Ladies and gentlemen, thank you for standing by, and welcome to the Air Lease Q1 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Mary Liz DePalma, Head of Investor Relations. Thank you. Please go ahead.

Hello, everyone, and welcome to Air Lease Corporation's earnings call for the first quarter of 2021. This is Mary Liz DePalma, and I am joined this afternoon by Steve Házy, our Executive Chairman; John Plueger, our CEO and President; and Greg Willis, EVP and Chief Financial Officer. Earlier today, we published our results for the first quarter of 2021. A copy of our earnings release is available on the Investors section of our website at www.airleasecorp.com. This conference call is being webcast and recorded today, Thursday, May 6, 2021, and the webcast will be available for replay on our website. At this time, all participants in this call are in listen-only mode. Before we begin, please note that certain statements in this conference call, including certain answers to your questions are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. This includes, without limitation, statements regarding our future operations and performance, revenues, operating expenses, stock-based compensation expense and other income and expense items. These statements and any projections as to the Company's future performance represent management's estimates for future results and speak only as of today, May 6, 2021. These estimates involve risks and uncertainties that could cause actual results to differ materially from expectations. Please refer to our filings with the Securities and Exchange Commission for a more detailed description of risk factors that may affect our results. Air Lease Corporation assumes no obligation to update any forward-looking statements or information in light of new information or future events. In addition, certain financial measures we may be using during the call such as adjusted net income before income taxes, adjusted diluted earnings per share before income taxes and adjusted pretax return on equity are non-GAAP measures. A description of our reasons for utilizing these non-GAAP measures, as well as our definition of them and the reconciliation to corresponding GAAP measures can be found in the earnings release and 10-Q we issued today. This release can be found in both the Investors and Press section of our website at www.airleasecorp.com. Unauthorized recording of this conference call is not permitted. I would now like to turn the call over to our CEO and President, John Plueger.

Thanks, Mary Liz. Good afternoon, everyone, and thank you for joining us. More than a year has passed since the start of the COVID-19 pandemic and we are beginning to see recovery in sight. We are optimistic that as vaccine rates rise, travel restrictions are eased and as countries work independently and collectively to develop initiatives to enable free movement, we will see a further resurgence of air travel. With that said, most of our airline customers are still grappling with the strain and limitations resulting from the ongoing pandemic. Today in our comments, I hope it will be clear how we are growing and further differentiating our platform, while also supporting our airlines and how we see that benefiting us as we move forward. For the first quarter of 2021, we are reporting $475 million in total revenues and diluted EPS of $0,70 a share, down 7% and 40% respectively, compared to the prior year’s pre-pandemic first quarter. Our results this quarter were impacted by approximately $86 million of rental revenues we did not recognized in the quarter due to cash versus accrual basis revenue recognition and lease restructurings. Greg will walk you through more specifics in his remarks. We took delivery of approximately $600 million in new aircrafts in the quarter which is $200 million more than we originally anticipated. 87% of these deliveries by dollar value occurred in the last seven business days of March providing minimal rental contribution for the quarter, but providing a long-term rental contribution thereafter. Our cash collections and lease utilization rate remains solid in the first quarter at 84% and 99.6% respectively, albeit both slightly lower than what we saw in Q4. To-date, we have agreed to accommodations with approximately 63% of our lessees with deferrals totaling approximately $243 million. Importantly however,…

Thank you, Steve, and good afternoon everyone. Let me expand a bit on the details underlying our financial results for the first quarter. I’d like to remind everyone that for comparison purposes, the first quarter of 2020 was relatively unaffected by the COVID-19 pandemic. As you would expect, the following COVID-related factors that continued to impact our performance, in the first quarter of 2021. As John mentioned, revenues were impacted by $86 million from the lease restructuring agreements and cash basis accounting, of which, $49 million came from lessees on a cash basis where the lease receivables exceeded the lease security package and collection was not reasonably assured. This compares to $25 million in the third quarter and $21 million in the fourth quarter of last year. In total, our cash basis lessees represented 15.3% of our fleet by net book value as of March 31, as compared to 7.8% as of December 31. The increase in rental revenue not recognized for the first quarter was primarily driven by a few customers with whom we are working forward – working towards reaching a resolution. Although we’ll not be going into details on these specific customers, it is important to note that one of our larger customers in the script has committed that they will repay our receivable balance. I want to reiterate the fact that we are receiving cash payments from all of our cash basis lessees and the majority of them are in some form of restructuring and have expressed that they desire to keep our aircrafts. We remain hopeful that the remaining lessees will emerge from their restructuring and not hit us future and that we can return to recognizing revenue on an accrual basis. It remains very difficult to predict the cash collections from these customers and…

Thank you, Greg. This concludes management's remarks. For the question-and-answer session, we ask each participant to limit their time to one question and one follow-up. I would now like to turn the call over to the operator to open up the line for the Q&A.

[Operator Instructions] And our first question comes from the line of Moshe Orenbuch from Credit Suisse.

Great. Thanks and I was just hoping, Greg, that you could just talk a little bit about whether any of the FX, those changes from the lease restructurings kind of carry into future quarters – was this – you mentioned the leases themselves were restructured in 2020. So, and maybe just kind of give us a little primer on the accounting and how that works and what will that mean for your second quarter and future?

Yes, Sure. The lease restructurings are basically lease extensions at a lower rate that shows up in our yield and I would expect that number to continue on in the future. The cash basis we anticipate trying to recover as much that as possible and we don’t see that continuing.

Great.

Obviously, that number should get smaller as time goes by but we definitely intend on recovering as much of that cash basis number as possible.

Got it. So, as we think about the progression in the second quarter, those lease restructurings are likely to continue but not increase and then, you would expect to have some degree, perhaps it’s not full in progress, kind of eating into those deferred balances. Is that the way to think about it?

I think that’s fair.

Okay. Thanks.

Obviously, anything can change, but that’s how we are thinking about it today.

Okay. Thank you.

And our next question comes from the line of Catherine O'Brien from Goldman Sachs.

Hey. Good afternoon, everyone. And thanks so much for the time. So, a question just on the incremental opportunities out there. Last quarter, you noted that the economics were fairly improving, but this quarter, doesn’t make any incremental acquisitions at least on the AL balance sheet or in the secondary market more broadly. Is that a reflection – is this a reflection of a change in the market dynamics? Or any change in your view on the financial recovery of the global airline industry or something else at play? Thanks.

No, I wouldn’t read too much – this is John, thanks Kate, I wouldn’t read too much into – not buying additional aircraft for one quarter. That’s just far too narrow the time focus. We look at this broadly year-to-year in every year, we’ve additional incremental aircraft and it’s not in every single quarter we’ve done so. So, I wouldn’t make too broad of assumptions about a change in the marketplace, et cetera. We aircraft just very selective on what we buy and add to our balance sheet.

Gotcha. So maybe more just the timing of acquisition of than any change.

Yes.

Okay. Got it. And then, just on your – on the high number of aircrafts that you have signed up to get delivered out in your 2022 and 2023 order books, could you give us a feel for like what the conversations with the airlines are like? Are the vast majority of the conversations there are like, being on your door, can we take the aircraft, are there still, I mean, that are a little bit nervous about, thinking where at this point or would just want some color on what the tone of the conversations are? Thanks

Thanks. It’s a good question. I would say that, if you look at our lease placements for the remainder of 2021, 2022 and through the first half of 2023. It covers a very broad spectrum, there is in fact kaleidoscope of airlines, it includes some global network carriers, intercontinental carriers that are among the top and airlines of the world. It includes smaller regional oriented airlines that want single-aisle aircrafts. It includes Transatlantic carriers, it includes Pacific Asian carriers. We have done a number of transactions recently in Latin America. We’ve done a number of deals in the U.S. So, it really covers a wide spectrum of airlines that are basically replacing aircrafts that they deem less economic or uneconomic as they look forward. And I think the vast majority of these placements are actually upgrading the quality of the airline suites, both from an operational and liability point of view, environmental, suitability point of view and also a lower cost of operating these aircrafts in terms of fuel burn, and maintenance costs and customer appeal. So, the widely diversified customer base that we have and the fact that we are focused on the most desirable new aircraft has given us this wide flock of airline customers on a global scale, rather than sort of packing and focusing in only one region of the world. And this is really going to carry us very nicely in the coming years, because it’s going to boost our rental revenues, mostly with very stable airlines that have shown a real strength in the recovery cycle out of this pandemic.

Understood. If I can maybe just squeeze one quick one in on the – follow-up commercial on the restructuring impacts. Is any of that temporary based on the shorter term [Indiscernible] agreement or is that all – that’s how it’s going to be stable over the life of these leases? Thanks.

Well, it’s kind of regains – our restructurings take a lot of different forms. We do have restructurings, for example with several carriers that say, okay, for the remainder of 2021, you can offset your – you can lower your lease payments x amount of dollars or x amount of percent. But you extend the lease terms thereafter. So, the restructurings are very individually-driven. They don’t always necessarily go out for years and years. I’ve just given you one example of a couple of cases where we said okay for the rest of this tough year, you can cut your payments to us. But we want it at the normal rates at the back end. So, it’s hard to characterize but generally speaking, as Greg indicated, when we restructure – it’s usually because we are taking something less today to get something more tomorrow in the form of lease agreements. But I would pause by saying that forever all of them are lowered rents for the next 3, 4, 5, 6,7 years. Often times, there is a limited period of time which we are giving breathing room effectively to our airline customers and then those – in some cases, those – the rental rates snap back after a certain period of time.

And just to add to John’s comments we’ve had several instances recently where we made some small adjustments in lease rates for a temporary period to our airline customer, but one of the conditions was that they would also take new incremental aircrafts from us that we’ll deliver in the future. And so, we traded off a little bit of yields on our current portfolio with that airline, but then, augmented that with new aircrafts at attractive yields that we’ll be delivering in the next 18 months. So, we try to create an equilibrium where it’s a win-win situation for the airline and also provides Air Lease with long-term cash flows on additional incremental aircrafts.

Got it. So a lot of interesting things going on below the surface. Thanks so much for all the time again.

Thanks.

And our next question comes from the line of Jamie Baker from JPMorgan.

Hey, good afternoon everybody. So, it looks like lease rates for sort of commoditized sale leasebacks are already back down below the 0.6 monthly lease rate level. So, considering this if there is lot of capital going after sale leasebacks, should we assume that for Air Lease, Alaska type transactions are mostly I think in the past, the vast majority of your business from here will simply be placing the order book?

Well, the Alaska transaction was placing from our order book. We placed 13 new 737-9 on 12 year leases with Alaska and as part that they only bought A320s that they inherited from the Virgin America merger and we leased back only on a short-term lease, only on a short-term lease until they get delivery of the new aircrafts. So, I would not classify that as a classic SLB.

Good point.

Jamie, I would also add that, as we look forward here, I made a big point in my prepared remarks about our management business. There are investors out there that are willing to take lower or significantly lower returns that we might be able to take. But we actually harvested an advantage from that, because we are able to get management fees – good management fees for the period of that time that overall enhanced and provide a bit of a gravy to our overall earnings and revenues. And so, that’s one of the reasons why we’re coupling a lot of these initiatives with our management business, because there are investors out there. At the same time, I would stop sort of saying and forever more ALC itself is out of sale leaseback business. For example, Steve just gave you the prior question an example where we place additional aircrafts as a result of a lease restructuring. Well, the same can be said as you see from many of our examples for sale leasebacks going forward. So therein lies a blend in the odd that our own order book is very, very attractively priced and provides good economics and maybe we would blend that with some forward lease transactions that although those leaseback transactions themselves might be on the lower end as you are talking about the blended deal with our own lease placements is well above the line. So, a long way of saying that combined with our own business, supplementing with the management business that we get seized on that sort of thing and there is a lot of investors that are happy to take smaller returns, we feel like we’ve maximized our position.

Okay. That answer is very helpful. I appreciate it, both of you. And second, I am going to embarrass myself here, so, part of my tax ignorance. But have you seen anything in the language of the Biden proposal that might have any impact on Air Lease? I know the proposed changes to 10/31 exchange is that’s not leasing that real estate. But conceptually, when I was reading about it, it sort of sounded the little bit similar to what lessors do with the depreciation – anything that has jumped out from any of the recent proposals from Washington? Steve Házy: Greg?

The only thing I could – go ahead, John. Steve Házy: Greg?

Yes, that’s fine. I was just going to say there is so many proposals out there and it’s really tough to figure out which of those is going to make its way through. Obviously, we are monitoring it pretty closely and I wish we do provide on it. But, obviously, we are watching rate and anything that will have a potential impact on our business.

Got it. Okay. Thank you very much, everybody.

Thanks, Jamie.

Our next question comes from the line of Helane Becker from Cowen.

Thanks very much, operator. Hi, everybody. And thank you very much for your time this afternoon. So, my first question is a point of clarification for Greg I think. Is this quarter’s cash accounting representative of the new runrate or should we still be thinking of lower numbers going forward?

It’s a great question. Right now, it’s a little too soon to say where it’s going to be next quarter in terms of cash accounting. Obviously, we are working really hard to collect so much cash from our customers and working on restructuring agreements with those in that category. But right now, it’s really too soon to say. That the broader comment I can layer on is, as the world gets better, I would expect naturally that that number to come down.

Right. Right. I would think that too. And then, as you think about – this is probably a follow-up for you too. As we think about adjusted pre-tax margins, when things – when one of your customers back in good standing, so let’s say, one year from now maybe or 1.5 years from now, would pre-tax margin stay at or above pre-pandemic levels?

I think a lot of that depends on the volumes of scale of what we are doing to, right. As we look at – the reason we rely on pre-tax margin, pre-tax ROE is because it factors in all the important components of the business, the buys, the sell, the lease, the management fees, the SG&A loads, clearly, we are going to be pushing as hard as possible to get it back to where it was. So, lot of it depends on where interest rates are, our sales volumes and alike. Short of giving you guidance is to where we are going to be, I probably can just leave it there. Steve Házy: The one other comment I have Helane, is that, most of the aircrafts that are delivering in the next 36 months that we already pre-placed, were negotiated, the lease rate and the economics of those leases were negotiated prior to the pandemic. So, it’s fully important for Wall Street to understand that these new deliveries that are taking place are not at distressed levels, they were negotiated under figure arms length structures prior to the pandemic. A lot of them were negotiated in 2018 and 2019. So, once these aircraft deliver and they are now on delivery as John and Greg mentioned earlier, they will make very, very positive contributions to our bottom-line and our revenues.

Okay. Actually – thanks Steve. Actually, very helpful. So, thanks very much. Okay, well, thanks guys. Have a nice day. Steve Házy: Thanks, Helane.

And our next question comes from the line of Ron Epstein from Bank of America.

Hey, John. Good afternoon, guys.

Hi Ron.

How should we think about the third of the customers that – you haven’t agreed upon within an accommodation yet? I mean, kind of where do we go from here? And kind of following up on Steve’s answers he just gave, so, none of the leases that were agreed upon pre-pandemic have been revisited by any other customers?

So, let me hit that first. Let me hit your first question first, Ron. You may not have caught it, but in my remarks, I said that the rate of deferrals and lease restructuring requests has reduced meaningfully and that has been the case. So, in terms of where do we go from here, I like, in a report, is what I have reported that the pace is really of those requests has decreased. I am sure, we will have some more. But clearly, we have moved into a totally different space than where we were six, eight months ago, nine months ago in a major way. So, I just think suffice it to say that those have dropped significantly. And we are focusing, as Greg mentioned that on getting repaid. And as to the forward placement side, as Steve indicated, we really had pretty good, pretty good consistency in customers living up to their pre-COVID lease rate agreements. I am just pausing my – switching my own memory here and just thinking as much as I can on the spot about where we might have made an adjustment here or there and maybe there is one or two examples, but I just can’t think of them off the top of my head. So, largely, I would say, staffs were seeing every single case, but I think it’s pretty close to it. Those lease rates has been preserved.

Got it. Got it. And then, have you guys had, in any of the restructuring is there really the short-term help you offer some customers how to do anything on a utilization basis? Steve Házy: Very limited. We don’t like hour by hour. We are not an Uber type operator. And generally, where we’ve done a modest – and PD8s hour by the hour. We absolutely require a minimum level of utilization or a floor. So, we are not going to expose ourselves to a pure hour by the hour type structure where there is no guarantee of any flying. So, even if the airline flies less than the minimum number of hours required at the lease they have to pay the number of hours that creeps that minimum floor. I mean, that’s what the company’s profit.

Got it. Got it. Got it. Got it. That makes sense. And then, if I may just one final one. You mentioned that you are seeing some lease rate strength on A321 aircraft, everybody is saying that’s going to flow through the XLRs and then you start getting it delivered. Do you think enough of those? I mean, are you going to do more of that airplane type or something that fits that segment in the market?

Well, look, we are launch customer on the 321 LR neo. We were the launch customer on the XLR neo. And so, that by our order I think you can suffice it to say that that’s a really core part of our order book. And so, as the industry continues to recover and as we look forward, as Greg mentioned in his remarks, it’s part of our capital allocation decision. And we will continue to order aircraft as facts and circumstances and time and capital allocation discipline dictate. But certainly, that type is proven to be a very, very good aircraft investment for us and I think it’s – you could just see it throughout the fleets of the world and the popularity of how the 321 neo in particular has really risen over the last couple of years. And even accelerating now with the LR and the XLR.

Great. Thank you.

Next question we have on the line comes from the line of Vincent Caintic from Stephens.

Okay. Thanks. Good afternoon. Thanks for taking my question. So, first question is a follow-up on the restructuring discussion. So, when we think about the deferrals you have now and the cash accounting, how to think about that in the – in terms of restructurings? Is that sort of like an avenue where we should be expecting maybe longer lease terms or maybe a little bit of a discount to lease rates as you work through the cash accounting and maybe some of the remaining deferrals or is there other sort of maybe if you can discuss how the deferrals on the cash accounting are reaching to resolution with sort of plans are? Thank you. Steve Házy: Greg?

Yes. I would expect that – as time goes on and we’ll collect more of that deferred balance, right? As we had a great track record in doing so. I would expect some of that cash accounting number to get moved into the deferral bucket and to be repaid over time and to your point with extended lease terms. So, I think that’s how I feel working out and clearly, I think we’ve made a lot of comments on the call about how we see things improving and the world is getting better. So, as that happens, I would expect that to work itself out.

Okay. Great. And then the follow-up is on the – certainly a lot of activity and lease placements going forward and it’s encouraging to actually hear reactivating some of the 737 placements as well. As you are having the discussions with the airlines and signings, are the lease rates and the lease structure terms, so for, coming back to pre-pandemic levels, maybe any color you can give on things that you are signing going forward?

Steve? Steve Házy: Yes. I mean, that’s a very broad question and let me put it this way, vis-à-vis the 737 situation, because of the delayed deliveries of the aircraft in some cases, 1.5 years delay, we have actively and proactively worked with Boeing to restructure the economics of our purchase agreements on the 737s. So, to the extent that there may have been some erosion in lease rates unplaced 737, because there has been a reset in the market lease rates on 737 MAXs, we have adjusted our acquisition cost accordingly. So, that combined with what Greg touched upon earlier is that our average cost of financing is dropped. For example, from 3.2% to 3% on a portfolio basis means we are paying less for the aircraft than we would have paid for pre-pandemic and we are borrowing the debt capital to finance those aircrafts at a lower rate than pre-pandemic. So, hopefully, to our astute management and experience, we can kind of neutralize the – whatever erosion we’ve had on lease rates was lowering the acquisition cost which then reduces our depreciation expense for many, many years to come combined with a reduction in our debt expense. So that’s been the goal of our marketing team to find solutions where we can capitalize on the lower acquisition cost and still offer the airlines an attractive lease proposition.

And let me just add, don’t forget about the growth of our management business. Those just give us the very nice fees. They are still not huge, but these are really nice supplemental earnings that if you will supports the margin build back and the – some of the compression we’ve had, we’ve seen over the past year, year or so in this pandemic. So, just the management business, there is nothing but to add that.

Great. Thank you. And actually, maybe a question on the management business. Can you talk about how the investor appetite has been maybe for new sponsors and so forth, it seems like, interest rates have been low for a while. It seems like it might still be low for a while and gain from sales of other different asset classes have been really strong. So, just kind of wondering, your discussions with your investors who might be interested in that, what sort of – what are they looking for? Is there more investment opportunity for this management?

Yes, look, I think we’ve got a pretty good appetite from investors. As I indicated, we are kicking into gear our sales platform and I am optimistic that you will see in the second half hopefully starting in the third quarter, some evidence of that moving forward. There are a lot of investors that want to that want us to manage and source aircraft for them and we just announced or we just told you, we just added a new platform. So, I think the investors are there. They continue to be, I think bifurcated as to type. We sell a few that are looking at end of life aircrafts that we don’t really have any of that to discuss about or with. We have the other side, which they’ll take lower lease rates, but they want better credits and we have the intermediates who say, no, we’ll take a balance, we’ll take some mid-life aircraft we think there is good value there as airliners are still looking for really low priced attractive equipment, so financially bail themselves out. So I would say, we have a spectrum there. But it remains to be seen how the – that field unfolds, but I feel pretty good overall looking at that landscape for the rest of the year.

Yes. John, just to add to that, I think the demand in that space is pretty high and that’s being fueled by the recurring of the bank market. It seems like there is a lot of bank capital chasing a lot of these guys to put financing to, the supplier finds. I think that market is wide open and I think that works really well for us. We are doing more managed vehicles and I think it works really well for us to sell aircrafts here. So I think that’s a very positive dynamic for us.

Great. Very helpful. Thanks so much.

And our next question comes from the line of Ross Harvey from Davy.

Hi all. Thanks for taking my question. In terms of the forward order book, can you comment specifically on the aircrafts that you had already placed pre-COVID? I am wondering how do you renegotiated the rates on any of those just to ensure the kind of delivery are whether airlines were mainly you moved the delivery to the right, but you might have thought a positive effect on the lease rates. I am just getting to understand has there been any changes on those?

Steve? Steve Házy: We had very little delays instigated by the airlines on the forward deliveries. And as I mentioned in my earlier response to another question, we have absolutely limited the amount of changes to the pre-COVID contracts for future deliveries. So we have resisted that and we are working with our airline customers to make sure that these transactions stay solid and they are what they are.

Okay. Great. And maybe a more general one if I can. So, I mean, we obviously seem to be sort of the watched the pandemic and overall, you’ve clearly traded fairly well through it for some of that difficulties already, on concessions and sales and what not. I am just wondering how does you kind of strategize for the post-pandemic days? Is there any aspects of the business that you might look to adjust in terms of in the aircraft sourcing or the size of the management platforms? How you obtain some of the – strike lease agreements, just anything that has come off as something that you might look change in the future based on the experience of this pandemic?

We really just jumped into answer that right off. Look, I – the industry has been going through a very difficult time, but frankly I mean, not to pat ourselves on the back, but it’s been the very platform that we’ve devised and developed since we started this company that’s led us through this and if anything, I would say, it underscores exactly that we’ve done much more right than we’ve done wrong. And so, we don’t foresee any major changes to our playbook as to our – how we finance ourselves. We’ve just – we just enjoyed some of the cheapest financing we’ve ever gotten as the company and had a negative outlook removed by S&P. So, from the selection of the aircraft types that we have we mentioned we are large customers for the 321 LR and XLR and other aircraft types. I mean, it’s by this very engineering that we think we’ll be able to weather pretty through, so, why change it?

Yes. I mean, I just want to echo what John – the clear demonstration of our asset quality as compared to our peers is that we had no impairments or write-downs of our aircrafts since this company started in 2010, 11 years ago. So, you can compare that to our peers and you get a vastly different result. So, I think management has navigated through this crisis, because the foundations for our success were laid long before the pandemic started. So, relative to other lessors, I think we had to make fewer adjustments to our game plan.

Yes. And just going to the start if I may, as you mentioned the peers, I am just wondering, one of your peers mentioned that they were looking to get possibly, 60% to 70% of the cash and currency effects, in reverse that they might recover in medium term. Just wondering is that’s a good starting point when we think about you or given what you are seeing, going forward do you expect to reclaim maybe more than that?

I think at this time at this – we are just announcing our first quarter. I think that’s a bit premature. I mean, I’d like to give even a more optimistic number, but we are conservative by nature and I just think we need to see that unfold.

Okay. Thank you.

And last question we have in and it comes from the line of Koosh Patel from Deutsche Bank.

Hey, good afternoon guys. You mentioned you are going to get – lease rates rebounding from the Airbus Q321neo aircraft. How did those rates compare for the late kind of the demand for the aircraft compared to what you were seeing pre-pandemic and is there any read through to extrapolate the trend to other aircraft types as well? Is the foundation of actually A321 model?

Steve? Steve Házy: I think we just pointed to the A321neo as an example for other aircraft types that have gained popularity for two reasons. One, it was – it’s an airplane that fits into the airline demand picture very well in terms of size performance, operating cost. But we don’t want to say that the A321 is, at this and level everything else is at a different level. I just – I think we just used A320 is an example of how an asset type has performed quite well through the pandemic. But we have other aircraft types, A350s, 737-800s, or A320 and A321 feels which generally are younger than many of the other lessors. They actually performed well and continuing to perform very well. But as I said, we use the A321neo as sort of an example of an asset that has performed very well, but that’s because it mean the other assets that we have that have performed well. Our focus on the smaller and medium-sized wide bodies has been a real positive. We have a strong presence in the A350 market, in the 787-9, 787-10 marketplace. We don’t have any more 777s on the order. So, I think, even our wide body fleet is very well positioned and well placed with a diversified group of customers. And as I said earlier, we are doing everything we can to preserve the commercial terms that we had bargained for with our airline customers.

Yes. Okay. That makes sense. And then, I guess, what are the factors that would lead you to go back to the OEMs and add to the order book? And I guess, to add to that, what is – if you were to going to do that, what’s kind of the timing of delivery slots that might look most attractive to you right now?

Well, I think we’ve said several times, this is a matter of capital allocation and that’s something we look at every single quarter quite a bit. Look, it’s a balance between how much we’ve already got placed of order book, what we had in the order book is already placed. How we see the recovery trends and there is still some uncertainty in that regard. We are keeping an eye on certain customers that would be natural recipients of forward order book to make sure they get it okay. So, it’s a little premature to say, we are going to buy aircraft next quarter or the other. In many ways, there is no difference pre-pandemic. We buy aircraft at the time in the pricing, in the place that we think is right. And so, I think it’s also safe to say that these conversations are part of our normal monthly, weekly dialogue with the manufacturers and all I can tell you is, as we’ve always done when the time is right, we’ll do so. But I think it’s fair to say, we’ve also been a very conservative company and our ratings reflect that. So, we’ll just be, probably a bit more cautious looking forward to make sure that the pandemic recovery is on the track that that we think it is. But we are not adverse to ordering aircraft at any particular time if we think the pricing and the terms are right.

Okay. Thanks a lot for the time guys.

And at this time, there are no more questions in queue and I’d like to turn it back over to Mary Liz DePalma.

Okay, thank you everyone. That concludes our conference today and we look forward to speaking with you again after the conclusion of the second quarter. Operator, thank you so much and you can now disconnect the line.

This does conclude today’s conference. You may now disconnect.