Avation PLC (AVAP) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to Avation PLC Half Year Results Call. [Operator Instructions] I would like to remind you all that this call is being recorded. I will now hand over to Duncan Scott, Group General Counsel, to read out the legal disclaimers.

Thank you, Milly, and good day to everyone. Please note that certain statements in this presentation, including answers to questions, may be forward-looking statements, including, without limitation, statements regarding our future operations and performance, revenues, operating expenses, other income and expense items. Those statements and any projection as to the company's future performance represent management's estimates of future results and speak only as of today, 26th of February 2026. These estimates involve risks and uncertainties that could cause actual results to differ materially from expectations. Further information on the factors and risks that may affect Avation's business is included in Avation's regulatory announcements from time to time, including its annual report and half year results announcements. Avation assumes no obligation to update any forward-looking statements or information in the light of new information or future events. Unauthorized recording of this transmission is not permitted. I'll now hand over to our Executive Chairman, Jeff Chatfield.

Thank you, Duncan. Next slide, please. Good afternoon or good morning, depending on where you are. So the snapshot as at 31st of December, the company owned 33 aircraft. We had 16 airline customers, a split in wide-body, narrow-body and turboprop. So by value, we're principally a narrow-body commercial aircraft lessor, 8.8 years average age. Total asset values of $993 million, $350 million in unearned contracted revenues. So the company is pretty well placed. Next slide. The portfolio as at 31st of December, you'll see there, we have significantly grown in percentage terms the narrow-body percentage by disposing what we consider to be a risky asset in the 777, which was an out-of-production aircraft, 31% turboprop and the majority of ATR72-600s. During the period, we also added an engine, which is on lease to the mix, which is mainly a sales tool, but it's a leased asset. Next slide, please. So we like diversification. So we like to have aircraft in as many jurisdictions -- sensible jurisdictions as possible. So, some of the new names there include Clic in Colombia, which is our first aircraft into the Americas, SUM Air in Korea, which is a new airline. So that's new names, which is very important for the company to lower its risk and be further diversified. Next slide, please. So some of the highlights. We had a very busy 6 months, dominated in management time by the redemption and reissue of a new unsecured 5-year bond. We achieved improved credit ratings from Fitch and S&P and got a credit rating from Moody's. So we have B1 with Moody's, Fitch with B, S&P with B. We transitioned Mandarin Airlines aircraft for PNG. We delivered a new aircraft to SUM Air in Korea. We transitioned another Mandarin ATR72 to CLIC, which was in January this year, but it's pre this results presentation. A third ATR72-600 will transition during the month of March. And most importantly, probably in economic terms, we agreed a 4-year extension on the A330-300 with EVA. So lots of activity, very positive news there. Next slide, please. So we have -- currently have 9 ATR72-600 aircraft to be delivered by second quarter of 2028. We have 2 going to -- on 12-year leases to Cambodia Airways. We have -- all the new ATR aircraft have the latest technology engines, which are expected to be 100% SAF compatible. We have -- in terms of further growth, we have 24 ATR72 purchase rights for delivery by June '34. And [indiscernible] valued those aircraft when they exist at $552 million. So there's plenty of growth there. Next slide, please. So we have contracted growth in the number of aircraft, which means -- which is a good thing for shareholders. So it's fairly organic growth. We clearly -- we're looking at secondary trading opportunities, but we have a base growth case, which is important. So these are things we know about in the coming years, growing to 39 aircraft in full year 2028. But presumably with secondary acquisitions, that number could grow even further. Next slide, please. In terms of the results, the financial results, I'd like to hand to Iain to -- in court to go through some of these numbers.

Thanks, Jeff. We'll now turn to the half year financial results announced this morning. So this slide shows the results for the 6 months ended 31st December 2025, which show the company producing consistent levels of income and strong cash flow from its contracted fleet. Total income increased by $0.6 million to $56 million, generating EBITDA of $54 million in the period. These results reflect the fleet's 100% utilization throughout the period and include $10.2 million of maintenance reserve revenue and $2.3 million of end-of-lease compensation revenue. Operating profit increased by $10.5 million compared to the first half of the 2024 fiscal year. Operating profit includes a $4.1 million gain from the sale of a Boeing 777-300 aircraft and an unrealized loss on revaluation of aircraft purchase rights and deposits paid of $4.2 million. We note that the gain on sale of 777 follows gains recognized on the sales of 2 ATR aircraft in FY 2025, providing evidence of the current strength of the aircraft market values. A loss after tax of $4.9 million was recorded after booking $13 million of noncash adjustments related to the redemption of bonds in November 2025. Net indebtedness has been reduced by a further $61.5 million since 30th of June 2025, indicating strong cash generation. In addition to reducing net debt, the company has also deployed $10.1 million to repurchase shares and has paid cash for an aircraft engine and the final contract price installment for a new ATR aircraft, which was delivered in December. Following the payment of a USD 0.01 dividend in October and a net reduction of 4.3 million outstanding shares, net asset value per share has increased by 7p to GBP 2.74. Next slide, please. This slide provides some explanatory guidance on noncash and nonrecurring expenses included in operating profit and profit before tax. We note that expenses totaling $13 million were booked in connection with the final redemption of the company's bond issue, which was refinanced in November 2025. It's important to note that these expenses will not reoccur and future periods will not be affected by these items, which were derived from the IFRS accounting treatment of the modification of terms of the old bonds in 2021. Next slide, please. Looking at the company's debt structure, the key change since the 30th of June is the refinancing of the company's unsecured debt with a new $300 million bond maturing in May 2031. This new bond issue significantly extends the maturity profile of the company's debt structure. Total debt has been reduced by $63.6 million through scheduled repayments of senior loans and the repayment of a $38.8 million loan outstanding on sale of the Boeing 777-300ER in August. The weighted average cost of secured debt has ticked down slightly due to reduction in floating interest rates, while the average cost of debt has increased slightly, resulting from the new unsecured bond coupon of 8.5% and a slightly higher proportion of 50.1% unsecured debt as a percentage of total debt. The company is still substantially hedged against interest rate risk with fixed or hedged rate debt at 84% of total debt. We're pleased to achieve improvements in the company's corporate credit ratings in the period, including a new rating from Moody's of B1 with a stable outlook. Next slide, please. Avation's net asset value per share increased by 7p to GBP 2.74 in the period. This increase reflects the company's policy of buying back shares at a substantial discount to NAV, which has reduced net shares in issue by 4.3 million shares or 6.4% since the 30th of June. Lease yield improved slightly to 11.5% and is expected to remain above 11% in the near term. All credit ratios have seen improvements in the period as the company continued to pay down existing secured loans. The face value of Avation's unsecured debt was also reduced from $310 million at 30th of June to $300 million when the old notes were refinanced. As a result, key credit ratios of net debt to EBITDA and EBITDA to interest expense have improved to 5.1x and 2.6x, respectively. Next slide, please. In addition to repayments of debt, the company deployed cash to buy back shares and also paid cash for an aircraft engine and the final contract installment for a new ATR delivered in December. As a result, total cash has reduced to $104.8 million at 31st of December 2025. It should be noted that the company intends to finance the new ATR together with the next scheduled ATR delivery in April 2026. Finance lease receivables represent future lease payments receivable on 3 older ATR72-500 aircraft, which will be sold to the lessee at the end of their lease periods in FY 2027. The company ended the period with 10 unencumbered aircraft with a combined book value of around $180 million. Unencumbered aircraft provide the company with significant financial flexibility as they may be financed with secured loans in future to provide further liquidity should the need arise. Next slide, please. The company's loan maturity profile has been significantly extended by the new $300 million bond issue, which now matures in May 2031. There are no significant loan maturities until FY 2028 when a floating rate secured term loan facility with a balance of $82 million outstanding matures. The company expects to extend or refinance this facility in due course. Next slide, please. The company has recently entered into new leases for 3 aircraft redelivered by Mandarin Airlines this year. Two aircraft have already been transitioned to their new leases and the third aircraft is scheduled to be redelivered and start its new lease next month. One further ATR 72-600 aircraft is due to come off lease in May 2026, and the company is in discussions with potential lessees for a follow-on lease for this aircraft. Lease expiries in FY 2027 include the 3 older ATR72-500 aircraft on finance lease, which will be sold to the lessee at the expiry of their current leases. I'll now hand you back to Jeff to take you through the market outlook and strategy section.

Thank you, Iain. Next slide, please. Thank you very much. So clearly, in the world of aircraft, there is a favorable dynamic in the market. There is plenty of growth in global air traffic. It's now back to 2019 levels, which is fantastic. We're very well positioned in Asia Pac. Clearly, that's the region of most growth, and therefore, we're well placed geographically to go and meet that demand. We have a good alignment in the market in the sense that we have turboprop, wide-body and narrow-body aircraft available, which is a good thing. In terms of the order books of the manufacturers, clearly, there's a multiple year overhang and aircraft supply is the issue for most airlines at the moment, getting enough aircraft, which results in keeping them longer because the manufacturer is not making enough to satisfy their demand or backlog. Next slide, please. There is a significant opportunity with ATR turboprops although these are, if you like, low value compared with bigger aircraft. There's strong demand for them all over the world. We have purchase rights for 24 and 9 on order. Clearly, there's demand for a couple of thousand aircraft given that there's growth as well as replacement. So in theory, there's 1,100 required for replacement and 880 for growth. So that's a massive number of aircraft during the -- that's projected to be required. So we're well placed in terms of the -- in terms of being a lessor of those aircraft. Next slide, please. So what we're doing is we're continuing to grow the fleet. The fleet shrunk during COVID. It shrunk by us selling the 777, which was to minimize the risk of an expensive asset that was out of production is why we sold it. Clearly, we need to replace that growth at some point because it's -- we need to replace that revenue at some point, because we need to obviously maintain scale. We have a prudent growth record of opportunity with 9 ATRs on order out to 2028. That's not a lot of aircraft to place. We are transitioning aircraft all the time and we're using that to diversify our customer base. So the key when we transition aircraft is we're looking for new to the company customers so that we can lower our risk and exposure. We've been successful in placing our new ATR orders on 10- or 12-year leases. And managed to extend easyJet and EVA for respective terms. The EVA extension of 4 years was a very valuable one to the company. So we're managing our capital structure where continuing to produce cash flow. We are refinancing our loans. We've refinanced our bonds, and we're looking always to improve funding terms to ensure the best possible cash flow. Next slide, please. So in short, in summary, we're a full-service leasing platform with now a 20-year proven track record. We have contracted lease revenue, which provides consistent cash flow. We now have extended our bond by 5 years. At the moment, we have 10 unencumbered aircraft of a total of 33. So we're extremely well placed in terms of the opportunity to refinance or grow the business. We are continuing to diversify, but with new customers. There's plenty of airlines out there that we're dealing with. There's a lot of fundamental demand in the airline business with passenger growth, and we have built-in growth. We're one of the few lessors in the world with an order book, and we have an ATR order book, which is useful and a good asset that provides a stable platform.

Next slide, please. Well, thank you. So we've now moved to the question and answers, and I see there's a lot of questions that have come in. We'll try to share these around, and I will direct them as they -- as I can. So there's a number of questions, which we will now deal with. So here we go. First question, I will take, why is Avation undertaking more disposals of older aircraft? The answer is every time you sell an aircraft, your revenue shrinks. And clearly, we do have plenty of debt there that we need to service. So we're prudent in selling aircraft. Our job is to stay in business and grow, not just sell aircraft. Second question is about, given the company's persistent stock discount relative to the assets, when will the Board conclude the market will not recognize its value? And what concrete steps we'll be taking a significantly higher dividends or a sale? Well, we've been buying in shares. As we've -- we're not really in the market go out of business. We're in the market to -- if shares are available at a reasonable price, and we're in a non-blackout period, we've been willing to buy them in. As Iain mentioned, we've bought in significant numbers even since June last year. We haven't really got going this year, but I'm sure that at some stage, we will. Next question, similar in terms of what is our opinion on the market recognizing Avation's value? Well, a lot of that's to do, in our opinion, is to do with scale as well as the market. I think in our experience, bigger companies tend to do better. Clearly, there's a buyback opportunity, which we've been doing. We bought a lot of shares in and we'll continue to do so. Next question is, what specific balloon costs or unmodeled expenses have been discovered during asset sales? I'm going to let Iain deal with this one.

Thanks, Jeff. Yes. I mean the short answer is none. I mean we tend to sell leased aircraft. And what happens with the sale of a leased aircraft is that the buyer has an opportunity to inspect the aircraft. And then once they pay a deposit, they're committed and then we sell the aircraft based on a sort of formula where you choose a closing date or a notional economic closing date. And then the price is based on that value minus any rent collected after the economic closing date plus an element of interest. So you sort of fix the -- fix the price in advance of sale. And then obviously, we have sort of standard legal fees to pay for documenting the sale, but that's about it.

Next one is to what extent does the current global aircraft supply shortage should support higher residual values and standard economic lives? Well, the answer -- and how these are reflected. Well, we've sold a lot of aircraft in our life and on average, made about $1 million per aircraft. The valuation of our commercial aircraft at the moment in the market is probably 20% above historically where they should be. That's due to the shortage. The economic lives have been extended because not many aircraft are being made. Does that really affect our internal valuations? Well, not much. I mean our internal valuations are what they are. The fact that we can make a gain on sale of these things demonstrates that our aircraft are probably undervalued in our books compared with the market. Next question is leverage. Iain can do that one?

Yes. I think that the industry standard for aircraft leasing companies is probably a debt-to-equity ratio of 3:1. We're currently at 2.6%, I think. And we want our EBITDA to interest coverage to be above 2%, and we're currently at 2.6%. So on both of those metrics, we're -- we're sort of within the right range for leverage, but showing some headroom for growth should we want to leverage up a little bit.

The next question is what's the expected forward lease yield versus the current portfolio average? Well, we try to keep it at sort of 11% -- 12% is a good yield number. Next question is around M&A, which we have no real -- no real comment on. The next ones around should investors expect [indiscernible] consistent long-term profit contributor, Iain can do this one?

Short answer, yes. I mean our accounting policy is to recognize revenue when we collect maintenance reserves for a proportion of the maintenance reserves that we assess to be surplus to requirements. And as long as we're collecting maintenance reserves, we will continue to recognize revenue. And therefore, there's a profit element included in those leases with maintenance reserves.

Next question is a technical question. Does the company benefit from discount to MRO pricing versus reserve billing? And do we have our own parts pool? The answer is no. We don't really have too many parts, spare parts. We have a few, not many. We don't really operate a pool. We're not really that terribly involved with MRO. So the answer is no. Next question is what average fleet age do we consider to be the threshold at which residual value risk, leasability and financing attractives begin to deteriorate? That is an interesting question in the sense that aircraft have gotten older. Aircraft have a 25-year economic life, and they really genuinely do have that. An old plane would probably be 15 to 18 years, at which point you'd be thinking that it wasn't going to be leased again and be parted out. So obviously, as they get older, often the yield goes up, consequently, they can be quite good investments when they're old. I mean we tend to prefer new aircraft, the newish aircraft and have typically taken new or newish aircraft. But probably 15 to 18 is a risk point. It depends also the aircraft need to be in production in our view. Next question is how many spare engines are planned? Well, we don't plan to have many. We only have one at the moment, and that's sort of a strategic asset. We don't really want to be an engine lessor. We prefer to be an aircraft lessor. However, we are willing to do it if the opportunity is there. Next question is around ATR's, shortfalls. Well, how confident with the ATR delivery schedule will be maintained? What protection, contingency or flexibility do we have in that? Well, I mean, clearly, there's a greater demand for ATRs than supply. Having an order book gives us an advantage. And if they're late, there are some contingencies where ATR do give us credits for being late, which is valuable. Clearly, ATR's strategy lately has been to direct sell to airlines, which you would have read -- may have read about. So we're well placed in the sense that we have an order book. Clearly, we probably like more to place given that you don't -- the rate that they're being delivered is not that fast. Next question is on buying back shares. Well, we have been doing that. Why are we prioritizing low-yield growth? Well, we want to stay in business and generate revenue because ultimately, revenue pays off the debt. During the last 6 months, we paid off $60 million in debt, which is important because we need to maintain a cost of debt to operate and credit ratings. And so we need to get rid of debt as well as buying shares. It's not just buying in shares. Next question is repetition around buybacks. Well, we are -- as I said, we have been buying in shares. Next question is a theoretical one on Black-Scholes. I'm sure Iain would like to take that one?

Yes. I'm not sure the question is sort of comparing apples with apples in the Black-Scholes pricing model. Price is an option, including sort of intrinsic value of the asset and then the uncertainty or the time value of the option. But in terms of trying to sort of paint an accurate picture, I think the aircraft that we delivered in December, we will realize an excess over the value that was ascribed to the purchase right that we exercised back in February 2024 to acquire that aircraft.

I mean as the number of purchase rights go down, obviously, that total -- the value of the Black-Scholes purchase right asset becomes aircraft. Next question is technical failure on A220 and an insurance payout are blessing the skies. Well, not really. We prefer the revenue. We've got -- the insurance claim is the full book value. So we get -- we turn book value into cash, which is great. So there'll be some debt and we get the balance of our equity. But clearly, we would prefer to have that plane leased and generating revenue for the -- its duration. So that certainly gives us more cash to play with, and we will do something with it at some stage. Next question is on buybacks. I think we've dealt with a few questions on buyback. We are doing -- we're growing -- we've got to grow the revenue as well as buying shares. Next question is on ATR exposure. Will we become a predominantly an ATR? Well, at the moment, we're predominantly a narrow-body aircraft. So -- narrow-body lessor. So it's a mixture of things. We do wides, ATR as well as narrow-bodies, ATR are low price. So a lot of ATR is equivalent to 1 or 2 narrow-bodies. Next question is directed, can you explain the working capital change in cash flow statements, especially reserves? Iain can deal with that one?

Yes. If you look at the cash flow statement, what you'll see is that cash flow before working capital was pretty consistent between the 2 periods at around $40 million. And then there's a $22 million outflow for maintenance reserve claims in the current period. So that was basically due to engine overhauls carried out on narrow-body aircraft. So we've refunded maintenance reserves. But what you will also see further down the cash flow statement is a $22 million inflow from restricted cash, which is basically the restricted cash that was used to pay those maintenance claims. So if you include that $22 million in a sort of a total cash -- cash flow statement, then your sort of net operating cash becomes $21 million. So it's a kind of a presentational issue with the cash flow statement, but we haven't lost a lot of unrestricted cash to meet those maintenance reserve claims.

The next question is around the issue of the AirBaltic A220-300? They -- it had a technical fault in an ozone converter and the hull was damaged. And as the airframe was damaged, it's very hard to repair. And so it's just an unusual situation. It was on the ground. So it was an incident. It wasn't an accident. It was nothing to do with the engines. So we get paid the full book value of the plane, the lease ends, we don't have an obligation to resupply. It just means that airline has got 1 less aircraft, and we have our book value in cash. So it's sort of a neutral outcome that we would prefer to have it leased. It's an unusual event. Normally, airframes are not really the problem. Next question is the intention to exercise purchase rights? Well, the answer is yes. Clearly, we wouldn't have worked so hard to get them and it gives us growth. And clearly, clearly, we're looking for as many as -- I mean, mathematically, the best time to exercise your purchase rights is right now. The 2 ATR from Braathens have deployed elsewhere. Well, we have -- I can announce that we have LOIs. We have a customer for them. We have assigned by an airline LOI. We haven't quite decided yet if we're going to take that one or another one. So there's plenty of demand. So it's really business as usual. Well, it's not material. We'll make a decision on which airline probably in the next few days and proceed accordingly. We do want to diversify away. We want to use it as a chance to get another country -- another airline in another country and the LOIs that we've got out there deliver that. Next one, Niall O'Connor asked, congrats on another financial period, asked about share buybacks. You don't have enough scale? What can you do to grow? Why don't we let Tim Bacchus, who's dealing with a number of American investors, who always ask that question answer that one. Tim?

Well, I think -- thanks, Jeff. It's pretty clear that we need to grow the fleet. Obviously, our commercial team is out there scouring the market for opportunities to get additional aircraft beyond those contracted ATR flows. And I think when we demonstrate that and when have some news to announce on that front, I think you'll see certainly some acceleration in our metrics in terms of scale. And it will set us on a path which hopefully, it will be reflected in the share price. And really, we want to demonstrate some increase in the acceleration of that NAV growth.

Okay. And also, we can buy aircraft. The next one is, given major progression on lowering net debt to EBITDA and potential to generate $30 million to $40 million per annum, how are we thinking on new aircraft orders and secondhand purchases or share buybacks? Well, they're ends, -- we don't just do -- we've demonstrated we can buy back shares and can buy aircraft, and order aircraft. I mean clearly, if aircraft prices are too high, and we have our own metrics around what we can afford. Clearly, we don't overpay for stuff and the cheapest way to get aircraft is to actually exercise purchase rights and place the plane, but that does take a long time. But we do all those things. Next question is from Mr. Nandeep. Congratulations on refinancing the notes. Thank you. Was the unrepairable A220 unencumbered? Yes. Ashley, he's asking about the debt to valuation of that? Ashley wants to answer this one?

Yes. So the unrepairable A220 was encumbered. It did have debt against it. So the net proceeds, so it's the $33 million from the insurance settlement and the debt associated with the aircraft is about $19 million. So we should be expecting the difference in the return of the equity to us. In terms of aircraft deliverables, 4 new aircraft this year in the current production schedule, yes, that's correct. And in terms of referring through this year, that is the calendar year as opposed to the fiscal year. So it's the 4 aircraft during 2026. Should we expect the 2 Braathens aircraft to be placed with existing or new customers? I think as Jeff has said, we actually do have a number of customers chasing those 2 aircraft, and the management is still trying to work out, which is the winning airline customer to get them.

Thank you. Yes, we have 3 viable clients for them, and there's a sort of a spreadsheet of all 3 names with the pluses and minuses of each. And we're looking at risk, revenue, duration, all that sort of stuff. The next one is on strategic stuff around M&A. I mean, there's -- we've got no real comment on M&A. Next one is from -- on the [indiscernible]. Well, we don't comment -- it's not appropriate to comment on what investors say about M&A. They -- often they speak their own book as it were and it's been different. The next one is, can we expand on the situation with the Braathens ATR72s? This is from Damian Brewer of Canaccord? Yes, there will be no material cost to the company in transitioning the Braathens ATR72s and they were fairly current when they went into administration. So there won't be a material if any, impact. And what we'll try and do is get a much longer duration of lease. So economically, we'll probably come out better off with a new client because it will be for a longer duration than the remaining lease term of Braathens. I mean, Iain, do you want to expand on that at all?

Yes. I mean, Damian, you're right, one of those planes is fresh out of maintenance and is ready to be leased pretty much immediately. The other one has got an engine going through a shop visit right now. So that will be ready to lease shortly. The lease is -- I mean both aircraft were delivered in December 2019. So we -- we had 6 years of revenue out of Braathens before they went into administration.

I mean any ongoing lease will be another 8 years or whatever it is. So it's actually, in a way, I mean it's sad that the airline went into administration. But economically, it's great because we'll turn those leases into a longer duration. The next one is around total loss. Would any further compensation payable to AirBaltic? No. The plane is ensured they -- we get the payout because we own the aircraft, the bank will get paid. They just will have 1 fewer aircraft. We'll have all our money. So it's not -- there's no real -- that's why you buy insurance. There's no real issue with it. Current -- customer concentration is the next from Aberdeen Investments. [ Callum ] thank you for your question. Is the customer concentration as a percentage of net book value or revenue? Why doesn't Iain do this one?

Yes. [ Callum ], so without going through the whole list, our top customer represents 30% of revenue and the top 3 combined are just under 60%. I think 59% of revenue.

Next one, is the market value is 20% higher above book, why is the insurance only paying out book? The insurer is paying out agreed value. So when you -- in a lease, you agree a number that the airline needs to ensure the aircraft for. And that number goes down each year with depreciation. So when -- if those aircraft would -- that aircraft is [indiscernible] each year, it will go down a little bit to match the theoretical depreciation, which is why -- which should match our book value. So we can't -- you don't ensure profits or potential profits, you ensure the asset. So it was insured for what it should be insured with. Next question is it correct that 4 of the 33 aircraft in the fleet are not currently leased? Well, technically -- we're basically fully leased. I mean, I'm not sure where this question is really going. Ashley, do you want to jump into this or Iain?

I think the only 2 that are transitioning really are the 2 Braathens planes that we're lining up to place with new customers. So my understanding there's probably only that 2 aircraft that are in transition really.

Well, you've got one coming off later in the year, but that's -- we've got plenty of places for that. I mean it's currently leased. Next question is from Niall from Aron Funds. The NAV -- around the NAV growth? Well, we sold a 777, which is a big aircraft, a lot of revenue, which generated plenty of -- plenty of revenue, which therefore generates profits, which generates NAV. Clearly, you want -- in this business, you want scale, which means lots of revenue and you get lots of profits, if you -- if your cost of funds is okay. Next question is, are we hanging on to Philippine Airlines stock? What's the plan for that? Well, we've been a big seller. We've been selling the stock gradually through the market. So our plan for that is to dispose of it all. Next question is from Mr. Bristow. Is there an ability to demonstrate premium? No, you only get paid for what you're insured for. So if you insure it for $33 million, you get paid $33 million. And the airline -- to be clear, the airline pays for the insurance as part of the lease and then we get the benefit of the payer. The last question is from [indiscernible]. Do the other [indiscernible] A220s have similar LTVs? We don't really -- it depends on when they were delivered and the current individual state of each plane, but they would be in the ballpark of 50-50 LTV. They would be in that ballpark is the answer to the question. So I think we've answered all the questions. So if I can pass it back to -- if there's no more, we'll pass it back to Milly.

There are no further questions at this time. That concludes today's call. Thank you, and have a nice day.

Thank you.