Avation PLC

Good afternoon, ladies and gentlemen, and welcome to the Aviation PLC 2022 Financial Year Results and Investor Update Conference Call. My name is Mark and I'll be your conference moderator for today. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time using the Q&A tab situated on the right-hand corner of your screen. Just simply type in your questions at any time and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, we would like to submit the following poll, and if you would give that your kind of attention, I'm sure the company would be most grateful. I'd now like to hand over to Duncan Scott, Group General Counsel. Good afternoon.

Thank you, and good afternoon to everyone. Today, on 29th of September, Evasion published its unordered will be available for a play on our website. Please note that certain statements in this conference call, including answers to your questions, are forward-looking statements, including without limitation statements regarding our future operations and performance, revenues, operating expenses, other income and expense items. These statements and any projection as to the company's future performance represent management's estimate of future results and speak only as of today, 29th of September, 2022. These estimates involve risks and uncertainties that could cause actual results to differ materially from expectations. Further information on the factors and risks that may affect Ovation's business are included in Ovation's regulatory announcements from time to time, including its annual report and half-year results announcements. Ovation assumes no obligation to update any forward-looking statements.

Thank you very much for your time. In the year ended 30 June 2022, Evasion has returned to profitability, increased net asset value per share, maintained the liquidity, lowered net debt, and developed its new CO2 strategy. The company is positioned to execute its business strategy as the aviation sector recovers from the pandemic. There has been a significant recent recovery in passenger numbers in the airline industry. The company is optimistic about a future for the leasing industry characterized by high demand for aircraft as the global fleet transitions to low CO2 technology in the coming years. Fleet utilization has improved as unused aircraft have been transitioned. Significant impacts of airline insolvencies and restructurings have mostly been reflected in previous periods and distributions creditors from these insolvencies are now being received. The company is seeing increasing levels of interest from airlines to buy or lease aircraft at sustainable lease rates. Senior lenders willing to lend grants against aircraft assets. These factors confirm the emergence of an industry from the pandemic. The company's strategy will be to focus on leasing modern, low CO2 emissions, fuel efficient aircraft in the future. Aviation is supportive of the aviation industry's goal becoming more sustainable through a transition to new technology, more fuel efficient aircraft engine and the use of sustainable aviation fuel. The company will position itself to return to growth through opportunistic trading and deliveries from its order book in the post pandemic environment. As at 30 June, the company had 39 aircraft in the fleet, serving 17 different customers in 14 countries. Aviation owns regional narrow-body and twin-aisle aircraft. The fleet is split 17% wide-body, 52% narrow-body, and 31% turboprop by value. The aircraft fleet has a 5.6-year weighted average age and a 5.7-year weighted average remaining lease term. Aviation has total assets in excess of $1.2 billion Attached to that fleet is $507 million in unearned contracted lease receivables from existing operating leases and a further $61 million in financed lease receivables. That's over $568 million in receivables and remaining leases with which to repay debt. And at that point, on average, the fleet will still be less than halfway through its life. The company has begun positioning itself for the eventual transition of the industry with aircraft using 100% sustainable aviation fuel to produce low CO2 emissions on a net basis. Low CO2 emissions will advantage airlines in terms of taxes and government regulation. The company is engaged in a number of campaigns driven by the airlines wanting to increase and renew their fleets for the delivery of new aircraft. Evasion's fleet at 30 June is dominated by fuel efficient regional and narrow body aircraft. It's these sectors that are fastest in the return to service from the pandemic. 83% of Evasion's fleet is focused on regional and domestic travel, which is close to returning to 2019 pre-COVID levels. Evasion believes newer aircraft carry a lower risk of obsolescence provide greater long-term cash flow service debt through long-term leases, and importantly, will continue to deliver improvements in emissions and sustainability in the airline sector as it moves to a carbon neutral future. Aviation holds orders for two aircraft and purchase rights for 28 ATR 72600 aircraft. This access to new aircraft represents a growth asset that has increased in value during the financial period as customer demand drives airlines to increase capacity and provides investors with a visible pathway to Evasion's future growth. Evasion has returned to a high level of operational efficiency, which simply means that a high percentage of the fleet is generating rent. Today, Evasion has four unutilised aircraft as a result of repositioning or selling 17 of the 21 aircraft that were returned from customers during the pandemic. With strong interest in the remaining aircraft, And our expectation is that we will sell or lease these remaining unutilised aircraft in the short term. Aviation has reviewed the values of aircraft in the fleet and reversed some of the impairment and increased the overall value of the fleet. The increase in valuation only represents a small recovery of the impairment taken during the pandemic. As the world continues to emerge from the pandemic, demand for aircraft is expected to continue increasing. As airline travel continues to gain strength, improvement in lease rates may lead to further increases in aircraft value in the future. The next slide shows airline customers. Today we have 17 customers in 14 countries. Baytion's customers include five flag carriers, These flag carrier airlines appear to have been more resilient as they typically receive support and continue to service domestic routes. As countries have moved beyond the peak of the pandemic, domestic travel has recovered faster than international air travel. It is important to note Avation's geographical spread of customers to the pandemic has impacted different areas at different times. Around two thirds of Avation's customers by revenue are located in Asia. with the remainder in Europe, where our largest customer, AirBaltic, has been performing well. The PAL restructuring plan became effective on 31 December 2021. Assured to the restructuring plan, PAL has retained a Boeing 777-300ER aircraft on lease from Ovation in accordance with the plan. The lease for this aircraft will continue until the original scheduled termination date. Powerless met its commitments under the restructuring agreement and continues to meet the ongoing lease terms. As we've been able to conserve the majority of our customers, fleet, team and business model through the pandemic, we believe Evasion's business is largely intact. Evasion has no and never has had any direct exposure to Russia or any Russian airline. Evasion is currently not aware of any sanctions resulting from the evasion of Ukraine that will impact the company. Innovation is a focus on new or young aircraft and therefore is a natural seller of midlife aircraft. I'll now hand over to Richard to run through the FY22 results.

Thanks, Jeff. The next few slides of the presentation provide a summary of our FY22 financial results. Further detail is included in today's stock exchange announcement, which is also available on the company's website. On to the financial 22 summary. During the financial period, OCEAN generated a total income of $116.4 million with revenue of $112.2 million. Operating profit saw a dramatic turnaround to $90.2 million profit from a loss of $62.7 million in 2021. Profit before tax, before non-cash loan modification charges, saw a $150 million turnaround to $34.9 million from a loss last year of $120.5 million. We have highlighted profit before tax number pre these charges due to the material non-cash charges skewing the profit and loss as a result of loan modifications and their treatment under IFRS 9. The extension of the maturity date and other revisions to the terms and the conditions of the notes were accounted for as a substantial modification of the terms of a debt instrument in accordance with IFRS 9. which led to a non-cash gain being recognised of $50 million in the statement of profit loss last year in the year ended 30 June 2021. Under IFRS 9, this gain is required to be amortised over the term of the extension of the notes. Investors should note that the current financial year ended 30 June 2022, amortisation of this gain led to a non-cash charge of $8.8 million being recognised as a finance expense. In addition to this, A further non-cash charge of $3.5 million was created when Ovation successfully extended the aircraft loan warehouse facility to 30 September 2026. As a result of this, total profit after tax of $17.1 million was earned, which is a significant turnaround from a loss of $84.9 million in the corresponding period last year. Total assets declined by 5% to $1.21 billion. However, net indebtedness was able to be reduced by 14% to $793 million, down from $923 million the previous year. Earnings per share were 24.7 US cents for the period, up from a loss of 131.2 cents last year. NAV per share rose by 63% to £2.68 from £1.64 a year ago. On to the operational highlights for the financial year 2022. The company managed to sell five aircraft, including an Airbus A220, an Airbus A321, and three of the ex-virgin Australia ATR-72 aircraft. A further two ATR-72 aircraft were returned and are in the process of being sold with completion next month. Two aircraft leases were extended with heavy lift and a third ATR-72 was leased to heavy lift as well. The PAL restructuring was completed with the airline retaining the Boeing 777-300ER, as Jeff just mentioned, and another ex-virgin Australia ATR-72 was leased with the delivery to a new customer occurring this month. Another lease on an Airbus A320 was extended by 44 months with EasyJet. A couple of aircraft transitions as well. Boeing 737 was repossessed, and we're remarketing that aircraft now. And Airbus A320 was returned, and that has been transitioned already to a new customer. And an ex-Golden Myanmar ATR-72 aircraft was recovered and is being transitioned to a new customer with expected completion next month. In addition to this, as I mentioned, the aircraft warehouse loan facility maturity date was extended to 30 September 2026. On the following slide, we have a quick debt analysis on our debt position, which has improved significantly over the past year. Total loans and borrowings, current and non-current, dropped by 13% to $828 million from $948 million a year ago. Net indebtedness has declined by almost $130 million since 30 June 2021 to $793 million, down from $923 million. There was an increase in the weighted average cost of the group's secure debt facilities to 4%, up from 3.9% as a result of repayment of some lower cost debt that increased the number of unencumbered aircraft in the fleet in the period. The weighted average cost of debt for the company increased to 5.7%. At the end of the year, 89% of total debt was fixed or hedged interest rates. Novation's net debt to assets ratio improved significantly to 65.1% over the past year from 73.9%. And the chart at the bottom of the page shows the evolution of the group's cost of debt over the past nine years. In the next slide, we provided some key ratios for a comparative basis. The net asset value per share saw a significant increase of 45% to $3.27 from $2.26 last year. That's in US dollars. As a result of the weakening of the pound against the greenback, this saw the net per share in pounds increase 63% to £2.68 from £1.64. As of the date of this release, with the pound weakening further since the end of the financial year, measured at today's exchange rates, the NAV per share approximates £3.06. This is important as the US dollar reservations functional currencies, most aircraft leasing transactions, purchases and sales and lease agreements are in US dollars. Lease yields decreased slightly to 9.6% from 10.3%. Administrative expenses on a cash basis, excluding warrant expense, increased to 7.2% from 6.6%, but still by comparative standards in the industry, quite low. Debt to equity saw a large improvement to 3.6 times from six times over the past year. And net debt over EBITDA saw a similar improvement to 7.6 times versus 12.5 times as at 30 June 2021. Debt to total assets dropped to 68% from 73.9%. And EBITDA as a function of interest expense also improved to 1.9 times from 1.4 times a year ago. The next slide would provide a summary of Avation's liquidity position, and the maintenance of that liquidity position has been Avation's key focus during the pandemic, as we've noted a number of times in these past conference calls. Cash has been preserved over the past couple of years during a period of extreme uncertainty. when a significant proportion of the fleet was unutilised and the remaining airline customer debtors were building. This was a difficult exercise and we are now fortunate that it will not require the focus and attention it has as the industry continues to return to more positive operational conditions. The unsecured bonds have a maturity date of 31 October 2026 and are callable at any time. The nation has made an opportunistic repurchase of the unsecured bonds just after the completion of the financial year, following the direct approach from a bondholder. Cash collections are returning to normal with the cash collection rate running at 108% for the year ended 30 June 2022, which is a significant improvement over the last financial year where the cash collection rate was 67%. The company also has three unencumbered aircraft as at 30 June. Liquidity is expected to continue to improve in the first half of the new financial year, beginning with the completion of the sales of two ex-Logan Air ATR aircraft, and then in the second half with regular significant repayments of some of the deferred rent from the pandemic period. Other positive cash flows include can potentially include further aircraft sales, which could include any of the unutilised aircraft, being the Boeing 737 and the two ATRs that we are currently remarketing. Collections of debtors from customers, the opportunity to refinance existing aircraft in the fleet, and collections from the Virgin Australia insolvency and potential realisation of the Philippine Airlines shares that we hold. Ovation's claim against Virgin Australia has been adjudicated by the trustee of the creditors' trust in the sum of 101.4 million Australian dollars. Ovation was notified of an initial distribution from the creditors' trust of 5.4 cents in the dollar on 15 September 2022 in respect of the claim. A further distribution based on funds withheld by the trustee is also expected. And in addition to this, further funds may be made available to creditors should Virgin Australia meet performance targets in the financial year ended 30 June 2023. The potential total of these additional distributions is estimated to be in the range of one to two cents in the dollar. Onto the next slide, which shows our liability structure and loan maturities. On this slide, we show over the coming years the loan maturities. The secure debt loan maturities in blue match the underlying lease terms of aircraft and obviously are manageable and will pay themselves off. The orange maturity represents aircraft warehouse loan facility, which Ovation successfully extended out to 30 September, 2026. As such, there is no cash crunch as a result of senior debt coming as a result of the loan amortisation restructuring Ovation has negotiated with senior lenders as part of our COVID-19 coping strategy. There is also a long pathway to maturity of the unsecured bonds represented in green out to October 2026. Loan maturities are typically aligned with lease terms and with a long average lease duration of 5.7 years. Most of the evasion senior debt, which makes up close to 60% of total debt, has significant duration. Ovation confirms that it is current with all payments to secured lenders. Ovation either complies with or has received waivers with all senior bank loan covenants. Ovation is in discussions with senior lenders to permanently amend or remove some covenants that no longer reflect the current capital structure. I'll hand back to Geoff for the final couple of slides that talk about the company's strategy and pathway forward.

Thank you. Richard, a major strategy during COVID was to reserve liquidity and reposition or sell aircraft returned from customers as they occurred, which has basically been successful. The implementation of this strategy has enabled the company to materially lower net indebtedness, support our customers' survival, maintain adequate liquidity, and keep the core business intact. Now that the industry is returning positively with opportunities increasing, the company will transition into a more forward-looking strategy that is intended to return the company to the growth and profitability experience pre-COVID. The return of air travel and the confirmation of passenger demand around the world is a surprise to the upside in the past couple of months. This, combined with the expected Further reduction in unutilized aircraft represents an opportunity for Avation and its investors to focus on the future rather than the recent history of having to react to the problems and obstacles inflicted by the pandemic. We have developed a very sensible low CO2 strategy for the company going forward. So in 23, the focus is to Position, transition, sell, place the last three unutilised aircraft. Maintain a focus on liquidity. There is significant opportunities around the ATR72 order book with the new Pratt & Whitney 127XT engines. The commercial team is now able to focus on the new opportunities for the order book rather than just transitioning repossessed aircraft. And so clearly the team will be able to focus on new customers rather than repossessing and transitioning aircraft. The strategy, this is very important, very important. The company's got to focus on low CO2 emission aircraft. So there's low CO2 fuel efficient aircraft becoming available in all types, but The first one that's been successful is the ATR 72, where we have seen one of our customers demonstrate commercial aircraft flying on 100% sustainable aviation fuel. So gradually over years, we expect that we'll trade out of older aircraft types and focus on aircraft types such as the NEOs and the A220 series in addition to the ATR 72. with the recently announced new generation engines. And I should make it plain that all of our order book, all of the orders for those aircraft in future, all have the new engines, the PW127XT, which is very important because the engine itself provides a 20% lower maintenance cost, extended time on wing, 3% lower fuel consumption, 5% more power than the current engines. The manufacturer expects that the PW127 XT engine will be certified to operate with 100% sustainable aviation fuel in the near term. When using sustainable aviation fuel, net emissions of CO2 are reduced by 80%, which is very important because obviously regulations and governments are forcing low CO2 operations on airlines. Aviation supports and is committed to the eventual transition of the industry towards aircraft using 100% sustainable aviation fuel to produce low CO2 emissions on a net basis. Low CO2 emissions will advantage airlines in terms of taxes, governments, costs, and are also key to providing a sustainable future for global aviation. So in conclusion, The disruption created by the COVID-19 pandemic is receding following the successful rollout of vaccines and other things. And this has supported the return to increased levels of air travel. This trend is evidenced in regional and domestic travel passenger numbers and is being followed by recovery in international travel. The completion of the restructuring by Philippine Airlines, the payment of the initial distribution from Virgin and the extension of our aircraft warehouse facility resolve some of the key remaining issues generated by the pandemic. Evasion is set to emerge from the pandemic with a smaller fleet with higher levels of utilization and a long timeframe for the repayment of the company's unsecured notes and warehouse. Cash flow for operations continues to improve to normal trading conditions as countries open up. Avation's largest five customers, which make up almost 70% of the revenue, were current with or in compliance with repayment plans as of 30 June. Cash flow for the remainder of the financial year will be boosted through the settlement of announced aircraft sales and expected further sales of unutilised aircraft, collections from insolvency proceedings relating to Virgin Australia, Philippine Airlines and collections of outstanding amounts related to rent deferral arrangements and the increase in receivables as a result of COVID-19. There are likely to be opportunities to buy aircraft from airlines and lessors looking to adjust or reduce their portfolio, which, with evasion, is positioning itself to take advantage of in future years. Vation's optimistic about the long-term opportunity for airline travel, particularly in the low CO2 turboprop and narrow-body aircraft sectors. We as a management team continue to support, believe in and align with the company and its investors. And I'll now hand over for the Q&A session.

That's great, Geoff. Thank you very much indeed for your presentation. And I'll bring up everybody's cameras now. that's happening now. So thank you very much indeed. Ladies and gentlemen, please do continue to submit your questions using the Q&A tab situated on the right-hand corner of your screen. But just while the company take a few moments to review those questions submitted already, I'd like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via your InvestorMeet company dashboard. Jeff, as you can see, you've had a number of questions from investors throughout today's call. So thank you to everybody for your engagement this afternoon. Maybe if I may, Geoff, hand back to you, if you could perhaps read out the questions and distribute them as appropriate, and I'll pick up from you at the end.

Okay, well, we'll start with the results of the poll, because they're interesting. Are you a shareholder of Ovation PLC? Well, 54% of you are, so I don't know what the rest of you are. Should Ovation's credit rating increase now that we've shown that we've survived COVID? 87% of you think we should. That's great. The interesting question is how much more would you pay to be zero to CO2 if you spent $500 on an air ticket? 65% of you say zero, 28% of you say $100, and 7% of you say $500. The bad news is that today's prices, the real numbers more likely to be $1,000. So that's why it's important that we have low CO2. So I said, you know, if only 4% of you will pay, sorry, 7% of you will pay $500, it's not a very good result. So the Q&A, we've got lots of questions. So, Jake, pre-submitted question. Historically, innovation had been approached in the past for sale of substantial portions of the fleet, and indeed, private COVID innovation was reviewing a strategic review. after being approached by a bona fide offeror. Given the substantial discount to NAV, has Ovation received any expressions of interest in the company with a substantial part of its fleet taken in recent months? Or is the general appetite for M&As subdued? Well, the company receives inbound inquiries from various investors of various qualities every couple of weeks, but they're not generally... well formed and that's why we have brokers and advisors. Those people come into our brokers and they deal with them in the normal way. I don't see a lot of M&A activity in this sector given that COVID's only just finished and people are still working out what's going on and there's a lot of volatility in the financing markets. The second question, would Jeff Chaffin, or would I look forward to creating a new aircraft leasing company from scratch again, or seek to have a secondary role within an enlarged group? Well, the answer is Avatian's doing super well now. It's super well positioned, so we don't need anything else. Question from Brandon. After COVID, I believe you converted one or two Receiver from lessees into effectively term loans. In relation to these, could you detail how much of this currently stands at when the repayments commence, the period over which these will be paid and the monthly installments?

That's a question for Ian. Yeah. Hi, Brandon. So the amount at 30th of June outstanding on that loan is $21 million. The repayments will start in January 23rd. and continue over the 24 months until December 2024. Excellent.

Phil asks, what is the company's ability to monetise PAL shares and what is the expected value?

Ian? Yeah, I mean, there's no restrictions on us selling those PAL shares if we can find a market for them. And the valuation... They do convert to listed shares. I think at some point. At some point. At the moment, they're still unlisted. So, I mean, our valuation is based on the listed holding company and we value the shares between three and four million dollars.

The next question was, given the current NAV and dollar rate on the share price, do you have thoughts to launch a substantial buyback or would there be a better use of spare cash? Well, ultimately, the company's got to manage all parts of capital structure, so bonds, shares and bank debt and clearly expensive money at the moment are the bonds so um and also it's got to be able to grow and survive so it's a juggling match with several balls so that the shares are part of it uh the bonds are part of it and growth's part of it and you clearly you need to fuel all all of those activities Ken B asks, what level in inflation rate are you seeing on new ATR 32220 ATA aircraft? How is this reflected in existing fleet valuations over and above the normalising of asset revaluation? This is a question for Ian.

Yeah, I mean, we've obviously seen inflation jump in the last year, so we've increased our inflation estimates which we use for our residual values, which forms part of our loose incumbent valuation of the aircraft fleet. So we've basically increased the near-term inflation factors to match current rates of inflation. And then that trends back down to a sort of a long-term 2% inflation factor.

Well, we're way under. If you read the newspaper, the inflation rates are three times what our inflation rates are.

Yeah, I mean, we did this exercise before 30th of June. And I think what everybody's seen is that inflation has continued to increase since 30th of June.

We used the published numbers back in about May. And clearly, obviously, the published numbers now could be double or triple that. Next one. Keith B. Aircraft sales to ATR 72 for completion in October 22, not 23 as on slide. We have two available for sale and lease at the moment, correct, in 2022. There might be an error on a slide.

No, it's not. Two are in the process of being completed and the last two Virgin aircraft we're still trying to sell.

That's in 2022. the health of sale of the two that are currently for sale.

Yeah, there is an error in slide nine that he's referring to, which is the second bullet point, two ATRs, 72, 600 have been returned and sold with completion expected October 23. That should be October 2022.

Jonathan P., is there any reason why all the debt is not hedged? Well, it is. 90% of the debt's hedged. The only bits that are not hedged are in the warehouse, which is what a warehouse does.

Yeah, there's two components to unhedged debt. There's the warehouse loan, which is about 8% of our debt. And then we also have two aircraft which are on floating rate leases. So we've kept the debt at floating rate because there's a natural hedged debt, although we don't call it hedged in the 14th.

Next question from Annie G, which aircraft are currently unutilized and what are their plans to release or sell? Do these four aircraft represent the 113 million assets held for sale? Rod, what have we got to place?

Well, we have currently, we have 737, which still needs to be placed. And we have two Two ATRs. The last two are the Virgin ATRs, which we're still trying to place or sell, lease or sell. And the Myanmar one. And the Myanmar one, although it's the contract. We have a commitment.

Transition. Transition. Assets have held for sale as of 30 June. There was a number of aircraft. You've seen a number of aircraft transactions occur and occurring. Phil, H, what was the size of the bond repurchase and what was the price?

Ian? So we repurchased $4.4 million face value of notes at 75 cents.

Brian, C, generally speaking, the current market, where do you expect to utilise process from assets of sale, investment, new aircraft or water debt? Pay down. Pay down. Well, if you look at our current liabilities are relatively low and, but we do have a growth, a small growth pipeline and we do have to pay our bond coupons and we do need to continue in our business. So there's not a sort of a, you know, we need to continue as normal. Right, Keith B, could you explain how low carbon emissions fuels are manufactured? Well, the thesis is that fossil fuels are obviously pulled out of the ground, processed and distributed, whereas sustainable aviation fuels are manufactured product mainly from sustainable inputs. And the advantage from a number of perspectives is it's a manufactured product. So people have offtake agreements and they're not exposed to the you know, the oil price changing every day. But at the moment, you know, the manufacturing is quite energy intensive and it's much more expensive than normal fuel. So clearly in the coming days, fuel efficiency is very, very important and new technology is very, very important. And aircraft engines will need to be changed to be able to support it, but fortunately ATR's engines can, and we'll be certified to support it in the very near term, but other types will take a bit of time. Probably by the end of the decade, all aircraft types will be able to use it. Phil H, why did ASSET's health reserve jump so much? Well, because we've sold and transitioned lots of planes. How many did we have to transition? 21 or something?

Yeah.

Last year, the number was based on three ATRs, which were sold in the last year. And this year, the number is based on two A321s and two ATRs, which are currently available for sale.

The next one is, can you expand more on the situation with customers less compliant with payment terms?

Ian? Oh, yeah. I mean, you know, there's a number of customers who are in arrears, but I mean, I think the position has improved compared to last year. I mean, if you look at some of our major customers, I mean, we spoke earlier about the conversion of some of those arrears into an interest-bearing loan. But yeah, I mean, we regularly follow up with customers over arrears and sometimes take steps to recover those arrears. There's a couple of claims out at the moment.

The next one is from Mosin G. Should we expect higher pay down of secured debt in FY23? Probably not more than normal because it follows amortization. Unless you sell an aircraft. Unless you're trading an aircraft, but there's only a few we're trading in. Should we expect further material bond buybacks? Well, no comment on that. There's probably not. From a modeling perspective, any guidance on revenues in EBITDA for 23? Again, for most of... No, not at the moment. Um... How much should we expect exactly in asset sales processing? We don't know the answer to that. James is asking, it was going great pre-COVID. How are we doing now compared to pre-COVID? Well, we're recovering from COVID. Clearly, there's plenty of opportunity now because the manufacturers haven't manufactured that many aircraft during COVID. The airlines are recovering. Five or six or 7% of all the world's aircraft are sort of lost forever into Russia. And interest rates higher mean that airlines actually need leasing companies. So in theory, we're going into a fantastic time for aircraft leasing companies because what we provide is It's in demand. And also, quite interestingly, with the technology change of low CO2, it means you can do it all again. You know, you've got to, there's a lot of aircraft that will need to be replaced. So the whole aircraft leasing industry is going to be sitting there thinking we have a lot of work to do and a lot of opportunity, and there'll be a lot of growth. So we're not there yet, but clearly... It's a very opportunistic time. Can be. Is there an opportunity to revisit spare engine support in the new engine type? It could have become a tool to attract and support more customers. The answer to that is probably not because airlines want aircraft and they often have their own arrangements around engines. There are people that have tried to set up pure leasing aircraft fleet engine leasing businesses, and they don't seem to have the scale that they could have. Phil, should legal professional fees come down, or will it remain at recent levels? Well, Duncan's on the line, so why don't you answer that one?

Thanks, Jeff. Well, during COVID, we did legal transactions with almost every lessee and almost every bank off our external council fees were much higher than we would normally expect. I mean, normally our fees are a proportion of new transactions that we do, but they've been extremely high during the COVID period and we do expect them to come down significantly in the future.

Jay C says, with the expected influence from rents, what is the minimum cash you need to hold? What are your priorities for excess cash? We have no excess cash. We'd like to hold over $100 million. I think the minimum would be $100. Next slide. Brand and B, is it revised broken notes? Yes, there are two or three. Canaccord have one. Davey have one. And WH Ireland have one. We'll see credit will not drop. We've been minus now. We've been upgraded. If you were to issue debt today, what yield would it be required? And how is it compared to your asset? Well, I don't know how. I think the market's pretty tough for anyone at the moment. I see all the, it's a struggle on that one. Are there any more questions?

Jeff, you've been very kind and you've read through every single question that has come through from investors. If there are any other that we've missed or whatever, obviously we'll make those available. host today's call um jeff thank you and to to the team for updating investors this afternoon i know investor feedback will be important to you all i'll shortly redirect those on the call to give you their feedback but jeff before doing so i wonder if i may just ask you for a few closing comments uh look thank you so much for your support i mean clearly it's been a a torrid time and there's it's still a lot of risk in the industry um you know there's wars there's pandemics um

And there's technology change around the CO2 stuff. So clearly there are plenty of risks, but at the moment it does seem to be that the fundamentals, which are passenger demand, is demonstrably there. You know, airlines, people want to travel. The airlines are recovering and the ones that have survived will do well and therefore will do well. So thanks for your time and please, feel free to contact us with questions at any time and we remain available. Thank you so much.

That's great, Geoff. Thank you very much indeed. Could I please ask investors on this call not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order the management team can better understand your views and expectations. It's only going to take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of Aviation PLC, we'd like to thank you for attending today's presentation. May we wish you all a very pleasant afternoon. Thank you.