of September 30, 2021, the controllable cost per bureau receivable was $12.7 million over the Greek cap of $20 million in subsequent only paid in accordance with the 2021 CPA amendment as COVID O's impact varies by region. And our CPA CAC portfolio is global in nature.

We anticipate that CACs gross lease receival at $62.3 million. US at the end of the third quarter could increase up to $65 million us by the end of the fourth quarter 2021, which is up from our outlook, share less quarter due to potential delays and payment plan capital expenditures in 2021, including capitalized major maintenance overhauls are estimated to be between $19 million and $20 million.

This estimate includes between seven and 9 million. That will be include in the controllable costs and paid by Air Canada.

Planned aircraft related acquisitions are expected to be between $42 million and $50 million in 2021 actual spend to September 30, 2021 was $42.7 million while there are no further significant growth capital expenditures forecast for 2021. At this time, we continue to prudently evaluate new transactions while also remarketing our two awfully CRJ 900 aircraft and one Dash 8 400.

We expect to be returned at the end of January, 2022 with the current recovery and pass through demand for air travel and further improvement expected in 2022 course plans to invest between $300 million and $400 million in aircraft acquisitions in 2022, finance through existing cash resources, capital raises, secure debt financing, or combinations thereof. We have continued with our plan to create additional flexibility in our capital structure, by paying down our secured and overall adjusted net debt.

By the end of the third quarter, we successfully completed another capital raise with gross proceeds of $85 million and reduce our adjusted net debt. Since the beginning of the year by $194.8 million, we also increased our percentage of unsecured debt to approximately 18% of total debt and brought our unencumbered asset pool to approximately $115 million us.

We have participate continuing with our debt reductions while evaluating growth opportunities over the course of this year, before opening the call to questions from the analyst community, I would like to acknowledge the continued outstanding efforts of our team during 2021 in a challenging and evolving operating environment. That concludes my commentary.

Thank you for listening. Operator, we can open the call to questions.

So question on, I guess the growth plans for 2022 in the MD&A you've highlighted that I guess your current expectation is that you may be spending between $300 million to $400 million for additional aircraft acquisitions. Can you talk a little bit about what specific opportunities you're seeing there are these, I guess buying out of leases are, are there, I guess maybe new aircraft mean, you mentioned a two 20 and, and E two as attractive assets.

So maybe just a little more detail around your expectations for next year on the portfolio growth.

Sure. Well, what we're seeing now is more activity in the market with respect to sale and lease back opportunities specifically as scarier.

The manufacturers are starting to ramp back up carriers are you know, really firming up their commitments in terms of these aircraft deliveries. Most, especially on the crossover aircraft that I mentioned.

So obviously that's an area that, you know, we've been at have been previously and now look to pick up on and during this period of as well, we've seen and we expect we will continue to see some portfolios that may become available as well. So we're starting to see more activity more often opportunities.

I think the last, this last quarter is when we've really seen it sort of start to pick up and that's why we have this optimism and we're seeing the request for proposals out there now from carriers.

Okay. That's helpful.

And, and I guess my second question is, is kind of related to the leasing business. I mean, in Q3 I guess before tax there was a loss in the business.

I mean, obviously you, haven't got your full portfolio on lease. So presumably that that will that will change, but can you talk about the profitability of that business as it kind of normalizes and, and given maybe what lease rates have done, I mean, can this business get back to the level of profitability that, that certainly meets your return objectives, but also is, is consist to with maybe what you saw pre pandemic?

Here when you look at the rail division, certainly we're going to have a lot of aircraft or they currently off these aircraft coming back to work. The other thing is to note is, is a Mexico and others emerge from bankruptcy.

They'll get back on the positive side ledgers for as growth in revenue as they went through the bankruptcy piece. It was a little more challenging.

So we're going to see the pickup from the off lease aircraft. And plus is some of these leases get restructured a little bit of a pickup there.

So we expect things to get a bit better on the revenue line. That way the other side is the interest has been coming down on that side as we've been paying down our debt.

So you'll see that make its way through and then the other thing is on the ECL. We booked just short of a million, I think there's 900,000 in the quarter.

And we continue to monitor that, but as the, the health of the lessees has been turning around, you know, we're hoping that that ECL provision will turn around also. So from that perspective, but I think the core fleet will start to perform better then as we grow, we'll continue to add aircraft into that.

And certainly that will start to, to get the emergence back to a much healthier level. And, the other side is SGE is a bit high right now is the percentage of revenue.

And that's really because of the nature of what we just went through, where we had lease aircraft and whatnot. And as we grow, that'll come down.

So there'll be a, a few factors that we'll start to bring that back to a better merge. So, I would say Cameron, in terms of the opportunities in getting back to normal, it's between two areas.

One is, there are still a number of airplanes that are off lease and distress in terms of the older portfolios, et cetera. The good thing is that we have essentially placed all of our grounded aircraft back on lease.

So, it's something that we don't need to have and see these aircraft coming back in the near term and be under a lot of downward pressure because the market will be absorbing some of these excess assets that are there. So that's one part of it, but the other side is the actual sale and lease back side, which we see recovering very well because these are new assets.

They're not really competing against the assets that have been grounded. They're new technology they're because of the green initiatives, carriers re fleeting, et cetera.

So that end of the business we're recovering in a very good way. And as I mentioned in my comments, you know, with the balance sheets that are there, we think that the penetration of operating leases within the business will actually increase as a percentage of the new production that's coming out.

So, so that's why we're optimistic in terms of that part of the business. It doesn't mean that there won't be competition out there, etcetera, but we believe we can compete in that business.

And you know, so that will be a focus and any other portfolios that are out there, should be priced according to the market conditions, et cetera, that exist for those, for those aircraft. So, that's why we feel the worst behind us.

We just have these two airplanes left to release that were optimistic. We'll have something there very soon and then we'll be focused on the two areas that I just mentioned.

Okay. No, that that's great.

I'll pass the line. Thanks very much.

Hi, thanks for taking my question. I just had a question about the leasing business specifically just to build on camera's question as we think about the recovery moving forward.

Do you think we've seen the worst of the downward revisions to these rates or there's still pockets of vulnerability in the leasing portfolio?

I think as I mentioned in my comments, I think we've seen now an inflection point. You know, I, I see as carriers get back up and as passenger travel resumes and as vaccination rates increase because, you know, the vaccination rates is really key here in terms of the recovery of the business.

I think as we see that continue to, to rise, the business itself will rise accordingly in terms of, of the level of demand as people get back up in the air. And you know, I think that's evidenced by the increased utilization we're seeing in the fleet, both ones, the aircraft release, we monitor that closely.

And of course our air Canada express operation, which is has rebounded quite significantly.

Great. And just one, one quick question about the regional aviation services.

So just wondering what about the necessary resources that are being bought, being brought back to support the recovery. And are you seeing any bottlenecks that that you're, you're seeing in that recovery there?

No, we're, we're very busy training people and, you know, we've gone through our list and in fact, we're hiring flight attendants now, et cetera. But you know, we don't see anything in an air term at all that is going to create any pressure for us.

We look at the industry going forward, just like coming into the pandemic. Everyone was looking at the pipeline of staff, etcetera, but relative to others in the industry, I think we're really in a good position.

We have this flow-through agreement with Canada, Air Canada. It comes back, they will be hiring a lot of our pilots, but that helps us hire pilots ourselves because they see a career path through Jazz as being a long term career path in the industry.

And you know, that's why we're such a, I think a very good part of the supply chain, very strong with the relationship with air Canada, but you know, it's something that we have to keep our eye on going forward for sure is the availability of human resources.

Hi. Thanks for taking my question.

I, I, I did get on the, the call a little bit late, so maybe you did, did address this, just, just wondering when you look at the leasing business or, or chorus aviation capital specifically, just, just wondering, you know, I guess the, the potential changes is to the taxes in that jurisdiction given, given the broader global tax mandates being put out by, by major economies. Does that mature change the returns you would see within CAC or, or, or is it, or does it just end up kind of being a rounding error?

Kevin no, we don't see it as really changing the equation. You know, the minimum tax going from really 12 and a half in Ireland to 15 wouldn't have a material impact because there's a couple things at play in Ireland.

The way the tax regime works is really your, your income is deferred really to the end, you, and as a result, it's at the back end. So when we look at returns, it'll affect that and it's pretty nominal the difference as far as that goes.

And so we don't see it as being a material to the business and not changing the value equation.

Okay. That's helpful.

And I guess just on, I guess, the refocus on growth here within, within leasing it sounds like you feel you turn the corner on lease rates. You, willing to put some capital to work here on the sales lease back, but presumably, these lease rates probably aren't where they were at least pre pandemic, even if they've inflected positively, you know, to, to get the returns you are typically targeting.

Does that suggest that you're able to get these assets at a, at a lower price to, to kind of drive that mid team's ROE or typically it's pushed through your hurdle OIC percentage.

So here again on the lease rate factors, obviously they'll be commensurate with the metal value and also the interest rates and whatnot. Certainly they're a little bit lower, I would say on some of the larger equipment, but the financing is much more competitive and, and much more dynamic that way.

So from that perspective, the return should be, you know, in, in good stead for, for those that metal. So we're not really that concerned that we won't be able to at least be competitive in that space.

Okay. And maybe just last one for me you know, 75% of your lead aircraft are, are, or your, your, your least aircraft are running about 75% utilization from pre pandemic levels.

Is there a way to think of how that's bifurcated, is it a pretty wide range? Like some people are at a hundred and some people are in 50 and you kind of average out 75, or is it pretty tight around that 75% range?

It there's some variation amongst the carriers, and generally it's pretty much correlated to what's going on in the country with respect to COVID in that geography. So, it's variable.

You know, so we don't speak to the individual operator, but there, there is variation.

Okay. Maybe I could just ask a last one.

I know this, this is probably difficult to just answer on the fly, but I look at you like your, your, your, your, let's say 2019, cash flow from operation, then I'll take a working capital. Cause I know that can swing around for you guys.

I should, if I look at '18 and '19, you're kind of hovering around 270 million on an annualized basis. Just wondering, based on what you're seeing today in the recovery in the lease portfolio where lease rates are, where, you renegotiate the Air Canada contract, I guess what, how much can you get back to that $270 million level, or how much of that is just, let's say just totally impaired because, you know, you have to renegotiate some of these agreements and, and, and, and maybe if you kind of get to 90% of that, that's kind of as good as you can get with the existing portfolio.

And then to grow above that your, your obviously investing in your, in your asset base is, is there a way to kind of frame that just based on all the, all the stuff you've done over the past couple of years?

Yeah. Sorry, it's Gary here.

If you look at you know, prior to COVID or, you know pre the 20, 19 20 20 levels, there there's some changes obviously that have occurred on the morale side with leasing, but also with the CPA peaks that you know, we've had to, you know, the step, a bit of a step down of the fixed fee and what autumn and remove. So certainly there's some changes there, but the one thing is the steadiness of the cash flow is still there.

And as you look forward, it should grow a little bit hopefully as a row. And, and that starts to kick in and void your what the growth they're seeing, but, you know, the levels you're seeing with a bit, you know, at today's level are, you know, certainly good basis to move forward without giving a big prediction is where it's moving.

But we'll start, certainly it's a great base to move ahead with, and you probably see some growth from it as we get aircraft released and, and voyaged a little bit more.

Okay. That's fair.

And that's helpful, good progress in the third quarter on the recovery. So I'll leave it there.

Thank you for taking my questions.

Hi, this is Ryall Stroud on for Walter. Good morning, and thanks for taking my questions today.

Good morning.

I just wanted to start off and, and was wondering if you could provide us with some more context in what you're seeing on the domestic recovery front, you know, is moving from 55% recovered in Q3 to 75 to 80% recovered in Q4 this fairly significant jump. And maybe looking ahead, how far away do you think you are from fully returning to normal from a, from a capacity perspective?

Well, considering in terms of our air Canada express flying and the level of flying that is actually determined by air Canada we do not determine that. So, in terms of predicting the indication that we have now with respect to the fourth quarter is the plan that we have from air Canada, but I think with this trend, continuing, you can certainly see with this type of trajectory that getting back close to full operations in the, probably late second quarter could be very achievable, but again, it depends.

It depends on, on the demand on the air Canada front. It depends on you know, the border.

And I know that there's a lot of pressure these days to make crossing the border easily more easy or easier. And I think our operation really benefits from things like that because we do a lot of transporter flying for Canada, as well as they open the transporter markets and, and travel increases.

And you know, and we are seeing on the flights that we operate very good demand in the domestic market. So, I think I think it's, it's looking pretty good and of course we're on the right side of the business because the demand for the smaller aircraft really is the first to come back.

And, you know, that's why our 76 seat after jet aircraft are very busy these days flying throughout north America for Canada. And that same sort of pattern is existing in other parts of the world.

You know, we've seen Europe now you know, there have been a few fits and starts there, but, and that, but you know, headed in the same direction.

Got it. That makes sense.

And that's very helpful color. And then, then just, just lastly here you know, you mentioned that the pure later agreement kicks in later this month.

I was wondering if you could provide us with any color on, on how material this is expected to be to the top line, and if there's any additional CapEx spend associated with partnership

Sorry, it's Gary here on the, I can ask the CapEx is minimal it's in forecast and, and it's certainly not significant. And then on the revenue line, it's not overly material to course at this point in time, but it continues to grow.

And as the relationship grows, it'll continue to make its way through. We've also had the pure later arrangement in place now for two or three quarters because it star trial.

So a lot of that, revenue bump up, you've seen at least off the existing fleet, but we are hoping to grow that relationship. Yeah.

What I would say is that we've converted these dash eight one hundreds Bo inch freighters and you know, we had temporarily aircraft operating in there for pure later that were not the fully converted freighters that we now have in there operating for later. But we do have a number of these airplanes to convert and you know, the conversion cost is quite reasonable.

You know, from what we understand the aircraft are performing very well. They have a very good payload on, especially transporter services, et cetera.

And you know, the interesting thing is that the, and because of the online purchasing that's going on in smaller communities and remote areas and that sort of thing, I think that's that puts us in a pretty good place. And I think pure leader has a very strong position in that market as well.

So we'll continue to work with them to identify new opportunities and ways of, of growing that business. So we're optimistic that you know, positive things will continue to occur there.

It's an interesting business to us and we're, we're very focused on the relationship and growing it.

Okay. That's great.

Good to hear and thanks for the color and thanks for taking my questions. I'll pass the line now.

Thank

Good morning guys. So may maybe just digging into here a little bit for next year.

So I think you guys mentioned $300 million to $400 million in aircraft acquisitions next year, perhaps, and that seems like an opportunity base more like more than a sort of a committed CapEx at this point. So let's say you do $300 million to $400 million next year on aircraft.

Like if we, if we look historically, I like that could be possibly six weight, larger aircraft, like eight to twenties or if you go smaller, it's probably 10 to 15 regional aircraft. So can, can you give us some sense, like, is there going to be a mix of both, maybe eight to 20 kind of aircraft and smaller aircraft?

So we are anywhere between probably eight to 10 or 12 aircraft possibly and decide that you're anticipating next year. It's scarier.

It could be a, there'll be a mix of those types of aircraft. We're not getting specific guidance on the aircraft, but giving a range for the CapEx and your point.

It, it will depend on the deals that we focus in on and we're able to complete, but your just weren't, I don't believe off. Yeah.

And the opportunities, you know, I mentioned to cross over airplanes with respect to the E2S and the a two 20S and of course now ATR is starting to pick up in terms of their manufacturing rate as well. So, ATR 72S potentially could be in the mix.

The manufacturing of P8, 400 has been suspended. So there's not a lot of activity in that regard, but in terms of new metal those are the three aircraft types, but of course they vary quite a bit in terms of their acquisition cost.

And it's hard to say exactly what the mix will be but you're right. You know, the number of airplanes is clearly, you know, has to be reflected in the mix and of the 400, three to 400.

Okay. That makes sense.

And that kind of probably puts you back somewhere to your pre pandemic kind of goal for, for 20 aircraft or so. Yeah.

So, so it seems like it's heading there no, with respect to non aircraft CapEx. And I, I know it's still a bit premature, but like we have seen perhaps not a significant variation this year versus 2020 and maybe before, but is it fair to expect the non aircraft CapEx it's more or less similar in 2022?

I would say any, any, any incremental ramp up your expense

Scary here. Can't really give you a good flavor for that at this point in time.

As the operation ramps up though, one would expect that that would ramp up a bit, but the, you know, if you look at particularly for jazz things have changed with the embryos coming in play too. So you know, I think a little early to give you, give you guidance on for next year.

Okay. Not, not a problem, Larry, thank you so much for that.

And then lastly, for me with respect to the, the remarketed aircraft so I think you have done about 11 of those so far and, and the two are coming out shortly as well. So, yeah, and I think if I'm reading it correctly, you mentioned somewhere in the disclosures the, the sixth, I think ATRs are spreading over the next 12 months or so essentially can like, can you provide any sense as to -- should we expect the, the ramp of remarketed aircraft placed into the leasing revenue to be linear over the next three to four quarters strike on Q4?

Or should we expect like a big bump in one or two quarters?

I think it's scary here. I think it would be more linear, but it could change.

I, I know of deliveries and the timeframes have moved around a little bit with Emerald and other carriers. So they could, it could be, it could be a spike or it could be more linear, but for modeling, I would probably use more of a linear approach.

Okay. That makes sense.

Thank you so much. Thanks guys.

Yeah,

Thank you, Michelle. And thank you everyone for being present on this call.

And we look forward to speaking with you all soon. Have a great day,