Ladies and gentlemen, thank you for standing by, and welcome to the Chorus Aviation Inc. fourth quarter 2019 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone keypad. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Nathalie Megann, Vice President, Investor Relations and Corporate Affairs. Thank you. Please go ahead.
Thank you, operator. Hello, and thank you for joining us today for our fourth quarter and year-end 2019 conference call and audio webcast. With me today from Chorus are Joe Randell, President and Chief Executive Officer, and Gary Osborne, Chief Financial Officer. We'll start by giving a brief overview of the results and then go on to questions from the analyst community. Because some of this discussion in this call may be forward-looking, I direct your attention to the caution regarding forward-looking statements and information, which are subject to various risks, uncertainties, and assumptions that are included or referenced on page 55 of our management's discussion and analysis of the results and operations of Chorus Aviation Inc. for the period ended December 31, 2019, the outlook section and other sections of our MD&A, where such statements appear.
In addition, some of the following discussion involves certain non-GAAP financial measures, including references to EBITDA, adjusted EBITDA, adjusted EBT, and adjusted net income. Please refer to section 18 of our MD&A for a discussion related to the use of such non-GAAP measures. I'll now turn the call over to Joe Randell.
Thank you, Nathalie, and good morning, everyone. I am tremendously pleased with our accomplishments. It was a truly transformative year. On total revenues of CAD 1.4 billion, we generated adjusted EBITDA of CAD 341 million in 2019, an increase of CAD 1.2 million over 2018. We kicked off last year by establishing a stronger partnership with Air Canada for an additional 17 years, providing a minimum of CAD 2.5 billion in contracted revenues with opportunities to increase this business. This was a critical development as it laid a strong and long-term foundation from which we continued to grow and diversify. Today, we operate about 80% of the Air Canada Express network, an increase of approximately 10 percentage points from the beginning of 2019. We safely delivered close to 11 million passengers and operated over 226,000 flights.
I thank the team for their professionalism and for helping our partner manage its network challenges, certainly posed by the grounding of the 737 MAX fleet. The implementation of the amended CPA went well and included the transitioning of 24 aircraft in and out of the Jazz fleet. This activity will continue, including the induction of nine new CRJ900s, beginning in May, which will generate additional leasing revenue under the CPA. Voyageur's performance strengthened year-over-year. We also successfully won new international contracted flying missions with the United Nations and other clients and saw several contract extensions. Our specialized maintenance, repair, and overhaul facility in North Bay had a very good year, and we've been hiring to keep up with the demand. The launch of the Dash 8-100 Package Freighter was positively received, and we intend to actively market this product.
While not our primary growth vehicle, it does lend synergies to support our growing leasing business. In 2019, we acquired 3 aircraft for disassembly and parted out 7. To date, we've parted out 15 aircraft. We see significant potential in parts and component sales, and we were pleased to establish a parts sales depot in Dubai, further extending our reach into the international markets. I thank our employees in North Bay and those around the world for their operational integrity. We've made significant advancements in growing our business, becoming a worldwide provider of regional aviation services. We successfully raised CAD 184 million in capital during the year, including our CAD 86.3 million unsecured hybrid debenture, and secured $300 million U.S. warehouse facility to support our growth in regional aircraft leasing.
We now have a committed portfolio of 64 attractive assets, placed with 16 customers, a 60% increase in the fleet over 2018. Together with the aircraft we have leased under the CPA, our portfolio comprises of 135 aircraft with approximately $2.1 billion in future contracted lease revenue. The growth in our leasing business drove a 27% increase in this segment's adjusted earnings before tax over last year and now represents 22% of Chorus's overall adjusted EBT. I'm very pleased with the positive momentum we gained in 2019 and with our continued maturation as a leasing company. We completed our first sale of 3 leased Dash 8-400 aircraft and extended our first leases with the renewal of 3 Aeromexico Connect Embraer 190s.
The addition of the highly sought-after Airbus A220-300 aircraft to our portfolio was an important development in our evolution as we see growing demand for this state-of-the-art, fuel-efficient aircraft.... These aircraft are being placed with airBaltic, an existing MRO customer that we're pleased to welcome to our leasing portfolio. The pipeline of potential transactions remains strong, and we will not waver from our investment principles to profitably build our leasing business. Finally, we were very honored to be the recipient of several business and industry awards, including being named amongst Canada's Safest Employers 2019, taking home gold in the transportation category. I thank the Chorus team for delivering a standout year. I look forward to our future accomplishments together. So thank you. And now I'll pass the line over to Gary to take you through the fourth quarter and the year-end financial results.
Thank you, Joe, and good morning. I would like to also thank and congratulate our team for our successes in 2019 and so far this year. Together, we've built a great foundation from which to further grow and strengthen our organization. With over 90% of our revenues secured through long-term contracts, our business is predictable and transparent. As such, our business delivered results that once again met our expectations. Here's how the fourth quarter compares to the same period last year. We reported adjusted EBITDA of CAD 88.6 million, a decrease of CAD 3.4 million, or 3.7%, relative to the fourth quarter of 2018. The Regional Aircraft Leasing segment's adjusted EBITDA increased by CAD 12.3 million, primarily related to the growth in aircraft, with 11 closed transactions in the fourth quarter.
As Joe mentioned earlier, we are proud to have completed our first sale during the quarter, generating net cash proceeds of $25 million and an internal rate of return in excess of 30%. The sale of these 3 aircraft produced an accounting loss upon the wind-up of the special purpose entities and resulted in a decrease in Adjusted EBITDA and Adjusted Net Income of CAD 3.4 million and CAD 1.3 million, respectively. Excluding the impact of the sale, the margin on the Regional Aircraft Leasing in the quarter was consistent with Q3 and our expectations. Again, in line with expectations, the Regional Aviation Services segment Adjusted EBITDA decreased CAD 15.8 million. The decrease reflects the 2019 CPA amendments, which moved the fixed fee margin and performance incentive revenue when Chorus moved to market-based compensation rates.
Beyond the changes related to the 2019 CPA amendments, fourth quarter results were impacted by increased stock-based compensation of CAD 6 million due to the appreciation in Chorus's share price relative to the comparable period, which was partly mitigated by the total return swap implemented in the fourth quarter of 2019, and decreased capitalization of major maintenance overhauls on owned CPA aircraft over the previous period for CAD 1.2 million.
Adjusted net income was CAD 23.3 million for the quarter, a decrease of CAD 12 million due to the CAD 3.4 million decrease in adjusted EBITDA previously described, an increase in depreciation of CAD 6.6 million, primarily related to an addition to additional aircraft in the our Regional Aircraft Leasing segment, an increase in net interest costs of CAD 5.3 million, primarily related to additional aircraft debt in the Regional Aircraft Leasing segment, and an increase in non-operating costs of CAD 2.5 million, primarily related to the loss on disposal of an engine of CAD 1.2 million, and a change in foreign exchange losses of CAD 0.8 million, again, offset by a CAD 5.7 million decrease in income tax expense resulting from lower adjusted EBT.
Net income increased CAD 34.3 million, primarily due to the change in net unrealized foreign exchange gains on long-term debt of CAD 46.2 million, offset by the previously noted CAD 12 million decrease in adjusted net income. For the 2019 year, Chorus reported an adjusted EBITDA of CAD 341.7 million, an increase of CAD 1.2 million over 2018. The Regional Aircraft Leasing segment's adjusted EBITDA increased by CAD 42.4 million, primarily due to the growth in aircraft earning leasing revenue. The leased fleet over doubled, increasing to 60 at the end of 2019 from 29 at the end of 2018. In line with expectations, the Regional Aviation Services segment's adjusted EBITDA decreased by CAD 41.3 million, which reflects the 2019 CPA amendments and the reduced fixed margin and performance incentive revenue as Chorus moved to market-based compensation rates.
These reductions were partially offset by the implementation of the Controllable Cost Guardrail that helped mitigate some of the CPA margin shortfall resulting from reduced fees. Beyond the changes related to the 2019 CPA amendments, 2019 results were impacted by increased stock-based compensation of CAD 15 million due to the appreciation in Chorus's share price relative to the comparable period, which was partially mitigated by the Total Return Swap implemented in the fourth quarter of 2019. Decreased capitalization of major overhauls on own CPA aircraft of CAD 1.9 million over the previous period, offset by increased leasing under the CPA.
Adjusted Net Income of CAD 96.2 million decreased over 2018 by CAD 26.1 million due to an increase in depreciation of CAD 18.5 million, primarily related to additional aircraft in the Regional Aircraft Leasing segment, an increase in net interest costs of CAD 15.5 million, primarily related to additional aircraft debt in the Regional Aircraft Leasing segment, and an increase in non-operating costs of CAD 5.6 million, primarily related to foreign exchange losses of CAD 4.2 million, in addition to a loss on disposal of property and equipment of CAD 0.5 million, partially offset by the CAD 1.2 million increase in Adjusted EBITDA previously described, and a decrease in income tax expense of CAD 12.2 million, resulting from lower adjusted EBT.
Net income increased 65.7 million over 2018 due to the change in net unrealized foreign exchange gains on long-term debt of 90.8 million, and decreased employee separation costs of 3.1 million, offset by the previously noted decrease of 26.1 million in adjusted net income and increased signing bonuses of 2 million related to the Jazz pilot collective agreement. We ended the year with a solid cash position of CAD 87 million. As mentioned, we raised gross proceeds of over CAD 86 million in the quarter and cash financed the IndiGo and Croatia Airlines deliveries. We expect the debt financing of approximately $46 million on these aircraft to be in place by the first half of this year.
We're maintaining our intention to grow our regional aircraft leasing segment by up to 20 aircraft per year, as we have the capacity to make this investment through a combination of new debt and internally generated cash flow. The timing of these future transactions will not occur on a consistent basis. However, we expect the majority will be executed in the second half of this year. We will also use these resources to fund the delivery of nine CRJ-900 this year and five remaining ESPs to be completed before the end of 2022. As has been our practice, we manage costs against the objectives of remaining within market acceptable ranges of leverage and maintaining adequate financial flexibility.
With the addition of the aircraft under both the regional aircraft leasing segment and the aircraft leasing revenue under the CPA, Chorus's estimated future contracted lease revenue is approximately $2.1 billion. When the CPA fixed margin revenue of $0.6 billion is included with the future contracted revenue, Chorus's future revenue approximates $2.7 billion. Capital expenditures for 2020, including capitalized major maintenance overhauls, but excluding expenditures for the acquisition of aircraft and the ESP, are expected to be between CAD 38 million and CAD 44 million. Aircraft-related acquisitions and the ESP capital expenditures in 2020 are expected to be between CAD 442 million and CAD 452 million, related to previously announced transactions.
For additional information supporting our outlook for the balance of the year, I'll refer you to Section 4 of the 2020 Outlook section of our MD&A for the period ended December 31st, 2019. That concludes my commentary. Thank you for listening. Operator, we can open the call to questions from the analyst community when you are ready.
Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound or hash key. Please stand by while we compile the Q&A roster. Your first question comes from Doug Taylor with Canaccord Genuity. Your line is open.
Yeah, thank you, and good morning.
Good morning, Doug.
With respect to the lease... Yeah, thank you. With respect to the leasing activity, you suggested it's going to be back-end loaded with for commitments. That's a similar kind of seasonality or cadence to last year. Is it fair to assume that that is gonna be the regular seasonality for commitments and deployments going forward in future years? Is there some kind of intentional pause right now to digest some of the recent, you know, activity? And then perhaps related to that, do you notice airlines pausing their decision-making in with respect to their fleets in response to either the MAX or coronavirus or any other factors?
So, first of all, there's no intentional pause on our part here. It really is looking at the transactions that are in the pipeline for this year and looking at the expected dates, which they will come to a conclusion. And as we look at it, you know, we see it being more in the last half of the year. So that's, you know, generally the business is a little lumpy, and, you know, so we're just sort of giving some outlook for the year in terms of when we see the transactions actually happening. I don't think, you know, it's necessary that the same trend would be there every single year. It depends on, you know, who's out, where the opportunities are, et cetera.
A lot of people, of course, like to get deals closed by year-end, and that's generally something that focuses folks, perhaps more so in, you know, from a customer point of view and that sort of thing. And I guess your question on, you know, have we seen any changes as a result of, you know, the overhang that exists right now because of the coronavirus? We've not seen anything like that at all in our business. You know, we've not seen any change in the pipeline, in the outlook, et cetera. So, at this point, we haven't seen any effect. And Doug, it's Gary here.
The same goes for the MAX?
Pardon me?
Same goes for the MAX and that impact on coronavirus?
Yeah, well, the MAX impact is more on Jazz, where we are flying, you know, our aircraft, a lot more hours and trying to support Air Canada as it's missing, you know, a substantial amount of its fleet and managing through this process. So, you know, we've been very busy, you know, with utilization, high crew utilization, et cetera. What's most important, of course, is we do it safely, and, that's what our focus is on. And, you know, we'll continue to support Air Canada in that regard. And, you know, just as a, as an added comment, our new arrangement with Air Canada makes this far easier as well, because with the cost guardrails that are there, you know, we're totally aligned with Air Canada in terms of just providing them with what they need to support their network.
... So, you know, I think that's a major benefit of our new arrangement with Air Canada, is we're not spending a lot of time, you know, negotiating. It's just a matter of saying, "Hey, we're here to help, and we'll do whatever we can to, to help you through this difficult period.
Doug, it's Gary here. Sorry, on the deliveries, if you look at last year, we were about one third in the first part of the year and then two thirds in the second half. It's probably going to be similar in around that same this year, at least from what we can see.
Yeah, thank you. And that brings me to the next question, you know, the timing of the A220 remaining entries in the fleet this year. I think the last guidance you gave was kind of the end of Q3. Is that still accurate?
Yeah, I don't think we've seen any change in our expected deliveries from what we had previously provided.
No, not at this stage.
You know, it's an exciting addition to the portfolio, as you mentioned. It's, it's also, you know, a little larger aircraft, a little closer to a narrow body, which has been, you know, a more competitive end of the market. This is also a relatively new platform, so there's a couple considerations there with respect to, you know, the lease factors relative to the existing portfolio. Can you provide any comment on that?
Well, it's certainly very competitive. The lease rate factors are generally a little lower, the larger the aircraft, frankly. But you know, the returns are still very, very good. And you know, we are very heavily turboprop-oriented, which is, we like that. And but we have a you know, a lot of the top names in the industry and that sort of thing. Our focus right now, you know, going forward, will be more, I think, on the larger regional jets. We'll continue to focus on turboprops, but you know, so the A220 is proving to be a great aircraft. We're also carefully looking at the developments at Embraer and the E2s, which is again, a new technology, more fuel efficient aircraft.
So we see that as being, you know, in our, a bit in our sweet spot as well. So, yeah, we're, you know, we still see good returns here, and, you know, so we're, we're able to be competitive, I think, as was demonstrated in the case of the airBaltic acquisition.
Perhaps I'll, I'll sneak one more question in here. The loss related to the special purpose entity, can you walk us through, you know, you get the gain, the positive IRR, 30% you mentioned, you get a loss. And also, is this a unique situation with these aircraft specifically, or is this something that may recur, this kind of, machination, when you do dispose of aircraft?
Well, it's, you know, I think it depends in terms of when the aircraft are disposed, but, you know, aircraft trading is an integral part of the business. And, you know, for a leasing company to sell assets off at any one time is not unusual, and it all depends on the deal itself. And, you know, we make decisions based on the attractiveness of the deal. And I think, as Gary said in his comments there, with respect to the cash that was produced and the return that we saw, and, our ability to reinvest this in additional fleet, you know, we manage more for the overall business return and making the right business decision, even though there was, an accounting loss as a result of this in terms of the structure that was there.
I think we've really achieved a better return with the combination of the sale and us looking to reinvest the proceeds. So I think it was the best decision for the business, and it is, as I say, a trading business, so from time to time, as you do this, there can be some, I guess, accounting adjustments required.
Yeah. So if you look at that, that transaction, it's pretty complicated, and, and as you can see, overall, you know, not a, a material number. But, as we work through these, these items, you, you can see that. You know, there's a lot of lines it hits. And, you know, when we take the funds and we look at the IRR, it's over a 30% IRR, and then, we can reinvest those funds and acquire another four or five aircraft in, in replacement. So we viewed it as a very positive transaction, even though the accounting in this quarter only, produced that issue.
Yeah, and I think, you know, when you look at the, at the cash results here, we could have ended the year, if we didn't do this transaction, with 67 aircraft. But, you know, by producing CAD 25 million and the total, and the normal transaction that we have here, that gives us the ability, actually, to do 4 aircraft. And, so you know, we're, we're guided more by making the right investment decisions rather than being held on any one particular metric.
Yeah, I don't think anyone's going to complain with 30%+ IRRs. So thank you. I'll pass the line.
Okay.
Your next question comes from David Ocampo from Cormark Securities. Your line is open.
Good morning.
Morning.
Morning.
To piggyback on, Doug's first question there, can you kind of walk us through the typical timeline of a leasing transaction? Just trying to get a sense if the discussions you're having today give you the confidence that you'll close on two-thirds of the deliveries in A220.
Well, each deal is different. Some happen faster than others. And it really depends upon primarily the customer and the rate at which the customer moves. Quite often, they put out RFPs, and they make decisions, they could defer decisions, et cetera. So it's very difficult to give you a specific timeline with respect to a transaction, because each one is different. And your expectations of when deals close, though, at any one time, is a function of your expectation of when the customer is ultimately going to make that decision. So, you know, when we talk about having most of the transactions in the second half of this year, it's really as a result of our looking at what we have right now. And it could happen potentially, where we may have something happen earlier, something comes up, et cetera.
But that's where this business is, is lumpy, and we tend to look at it from a sort of a yearly annual point of view. We've said we have the ability to fund 20 aircraft a year, et cetera, but it will vary throughout the year, and it's, you know, it's not going to be so many a month. It's going to be a function of, again, the customer. So it, it's very difficult to do that other than really primarily on an annual basis, and then giving, I think, a bit of an outlook in terms of when, what we have before us, we expect it to to close.
David, it also depends on if it's a new customer or an existing customer. New customers take longer. There's much more due diligence and other things that go around it. Existing customers, it's a little easier to put the paperwork in place because you've already negotiated it. So back to, you know, your point on timing, to Joe's point, there's RFPs and that, but you could be anywhere from 2-6 months, depending on where things are and what the customer is and how complicated the transaction. So it's kind of difficult to put an exact timing on everything.
Yeah, and in some cases, even longer.
Yes, even longer in some cases.
Yeah, that makes sense. Last one from me here. Your leverage ratio continues to grind higher. I know it still sits below where the leasing comps trade at, but do you see this grinding up much higher from this point? That, I think it's 5 right now.
Yeah, I think, as we continue to invest in the leasing area, it is gonna go up a bit. It's not going to get, you know, into the leasing stratosphere, I think, at this point, given we're, you know, a hybrid company, but it will go up a bit more as we invest. And again, because, you know, as you know, the returns are in arrears, so, you know, it takes 12 months to accumulate. So I think you'll see it, it grow a bit more, but, certainly stay well manageable.
That's great. I'll hand the call over.
Yeah.
Your next question comes from Cameron Doerksen with National Bank Financial. Your line is open.
Yeah, thanks. Just a question on additional leasing opportunities. Are you still seeing, you know, potential opportunities for acquiring larger portfolios of aircraft? I'm just wondering if anything has kind of changed on that front.
We are. You know, we continue to evaluate those, and, you know, there are a number of considerations when we look at these in terms of the fit, in terms of our strategy, in terms of customer concentration, equipment type, et cetera. So, we are, Cameron, seeing an ongoing, ongoing opportunity in that regard.
Would you ever acquire a, you know, a portfolio of aircraft that maybe had some aircraft that are outside of your, you know, regional focus, you know, maybe narrow bodies, and then, you know, subsequently divest those? I mean, is that something you would look at doing, or would you prefer just not to, not to do that?
No, I think that's something that clearly can be looked at. You know, I think if we look at a portfolio, there may be some aircraft that are a little outside of what we would normally do, but we would have plans then with respect to how we were going to deal with those assets, for sure. You know, it is not our plan to get into larger narrow-body, wide-body aircraft at all. But you know, we're flexible, and I think as we've grown scale with respect to this business, you know, our ability to look at some of these things increases.
You know, I think we as well, and we've talked about before, as we mature the ability and opportunities to do skyline purchases or things of that nature as well. And in some cases, if we purchase a portfolio, it may be beyond our fleet concentration targets, which again, we would have plans to deal with that so that we maintain a well-balanced, you know, risk-managed portfolio of assets.
Okay. No, that's good. Just quickly, I'm just wondering if you can update us on when you, the timing of the CRJ900, so, you know, moving into the CPA operation, just, you know, how they kind of come in by quarter?
Okay. They start basically one a month introduced into the CPA in May.
Okay. one month starting May? Okay.
Yes.
They'll all be in place by year-end, correct?
Yeah, they're expected to be in place all by year-end, yep.
Okay. Okay, that's great. Thanks very much.
Okay.
As a reminder, if you would like to ask a question, you will need to press star one on your telephone. Your next question comes from Tim James with TD Securities. Your line is open.
Thank you. Good morning.
Morning.
Morning.
Just thinking, long-term, strategically here. The leasing business is now certainly well on track to provide some nice diversification in terms of earnings and cash flow. Do you see a need, I mean, at this point, as you think forward, for additional diversification opportunities, or do you think the leasing business now at maturity will provide a satisfactory business mix for the long term?
Well, I think, you know, it really relates to who we are and our strategy. And, you know, we do, really three things overall. We fly contract flying, which I think we are doing very successfully with our CPA. We do it very successfully with Voyageur.... And, you know, although very similar assets within the, the regional space, you know, contract flying, and other types of contract flying would definitely be of interest to us because there's also a leasing component to that, and a support component. And, you know, we're modifying older Dash 8s, et cetera, into other purposes. So, you know, contract flying provides, I think, a business that is consistent with our business model, which is predictable, generally stable, and, synergistic.
Then we have, of course, our leasing side, which is now our growth vehicle, as you say. But then we have this support side of our business, and this is where I think I mentioned in my comments here, where parts and components, for instance, is a really interesting business for us. We've parted out a lot of aircraft. The returns are very good. It isn't huge. It isn't, at this point, it's, you know, doesn't really materially affect results. But again, it's very supportive, and, you know, we really look at these aircraft over the life cycle of the aircraft in various roles, different purposes, etc . And this is why we are not a pure play in leasing company. We think we are stronger as a result of being able to operate them, redeploy them, etc .
And, you know, I'll give an example of this, where we just recently had a Q400 come off lease with a carrier, and we are actually going to be operating that aircraft under contracts with Voyageur. So that aircraft now is being transformed and will be on special mission contracts with Voyageur. So it really gives us the ability to look at, you know, whether we park the airplanes out, whether we operate them for special missions, whether we modify them, et cetera. So, we don't see leasing as being our pure and only growth vehicle, and I think by looking at it from a broader perspective, that will help us further diversify and, you know, and grow the company.
Because the, you know, the amount of revenue that we will receive, as you know, under the CPA for the fixed fee is decreasing. And, you know, where you look at the rest of the business and the leasing revenue that's there, and now to augment it with others, I think it would make the, the company very much stronger and build up on its reputation in all segments of the business.
Okay, that's great. That's very helpful. So it sounds like you feel you've got the foundation for the necessary diversification as time goes on, as opposed to, you know, feeling the need to branch out into any other area of aviation. You've kind of got the groundwork laid there.
Well, I think, you know, we've been in the business a long time. We know a lot about the business, we know a lot about the assets, and, you know, we're growing, we've grown our team, we've grown our expertise, and, I think we're now starting to show additional milestones, even within the leasing business, in terms of extending leases, selling assets, redeploying them, et cetera. So, you know, we don't see the requirement to really reach out to unrelated businesses or anything of that nature. We see great opportunities within the areas in which we have expertise.
Great. Thank you very much.
Your next question comes from Amina Jirde with Scotiabank. Your line is open.
Hi, I'm Konark Gupta's associate. In the previous question, you did mention about, a little bit about Voyageur. Could you provide a little more details on where do you see growth opportunities, for Voyageur coming up for the next few years?
Yeah. Voyageur had a very good year last year. You know, a lot of improvement over the year before. Contract flying opportunities are still there, for sure. The MRO side, we've hired a lot of staff in, North Bay, and we are doing a lot of, specialty, aviation work there. It's a very solid business. The primary growth area for Voyageur is really this parts business that I mentioned earlier, and, it's still relatively new. Margins are good, though, and it's a business that we are able to feed with older assets. And as well, there are attractive older assets that are available for purchase out there. So, you know, we see Voyageur playing a supporting role.
I think it will be growing and improving, but again, you know, it's a long way from our flying business and our leasing business in terms of the size of the segment, but it is very critical in terms of how we knit this whole business together.
Okay. Are you seeing any incremental interest in the A220 leasing after signing your first customer?
Yes, we are. We're seeing good interest in... You know, we believe there are good opportunities in the larger regional jet space, including the A220, including the Embraer E2s, and those are aircraft that were, are definitely attractive to us and I believe will be great assets.
Yeah, I don't have any more questions.
Again, as a reminder, it is star one on your telephone keypad if you would like to ask a question. There are no further questions at this time. I will now turn the call back over to the presenters.
Thank you very much, and thank you all for participating on the call, and we'll talk to you again next quarter.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.