Good day, and welcome to the Cargojet conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Pauline Dhillon. Please go ahead. Good morning, everyone, and thank you for joining us on the call today. With me on the call today are Ajay Virmani, our President and Chief Executive Officer, Jamie Porteous, our Chief Strategy Officer, and Sanjeev Maini, our Interim Financial Officer. After opening remarks about the quarter, we will open the lines for questions. I would like to point out that certain statements made on this call, such as those relating to our forecasted revenues, costs, and strategic plans, are forward-looking within the meaning of applicable securities laws. This call also includes references to non-GAAP measures like adjusted EBITDA and adjusted EBITDAR. Please refer to our most recent press release in MD&A for more important assumptions and cautionary statements relating to forward-looking information and for reconciliations of non-GAAP measures to GAAP income. I'll now turn the call over to Ajay. Thank you, Pauline, and thank you everyone for joining us this morning. When I spoke to you in November 2021, there was a lot of optimism in the air about the reopening of the economy. In December, we reversed course and Omicron forced yet another wave of lockdowns and the challenges that came with that. Once again, we are seeing some signs of hope, and this time I truly hope that the reopening can be sustainable. Before I jump into the quarterly results, I wanted to share a few observations about the macro trends affecting our business. Number one, digitization. Be it educational, work or shopping, the digital adoption has gone through a dramatic shift in virtually every industry. We believe that it is no longer an emerging trend, rather it is becoming the new normal. The trend has profound implications for every business, but for Cargojet, we see this trend to be a net positive. Number two, hybrid. I talked about hybrid everything for our on our last investor call. This may be the lasting legacy of COVID, and workplaces may have to adopt a new culture. Among many other benefits, we see hybrid work allowing for a better work-life balance, potentially reduced number of vehicles on the road, create more leisure travel and activities, which would require online shopping for more categories of goods. E-commerce. While this trend was already showing strong growth pre-COVID, the last two years have brought forward at least five years of growth. Even the hardest opponents of online shopping have now accepted the reality of e-commerce. Many companies who did not ramp up their e-commerce and did not believe in it, have now started to do so. In this new world order, instead of opening a new store in a shopping mall, entrepreneurs now open their new stores on online portals. This is a secular shift, and we expect this trend to continue to be a tailwind in the medium term. Number four, passenger airlines and cargo. A prolonged pandemic has triggered structural changes in the aviation industry. With a dramatic reduction in cross-border passenger air travel, a significant belly cargo capacity has been taken out of the global supply chain. At the same time, the pandemic has accelerated e-commerce at an unprecedented rate, creating even more demand for air cargo services. While dedicated air cargo operators have tried to step up in the short term, there remains a significant gap in the worldwide airlift capacity versus the demand that is expected to persist in the medium term. As major passenger airlines shed their larger wide-body fleets, 747s and A380s, in favor of smaller, more fuel-efficient narrow-body aircraft, the reduction in resulting belly cargo capacity will likely become a longer-term structural shift. Cargojet is very closely watching these trends and positioning its business to continue to capture emerging growth opportunities. Now let me get into the fourth quarter results. Q4 revenue growth of 26.1% for the quarter compared to the prior year reflected the results of our previously announced diversification strategy that is helping deliver a balanced portfolio growth. Each line of business was a strong contributor during Q4. Domestic network posted a growth of 18.2%. ACMI posted 26.7%, and the charter business both posted the largest of all, 54.6% growth compared to the same period last year. Overall, the full year growth averaged 13.4% despite extremely difficult comparison to prior years. The adjusted EBITDA for the full year stands at CAD 293.1 million, compared to CAD 281.7 million for the same period in 2020, an increase of 4%. This result must be viewed in the context that the Cargojet flew an extraordinary number of charter flights to Asia during quarter 2 of 2020 to bring PPE supplies to Canada. It is worth mentioning that we remain a disciplined operator and have used our strong results to invest in growth, reduce debt, pay down aircraft leases, and build balance sheet capacity to fund future growth. Given the structural shifts noted earlier in my remarks, we are planning to enter a higher capital expenditure phase over the next 3-4 years. This will be to take advantage of the long-term growth opportunities, and we believe we have sufficient liquidity to fund this growth. Our balance sheet remains strong, the leverage ratio at 1.36 times adjusted EBITDA. On the operational side, volume growth remains strong. Average daily volume is up 25.4% in quarter four versus prior year and is up 24.3% for full year compared to last year. We grew our fleet size to 31 aircraft. Our on-time performance remains 98%, and this is a critical deliverable given the importance placed on the target by our customers. We did face some on-time performance challenges in the months of December and January, especially with the bookoffs because of the COVID situation. We remain focused on cost, expense, and expense management, and full year SG&A cost is down 9.6%. One area that remains challenged, obviously from our numbers, is the cost of crews. The crew costs have been impacted by a combination of factors, including the recently implemented new cargo fatigue rules by Transport Canada that discriminate Canadian air cargo carriers against the U.S. and other international all-cargo carriers. We are also investing in pilot training to prepare for growth in our fleet. This has added short-term costs in the quarter. We are focused on finding cost-effective solutions to address this headwind and over the coming quarters. In order to take advantage of the new digital and global aviation realities, we are investing heavily in acquiring and retaining talent. We have now built a strong, experienced, and seasoned international cargo team that nicely complements our core talent that continues to successfully manage our growing domestic network business. Once again, thank you for joining us this morning. We'll now open the call to the questions. Thank you. Ladies and gentlemen, if you would like to ask a question, please signal by pressing star followed by one. That is star one to queue for a question. We'll move to our first question from Konark Gupta of Scotiabank or Scotia Capital. Please go ahead. Your line is open. Thank you, operator. Good morning, everyone. My first question is on the fleet. I think looking at the fleet table in the MD&A versus what you disclosed in Q3, seems like there is an additional 5 Boeing 757s which are coming in 2022, and there are now 8 Boeing 777s coming between 2023 and 2026 instead of 4 that you were anticipating before. I wanted to ask you, what is the purpose of investing in incremental aircraft at this point here? Are you seeing any, you know, kind of, you know, intentions from your existing or new customers in the sense that they want to secure more capacity or this is purely on spec basis that you anticipate demand in the future? You know, we never go out and gamble and spec on these things, Konark. You should look at our 21-year track record on these. First of all, the three aircraft are needed badly. 767s are needed badly for our maintenance and spare aircraft, because every time we do have one, you know, customers have requested that we fly ACMI or, you know, charters and deploy it any which way we can because they're short of this capacity. Those three aircraft are needed for our in-house needs to cover our operational and maintenance needs on a daily basis. The 757 strategy is an interesting one. The domestic network is at the present time a combination of 767 and 757 networks. Our strategy is to use more 757s domestically and take the 767s out for ACMI business. This strategy is obviously based on the demand and what I hear from the customers and what we have been told and what the requests are. The 757 also provides our customer with better service as they can be more non-stop flights from Hamilton to Western Canada and Eastern Canada, and similarly from Montreal as well and the way back. The 767s are bigger aircraft. They are more challenging to handle. The stopover flights from Winnipeg or Calgary and continuing on to Vancouver certainly takes more time. This also improves our service. It also improves more capacity that we need for growth. Second, thirdly, it also frees up 767s for international and ACMI demand, which seems to be continuously high. 777s have been added based on our discussion, ongoing discussion with customers. We look at the ongoing demand that's going on, and the backup is like if we have 2 or 4 extra planes, there is sufficient demand to even dry lease these if we needed to. We have backup plans after backup plans. These are not just backup aircraft. Okay. No, that's good clarity. Thank you. For the airframe that you are expecting this year, including the 757s you mentioned, and that will release some 767s for ACMI opportunities, when do you expect to formally sign those ACMI opportunities for further 767s? We'll announce them as soon as we sign them. There's ongoing discussions. We also have opportunities that are beyond ACMI, like those are for you know, our own international growth and similar to what we do domestically. We also have opportunities to sign longer term block space agreements, even on some of the international lanes that we service ad hoc or on charter basis. We have choices. We can either go that route, or we can go ACMI route. We don't like to firm up things and tie up until we know that the aircraft is on its way at least 3-4 months before. The opportunities are there. We just haven't signed them. You know, as I said, on both block space agreements, just like they were domestic network and also on ACMI. I would imagine that, probably, I'm hoping that next quarter we will have more to announce on those. That's good, Thanks. Last one for me, Sanjeev, if you have any, you know, guidance on CapEx for this year and the next year, given the capacity increase and fleet size you are describing. Thanks. Hi, Konark. The CapEx plan for this year definitely move up with this new addition. We will be in the range of CAD 525 million-CAD 550 million. That includes maintenance CapEx as well. That will be the range which we will be looking for in 2022. In 2023, it will be in the range of CAD 300 million-CAD 350 million. We're looking at CAD 120 million for maintenance CapEx, and the balance is growth. We also have two simulators, 767 and 777s, that we will be doing our own pilot training in-house in Hamilton, which would also, you know, longer term, this would also bring our cost down and increase our training and efficiency and safety as well. The important part here, Konark, to note is that we plan to fund this growth mostly from our internal cash flows. Secondly, we do have a line of credit of CAD 700 million that's underutilized. We have sufficient liquidity to fund this growth for growth. Great. That pretty much makes perfect sense. Thanks a lot. Bye. Okay. We'll move on to our next question from Chris Murray of ATB Capital Markets. Please go ahead. Your line is open. Thanks, folks. Just one of the questions I have, unfortunate situation, but with what's going on in Russia, there's been a lot of discussion around a lot of Russian cargo carriers moving out of the market, and just wondering if you have any commentary around how this is changing what you're seeing for demand, even on short-term charter, and if there's any longer-term opportunities for you to pick up others that may have been dislocated. Yeah. You know, there is a number of Russian carriers that have been grounded with Antonovs, you know, at least 20-25 747 cargo planes, a few 777s, and a few 757s that are operated by the Russian carriers. Yes, short term, we've had a lot of inquiries. We've had a lot of demands. You know, wherever we can plug it over the weekend, we have done it, and we will continue to do so, take advantage of those ad hoc opportunities. Most importantly, we do not have presently the fleet to deploy, which we had 20 aircraft, which we could advance these three years and have these aircraft today, and they will all be working. These are opportunities, you know, about four months ago, we had opportunities when the B.C. highways, you know, had the flooding. You know, these short-term opportunities do start to keep popping in and, you know, wherever we can plug, we can. A lot of requests have come in even for, you know, charters to Poland for relief goods as well, besides the normal trading, besides the normal, you know, day-to-day charters that we are being requested for. You know, we are obviously weighing each one of them. We do not wanna take on additional work to disrupt our day-to-day normal long-term customers. If there are opportunities, we continue to use those. Okay. That kind of goes to my next question because, I mean, one of the questions we always get is the, you know, the question about, you know, all this capital spending and bringing in these new aircraft. Is it fair to think that, you know, and I think you alluded to it maybe in the earlier question about the fact that, you know, you've got the opportunities, you really won't decide until 3 to 4 months before you get the aircraft. Is it fair to think that those aircraft will be fully utilized pretty much when they arrive, and we should see kind of a margin profile similar to what we've been seeing over the last couple of years? Yeah, absolutely. I mean, we wouldn't be investing if we didn't believe in our business plan and what we've done, and have a track record. There is not going to be an aircraft, you know, that we feel today, certainly that it's not going to be utilized or going to be underutilized. Yes, we have a lot of openings. We have a lot of requests. We even have requests from people who, you know, today cannot get conversion slots. You know, we could even sell those conversion slots if we wanted to make a short-term profit, but or we could also, dry lease them. There's many opportunities, that this capital is not just going to be sitting there, collecting dust. They will be fully utilized one way or the other. All right. That's helpful. Thanks, folks. We'll move on to our next question from Nauman Satti of Laurentian Bank. Please go ahead. Your line is open. Hi, good morning, everyone. So my first question is more on the higher fuel cost. I know that, you know, the bulk of fuel costs, you can pass that on. But I'm just trying to get a better sense of if the fuel prices remains at these elevated levels, would you expect some sort of demand destruction to happen in the air cargo business? Maybe if there are some learnings from the last time when oil prices had gone that much higher because you're adding a lot of capacity, but you're still confident that all of that will get absorbed, even if there is some sort of demand destruction from higher oil prices. Yeah, because simply, you know, whenever we had higher fuel prices, yes, the demand did come down in the previous experiences and maybe Jamie can shed a little more light on it. Just keep in mind that today the supply chains are very disrupted, and there is no end in sight for these. There is a little bit tailwind we get when ocean and you know, rail and trucking isn't performing to what they should be. Even the rail, like, you know, with the CP Rail strike in sight. When you look at all the factors that are happening today, I believe that, yes, the fuel is high, all-time high, but also, you know, people do need the goods, and people do need the supply chain, and people do need the e-commerce and daily necessities. When you can't depend on surface transportation, air becomes the choice, especially when the belly capacity doesn't exist in the market that used to exist. Combining all these factors, and higher fuel price, you can look at it this way, that, yes, the fuel prices are gonna be higher, and that's where we are. Everybody's finding the inflationary pressures in various industries. Generally we feel that it should not affect the air cargo business. The demand is certainly much higher than the supply today in every logistics business. Jamie, you wanna add some color to that? Yeah, no, Ajay, I was just gonna say, you know, compared historically when we saw fuel prices rise, you know, 10 or so years ago, the one fundamental difference is, as Ajay suggested, you know, demand is at an all-time high and capacity is probably pretty close to an all-time low. With the, you know, continued delays of the global supply chains, demand for global air cargo services, we feel is gonna continue to be very strong regardless of the input price of fuel, particularly when customers pass the increases. Okay. No, that's fair. Maybe just on the same thought process, when historically for some of your customers that the costs have gone up, but you know, you guys have generally, your margins are still pretty high. Like, do the conversations start to move in the direction where they sort of ask you to share some of the burden or generally, it's just a small component of their cost and those discussions don't come up? No, I mean, generally, they don't, Nauman. You're right. I mean, we make a concerted effort to manage our, you know, the rest of the reason we maintain the margins is obviously we pass on the fuel, the increase in fuel as a surcharge to our customers, and we continue to manage the rest of our operating costs very diligently every day. I would say, no, normally that discussion doesn't happen. Okay. No, that's good. Great color. Just one last one from my end. I think in Q4, you've mentioned that, you had some additional, relief charter flights, for the U.S. and Canadian government, and it's gonna continue in the first half. Just trying to get a sense of, is the sequential improvement in all-in charter businesses primarily from that one, and we should expect a similar run rate for the coming quarters? Well, that's kinda hard to say, but it's certainly, you know, it depends on where we were last quarter. Last quarter, we also had some charters from the BC highway situation. We also had some relief charters as well. Time around right now, it's a different kind of charters that are going on. What our experience tells us that there's something or the other that is happening that encourages charters in various directions. These are opportunities that we take, you know, what people call it wet lease, we call it ACMI, obviously. We take the wet lease opportunities very seriously from a standpoint that we wanna service our regular customers and also focus on some ad hoc opportunities if our system and our people and our aircraft can accommodate those. Certainly, at this stage, I can tell you that, you know, if we wanted to book six months ahead of charters from even our regular customers, we could. It's not just the ad hoc opportunities, it's our regular customers looking for more lift. You know, that's where the opportunities come in. Okay, that's great. Thanks for taking my questions, and congrats on the quarter. Thank you. We'll take our next question from Walter Spracklin of RBC Capital Markets. Please go ahead. Your line is open. Yeah. Great. Thank you very much, operator. Good morning, everyone. Starting on your CapEx plan, could you perhaps give us, Sanjeev, for the 2024, 2025—like, the years where before you get down to the CAD 120 in maintenance, what those CapEx numbers just so for visibility purposes for investors going forward that they can appropriately model and then, you know, our job is to now kind of calculate returns on that new invested capital going forward. Understanding the CapEx spend through your entire fleet plan additions would be helpful. I don't know if you have those numbers for 2024 and 2025. As of now, I can just give you a rough estimate, because things will change as the year passes, right? Whatever fleet plan we have in place, we expect our maintenance CapEx will be in the range of CAD 120 million-CAD 125 million in coming years per year. Growth CapEx, like I said, for 2022 and 2023, I have already given the figures. 2024 and 2025, we expect, based on the year in which our 777 supply will come in, growth CapEx will be in the range of CAD 225 million-CAD 250 million for 2024 and around CAD 175 million-CAD 200 million in 2025. Yeah. That's growth only, you said, right? Yes. Yeah. Okay. Walter, just so you know that planes do need facilities and ground support equipment and investment in training for pilots and maintenance people and spare parts so. Yeah. This is all sort of inclusive that goes with it. You just can't get triple sevens and not grow your facilities. Right. This has hangars attached to it. This has simulators attached to it. This is training attached to it, spare parts. There's a lot of moving parts on all this. My next question, that's helpful. Yeah. That's a good consideration. My next question then is once you have this fleet in place, you know, even if we were to only assume ACMI, and I know, Ajay, you were talking about upside if you did block hour flying internationally. But if we were to only assume ACMI goes into the aircraft that come out from this, I don't know if you have, you know, what we're gonna be looking for is what is your total revenue dollar, you know, capacity? You know, if it looked differently, if I go in my model and use the $10 million revenue per aircraft per year for ACMI, is that a good number to use now, or is this inflationary environment made that $10 million per year per aircraft, you know, maybe $12 million or something, you know, even higher? You know, we roughly, the ACMI can do about 200, you know, anywhere between 200-300 hours a month. Just one second, I can give you some kind of an idea on what this is. Per aircraft, $10 million-$11 million is a good number for revenue for ACMI on- a 777 probably. That's just a base, you know, that you do everything ACMI, and if you do your block hour business, then that's pure upside, right? Ajay, is the best way to look at that? Sorry, was that a yes? Yes. Yes. Okay. Yeah. Perfect. Okay. All right. Then, under your existing contracts, can you update us as to whether, as to when you expect your current, long-term contracts with your major domestic customers to be renewed? What flexibility do you have in your current, contract to move your pricing higher with cost inflation? Or is that something that we're kinda gonna have to wait for? Might we see a big lift in your pricing to capture some of the higher inflation that we're seeing today? Or can you do it under your existing contract? First of all, you know, we just renewed two medium-sized contracts last quarter. We have two major ones coming up, but they're not due for another 36 months or even a bit longer. You know, we have certainly kind of had discussion with our customers about longer-term, sort of extending them. As you know, three years in this business is an eternity. Certainly, between this year and before it reaches 24 months, we certainly plan to have those serious discussions in the next quarter, in quarter two and quarter three with them. You know, also customers and we are both nervous, as many of our suppliers, we've asked for long-term contracts, and we have said, you know, "Okay, we're not taking these contracts right now because, you know, those contracts are being quoted on what's happening today." There is some kind of a nervousness on the parts of suppliers and customers, as we have been in similar situations that tend to hold off and see if things stabilize. If we were to lock in an agreement today with a customer, our nervousness is that we could be faced with even higher cost increases. That is a bit of a challenge both on a supplier and a customer side for us. Also keep in mind that, you know, we feel confident about the renewals. We have not, you know, in our track record, we have never had a situation where we haven't renewed a contract. Yes, there are a few, you know, small competitors knocking on the door. We all know that. What we have, Walter, the cause for renewal, which is our infrastructure, 20 years of cargo pedigree, our on-time performance, our people, our investment. We have 6,000-7,000 ground support equipment in handling. We have 250 maintenance engineers that work on it. We have over 350 pilots. So we have a lot of infrastructure. We have spares, we can reroute planes. There is so much flexibility we give our customers. With the 757 introduction of more nonstops to Hamilton and Montreal, we'll be able to serve seven cities nonstop in Canada in both directions, which is a major plus. You know, the network, the discipline, the cargo culture that we have developed prior to Cargojet coming in, as you remember, there were 15 cargo airlines who tried and gone from 1985 to 2000. You know, we are well-funded, we are well capitalized, we've got a great team, we got all the assets that we need to make this work. I'm pretty confident those renewals are gonna happen. Can I give you in writing and in guarantee? Nothing is there forever. Nobody expected the Russians would be at war today. Given what I know, given the circumstances we have, given the assets we have, given the performance we have done, there's no reason why we wouldn't get it at a fair price. Now, would we be able to capture every cent? I don't know what the situation will be when we sit down at the table. Certainly, it's not lost on us, and we will start those discussions. We have had informal discussions. You know, we have exchanged notes. We have talked about what-ifs. I think we will only get serious when, between, I would say, when we have, you know, closer to 30 months rather than 36 months renewals. Well, makes sense. You mentioned trepidation about locking in too long. Are we to interpret therefore, Ajay, that you'll be looking at similar structured agreements that would be 7-10 years in nature, upon renewal or- As a minimum, our guideline always has been to get between five and 10 years agreement. If we've got, let's say, two years left on an agreement, we would certainly like to add a minimum of three with renewal options for one or two years as we go along. Got it. Okay. That's all my questions. Thanks very much, Ajay. Okay. We'll move on to our next question from Kevin Chiang of CIBC. Please go ahead. Your line is open. Thanks for taking my question. Congrats on a good Q4 there. I'm just wondering, is there a way to frame, I don't know if it's by block hours or another metric, just how much, maybe how much demand you're leaving on the table today, given the size of your fleet, just to kind of level set, you know, how much of the growth that you're planning for the next few years is to backfill existing demand that you see versus maybe having to chase demand or making a call on what demand looks like, you know, two to four years from now? Jamie? I think, Kevin, a good indicator of that would be, you know, the comment that we've made before, that not only looking at the dedicated air cargo demand for freighter aircraft around the world, but pre-COVID, over 50% of the world's air cargo moved in the belly of passenger aircraft, particularly the long-haul intercontinental flights flying between Asia and North America, North America and Europe, and Europe and Asia. With most of that capacity still, it will never come back to pre-COVID levels at a time when demand globally driven by, you know, the surge in e-commerce growth, the supply chain issues globally in terms of logistics. We're very confident that the demand is gonna continue to be very strong for at least the next, you know, 5-10-year period. It's one of the reasons why we're making the investments in aircraft now. As AJ indicated, we have, you know, an extremely strong 21-year track record of being very successful at and being very prudent when it comes to CapEx. And ensuring that we only enter into agreements to get aircraft when we know there's a certainty that we're gonna put those aircraft into use, whether it's an ACMI basis, whether it's enhancing our domestic network or continuing to grow our international and charter business. as I said, as a risk management, we also have a backup plan because these aircraft and slots are so much in demand that we could even dry lease them. There is opportunities even in that, Kevin. Right. I mean, it does help that these are fungible assets. Obviously, the market is very tight now in the foreseeable future. Just on your triple seven strategy, you know, you are adding more aircraft here. You note that in your updated fleet plan. It does feel like you're starting to shape how you see these larger aircraft, you know, or what role the larger aircraft might play in your network given you're adding these bigger aircraft types. Is that something you can share with us? If it's, you know, is it? Did you see, you know, more international opportunities as you kind of tested out the market? Is this primarily, you know, AJ talked about using, you know, seven five sevens domestically. Do you think you need more triple sevens for maybe some of the trunk routes between, you know, Vancouver to Hamilton, so you need a bigger aircraft? Just wondering how you see that triple seven strategy evolving here, given you're adding more of those aircraft. Yeah. You know, our strategy on triple sevens is a combination of, like I said, wet lease, ACMI operation, and also, you know, some of the routes that are always in the past 30 years, if I looked at it, they are always in demand, like, you know, flights from Hong Kong or China or Seoul, Korea, or some of these Far East places today. You know, to reduce the dependence on the Chinese market, there's a lot of flights coming in from Vietnam and even Thailand. So our customers are branching into some of those Asian countries where the lift is not as much. You know, we have an opportunity on this triple sevens to operate from the Far East. Any of those destinations today, when if you fly to one destination, you can always connect from other destinations on an interline basis feeding into that. We would look at probably, you know, Far East, our initial plans call for flights going as far as Far East, coming back into Vancouver, then going over to Europe and maybe to India. Then the 767 network would probably be more suitable to bring in the Europe fleet, to connect in with our 777s to Europe and also 777s, 767s to South and Latin America as well. You know, Cargojet plans to be a truly global airline serving all five continents. You know, triple sevens would be long hauls, and seven six sevens would be medium hauls. You know, again, as I said, triple sevens, we have opportunities in discussion, which I can't say right now because there's nothing concluded, but there is definite interest in terms of, you know, some ACMI operation of these, and then, a few for commercial, just like we do with the domestic network, on block space agreements with certain users. Okay. Okay. I think that, as we move forward, you will see a lot more clarity on our business plan, you know, because of competitive factors and some of the stuff that we haven't finalized, so we can't totally come out on that as well. All I can assure you is Cargojet does not go out and put money, if we didn't believe in ourselves and didn't believe in the business plan. On top of it, we have backup plans, so. Right. No, and you also have a strong track record there. Maybe just last one from me just again on the fleet. Do you have any intentions, do you see the need to add aircraft that are smaller than the 757 payload? I mean, I think a number of OEMs have started to, you know, push through freighter conversions of some of the larger narrow body aircraft. I think like Embraer is doing something, and Airbus with the A321. Are those things that you think need to be. Do you think that's an asset that needs to be utilized or could be utilized within your fleet, or is the 757 kind of the line in the sand in terms of how small you wanna go? Jamie? Yeah, Kevin, we always have entertained looking at other aircraft types. You know, there are some markets that a smaller aircraft might be more suitable. Really the benefits that we have with the 767 and the 757 with the common cockpit, the same flight crews can interchange between aircraft, provides us a lot of both operational efficiencies and cost efficiencies. You know, I think it would, you know, our intent would be more into entering into the agreements on the wide-body aircraft, the 777 aircraft, because we feel there's certainly global opportunities, you know, driven by the increased demand, the lack of belly cargo capacity. As Ajay said, you know, 767 is an ideally suited aircraft for certain lanes, but when we talk about long-range intercontinental from Asia to Canada, a 777 is more conducive to operating in that, on those lanes. We continue to look at it, but it's not something that, you know, in the short-term horizon that we're looking at smaller aircraft. Excellent. Thank you very much. That's all for me. Thanks. We'll move on to next question from David Ocampo of Cormark Securities. Please go ahead. Your line is open. Thank you. Good morning, everyone. I just wanted to circle back on the fleet, and maybe Jamie, you can answer this. The seven five sevens that are coming in, you mentioned that it's gonna free up some seven six sevens. Is that gonna be on a one-for-one basis, or should we think about the 5 aircraft that's maybe freeing up 3 seven six sevens for ACMI? For every two 757s, you free up one 767. That's the kind of formula. Jamie, you wanna add something to that? Yeah, I was gonna say it's not a, you know, not a one-to-one. It's really, I mean, if you can look at it in terms of capacity, the 757's about approximately an 80,000-pound gross payload aircraft, where the 767-300 is a 125,000. It's certainly not a one-to-one. It's more, as AJ suggested, two-to-one. There are some times where we could, you know, add three 757s and potentially free up two 757s. Okay. That's helpful for us. Just a quick one from me, last one. On the B2B volumes, you guys noted that it picked up in the Q4. Where was that relative to pre-pandemic levels, and how do you see that trending throughout the year? Yeah, it's really hard to pinpoint, David, only because, as I think we've said before, we don't have, you know, clear transparency from all of our customers unless they're strictly in one space, either the B2C or B2B. You know, Amazon as an example is strictly an e-commerce place, so we know 100% of their business is B2C, where a lot of our other customers have volume in both spaces. They don't differentiate between the, you know, container of B2C volume or B2B volume. We have very little business or very few customers that participate strictly in the B2B sector. Although, you know, from dialogue and communication and conversations with them, as more and more businesses and economies were reopening, they were indicating they were seeing, you know, the return of B2B business that they hadn't seen for a while. I still think it'll be, you know, I think certainly the last couple of years as a percentage of our overall domestic revenues, I would suggest that the B2C certainly is the majority now, and I think that's gonna continue to be so going forward. Okay. That's helpful. That's it for me. Thanks, guys. Thanks, David. We'll take our next question from Matthew Lee of Canaccord Genuity. Please go ahead. Your line is open. Hey. Morning, guys. Just in terms of the varying economics per plane, I mean, is part of the reason you're taking on those triple sevens because you're getting them at a relatively attractive price, just given the number of that are being shed in the international community? Just similarly, you know, is the strategy of adding seven five sevens related to your ability to get those at an affordable rate, maybe against seven six sevens? Jamie? Yeah, no. I would say the, you know, it's not necessarily driven by discounts on freighter aircraft. I mean, freighter aircraft are in extremely strong demand. There's certainly a large pool of available what we call feedstock or passenger aircraft that have been retired either early or prematurely. There's this huge pool of feedstock sitting around the world. But pricing, we haven't seen pricing really drop on the feedstock yet, primarily because the demand to convert those aircraft into freighters remains you know, extremely high globally, and there's a limited capacity to actually convert the aircraft. There's only a few facilities around the world that do freighter conversions. All of them are rapidly trying to expand their conversion capabilities, but even just expanding their facility is gonna take them a couple years. Demand's gonna stay strong, and I think pricing's gonna remain strong for the next several years. Sorry, repeat the second part of your question, Matthew. Yeah. Just in terms of the 757s, I mean, you know, is their smaller size just a more efficient way to transport, or is it you know, are you seeing feedstock there at a relatively affordable rate? No. Again, it's really, you know, trying to fit the right aircraft to the right market. We've realized over the last couple of years that we've made some adjustments and sort of reengineered some of our domestic network flying by adding a couple of direct routes with a 757, and it's had a significant impact on service to our domestic customers. You know, piggybacking on that, it freed up some 767s out of our domestic network, allowed us to utilize those aircraft to either take on additional new ACMI business in advance of taking delivery of a converted aircraft or to use those operational spares. With the additional Boeing 757s that we found that came available that we're acquiring this year, the intent, as AJ suggested earlier, was to, you know, continue to enhance our domestic network for our overall domestic customers by flying more direct points. If that in turn fleet frees up, which it likely will, some Boeing 767s, we think there's some opportunities to put those into either as spares to back up our domestic flying or to put those into new ACMI flying potentially earlier than we otherwise would by waiting for delivery of a converted aircraft. Okay. Great. In terms of your contract with DHL, as passenger cargo kinda comes back a little bit more, are you seeing any slowdown in terms of their desire to add routes? Well, you know, as I've always said, that look, when passenger cargo comes back or belly cargo comes back, keep in mind that also, you know, the fuel prices paid by the passenger carriers are pretty well the same as what we pay. So, even if the belly cargo comes back, would it be in the same form, what the pricing would be? Looking at the fuel prices and fuel surcharges, you know, nobody can afford to give those away like they used to. That's one thing. Second thing is also the size of the passenger aircraft coming back. A lot of 777s are being sold now, so a lot of A380s are not coming back. 747s are not coming back. You know, 737 MAX can do Toronto, London, for example. You will see a lot more narrow body, less belly cargo, not palletized freight. You'll see some of that, those changes that are going to be in the marketplace. We feel that there will be some erosion of demand with the belly cargo. It has to happen. But also a lot of our customers, including DHL and others, are now experiencing higher levels of service and they've built their own competitive situation in their marketplace based on the service they have been providing for a year and a half, two years. To go back to the If you are buying stuff on e-commerce today of daily necessities, would you go back to the store and buy your toothpaste from, you know, again, or would you keep ordering it? Similarly on our customers' side, they have formed a certain habit. They've got a certain discipline of service through their dedicated capacity, which they're making them more competitive with their competitors. Yes, there will be a little bit, but we don't expect it to be huge to create any kind of imbalance that will be harmful. There's always an adjustment period when things come back to totally normal. We also got to be very aware of the fact that what's gonna come back is passenger traffic, not necessarily belly associated with what it used to be. If 777s are being taken out of the marketplace, that capacity is not being replaced by any other aircraft. Yes, there is 777X, but that's a $250-$300 million aircraft. You know, the demand of that aircraft is not going to be on routes which 737 MAX can service, for example. We believe confident that you know, any analysis we have done from Boeing and Airbus and some of the other industry pundits, we certainly believe that there will be some stuff going back to belly. Also keep in mind that you know, service that we have provided and people have now adjusted their service levels, it'll be extremely difficult now for these companies to go back. That's the feedback we consistently get. All right. Thanks. That's great color. We'll take our next question from Cameron Doerksen of National Bank Financial. Please go ahead. Your line is open. Thanks very much. Good morning. I guess first question, just on the ACMI contracts. In your sort of more recent discussions with potential ACMI customers, are you seeing a desire for longer term ACMI contracts? Just wondering, you know, how that might have compared to, say, three years ago on the kind of typical length of an ACMI contract. Are you seeing some, you know, desire for there to be, you know, a longer term for those contracts? Yes, we are absolutely seeing that, compared to what it used to be. Definitely. Is there any, I guess, sort of detail you can provide around that? I mean, what would a typical ACMI contract be a few years ago versus the discussions that you're having today? Well, they used to be more like 30-, 60-, 90-day contracts, and today they are at least, you know, we're talking anywhere from 1 to 2, 3 years and even 5-year contracts. There's a definite shift in that direction. We don't wanna dwell on too much competitive information, but yes, the trend is certainly for longer term contracts. Okay. No, no, fair enough. Just the second question from me, just you know with regards to the pilots and the cost. It certainly sounds like you're seeing some easing there, just based on reading through the MD&A. Maybe you could just talk about your sort of expectation for you know I guess some of the you know higher costs you've seen on the pilots the last couple of years and you know whether you're still very confident in pilot availability as you know, grow your fleet. We're constantly hiring. There's not a month goes by where we're not adding 15-20 pilots to the team. We'll continue to do that. Yes, there is some erosion. You know, people, some people love to fly cargo, and some people hate to fly cargo. People that love to fly cargo are the people who, you know, like to fly at night, and they don't wanna be bothered with all the going through airports and, you know, all the changes they go through. Cargo has better schedules. Their life is a lot better in cargo. Yes, we did find that in the past 3-4 months that we had a number of people leave to go back to cargo carriers. That puts a little bit of cost pressure and people pressure as well. I think so far we've been able to attract a lot of expats who wanna come back to Canada. They find that Cargojet's a great home. They have narrow-body aircraft. Although there is pressure, there is a shortage of every kind of trade today, whether it's maintenance, whether it's pilots, whether it's accountants, whether it's IT. Pilots are no different than other sectors that facing shortfall in. Cargojet remains an attractive place for people to apply and work so. So far, as I said, we've been having pilot training courses and new pilots about 15-20 every month, and we will continue to do that. Okay. No, that's great. Thanks very much. It appears there are no further questions over the audio at this time. I'd like to turn the conference back for any additional or closing remarks. Yeah. Thank you, everybody, for joining us today. You know, our heart goes out to what's happening in Russia-Ukraine crisis when we see the images on TV. Cargojet is not handling any in line with the government guidelines and some of the mandates. We're not handling any Russian product line or any of that stuff, which we never did anyway, but we're more cautious of it than we ever were. You know, our sympathies and our heart goes out to the people that are suffering, especially in Ukraine. We will continue to help as a company and as good corporate citizens. We will also be doing some relief flights for all the refugees and that are coming into Poland and some of the neighboring countries. We've had a number of requests. We obviously can't meet every request, but wherever we can, Cargojet will do its part as it's always done. We did it during Lebanon crisis. We did it during India crisis. We've done it in many parts of the world, and Cargojet will do its fair share as a Canadian spirit to make sure that we do our part to help out. Thank you again for everybody who's joined us today and we really appreciate the support that we get from you guys. Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.