Earnings Call: H2 2016

Mar 26, 2017

Ladies and gentlemen, welcome to BOC Aviation Limited Annual Results Investor Call. Timothy Ross, Head of Investor Relations, will now begin. Thank you, operator, and welcome everyone to BOC Aviation's first full-year earnings conference call as a listed company to discuss our final results for the 12 months ended 31st of December 2016. With me today are Managing Director and Chief Executive Officer, Robert Martin, our Deputy Managing Director and Chief Financial Officer, Phang Thim Fatt, and our Chief Operating Officer, David Walton. Please note that some of the information you will hear during our discussion today may consist of forward-looking statements which are subject to risks and uncertainties that may cause actual results to differ materially from statements made today. You should not place undue reliance on any forward-looking statements, and you should review our results announcements for full details. Please also note that all currency references are in USD only. A copy of our earnings announcement is available both via the Hong Kong Stock Exchange and in the investor section of our website at www.bocaviation.com. A conference call presentation is also available in the investors section of our website. This call is being recorded and will be available for replay. I will now hand over the call to Robert Martin. Thanks, Tim, and good morning to everyone on the line. Thank you for joining us for our 2016 final earnings call. We achieved a number of operational and financial records during 2016 and wish to thank our shareholders, business partners, and employees for their support in achieving our targets. We raised more IPO proceeds than any other aircraft operating leasing company has ever done. We hit new corporate milestones in terms of deliveries from our order book. This saw us exceed a total of 250 aircraft deliveries from Airbus in December, and we have recently celebrated our 200th delivery from Boeing, underscoring the importance of our relationship with both major airplane manufacturers. The product of these revenue drivers in controlling our costs was the record earnings we are reporting. A net profit after tax of $418 million for 2016, up 22% on last year. This is equivalent to earnings per share of $0.60 based on the number of shares outstanding at year-end. This was achieved on total revenues and other income of $1.2 billion that rose 9%. In light of our strong performance, our board is recommending a final dividend of $0.119 per share, which will bring the total dividend for the year to $0.18 per share, or a distribution of 30% of our full-year net profit after tax. Once approved at the AGM, this will be payable to our shareholders who own shares on June 12th. We ended 2016 with total assets of $13.4 billion, reflecting the $550 million in net primary equity proceeds raised from our IPO, which we have since put to work. The increase in our equity base lowered our gross debt-to-equity ratio to 2.6 times as at the end of last year, as compared to 3.7 times at the end of 2015. It diluted our ROE to 14.4%, compared with the 15.1% achieved in 2015. We do, however, continue to generate the best post-tax return on equity amongst our peer group. We will continue to relever our balance sheet towards our target three-and-a-half to four to one gross debt to equity over the next two years. During the second half of last year, S&P Global Ratings and Fitch Ratings both reaffirmed our industry-leading corporate credit ratings of A minus. Turning to the market backdrop, macro conditions remain supportive of the aircraft leasing industry, in our view. On the airline demand side, the industry continues to perform very well, and air travel demand remains strong. Airline passenger traffic, as measured by IATA, rose 6.3% last year, gaining pace in second half 2016 and above the long-term trend rate of 5%. IATA projects record airline earnings for 2016 and over $29 billion in airline earnings for 2017, which would still be the third-largest profit that the airline industry has ever earned. With this backdrop, our global business model continues to serve us well, allowing us to leverage the strong relationships we have with our airline customers around the world. We continue to see good demand for leasing the popular Airbus and Boeing single aisle models, which make up over 95% of our future orders. We demonstrated our confidence in these models by having placed new orders for an additional 29 aircraft, comprising 12 A320 family aircraft and 17 B737 family aircraft since our IPO. We continued to see demand here in Asia Pacific, reflecting the more rapid rates of air traffic growth that this region is experiencing relative to more mature, slower growth economies. On the wide body side, we executed purchase and leaseback transactions with Air China for delivery of five wide bodies in fourth quarter 2016 and six wide bodies for Qatar Airways in 2017. The revenue impact of these transactions will be evident in 2017 and beyond. U.S. dollar liquidity in the market remains high. This is driving the strong demand for purchase of aircraft and lease attached that we continue to see amongst investors. Growing demand has supported our aircraft sales program as more new investors continue to enter the market. Greater liquidity is also good for the funding side of our business. While U.S. dollar base interest rates did rise towards the end of last year, they still remain relatively low. We took advantage of this throughout the year, closing a 10-year, $750 million bond deal in the first half of last year and a five-year, $500 million deal in the second half. With roughly half of our lease portfolio on floating rates, our floating rate leases were boosted by the upward movements in LIBOR during 2016. Our funding costs also increased, but the impact on our net lease yield has remained neutral. Net lease yield, which is defined as lease revenue less finance expense divided by the average aircraft net book value, was unchanged year-on-year at 8.2%, matching what we achieved in 2015. On the supply side, we see growth largely in line with demand, especially for the single aisle aircraft that account for the majority of our fleet. Whilst near-term production issues are seen for both A320 and 737 aircraft models, we also see some supply chain issues possibly limiting production ramp-up as pressures have emerged in some areas, such as seats and engines. Manufacturers appear to have responsibly addressed concerns around wide-body oversupply, with both Airbus and Boeing having cut production rates, especially for the 777 and A330 models. Our company's earnings and distributions continue to be anchored by a combination of our long-term leases and future committed order book. We will continue to invest in a disciplined manner, expanding both our balance sheet and our future returns in the process. I will now hand over the call to David to speak to our operations and business development, and then Thim Fatt will take over for a more detailed review of our P&L and balance sheet. David. Thank you, Robert. Let me add my thanks to you all for joining us today. In 2016, we delivered 67 new aircraft from our order book to our airline customers, including 11 where the customer exercised purchase options at delivery, giving us 56 new aircraft added to our owned aircraft portfolio. This compared with 40 new aircraft added to the owned portfolio in 2015. Our core lease rental contribution, defined as lease revenue less finance expense and depreciation and amortization of debt issue and lease transaction closing costs, continues to be the principal component of our pre-tax earnings. Core lease rental contribution makes up 70% of our pre-tax profits, and that rose over 7% in 2016. It represents a sustainable long-term income stream that recurs across the cycle and is highly visible, given our remaining average lease life of over seven years as at the end of last year. Our existing and future committed leases provide over $12 billion in contracted future lease revenues. We are pleased to announce that we had another year of strong portfolio utilization at 99.9%, and we ended the period with nothing overdue from our customers. In December of last year, we repossessed two aircraft when a customer in Taiwan ceased operations. Our team was well prepared and moved quickly to recover the aircraft, which have now been placed. The weighted average age of our owned portfolio is now 3.2 years, one of the youngest in the industry, and none of our owned aircraft is more than 10 years old. In 2016, we signed 79 leases with airline customers and at year-end had 71 deliveries scheduled for 2017. This provides us with a strong pipeline of core lease rental contributions. We sold 37 aircraft from the owned fleet during 2016. We sell aircraft, generally with leases attached, across the cycle, although the volume of our transactions typically increases during such high periods of USD liquidity as we are seeing right now. As at 31 December, our fleet stood at 246 owned and 38 managed aircraft, with an order book of 199 aircraft scheduled to deliver over the next five years. Our committed CapEx for 2017 is more than $2.8 billion. 2017 will be our most active in terms of order book deliveries in the company's history, and we see a number of good opportunities to increase our pipeline beyond what has already been announced. With that, I'll turn it over to Thim Fatt. Thank you, David. Our reported net profit after tax of $418 million for 2016 rose 22% compared to 2015. The principal drivers of the growth in earnings were a 9% increase in total revenue and other income that featured growth across all major revenue lines. This drove our core lease rental contribution up by over 7% to $436 million, representing 70% of net profit before tax. Our lease rental income rose over 7% compared to 2015, as higher interest rates lifted our floating rate lease revenues and as new leases signed on at higher fixed rates also contributed to the increase. Pre-tax gain on aircraft sales rose 30% from 2015 as we were active sellers of aircraft in a highly liquid market. Interest and fee-related income rose 20% compared to the same period last year. Our total costs and expenses rose just over 4% for 2016 compared to 2015. Depreciation was largely flat in 2016 compared to 2015 because of our active sales program earlier in the year, and we added more aircraft during the later part of the year. Finance charges increased by $47 million, driven primarily by an increase in LIBOR rates. The same LIBOR rate increase that positively impacted our floating rate lease revenue. Our long-term funding strategy, under which we increased the proportion of fixed-rate debt during the year, also contributed to the increase in interest costs, leading our average cost of funds to 2.5% in 2016 from 2% last year. Staff costs represented approximately 6% of our total revenue and other income in 2016, slightly up from 5% in 2015, and driven mainly by provision for performance-related bonuses given the company's strong performance and by an increase in headcount. Other operating costs rose 29% to $46 million compared with 2015, partly due to $3 million in expenses relating to our IPO. Our global average tax rate fell to 11.8% in 2016 from 14.5% in 2015. This was mainly due to a reversal of a $9 million tax provision relating to deferred income tax previously provided for. Since year-end, we have extended our aircraft leasing scheme for another five years period out to June 2022, which entitles us to a concessionary tax rate on income derived from aircraft leasing operation in Singapore. We appreciate the Singapore government's continuing recognition of our industry importance to the local economy. Net assets per share rose by 18% to $4.87 per share at 31 December 2016 from $4.14 per share as at 31 December 2015. At the end of 2016, our total asset had increased 8% to $13.4 billion from the end of 2015, reflecting CapEx of $2.9 billion related to our aircraft delivery. $1.9 billion of which took place in the second half of 2016. Our cash and fixed deposit at the end of the period was $558 million. Our debt edged down 2% to $8.5 billion at year-end, reflecting the funding of CapEx and repayment of approximately $2 billion in debt during the same period. We also have additional committed liquidity in the form of over $4 billion in undrawn and committed revolving credit facility as a result of closing a successful $1.5 billion revolving credit facility in November 2016. This positions the company well to refinance debt and fund both our contracted investment in aircraft and further growth in the portfolio. We have just produced another year of record earnings and recommend paying a final dividend of $0.119 per share, taking total distribution to 30% of 2016 net profit after tax. This concludes my review of the company's financials for 2016, and I'll pass the call back to Timothy. Thanks, Thim Fatt. This wraps up management's formal commentary. A copy of the transcript of these prepared remarks can be found in the investor section of our website, www.bocaviation.com. We now have time for Q&A and request that each participant restrict themselves to one question and one follow-up, unless time permits for additional queries. I'd now like to hand the call back to the operator for Q&A. Thank you. We will now begin the question and answer session. Participants with questions to pose, please press 01 on your telephone keypad, and you'll be placed in the queue. To cancel the queue, please press 02. Once again, 01 on your telephone keypad now. Our first question, Vashti from CLSA, please go ahead. Hi. Good morning. Thank you for the opportunity and congratulations on a very good set of results. Just a couple of questions. First one is, if you could just talk a bit about the competitive landscape in the PLB market. You also talked about the supply chain issues that you're seeing in the narrow-body aircraft segment. What impact could that have on your outlook? Okay. Thanks for the questions. Robert speaking. Competitive landscape. It's fair to say that, yes, we've continued to see more new competitors come into the purchase and leaseback market. Our way of dealing with this is basically avoiding just bidding on these very large RFPs where you get 20 or 30 bidders, and finding transactions where we have a particular competitive angle that works in our favor. That can vary from volume, as you saw with both Qatar Airways and with the Air China transactions, with wide bodies, or something where we're working directly with a manufacturer on a campaign, which takes us away from the broader competitive landscape. Unfortunately, we continue to see additional competition. But if you look at the split of our deliveries, you'll see we're very heavily weighted towards our own order book and the aircraft we've picked up as pop-ups, from where you've seen slight over-ordering in regions of the world. We've taken over the delivery positions and then placed them with carriers in other parts of the world. Just turning then, sorry, what was it? Aircraft supply. Aircraft supply. Okay, so aircraft supply chain issues, it is not just single aisles. There are two parts of it where we could be affected this year. On the issues related specifically to the 320neo, we only have one Pratt-powered neo delivering this year, so the impact on us directly is very small. We are also seeing some delays, though, on the A350 supply, which could mean that the A350s we are hoping to take in the first half of this year generally may slip back into the second half of this year. Understood. If I may just follow up, are you working towards a target for fixed rate funding? What would be your CapEx guidance, please? Okay. First of all, on CapEx, let me do it in reverse order if you do not mind. Just to give you a feeling of magnitude, our CapEx this year is planned at the moment to be in the region of $2.8 billion. However, we expect to add to that during the year. Just in terms of that CapEx, I mentioned because of some specific issues to do with deliveries, we expect it to be a little more back-ended this year than we would expect in a normal year, with probably more delivering in the second half. Yes. In terms of fixed rate versus floating rate, as a matter of policy, we will always hedge 50% of the mismatch between our fixed rate leases and our floating rate debt. At the moment, Phang, we are roughly- 43% fixed rate. No, in terms of the percentage hedge. 80%. 80% hedge for that difference at the moment. So for the 43% that you have on fixed rate funding, do you have a target of moving forwards in that in terms of increasing that fixed rate funding portion of your total debt? Okay. Everything starts with what the customer wants. The customer may want fixed or floating rate leases. Oh, yeah. Then we will build our liability structure to match what we have on the lease side. Our aim is to be close to being matched across the two sides of the portfolio, fixed versus floating rates. Where there is a mismatch, then we will hedge between 50% and 100% of the mismatch. At the moment, we are 80% hedged. I suspect we will stay somewhere around there for the balance of this year. Got it. Thank you very much. Thanks a lot. Thank you. Our next question, Edward from Morgan Stanley. Please go ahead. Hi, Tim and Rob. Thank you. I see you did a very good, generous dividend payout and about a 30% payout ratio. Going forward, what kind of guidance do you have of the dividend payout? Thank you. Edward, the guidance is exactly the same as was in the IPO prospectus. Our intention is to pay up to 30% of the previous year's profit. That guidance hasn't changed. Okay. Up to this is the upper limit of 30%. That's correct. Okay. Thank you. Thank you. Our next question, Vincent from Goldman Sachs. Please go ahead. Thank you very much. I think it seems that there has been a dip in the gross lease rate in the second half compared to the first half. Can you also give us some color on the outlook on this? Okay. It's probably just down to timing issues, because if you look at last year, in the first half of the year, we only added about $0.9 billion of CapEx to the portfolio, and we sold roughly 0.7. Whereas in the second half, we added 1.9. But remember, a lot of the wide body content only came in at the end of the year. Yes. You won't have the contribution of that $1.9 billion of additions for the whole of the second half. It will come in right in the fourth quarter. Right. I see. Can you give us some color on the outlook of lease rates going forward as well? Okay. The best way to look at this is if you look at the lease yield, because obviously you must factor interest rates as well. We managed to maintain year-on-year a lease yield of 8.2%. Obviously, there is upward pressure coming from interest rates. We're having to make sure that we've passed on that to the customer through our lease rates. It automatically comes through our floating rate portfolio, which is roughly half of the portfolio. Then we are pushing up fixed rate lease rates into the market as we place our aircraft. We've already placed 69 out of 75 aircraft for this year. We just have six pop-ups that we picked up towards the end of the year left to place. We've already placed 50% of next year. In terms of any impact of interest rates in the near term on the P&L, it's going to be very limited because most of the work has already been done. Sure. Just one more follow-up on the lease rates. I think we understand that more airlines are shifting their preference to fixed lease rates. We hope to understand the dynamics of this onto the impact to our bottom line. If we shift to a fixed lease rate that is being matched with a fixed finance cost profile, will this be a net benefit to our bottom line? Well, it depends on the rate you do it at. Obviously, what we want to do is maximize the fixed rental that we are getting in the first place from the client, and on the flip side, minimize the cost of debt that we are paying into the marketplace. I don't think you can make a general rule. The key question is, can your leasing team and treasury teams basically derive the value for the shareholders by pushing the lease rental up and by pushing the financing cost down? Sure. Thank you very much. Thank you. Our next question, K Ajit from UOB Kay Hian. Please go ahead. Hi. Most of my questions have been answered. Thank you for taking the question, and excellent set of results. I just want to understand one aspect of your leases. Is there a lead time between when you sign on your fixed rate leases and the time when you go for financing, or is it done concurrently? Okay. The answer is both. Let me explain that. Generally, our preferred policy is we will negotiate a fixed rate lease, where basically the rate adjusts at delivery based upon the then prevailing swap rate. Because obviously then we put our financing in place at the same time. There are one or two markets around the world, principally China, which seem to have moved to a fixed-fixed approach, where we have new competition who are not used to dealing with this issue. There, there is a limited number of leases where we're required to do fixed-fixed transactions. But in the overall scheme of things, they're a small number of transactions. What we'll do there, we'll consider either doing a forward-starting swap or alternatively, if in our judgment rates are not going to move up significantly in the period before delivery, then we'll keep an open position and then hedge at that delivery. I see. Okay. Thank you. Thank you. Thank you. Our next question in queue, Poh Yong from DBS. Please go ahead. Hi. Good morning, guys. My question is with regards to our net gearing. We are still at about 2.6 times, and I recall that when we came up for IPO, we mentioned that we would look to reach about 3.5 to 4 times by 2018. Does that target remain? Are we looking for accelerated sort of deployment of capital, I guess, in 2017? Okay. In terms of gearing, yes, it is still our plan that within 10 quarters from the IPO to get ourselves up to somewhere around 3.5 to 4 to 1 debt to equity. That is still in the plan. In terms of capital deployment this year, as we mentioned earlier, we already have $2.9 billion of CapEx in the pipeline. We already are going to be deploying more capital the next year in relation to that. On the sales side, we expect our sales to be a little less than last year, because last year was a special year where we were trading out of all of our aircraft older than 10 years old, and this year is a more normal transaction year. We would expect our number of sales to be slightly less this year, probably just under $1.5 billion, somewhere around there. Okay. Thanks, Robert. Yeah. Thank you. There are currently no questions in queue. Once again, participants, if you would like to ask a question or to follow up your question, please press 0101 on your telephone keypad now. Our next follow-up question, Vasmin from CLSA. Please go ahead. Vasmin, your line is open. Yes. Hi. Just following up on the operating costs, really. In second half, we did see operating costs go up quite significantly, half on half. Just trying to figure out, I mean, instance, both in terms of staff costs and even other costs. Is that the new normal we should sort of work with, or do we expect to see more efficiencies going down into next year? Okay. Thanks, Vasmin. One thing that was different about the second half was, remember, we did repossess the two aircraft out of Taiwan. There would have been some small increase related as we took provisions against moving those planes out and putting them through maintenance ready for the next operators. So that's probably where part of the difference comes from. Yeah. The other part will be due to adjustments for staff costs, in relation to performance-related bonuses. So we have a better sight in the second half of the year. Got it. Thank you. Okay. Vasmin, maybe just explain the last bit of Hang. The way that for the period up until the end of 2016, that our bonuses in the company worked, they were strictly tied to our profitability. Obviously, as we produced better profitability for the shareholders, by the end of last year, then the provision went up as well. Sure. Thank you. Our next question, James Teo from BNP. Please go ahead. Hi. Good morning, everyone, and congratulations on the great results as well. Just wanted to see if we can have a bit more details on the aircraft delivery schedules. I know you mentioned there's 75 incoming this year, order deliveries. How about for subsequent years and including the latest order for the 737, I think there's 13 of them. What's the kind of breakdown that we can expect from the delivery schedules, please? Okay. Just to confirm, you just really just want a year-on-year numbers, please? Yeah. If you can, for 2018, 2019, what is the expected based on the current order book of 199? Okay. So, in terms of deliveries then, total deliveries, 75 in 2017, 44 in 2018, 45 in 2019, 23 in 2020, and then the balance in 2021. I see. Thank you. In terms of the aircraft types and models, would you expect to see any changes or any new additions on top of what we have so far? Okay. Well, first of all, bear in mind that our overall strategy in this area is roughly 70% of the book invest in single-aisle products, so that does not change. The balance is 30% in wide-bodies. Of that wide-body proportion, maximum 10% in freighters. I do not see us changing significantly from that. What is interesting though, and I should just point this out, is if you look at the dollar volume of deliveries coming out of the manufacturers, you will notice that for the first time, wide-bodies are actually greater than single-aisle aircraft. Because of this, there is a market dynamic going on where you are seeing tremendous competition on any single-aisle sell and lease back, which is then pushing up prices to areas that, in most cases, we see as not being economic for us or for our shareholders. The wide-body sector has less competition. You will see us continue to do mid-size wide-bodies. This year we've got two A330s and two 777s that we have due to deliver to EVA that have been in place for two to three years. We've got the Qatar A350s coming in. You will expect to see us playing in the purchase and leaseback side in that mid-size wide-body space as well. If we saw a particularly good freighter transaction, we would consider that as well. But there, we tend to stick to sort of the better credits with very long-term leases. Right. Thank you, Robert. Thank you. Our next question, Eric Ling from UBS. Please go ahead. Hi. Good morning, everyone. Thank you. Actually, most of my questions were taken already. I just have one small follow-up. In the presentation, you mentioned about 37 aircraft being sold last year. Can you provide any color for this year, your plan? How many planes are you planning to sell? Any sort of color will help. Thanks. Okay. Yeah. For this year, when we look at the portfolio, we are planning to sell some of the smaller narrow bodies. Also, some of the wide bodies with shorter lease terms remaining. That will tend to be our focus. And you can expect, I do not know, somewhere around 30-ish aircraft this year to be sold in total. And we are very cognizant of keeping our average fleet age young. And so it is our intention as well to generally sell the older aircraft in the portfolio. Got you. Thank you. Thank you. Our next question, Vincent from Goldman Sachs. Please go ahead. Hi. Thank you. Just want to see your thoughts on the Boeing 777 residual risk. Okay. We've been a big supporter of the 777 ever since it was produced. You may remember, actually, that one of the very first orders the company did was a joint order with Singapore Airlines back in 1996 for up to 77 777s in total between ourselves and SIA. Our approach to 777s has always been as follows: We always, wherever possible, write a long-term lease, generally looking for 12 years or longer. Because of that then, we tend to sort of de-risk the residual, and we do the same in most larger wide bodies as well by having this longer lease term. If you look at our lease book, we have no 777s due back in the next 3-4 years. Right. I understand. On the follow-up of our lease revenue exposure, can you give us some color on what you think is the optimal level of lease revenue exposure to the Hong Kong, China market? Okay. The way we tend to think about this internally is, when we think about our portfolio, we split the world into four quarters, and we aim to have roughly a quarter to each of those four segments. One is the Americas. The second is Europe and Africa and the Middle East. Then basically, you have Greater China, including Hong Kong, Macau, Taiwan. Then finally, the rest of Asia Pacific. Over the cycle, we aim to have roughly a quarter in each. Great. Thank you very much. Okay. Thank you. There are currently no questions in queue. All right. Participants with questions to pose or to follow up, please press 0101 on your telephone keypad now. Our next question, James Teo from BNP. Please go ahead. Hi. Just a quick question on the Taiwan repossession of the aircraft. I think that is rather interesting case. Maybe you could just elaborate a little bit more about how long typically such repossessions take to be replaced on the new lease and any other info that you can share about how do you handle such cases? Okay. Why don't I talk about the pre-care, and I'll get David to talk about the aftercare. Basically, we'd identified this was a carrier that had some vulnerability. Our risk team had identified early in the year they had a put option on some bonds worth about $80 million, which was going to fall due in November. We went to meet with the carrier and encouraged them to think about ways that they were going to do this refinancing. They, for their own reasons, decided they're going to rely very much on their domestic market and domestic banks to do this. That heavily didn't come through. We started positioning ourselves to reduce our risk as early as before last summer, last year, and were then waiting to see whether the situation was getting worse or better with effect from September onwards. From September onwards, we weren't seeing any progress. When we got into early November, we met with them again. Once it was clear to us that they weren't going to be able to sort of resolve the situation, we had our technical teams on the ground. We copied the technical records. We were then tracking each of our aircraft that was flying. Then once the airline got into a situation where it was clear that they weren't going to be able to repay this debt, we then executed on our repossession plan. David? Sure. As Robert's saying, this is really a team effort. When it was clear that the airline was going to cease operations, we had technical, legal, and risk people positioned, and we had teams with each aircraft to keep an eye on them. Because we had a good working relationship with the airline, we were able to secure the aircraft very quickly and work toward deregistering the aircraft and moving them out of the country as quickly as possible. At the same time, we had our global marketing team working on placement opportunities. Right away, we had all the information that we needed to market these aircraft on a global basis, and we had LOIs in work very quickly, even as we were still recovering the aircraft. If you have early warning systems, as Robert was describing, you prepare yourself properly, and you move quickly, then you're in a position to market the aircraft and get them back on revenue. As we said in the prepared remarks, we've got these aircraft placed already. Right. But how would you say the process takes? How long would it be to replace the aircraft from the time you reposition? What would be the average, and in this case, would it be above or below that? Okay, so I would say this one, in terms of time to place the aircraft, was average. In terms of actually physically delivering the aircraft, because one of them was reached its 12-year check, we had to put it through a 12-year check. So basically, we activated the plan in late November. The first one delivered last month. The second one's delivering this month. So roughly three months start to finish. Wow, that's very impressive. That's from the time that we've taken the plane out to the time it's flying with the next carrier. Yeah. Pretty impressive. I would have expected something like maybe six months or so, but yeah, two or three months sounds pretty good. Yeah. Yeah. Good. The team did well on this occasion. Great. Operator, if there are no more questions, we are very happy to call it a day from this end. I would like to thank everyone for joining us this morning, and we look forward to receiving glowing praise from the analyst community. Thank you. Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.