Global Crossing Airlines Group Inc.

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to today's conference call to discuss Global Crossing Airlines financial results for the fourth quarter and full year of 2024. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded. Joining us on the call today are Chris Jamerows, Chief Executive Officer of Global Crossing Airlines, and the company's President and CFO, Ryan Gosso. Please be advised that a conference call will contain statements that are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995. The forward-looking statements are subject to certain and known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. These forward-looking statements are also subject to other risks and uncertainties that are described from time to time in the company's filings with the SEC. Do not place undue reliance on any forward-looking statements, which are being made only as of the date of this call. Except as required by law, the company undertakes no obligation to publicly update or revise any forward-looking statements. Please refer to the company's earnings press release for important risks and assumptions associated with such forward-looking statements. The company's presentation also includes certain non-GAAP financial measures, including adjusted net income or loss. EBITDA or EBITDA has supplemented measures of performance of the business. All non-GAAP measures have been reconciled to the most directly comparable GAAP measures in accordance with the SEC rules. You will find reconciliation tables and other important information in the press release and on Form 8K furnished to the SEC yesterday, which are currently available on the company's EDGAR page on the SEC's website and will be available to the company's investor relations section of its website within approximately 24 hours after this call has ended. Now I will turn the call over to the company's executive chairman, Chris Germas. Chris, please go ahead.

Thank you, operator. Good morning, everyone. Obviously after a setback in Q3, a much better quarter. Effective what you're seeing here, compounding returns of our focus on execution, professionalizing operations, improving service quality and a whole slew of commercial wins coming from an entire spectrum of charter customers. So we are pleased with what we printed in Q4 and I think we are well positioned for future growth, especially as the demand for our charter services is growing given the fact that we far surpassed the service quality or industry benchmark for service quality for charter airline. And I think we are going to dominate that niche of high quality on time performance and incredible customer service. And then we continue to see a growing demand for overall charter services and our platform is the right one and I think our business model is continuing to prove itself through the cycle. Throughout the quarter, we scaled up our ACMI operations, which has always been continued because this is high quality flying. We expanded our fleet, optimized our fleet utilization and all of those contributed to a meaningfully improved financial results. We continue to top tier all functions and the leadership team across the business as we are professionalizing operations, like I said, and we're expanding our relationships with commercial customers and government customers across the spectrum. Before I turn it over to Ryan, I do want to reaffirm our continued commitment to the path to sustained profitability. We do think that this year is the year that we will shine. We have built a business model. We've reinforced our platform and the strength of our commercial business is giving us or fueling us with confidence in our ability to deliver on our budgets. With that, I will now hand over to our President, Ryan Gopel to elaborate on GlobalX's fourth quarter operation of financial house. Ryan?

Great. Thank you, Chris, and good morning, everyone. As Chris mentioned, the fourth quarter concluded a remarkable year for GlobalX. We achieved the high end of our Q4 and fiscal year 2024 guidance for revenue EBITDA, EBITDA, and block hours loan. These accomplishments highlight the effectiveness of our management team, our focus on operational efficiency and the execution of our strategic plan. Our strong revenue performance was driven by the scaling of our ACMI business, which grew more than 3X to 36 million in revenue compared to the year ago quarter. The growth in ACMI was primarily driven by an increase in our fleet, continued strong customer demand, and further growth in our government business. As we mentioned before, we strategically allocated aircraft from our charter segment to ACMI to take advantage of its higher margin profile. As a result, charter revenue decreased to 22 million, now accounting for only 36% of total revenue compared to 75% in the same quarter last year. On the other hand, ACMI increased to 60% of total revenue compared to 22% in Q4 of 2023, reflecting the major shift in our business model from charter to ACMI. During the quarter, we flew 7,745 block hours, including subservice between ACMI and charter, a 26% increase compared to the year ago period, demonstrating our ability to secure new contracts and optimize fleet utilization. In Q4, we increased block hours flown for ACMI by more than 2X to 5,758 compared to Q4 of 2023. For charter, we flew 1,477 block hours compared to 3,395 in the year ago quarter, in line with our strategic shift. On the cargo side, we surpassed 1,600 block hours flown in Q4, marking our strongest quarter of cargo in Global X history. While challenges continue to persist in the cargo market, their impact is lessened significantly compared to last year, and we believe we have stabilized the business moving forward. Our average utilization for aircraft available increased 12% to 473 block hours compared to the year ago quarter. We continue to see accelerating demand in the past year market, driven by college sports teams, corporate groups, U.S. government, and other organizations seeking flexible travel solutions, along with the ongoing supply shortage and reduced direct competition. This demand is fueling our strong growth in the passenger segment, underscoring its importance within our overall strategy. To ensure sustainable growth, we consistently assess our operations to optimize our pricing strategies and maximize revenue generation. This commitment is reflected in our rising revenue per block hour, highlighting the effectiveness of our strategic approach. For ACMI, we generated an average of $6,191 per block hour, an increase of 47% to the prior year quarter. For charter, average revenue per block hour stayed relatively flat at $11,868 compared to $11,896 in Q4 of 2023. On a sequential basis, we generated a 10% increase in revenue per block hour for ACMI. The increase in ACMI revenue per block hour is primarily driven by contract negotiations at secure higher rates. By capitalizing on strong market conditions and rising demand, we expect to continue driving sustained profitability across our passenger fleet. Subsequent to quarter end, we took delivery of one additional A321 passenger aircraft, expanding our fleet to a total of 19 aircraft. We expect further increases of our fleet in the second half of 2025 by more than 20%. Integrating aircraft into our fleet is complex. The multi-step process required regulatory certifications and approvals as well as maintenance checks. Additionally, the aircraft market remains highly competitive with supply constraints driven by increased global demand. Our disciplined approach ensures that we lease new aircraft at the best possible rates while maintaining operational efficiency, positioning for sustained growth and expected profitability in quarters ahead. As part of our long-term strategy, we're beginning to acquire and take ownership of airframes while leasing engines. Airframes have a lifespan of 30 to 40 years, making them durable and valuable assets, providing long-term value and greater control over maintenance and modifications. Whereas engines, given their high production costs, maintenance and market demand, are significantly more expensive to acquire and maintain, making it more cost-effective to lease. This strategic shift allows us to optimize our capital deployment and maintain a strong balance sheet with operational flexibility. To further this initiative, we signed a letter of intent to acquire our first airframe with expected delivery in the second quarter. This marks a key milestone in our fleet expansion plan, ensuring we are well positioned to meet the increasing demand and enhance long-term profitability. During the quarter, we strengthened our relationship with both new and existing customers by deepening collaboration and tailoring our service to better meet their needs. As part of our ongoing strategy, we're always looking to convert contracts into multi-year partnerships, ensuring sustained growth and stability for our business while delivering long-term value to our clients. To start, we finalized a contract for this year's college basketball finals tournament, providing four dedicated aircraft for a minimum of $5 million in revenue. Additionally, we flew 12 college basketball teams during the regular season, reflecting our strong reputation in the collegiate sports sector and our team's ability to meet unique demands of high-profile athletic programs. To support this, we customized three aircraft into VIP configurations for the January-February basketball season, enhancing the onboard experience for the teams and their staff. With a total of three VIP-configured aircraft in our fleet, we continue to offer tailored, high-comfort travel solutions for sports teams and other premium clients, further solidifying our position in this specialized market. We've also secured a VIP charter contract to support a world-renowned band's North American tour beginning in April of 2025. This partnership further exemplifies our ability to deliver premium, flexible travel solutions tailored to high-profile clients with complex logistical needs. In our cargo business, we signed a six-month contract, an ACMI contract with DHL. This is our first contract with this major operator, further diversifying our cargo portfolio while delivering consistent revenue. We also renewed a six-month cargo contract with a Caribbean cargo company, guaranteeing a total of 200 hours per month across two cargo aircraft. This renewal underscores the continued demand for reliable cargo operations and reinforces our commitment to serving key logistical partners. Turning to international operations, we also expanded our partnership with TUI Airways to include a third dedicated aircraft for the summer of 2025, guaranteeing a minimum of $5 million of additional revenue. Additionally, we have secured a seven-month ACMI contract with a South American tour operator, guaranteeing over 1,800 block hours. These international wins reflect our growing presence abroad and our ability to meet increasing travel demand. Now turn to the financial results. Please note that all financial results discussed today are for the three-month period ended December 31, 2024, while variance commentary is on a -over-year basis unless others state it otherwise. Revenue in the fourth quarter increased 11% to $59.9 million compared to $53.9 million in the year-ago period, driven primarily by higher block hours flown and aircraft fleet expansion, as well as increased revenue per block hour for ACMI. ACMI revenue increased approximately 3X to $35 million compared to $11 million. Charter revenue in Q4 was $21 million compared to $40 million. Total operating expenses were $56.6 million compared to $55.2 million, driven primarily by higher aircraft rent, maintenance, and personnel expenses tied to the continued expansion of the global fleet. Part of our ongoing cost optimization efforts, we negotiated a 35% reduction in insurance rates, resulting in an expected $2 million savings in 2025. Net loss improved to $0.6 million compared to $2.6 million. Loss per share also improved to $0.01 per share, basically diluted share compared to $0.04 per basic and diluted share. Net income was impacted by a one-time $1.3 million charge related to the guarantee for lease return conditions provided to Alasor in 2021 to support the launch of Canada JetLine. This lease was returned to Alasor following Canada JetLine's bankruptcy. Adjusted net income increased to $1.2 million compared to adjusted net loss of $1.8 million in the year-ago period. EBITDA increased to $5.1 million compared to $0.4 million loss. EBITDA increased to $19.3 million compared to $11.4 million. This was primarily driven by increased revenue, fleet expansion, and higher average rates per block hour flown for past your ACMI. Turning to our liquidity, we ended the fourth quarter with cash and restricted cash of approximately $14 million compared to $7.8 million in September 30th of 2024 and $17.7 million in December 31st, 2023. We are pleased with our Q4 and our full year 2024 performance, which highlights our strong foundation and growing momentum as a leading narrow-body ACMI charter airline. Looking ahead, our summer schedules are fully booked, and when combined with our expanding fleet, our focus on securing higher margin ACMI contracts, and a commitment to operational excellence, we are well positioned to deliver another record year results in 2025. This concludes our prepared remarks. I now like to open the call for Q&A. Operator, back to you.

Thank you. We will now be beginning our question and answer session. I would like to hand the call over to Sean Manzori. Please go ahead, sir.

Thank you, Chris and Ryan, and thank you everyone for participating in the conference call. As we gather the queue for live questions, we first like to address a few of the questions that have come in via email over the past couple of weeks and even since reporting yesterday. So, kicking things off here, Chris, Ryan, can you provide more insight into GlobalX's continued growth in the passenger market? Is this rate of growth sustainable?

I'll take this one. The short answer is yes. We see substantial demand in the passenger market that far exceeds our current capacity. This is reflected in our near tripling of ACMI revenue in Q4. Our growth is driven by ability to grow and effectively deploy our fleet. In addition to market factors such as ongoing supply shortage, reduced direct competition, and increasing demand from various organizations seeking travel solutions. High demand has allowed us to focus on longer term contracts with minimum monthly commitments, which allows us to maximize the number of hours each aircraft can operate on a monthly basis. We refer to this as utilization, which is our ability to maximize is critical to achieving sustained profitability. Nowhere is this more critical than our work with US government, our partnership with Red Air operating daily flights to Curacao, and our Europe with key customer for the key summer months as part of our arrangement with TUI. Looking ahead, we expect passenger ACMI to remain core driver of our business. We expect anticipate further growth in 2025, supported by additional aircraft deliveries in the back half of the year, as well as our ongoing efforts to expand partnerships in North America and Europe.

Thank you. And can you elaborate on your fleet expansion strategy and the recent shift to begin acquiring airframes?

Yeah, and again, as part of our long term strategy, we are transitioning from a fleet strategy of 100% leased to a fleet ownership model, which we acquire airframes or leasing engines. Eventually we will evolve to acquiring engines as well, but in the current market that does not make a ton of economic sense for our model. We believe acquiring airframes and leasing engines allows us to achieve our goal of fleet growth, building a stronger balance sheet, while mitigating what we believe are really high lease rates for older aircraft, which is primarily driven by the engine prices.

Got it. And can you provide an update on the cargo market? What are your expectations for 2025?

Yeah, we continue to see lingering challenges in the cargo market. I guess with the tariff issue that we see in real time evolving is obviously a level of uncertainty, which is impacting it. But to put it in context, we believe we incurred losses of close to 10 million related to cargo in 2024, primarily in the first three quarters. We believe we have mitigated a significant amount of that exposure in 2025 with the contracts we have in place, which drives significant year improvement. The wildcard, of course, being the tariff war, which has created some uncertainty in the space. Well, we believe we are operating what we're operating in 25 is relatively insulated from this. It is impacting the overall cargo market and how is yet to be determined. And I think that exposure is is limited by the four aircraft we have it and no plans to expand that capacity in 2025.

Thanks.

And can you provide color on your long term growth and profitability initiatives? I'll take that one. Yeah. Yeah.

So, as I mentioned in my opening remarks, and you just heard from Ryan, the number one is expanding our fleet, because that's how we make money. And we've proven our ability to convert new capacity into revenue earning activities in record time at a satisfactory rate, particularly at the ramp up period. So that definitely will pays off. We, as you heard from Ryan, we are shifting our model, which is also part of our improved operating and financial performance to acquiring aircraft as opposed to strictly leasing it, which does have a lot of positive externalities for our business model. The demand for our services is growing, and that's because there is a niche in the market. Basically, there's a void of high quality charter operators. The market is littered with very poor, poor service quality operators utilizing aircraft nearing its end of life cycle with very low expectations of service quality. There is a void in that we've really kind of begin to own of a niche that I fully expect us to dominate of very high quality charter operator. And the demand for our services is growing. And we're not just taking share. We're actually creating new market share through our performance and the reputation we begin to earn by setting sort of the gold standard for the charter operators. And by the way, we know we're near where we want it to be, but we are already surpassing the industry benchmarks by the wide margin. We also expanding our commercial operations with respect to our commercial revenue generator and origination of new business from across the spectrum of new clients. And that's obviously contributing to our continued success. And there's a lot of other initiatives that are very operational focused that helps us improve our utilization of aircraft. And we are pleased. We are very pleased with that. But number one job for us is to make money to be profitable. And as I said that 12 months ago when we took the helm of the operation, that remains the absolute priority for us, for Ryan and for the entire team. And we are going unapologetically driving the focus on cost reductions, professionalizing the operations, top tiering the leadership functions and every aspect of the business that we are analyzing. And we stopped doing things that were grossly irresponsible, like growing cargo operations at the peak of the cycle, which could have proven catastrophic that we've managed to curtail that. And I strongly believe that this cargo exposure will serve us well because the cargo market is a very cyclical business. And I believe that the trough and the worst of the down the down cycle is behind us and we will continue to. I don't think as Ryan said, it's going to be a huge contributor in 2020. But I think in years beyond that, I think it will be a margin or very profitable operation for us to supplement everything else we do. So at the end of the day, I think we have proven that our business model is the right one. It continues to attract commercial interest from a variety of logos and high quality customers. And we are very focused on our path to sustain profitability.

Thanks, Chris, and probably just time for a few more here. Why doesn't GlobalX try to promote who they are flying, whether it's a professional sports team or any of the big name colleges?

Well, and I think a part of that is, you know, as a charter operator, the expectations of our clients especially is a certain aspect of privacy. We do we do we do fly some of the biggest stars in professional sports and soccer and some of the top 10 of the top 20 college basketball teams for the season. Their expectation is one of our mantras for the company is provide forgettable flights, which is we expect they expect us to show up on time, have nothing happen during the flight and land on time. And have that be a non event. And that's what we get paid for. They don't expect us to be out there promoting and highlighting who we're flying and where we're flying. And so we kind of keep that that level of discretion is expected of us and I think is an asset for us and helps drive repeat business, which is why they keep coming back because they don't necessarily want to read about LinkedIn, who we're flying and where we're flying. Because, you know, from their perspective, it's none of their business. So I think from that perspective, it's an expectation of the industry and it's expectation of our clients. And we respect it and that's why they keep coming back. I'd rather have a repeat business than a really cool LinkedIn post.

Well said. Can you provide additional details on the JV with ATB aviation? What are the advantages for global? Yeah,

so we announced that earlier this year and effectively what it is, it's almost like a franchise model where they're going to use our brand and some of our expertise in exchange for in exchange for our participation in the entity. They're providing the funding. They're providing the people. What the advantage is for us is it opens up another market that we're not we don't have the capability and infrastructure to service. We think age is a pretty big growth market for charter services, but we also know, you know, this kind of business is local. You need to be locally present. You need to be locally there. This is different than what we had done in Colombia and Ecuador, whereas in Colombia and Ecuador, we owned it and it was our people. It was our resources and our time. We recognize our time is limited. This is more of an expansion utilizing what we've learned as more of an advisory role. But it opens up a pretty large market gives us a foothold somewhere to not only deploy our aircraft, mainly to deploy our aircraft, but expand our revenue opportunities in a part of the world. We just wouldn't have the capability to do right now.

Got it. And with with about five minutes left here on the call operator will pass it back to you for a live Q and a thank you.

Thank you. If you would like to ask a question, please press star one on your telephone keypad. A confirmation to indicate your line is in the question queue. You may press start to if you would like to remove your question from the queue and for participants using speaker equipment and maybe necessary to pick up your handset before pressing the star keys. Our first question is from Brian foot with Broadway Capital Management. Please proceed.

Brian,

your line is live. Please check

and see if you're muted. Yes. Hello. Can you hear me? Yes, please. Great.

Great. This question is for both of you guys on the on the maintenance levels of CapEx. Now that you're making acquisitions of airframes and moving away from from the original asset light strategy. Two part question. What should we think of in terms of maintenance CapEx as a percent of revenues or how that looks with the new fleet mix potentially changing? And if we look at last year's numbers, what what level of CapEx was devoted to growth versus just just maintaining the the current operations?

Yeah, I can grab that. So last year we spent about seven million on maintenance CapEx mainly to purchase the rotables. And I think that will kind of grow in proportion with the fleet, whether you know, whether we own the aircraft or we lease the aircraft. That's that's kind of what ends up. That's that usually, you know, that proportion probably won't change. Last year we spent about three million relating to growing the fleet, which is mainly deposits. I think the advantage of doing the airframe is it won't be materially different to acquire airframes. You think of the deposits required, you know, doing it on a on a finance kind of lease from from the less or from a third party. And, you know, it's we're just basically trading a deposit that we would have been paying that we never got back and just kind of went into nothing into a deposit that creates equity for the company. So I think for twenty, twenty five, you know, that similar level of around ten million between maintenance and growth is probably it's probably still on track. When you think about cash flow for operations was over eight million for the year, which is positive, which is a big improvement from from the prior years and prior quarters. And most of that was in the back half of the year.

And just to follow on that operating cash flow, you did indicate, Ryan, that ten million was the hit for for the cargo business last year and again occurring in the first three quarters. If if we march out this year and I know you guys had some commentary about it, but have we gotten to a to a break even position? Is there still cash consumption going on at cargo? Any any update there would be really helpful for modeling.

Yeah, I think I think when you think about depends on the quarter, I think Q4 was really strong for us on cargo and that and that was kind of was was was good. I think that, you know, one of the it demonstrated the power of what cargo can do for us in the right in the right period of time. You know, when you look at our activity levels on the hours flown, you know, we've got around three, four hundred hours contracted across the four planes. That's not quite enough to be profitable, but it will absorb, you know, I think on an operating profit basis. It's it's a little bit below break even, but it absorbs some overhead is where we're at. So I think I'm fully burdened. It's a loss, but an operating profit basis, I think it's it's getting closer is the is the answer. So

so if 2025 were a repeat of 24, we add back 10 million bucks, you know, plus or minus.

Yeah.

And then just just looking at the you know, we're almost four years into this adventure of leasing aircraft and now you've expanded the opportunity by by looking at airframes. Is there a way to quantify that right if you were staying in the leasing market

versus

how many airframes are now available to you that you've entered into that that new world?

Yeah. So, you know, I think the answer is, is everyone's like, how many planes are you going to add to like how many planes are out there? I said, if I'm willing to pay a premium, I can get as many airframes as I want. The trick is you don't want to be burdened with an inflated, you know, a top peak lease rate for seven years. I think airframes, I think and really 90% of that growth in the lease rates for aircraft is tied to the engine value. And so, you know, while we still might have exposure to that increased lease rate on an engine, you can switch, swap, you can get stub engines, there's a whole bunch of ways to minimize the cost. So I think from our perspective on the when you start looking at airframes, you're competing with those who are salvaging it and just doing a teardown. And there's and it's really specific. Some airframes, they got to go, you know, they just don't make sense. But there's some airframes because we don't fly high amount of hours, we don't do a high amount of cycles, we can get another six, seven years out of that a major airline could not. So it really, I think, opens the door to, you know, look, we're looking at five to 15 aircraft over the next two to three years, you know, between lease opportunities and airframes, there's probably 100 opportunities out there. So it really becomes how do we get the best deal? How do we stay disciplined? And really, I think, when you look at the lease rates for engines, and then the cost of an airframe, you know, we're almost looking at, you know, the combined lease, the combined payment, owning the airframe and leasing the engine. So, you know, I think the cost of an airframe for engines is the same as it would be to lease the whole thing. But I get to own the airframe at the end of three years, which gives me something to go to swap out. So I just think it makes a ton of sense to do that for us right now. I don't think there's a shortage of aircraft out there. It's just a matter of how do we make sure we don't overpay and then be burdened with a massive lease rate on a very, very old aircraft in five years. That makes no sense.

Understood. It's really helpful, as always, and I know we're past the hour, so I appreciate it. I'll hop back off.

Thanks, Brent. Our next question is from Vishal Mishra with Bard Associates. Please proceed.

Hi, this is Vishal. So I have a question for Chris, especially about your comment about resilience of the business model, which is, you know, what is it about global crossing which will make it resilient, you know, over the full business cycle, which you alluded to earlier in the call?

The key, well,

it's a multifaceted answer. So number one is the type of aircraft we operate, which is the most universally utilized, you know, with offering a tremendous options in terms of configurations of seats, depending on various needs, the very fast timelines. And then the second question is the reputation of us as an operator, which I cannot overstate how important it is because we effectively changing the charter market from a perspective of reliable availability and sort of a wide glove type of experience for the clients. Because it used to be you get what you pay for type thing. And we obviously experiencing increased valuations of our services directly into that reputation. We have our ability to diversify and operates different route schedules and work with our customers on their very specific needs. And when you kind of think about, you know, flying, you know, celebrity performers, you know, a music arena or, you know, world's biggest, you know, athletes, sort of brand names versus flying European brands. And so for customers like TUI, you could not see more diverse mix of uses. And we can switch and adapt and perform in Excel very quickly. And that provides us with that being agile and being nimble to adjust to changing market conditions when the demand comes from. And the fact that we winning commercial clients from the areas that we've previously never even played in, it's quite encouraging and helping us for that. And effectively having owned aircraft, again, we will never be a full owned aircraft because that's not the point. The point is to having a mix. And that helps us through the cycle because, you know, when you effectively lease rates are currently at the peak and they remain at the peak, while we can find a lot more favorable financial terms in the ownership market, then we will respond to the changing financing and leasing conditions accordingly. As Ryan said, the key is don't get stuck with overvalued assets or, you know, a very expensive lease at the peak because you have to live through the consequence of that for many years after. And we've been very disciplined in that and very creative. So that continues to effectively fuel the robustness of our business model.

Great, thanks. There's another thing.

There's another thing. Sorry. The systemic change, the collegiate sports, the reorganizing conferences, that opened up the market previously, you know, previously untapped potential for an operator like ours. So it's a mix of internal initiatives and the way we run the business and also favorable changes in our macro environment.

Great, fantastic. Is there also like, I mean, you've spoken about the changing the business model to airframes and as opposed to leasing there. Is there anything like you, if you look at the competitors out there, is there anything like cost advantage, like low lease per plane or low lease rate per block hour or something? You have like substantially at the lower end of the cost curve. Is there something along those lines about your business?

I would let Ryan respond

to that.

Yeah, I think when we look at some of our competitors in the space, again, there's not a ton. Domestically, I think internationally, I think you, you know, lease rate is generally a reflection of, you know, the way we balance it is you can get, you know, generally the younger the aircraft, the fresher the engine, the higher the lease rate. The question is, can you match the cost of that lease to what you can generate in revenue and what is your ability to push the revenue and what's the value? I think we don't necessarily look at our, we look at the A in the ACMI when we do our costing and really the higher lease rates would increase the A, which would, which is what we would need to cover, which becomes a fixed cost. So I think we, we, we in our head and our model know when we start going into our profitability and what the market will bear as far as a rate. And so we will generally, every lessor who has a plane available, the first question that goes, what is your lease expectation rate? And we give them a number and they either call us back or we never hear from them again. The good news is we've been pretty disciplined of what number we say and they're now starting to call us back, which makes me feel we've kind of hit a peak, but it's still pretty high. And so we will only kind of look at something like that for an aircraft that's incredible, you know, specific conditions. I can't tell you how varied an aircraft is, even though there's 10,000 A320s out there, every, they're all snowflakes. And so you really can't look at two aircraft the same. And so that's why it takes so much discipline in doing it. It's not like buying a new one where they all look the same. You know, Airbus is producing 75 of these a month. That's once they get to 10, 18, 24 years old, they've lived a life. And whether they make sense for our model, you can't just look at them all the same. And I think what we've seen is there's been some operators that have been desperate for capacity or who will take capacity at any price with the expectation of fixing it in a year or two. I think we have probably one of the best cost per hour on the A for the type of aircraft we have in our market. And we'll continue to have that

discipline going forward. Great. OK, thank you.

Ladies and gentlemen, thank you. This will conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. And thank you for your participation.