Air Transport Services (ATSG) 7 May 242024 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Q1 2024 Air Transport Services Group, Inc. Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Joe Payne, Chief Legal Officer.

to quarter welcome call. earnings and morning, our XXXX first conference Good issued after yesterday earnings market We release the our closed. It's on atsginc.com. our website at

begin involve risks that you uncertainties. call, projections by course and other me and that this make we during statements forward-looking of will Let the advising

we results actual those future differ materially events Our here. may other from and describe

forward-looking Transport changes. forward-looking statements information to date of the statements as estimates of obligation in changes are These reflect or no call. to based Services Air underlying and update new undertakes on any information, plans factors, Group this assumptions, other

filed and as from SEC, timing week. These limited in and ability to labor filings we customers; of more be our we and to the number, were timing to the current inflation mark-to-market the supply including services, constraints, and result the service may of time in both to chain maintain persist key be ability in price aircraft market; purchase certain agreements but routes the and Form other geopolitical this the the or factors outside to factors financial agencies; modify current industry-specific assets share of changes; which contained in loss traded may and U.S., changes perform market expect; with and configuration; ATSG's for cost on-time the or in remain which include, and/or crisis, instruments; currently with our in compliance general impact we with services with deployments the longer government customers within charges of tensions to conflicts our and are customers; impact to or to, customers, unplanned health to respect competitive on economic aircraft in XX-Q and of lenders the impact time the airline's and including including severe our rates, of operating control interest a not in cargo our human demand costs; able for reduction the conditions, than a which regulatory scheduled and changes level fluctuations

included will earnings in refer cash pretax adjusted adjusted adjusted share, assessing adjusted EBITDA, release and financial including the are continuing flow. refer financials. investors measures from metrics position non-GAAP We GAAP to operations, flow These are adjusted and ATSG's to per also a Management you earnings, GAAP non-GAAP We results. meant be and cash earnings, reconciliations our useful financial to measures substitute website. believes on earnings these for free to in to advise our which are to not measures, our free

And call CEO, over now and I'll his the Chairman Joe comments. Hete, opening for to turn our

like positive I'd to Joe. couple Thanks, with I for our a before have morning, of developments reviewing everyone. share results quarter. you the Good

to add many Amazon As flying The extended with potential more this for beyond and XX includes up in expanded of June. that provide Boeing first just one Amazon will the freighters agreement our XX year you to Amazon agreement XXX-XXX we aircraft operate have the seen, XXXX. more to with

ATSG, providing evidence to we and relationship our with our of At we this expansion believe Amazon are high-quality service those committed to of customers, is efforts.

by operated be will aircraft XX first The ABX Air.

CAM Amazon, of XX initially that that freighters leases. This number by agreement to the including will will for XX year-end, aircraft XX, for ATSG increase operate

and Amazon's and be are continue will operations of to principal We air now provider capacity.

extend the amendment option agreement into the to XXXX, term the with the extends of XXXX. to flying Additionally,

and the benefit of factors additional as in additional guidance flying onboard the impact have XXXX agreement. adjusted We from partial our revenue. costs we year to include under a the aircraft some incremental for benefit the start-up The

in XXXX. from results incremental expect to improve this flying We

granted new ATSG As the and described already release of to they and warrant in Amazon warrants hold. and terms unvested amended incentives X-K, vested the press

ratified until their the with Air labor The that is ABX the This extension next an airlines amendable news off of out their XXXX. date into good contract significant second provides pushing decade. stability over of to customers leadership. piece pilots Hat's the the next weekend,

safety, as want control. focused to and team thank XXXX. their for entire I ATSG the we cost for We execute laid remain efforts plans the we out satisfaction on customer

spending We reductions in generated of the free putting full converted in the the us as the we same of our delivered customers freighters to quarter, external positive cash were achieve position XXX-XXX for X flow, and benefit year. more evident great to capital

million, mentioned, EBITDA our just are expenditure capital our I As and adjusted outlook raising $XX we reaffirming XXXX. guidance by for

for additional best Our and airlines, both guidance. for opportunities forward these look leases the remain our commercial excited our plans. focused to ATSG's We flying incremental about upside of and which to developments aircraft believe showcase realizing could on We're add they fundamentals. these teams

our turn to results for quarter. discuss Turner over Quint financial now the will call to I the

Quint?

a share quarter. Services a prior Thanks, everyone Joe, million, earnings pretax joining $XXX resulted first This year was million. per $XX revenue segment. of results Slide down the morning. in to our first in year start GAAP X, and quarter, this earnings ago This earnings for and I'll were financial CAM $XX we on quarter versus Revenues lower the summarizes share $XX In of the XXXX. million or million us which from to in $X.XX of earnings of down of welcome driven the the both diluted X% diluted $X.XX in period. per ACMI by pretax saw a a versus

an and half to $X.XX. by year prior million, adjusted fell of On $XX million levels down earnings was to $XX basis, EPS adjusted pretax

aircraft segment, revenues leasing decreased X%. our In

interest engine AXXX-XXX Boeing with XXX-XXX of CAM associated XXX flat. XXX-XXX XX been freighters, $X CAM's would additional XXXX, versus the decline million engine have returns fewer expense reflecting March Excluding and X program, $X pretax XXX-XXXs. but earnings a XXX-XXX segment both revenues power million leased depreciation saw Airbus $XX year. the freighters, and from CAM's cycles including for XX XX and revenue Since in prior more were down quarter, million

while deployed XXX-XXX freighters were external during a customers X At external the end, fewer X quarter, Additionally, converted quarter XX year customers, to to ago. leased and X X freighters were were returned. than XXX-XXX aircraft CAM-owned XXX-XXX

the segment, X year. In we pretax the reported our a ACMI year in $X by down of flown compared our block airlines loss X% quarter Services $X million last hours of quarter. loss a of million with were versus prior first Total

interest performed the Department better normal below Defense. see a largest call, was which topic quarter, demand continued from its of of customer, but trends the Omni, to on particular the budget in last than levels

next the to slide. Turning

and power was first to services million businesses the adjusted adjusted million, Of $XX EBITDA by increased service, $XXX Our decline decline XXXs decreased CAM's lower in down resulting compared other $XX year. the million $X in revenues. by quarter remaining the by CAM cycle by driven XXX-XXX was lease million. operated and in ACMI EBITDA, prior cycles engine and returns engine by fewer

ACMI was The operations. driven better our and increase by MRO at performance other in Services

$XX the Slide X consisting basis. million details $XX XX-month our was CapEx for capital growth CapEx. spending in of on in quarter sustaining million and a Total million, $XXX trailing CapEx

million we and than spending to CapEx compared first $XXX in XXXX. is XX% a capital quarter, down Our of decline expenditures project the for year-over-year more

from quarter That was cash slide net flow, down period, our year. Department $XXX Operating the a next cash flow million fuel due usual $XX receivable the versus flow $XX the first recovery in stronger adjusted of to The which as cash sustaining million Defense. this million free prior updates was measured operating year was CapEx. of by than of

the this year. have prior item, cash to decreased would compared Excluding operating $XX million flow by

a basis, On adjusted free ending trailing period March, million comparable from cash flow in slightly was the up XXXX. March XX-month $XXX

bank in $XXX see the million of U.S. X, under credit the the our Slide first On at and was revolver available can quarter. end you that abroad

values continue unencumbered that to $X.X liquidity with maintain asset under facility billion. of We healthy aircraft

to the to turn discuss our outlook. Now updated I'll Joe over call

Thanks, Quint.

to XXXX, of next our an ATSG Including $XX assumptions I'd in XXXX. some Turning Amazon EBITDA outlook million discussing flying of February. from expects to for increased the adjusted slide. announced outlook approximately like opportunities $XXX now increase the and provided yesterday, million in the spend time

or forecast contract, aircraft under excludes Similar additional EBITDA. adjusted prior any leases currently not contribution generate opportunities guidance, to could this flying our which from additional

Amazon-provided assumes to Air. prior into as them projection XX end takes and a as service, into year at of the XXX-XXX aircraft with account over of bringing adding the ABX This start-up costs associated XX well start-up projected pilots

in The February. million adjusted contribution out in from the included was we this expanded EBITDA laid of $XX agreement potential

the includes capital XX mentioned, year. the X in and for CapEx sustaining million with start spending continue aircraft total additional remainder conversion million for The gross process of year $XXX of feedstock were and million expect the year, of growth. acquisitions this to the at the completion spending of As of the we for $XXX the of that outlook $XXX aircraft

levels, cash midsized assets target our the year. demand for we to business outlook We over on our At the optimistic positive long strength our continue strategy. of current the capital and freighters free flow spending the term remain for

we on focused and ourselves market are cost We for operational execution position eventual recovery. as control the

demand. aircraft As to the ready answer meet customers' President; we with Commercial May have and to Berger, I, deploy our That our Chief leasing, concludes we our prepared the Officer, and market question? positioned additional Chase, our along Paul leader in Quint to Mike remarks. are first freighter well midsize are questions.

Becker Helane TD Cowen. [Operator Instructions] comes first from with Our question

So not say, ask feel done. you have you going One always I a congratulations deal X I but like on on. in that I quarter rush, just question questions pilots, you we're is, this and that the like then really. what's done. talking, got And deal we're getting every

done get prompted congratulations what it but finally that, So done? -- to get to on

about in is the ran session the still had XXXX ATI which -- which Well, with last in week. had a the XXXX. CBA things. mediation actually we ABX X fact, pilot are think previously through This Helane, there's you've group, ones them, asked One, was pilots, the which I mediation

challenges that the that in they had of the obviously, back strike ones they XXXX. One had, the were

hole after that, the customers came the to came comfort is of extend that way And wouldn't existing any to in give labor agreement to potential a a company" to some this the to leadership the of. an future. there kind had finally thing. with better go the Let's us you what, experience know than disruptions traditional, realization they dig had offer out they approach maybe And " they so And into

it So hard get going and believe, to this that's kind of X to we're in done it days. got I know Realistically, kicked but something you're to able off, find what done.

So it be a can behind done. can be done. will If it, there's it

a have from for And you think in the others people We're obviously, is realistic expectations they a of business. to in everybody. had agreement type not to what can market the minds to have sides they a stuff back we to passenger some their say FedEx UPS. marketplace it, give not on Obviously, I of altogether. Yes. come for We're table. up. different both When We're works airline. or had our an that put

it's to presenting conferences, done job ISTAT, Facts of not whether way. will Helane, this I'll Mike. at just be conferences. in rebranding see themselves example industry industry that. over done And an and represented nice a Cargo fabulous and really a the they've the their labor. you is also job themselves last positive it airlines fruits unions and at of I several very of think the a Normally, years. add They've

And helpful. it's completely question, follow-up That's my unrelated. really and then just

are there you aircraft going -- that On should are what are are year back or the got is there to back, aircraft there -- more coming that And this we you about? with know do is there that those?

Chase. Paul or cycles, we're cycles it's on either With just their depending -- the Helane, that the -- we're for marketing back, those aircraft come sale where respect aircraft maintenance to are in marketing re-lease.

back several at year, respect opportunities we back that aircraft X in today. more coming have looking we're to aircraft With expect XXXX. We this

or XXXs XXXs? those Are

are ma'am. And XXXs, at for we're least marketing -- Yes. question. sale, I I'm those sorry, misunderstood your sorry, XXX-XXXs. Yes, those

next comes Stifel. Our question from with Frank Galanti

sort of a seasonally September? that for was expectations business. from to the what about it margin And sort of of the sort Can perspective? wanted for pretax the sort to sort repricing what expectations ask of I Omni at of major think are sort Obviously, I contributor maybe segment. negative after the of talk you of that are that then end earnings on

saw it as of of down the Yes, was amount the talked has about Frank, where the from but slight There versus last obviously, standpoint as a prior Department Omni, prior the we Defense decline QX. years. calls, utilization was of been not what by on in first of nearly quarter significant in as versus year, we've

look was things standpoint side that from contributor quarter, for quarter hours, look X% the equation. of be on Omni that in the into the basis. first wasn't the we example, As year-over-year Omni necessarily so a Cargo to we the down to the were picking ATI, second loss results, it up And more experienced. the of at

So a us. lot above, Omni of all of but the it's we a has benefit that combination believe for still longer-term

said exceeded generated XXXX. flow I it last traditionally, our what expectations of at in in where terms and profitability they terms they far of but months, like back made time we And they've underperformed the acquisition cash XX has, had the in the in

of of you Okay. load that calculation? level into sort Is That's there's billion Quint, your values are -- that debt helpful. the future? to on commented relative and a for going leverage you the the sort market about book expectations of book value think And And what at unencumbered is then current value? thinking you about for comment fleet where Can comfort $X.X then assets.

values for each the bank about Yes, in pretty group are do bank appraisal. annually so we and terms Frank. Sure, under senior asset spring, with of that's secured on unencumbered fresh facility. That's that appraisals a that's done we value, something based the our talked there that

they've actually, aircraft values a But example, course, AXXX on values, XX versus the a expect, or you for the ]. course, fleet the XXX or XXX-XXX, of as our X XXX an differ well. of they general, up predominantly they might -- is can And XX in depending [ between, held and type,

it's conversion most largely conversion chosen the the of mind driven is the fleet half And value of pretty that terms value conversion, by of years midsized asset the aircraft. and Over in around. is our freighter still in in itself. the young XXX-XXX is the Keep since

So those values have held up well.

is facility our as of billion bank the collateral at $X.X have have excess a facility all because not we've in combination put as that aircraft, ratio. we That a put well into we coverage

leverage agreement, at a end the about free and way levels earlier the the debt I levels, and according is X.Xx bank spend the cash little as to year, as And our in of at and down generation. flow some quarter. talked the far As under remarks, we onset, mentioned were we're of this CapEx think I some Joe targeting

to So we look move stable range delevering. very of next And in year, we a EBITDA sort ahead see leverage. that to of anticipate as some then begins

Stathoulopoulos from Our with Christopher next question comes SIG.

a in while us any the economics, approached we've So ABX Amazon or here. of think parts here. of the accelerated And Joe, you who moving detail the about we here about of flying gone CAM quickly, it's deal, through, options, ACMI been through, fleet, composition real could since as book, talked the the the walk there's who kind versus a lot order

specifically? So this could us through kind you segment, this of here new deal new walk

yesterday, deal entirely duration, forward So if with the could of -- leases through. the just they end for decade was of of beyond? K off your sort yields wondering a continue uniform through the I And and the heard now? XX Is ABX economics the that the stagger contemplate XX. kind of an XXXs? XXXs There's sort Are And staggered at piece? excuse duration looking there's by we for then have this XX, that year-end. to endpoint of option made of Are me, existing done with so you the now put pull at and or the you

bit. I'll Chris, this you it's Mike. a take through little

end will the future XX will by you year. There's potentially we've aircraft of that ABX. now aircraft at another a award service those incremental get potential heard, as -- So for into initial We'll date. incremental Amazon be through this to XX that designated fly, that will the

to XX of have have potential date. the the also at incremental part potentially that Within as aircraft extensions lease will a that, future come we

extension So that's to potential, is in future. the how the with it the warrants initially, option agreement structured. lease to XX XX include the relates also incremental as

so then of also, seen of sort but think about mix within detail looks as ATI? On what of with any the that? also of and of sort most flying as each think mix are levels similar and that And the in to within aircraft many how ATI routes, what terms familiar and like, ABX similar far ABX I versus as utilization the we've we us of composition of

will ABX. XX initial be The

hours with very if composition XX, a domestic The in We have what date. as we similar we're later they'll make the determine we'll of that to successful will will really flying, additional the at not as only the of today. decision the where block piece, well terms be go

We have tail XXX a minimum [ block per of ] hours

month. Per

Excuse me, per Per month. month. yes,

small just are [indiscernible]. XXX these And Okay.

That's Yes. Correct. right.

Okay.

remind Quint, anything a of us in it. power of follow-up, the that economics, just by Got engines number consider? as else then and could should you Okay. And fleet the cycle we

Well, only prior we context about is to XXX-XXX CAM Sure. And talked the by in been the the offer per customers when type the in maintain, CAM Chris, fleet versus that CFX-XXA relationship a the a pool that to GE-powered of has changes we generally periods pay in engines on being power basis. those cycle cycle they access engines. that And of aircraft. we

As aircraft charge engines lease, ], that would operate cycle and it to is they we of capitalized maintain revenue. would OCAM Any and they do a they [ XXX-XXXs the pool is that they in depreciated. that hit overhauls lease,

or there there's depreciation, So for we've in now which wasn't a in that years, as you see begin on and, we or been remove take impact mostly because EBITDA service can that significant or last is particular, fleet with the drops with. usage, to doing when the utilization from XXX-XXXs, retire expense few

the out. comes straight revenue So

freighters. think, years make we've XX -- sort part and and months. of that seen from of are The said, think, is conversion year XX going beginning in XX to reached talked service. XX ways performing post majority we in fleet, are to eventually, to a of them -- remain to dozen roughly right aircraft from utilization away standpoint their age where aircraft sunset. this some those are monthly it the cycle just we've the that lower service, aircraft And it's so but look service. cycle And would about have we've of that some still that the sense as that so some last remove I of is end such those just remove at around removals, their still those or And that well, I airframe There a in the that are a or life we'll service it's have from of aircraft, the

we expect XX, in that X cliffs. maybe the had next to of only So but or of few of come so sort we years out service some

are may XX what XX Amazon you XX They first the of leasing started. aircraft were all the became first the we As sort Amazon, larger other to recall, that XX aircraft relationship they the of were XXs. got the that were

So terms. -- of with they came had extended lease done a times had as And fleet extend their the that couple an to obviously they option Amazon already end type. of not not to further

what seeing. that's you're So

think, year, this to negative last do these see we a and from of we next look year. into prior as CAM that because I comparing in XXXs So back a year-over-year we year chunks periods got of less basis, on had impact you'll

I so we that And stabilize look will forward. think as

X If I get Okay. just more. could in

and the remind with you Omni? us ATI just labor with are where So talks

Sure.

session X had that folks ago. we the mediation Chris, we're a the work earlier, with couple mentioned with still negotiations. a and folks week to through Omni of at I weeks ATI had last Obviously, trying As the

to here's a weren't with where CBA is up stepped and what they I think we what in okay, we the agreed said, look think look, if amendable, the at who reasonable. position pilots, was ABX you

totally market of for kind I the compare of earlier, a as opposed environment. sets as said a to, business or line it our business a anybody we UPS or it's ourselves of to can't So away FedEx that, different

that this get of particular year. still we So done won't expect any those we

great. we do, that's If

the were plate fact we with think days. and to guys, the ABX that took X I what across get something able realistically the

the to realistic So It here. the table. used there have the have expectations company on other can to side get of from

Our comes Securities. next Truist Ciarmoli with from question Michael

this because Would use you said you pilot I thinking settlement what, think got -- I of hire on to more Amazon, XX the Just to opt that pilots. mean, and you a have did ABX of been challenge. there just

did Just how I ABX play just ATI? guess, the into come versus

a rate board. the was key there think that there to that higher get agreement, on driver basically which the the I people was No, fact new allowed new us

airline One had in months is what of of to And that the has challenges is over the starting pilots. that XX last is course, the we've your had key is regard. finding what other industry in sufficient to XX rate every

be new for So the we able easier to us with it onboard necessary. the people to that basically agreement, made it need

the left on equation don't One had challenges of surprisingly of airplane, the we side cover guys is the that we've the ATI the have seat to of enough. enough

basically much lot to experience a move as have first not seat. hire of to We with new officers able left the to be

done. presents to terms need get of challenges being that in that able flying aircraft staff for So to up we the

the new so necessary onboard option easier to in tight we it people And for the made time agreement with have. that frame ABX certainly the the us

the target to we first get we've receive by we when of have X December that's won't into service mentioned, these bring June. is until lot a As on and airplanes X, aircraft to

Right.

these ABX ATI? wages that more there's profitability the the on Is on Okay. probably planes salary same, assuming just versus and

contract every different is in terms the cost structure. of Yes,

able ATI it's them move to with responsibility to be there. have basing, to example, company first their their they significant domiciled, folks, For assignment, the home are ABX where expense guys to so a the to the get which is

the So side equation that of down. cost keeps that

ATI the on of impact we has of piece is, that to negative pay pay had as The of I other a our earnings the said, that equation premium on the side had amount on it side.

And to piece. agreement that we think hiring the new with facilitates we ABX what the have that's on so And the overcome. side,

million need? lot just point announced dilution. language if new price color guess this Okay. trying mean, the regarding then why with and transaction of Why if mechanics to some give us Got X% behind sell that's what it. And warrants? at background. maybe different to I whole And just any and there there. understand I guess I'm for, there then was deal you just buyback can come did of in a the this X.X a I Amazon you can have guys the the give me

side Yes, course, Michael, creation unique always -- that deals It's deals. of discussions. some And of what's come and equity most assessment these value? that at the value it's that and an as deals, think you these into has a looking done get what best question does don't negotiation to Amazon, they just we've we different expansions interest do of negotiation any we're always part when the kind with significant up look of point in creates the other of I the just to a renewals. the party Amazon, make when they may in and

Our next with question Oppenheimer. Sellhausen comes from Isaac

guess, guidance assumptions I filling on flying the Isaac ask additional wanted Ian. the for mentioned. opportunities or still excludes for I you year. is to This which leases like in any

do I think be you that with that those feel potentially you Or leases expect any that around existing be right additional then the at previously new or or $XX range? higher? could And customers? flying Is would million. to still you quantified

the I'll on take the call. Yes. Appreciate leases. piece additional the

to And we in we'll on as year, continue year, as further the We've through going firm. and solid the to progress call, our say us throughout regards pipeline. advise we're to the make EBITDA. impact become our opportunities heard announcements leases next the you've revenue got in it have will further on As several

with you piece do it, the a The there's of pilots, significant start-up costs essentially. have bringing to bridging on flying aircraft check additional associated over, obviously, transitioning

the the revenue go-forward expenses a in on somewhere get you terms in offset once terms we will airplane last for $X gain So million $X service, be in so aircraft we're of that to won't that you'll the that as to the meter basis. range see, the in able leverage estimating XXXX, is of that obviously, to impact the in million you

moving quick lower. second How activity, follow-up just think passenger and then a trended side. in ACMI DoD on quarter? and block And improvement a mentioned cargo somewhat in I the still maybe Understood. Okay. the you slight April hours have but into

to are trying hours just understand So how trending?

In months. about quarter-to-quarter over terms example, as X, Last April of XX earlier, Remember, I of last the airplanes side, last, think were X% XX-XXXs basis. quarter, on ATI for I call ABX came a parked out were down it all mentioned they the the ATI was, the the it, couple. and

if to you standpoint we So it expect additional obviously aircraft back place, of in at April, to year. But the look call with additional on where we little that going it's through it's was a XX March. balance it, versus from down the in, flying be start bit coming no as bring it the

with Our SIG. Christopher Stathoulopoulos next question comes from

year upside ] as the contemplate, currently and flying any and You that AXXXs then ground? And particularly potential Quint, -- the next there be XX to and/or aircraft meaning currently these -- aircraft are we slack the at kind guidance? year-end, the AXXXs. on we need as Is XXX what the or other exist expected of to are all capacity for the utilization levels? [ here opportunities fully committed running that perhaps them at

how us this of are remind those point? many at Just committed

first in we've contractually end quarter. our all guidance by that leases, X given, include anything the in Sure. not said quarter. we've place the in we XXX-XXX that Well, of of operating committed which we as We're beyond did did guidance the the

don't the we'll late have in XXX we of level XXXs our during said year that that marketed, do million. of any to capacity first to we this aircraft. have we fourth year, come that earlier, you be aircraft So And out that? want additional as guidance of gave Paul being that the couple if then would $XXX to Paul, And additive of remainder AXXXs know, anything the including are and lease quarter. Airbus that I

there, pretty you confident some especially mean, demand covered seeing we will that customer AXXX some existential with No, we the strong we're AXXX. demand we're what freighter relative issues we're it, market XXXX. have overcapacity returning side, XXX XXX-XXX seeing and in in that's on in the yes, is, strong subside. But the the I hurting market, to on eventually see demand

But as -- contractual there certainly, we those piece. move in commitments additional leasing on result that we are through update the we But some would aircraft, that. made for might Chris, as year, upside discussions the are taking place there

issue here more relates as that of it the domestic "existential AXXXs The international? a is to XXXs, and issues" U.S. or

the what in referencing. No, I And that's issue. particular, AXXX, a was was global

You challenges. X have

going have VXXXX You and you issues on of have especially the oversupply then some side. GTF engine an XXX freighters with in

affecting what's product. that particular that's So

a continue add just this call to times standpoint, Chris, spoken be engine We've I'd the being on an from the of e-commerce. I've about industry. e-commerce spoken enabler market and many of Yes. we

you the which, by for X year, improving a that prior that's air winning way, trends, with months positive right? over combination, have If absolutely last been couple double-digit the cargo

major piece cross-border products. you the integrators in international piece of other results and If the look underneath numbers, versus their stand the out terms dramatically their

expand example, opportunity to Asia, growth drop we've for further specifically. talked Southeast a Asia, us, Central to Asia, just So for that, lot on a being about

those our assets very over seen place also is pipeline past areas. and You've the us there year. robust in

cargo to those got first earlier optimism, largest assets right the mentioned in So world's to will And assets. us as of continue and be the in we've confident the lessor allow Joe foremost, we're his world. freighters

questions. One moment for

question comes Our Truist with Securities. Ciarmoli next from Michael

mean, $XX of million, Just [ originally upside that million. $XXX ] I The point potential on a was clarification. EBITDA,

still just a specific there really million left? number? $XX on not $XX million, commenting are got Or is You you

start little the bit earlier outlook agreement June. in potential think first bit than much. We anticipated the a What I it this airplane a again, with that changed was Amazon. originally hasn't So our getting for might little slid

of downside there. And we a little the X, the a potential But lease had guidance. placements, coming started will through year out in there's opportunities we from So be bit flying again, placed is other standpoint. XX that conversion. the aircraft which We've saying

that It So to year at timing that us get there's end. sometime XX the upside. in in time, placed to point be more able give there, the all boils out expect to we this some down that

call turn to like now back Hete closing would remarks. to for I Joe the any over

ATSG of from and by years Once that relationship flow to have to Amazon of with and relationship aircraft Amazon. they proven our that again, start X years. our has the the to From require. commitments the efficient people Josh. service great can our the fly Thanks, provide our fastest, growth most ago, for acknowledged to customer, many has always more service and fund required manage performance more Honoring investment our customers cash extending best us

generate you updated keeping to new Our being I more forward cash allocate first Thanks, for a our progress cash year. did enough and have year on and quarter the to fund cash to produce in sustaining positive towards to and growth investments, day. just find capital as to first and as a free more quality ways goal we flow unfolds. look XXXX for the effectively the and that step is flow our

your the concludes This conference. you. you Thank participation. Thank for

You may now disconnect.