Good day, and welcome to the special 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. Thank you, operator. Good morning, everyone, and thank you for joining us on this very special call today. With me is the executive team of Cargojet. Prior to AJ's opening remarks, I would like to point out that certain statements made on the call, such as those relating to our forecasted revenues, costs, and strategic plans, are forward-looking and within meaning of applicable securities laws. This call also includes references to non-GAAP measures like adjusted EBITDA. Please refer to our press release for any other questions you may have. I would like to turn the call over to Ajay Virmani for his opening remarks. Good morning, everybody, and thank you for joining at a very short notice for the special investor and conference call today. Yesterday, we signed a very strategic partnership agreement with DHL Group that builds upon the strong commercial relationship we have enjoyed with DHL for over several years. Before we continue with the conference call, at this point I have a very special guest that I would like to introduce to all of you. Our special guest is Mr. Mike Parra. He is the CEO of Americas for DHL Group. He has joined us kindly for a few minutes to give us all a color of the deal that we just executed. Mr. Parra, are you there? Yes. Good morning, Mr. Virmani, and good morning to all the guests that are on the line. What an incredible day, not only for Deutsche Post DHL and DHL Express, but we assume the same feeling with our friends at Cargojet in Canada. This relationship for those on the line extends beyond the last 14-15 years, starting in Canada and now truly becoming a global relationship with Cargojet. You know, Deutsche Post DHL has over 570,000 employees globally. Within the DHL Express division, which is the division today that has made the announcement with Cargojet, we are 120,000 employees strong. We are in 220 countries and territories globally. We are recognized as the number one great place to work for all. I think it's important to know that DHL is the global leader in cross-border, time definite international as well as air cargo movement. We have a ground presence in over 220 countries, as I've said, holding a number one position globally in our space in Asia, Europe, and outside the United States, a number one position overall in the Americas. We've seen an incredible demand and robust growth in our services, over the last 24-36 months. Even if I look back to the last seven years now that I've been in the role as CEO for the Americas region, which is Canada, all the way down to Argentina, or if you're from Chile, I would say Canada to Chile, we've added over 14,700 new roles in the last six years, to be exact, and have increased our overall revenue spend, which as a result, positioned us nicely to continue to grow what we see as a strong relationship that we have enjoyed with Cargojet. When you think about the pandemic, and you go back to February and March of 2020, there was millions of pounds of belly capacity that suddenly disappeared. Like everybody else, we had to work hard to find solutions to meet those requirements. What further complicated the matters was obviously a skyrocketing e-commerce demand at the same exact time while we were trying to move, pandemic-related materials and equally starting a surge and a partnership with the partners around moving vaccines around the world. Anytime you pick up the phone and you call the friends at Cargojet, they're ready, they're willing, they're able to support us, with additional assets and aircraft. You know, with many other airlines simply not having the capacity at that time to scale up as fast as that. We're very thankful for the relationship that we have with Cargojet, their philosophy of always having aircraft feedstock in the pipeline that allowed us, and allowed them to support us during a difficult time. Another part of why it's important, this relationship, is they have a leading industry on time performance. They win hands down against, you know, any of the other players that we've experienced in the Canadian market. You know, the partner, when we start talking about long-term strategic partnerships, you know, a partner comes through during your most challenging times, and I just spoke about that. Through the relationship with Cargojet, and they are a true partner. Their philosophy of customer first, the fact that they're obsessed about it, is something that we see as a company, as something that matches with our DNA of being insanely customer-centric. We couldn't have asked for a better partner. They bring a strong balance sheet, a deep appetite to invest in growth, a well-managed business, an industry-best operational team that knows how to execute. Like us, they believe in a focus approach. We generally like to partner with airlines that are focused on air cargo as their core business, not as a nice-to-have or as a hobby, but something that is at their core. We have continued plans to build on this relationship, and as such, we're extremely proud of today's announcement, and we look forward to this continued growth with Cargojet, as well as their passion for being obsessed around customer first. Thank you very much, AJ, to you and your team. Great day for all of us, and look forward to seeing you in person so that we can celebrate. Thank you, Mike. Really appreciate your comments, and we feel the same way about DHL. It's a true partnership at every step, and we sincerely appreciate your trust and support in Cargojet and its teams and its abilities to provide you with aircraft and all the services that are related to the contract we did in this agreement. Thank you, Mike, for joining us. It means a lot. I will now continue on with rest of my remarks. This is by far our largest transaction up to today, with revenues of CAD 2.3 billion over seven years. We felt that the transaction of this size needed to have strong alignment of interest and the warrant structure allows us to achieve that goal. We have provided more details in our press release. A significant portion of the revenue is incremental to the current run rate revenue of DHL. This agreement also accomplish our goal of longer-term ACMI contract with the major customers. Typically, ACMI contracts with all customers are not to the level of five years with two-year options. They are much smaller and shorter. Given a detailed explanation of the transaction in our press release, I'm not going to repeat that information, but let me highlight a few key points. Although we have opportunistically participated in the ACMI international market, we wanted to wait for the right conditions to make a long-term strategic move in this space. We believe those right circumstances have now arisen due to major global structural shifts. Let me highlight a few key points. During the past two years, we have seen a massive digital adoption of retailers and a vast majority of new businesses are starting purely as e-commerce online businesses. This is not just a Canadian trend, rather a global trend. DHL is a key player in cross-border e-commerce. Number two, global supply chains are going through a massive restructuring as countries rethink their national security interests. This dislocation will lead to manufacturing sites moving across the world and new origin destination pairs will be created, and they are already being created. These pairs may not complement the international leisure travel cities of the future. Number three, structural shifts in retail real estate have led to repurposing of several shopping malls, shutting down thousands of bricks-and-mortar retail stores, and we do not expect those stores to return anytime soon. Number four, belly capacity will remain uncertain due to unpredictability of the return of the international travel. This has also forced global couriers, such as DHL, to secure long-term capacity on dedicated aircraft to maintain high predictability and service quality in their networks. Number five, many airlines are retiring fuel-efficient 747 and A380s, creating a permanent shift in available belly capacity. Many airlines are also replacing a wide-body long-haul aircraft with more fuel-efficient B737 MAX and A320neo, for their use, rather than relying on the old traditional 777s or A330s. B777 converted cargo aircraft is emerging as the aircraft of choice due to its better fuel economy, payload and longer range as a replacement to older B747, A380 workhorses. We are also thrilled to have secured the feedstock of early conversion slots for the highly sought-after plane. Together, these changes presented an attractive entry point for Cargojet to build a stronger ACMI and international footprint. We are thrilled that we are embarking on this journey with the DHL Group. The global leader of international cargo movement. We are fortunate to have been selected as a strategic partner by DHL as it expands its global reach and adds capacity to its key links. It is worth noting that as a sophisticated operator, DHL had many choices to select from among Canadian and other global airlines to partner with. Their decision to pick Cargojet to be the long-term partner is a major endorsement of Cargojet's track record, strategy, and above all, our great team. We couldn't be happier. We have a strong track record of investing in the business that is supported by strong customer opportunities. As we recently disclosed with our fourth quarter results, we have increased our CapEx spending in 2022 due to these structural shifts in the global air cargo industry. This major customer win with DHL supports a significant portion of the CapEx we announced. Had we not got into acquiring the planes and the CapEx we announced, we would today not have the DHL agreement. The process that naturally leads to transaction of this size does not always perfectly line up with how and when we need to make commitments for CapEx. That is a reflection of the strength of our customer relationships that brings with small steps and lead to strategic partnerships. We are also working on plans for international network development to select high yield destinations with a similar block space agreement as we have accomplished in the domestic market. We will certainly be announcing more of these plans and contracts as they get finalized in the very near future. We have equally strong track record in executing our strategies with industry best on-time performance and high customer satisfaction. With DHL, we believe we have strong cultural alignment and is best described by Travis Cobb, our Executive VP of DHL Global Network and Operations and Aviation. He says, and let me quote, "Cargojet's customer first culture has added flexibility and resilience to our network." This quote is a great tribute to the entire team of Cargojet that has worked extremely hard, particularly during the pandemic, and never missed a beat, despite all the challenges that were thrown our way. I want to use this opportunity to thank each one of the Cargojet team members and our current and future customers for their support and confidence in our abilities and services. Thank you for trusting with your business to Cargojet. We are also in the process of further strengthening our domestic network that will create more direct cargo flight connections from Canadian cities than anyone else. When we are finished deploying our 757 domestic strategy, we will be servicing eight direct flights a day from our major hub of Hamilton and Montreal to each of those eight major cities in Canada. We are committed to maintaining our leadership in the Canadian domestic market and grow selectively in ACMI charters and international businesses. We also are in the process of planning our first Investor Day in the coming months, and we'll be sharing more details for this event for all of you guys to visit our Hamilton hub, along with presentation of overall strategy that Cargojet contemplates in the very near future. I thank you again for your patience, your support in joining us this morning, and let me open up the call for questions. My management team is with me for all questions you might have. Thank you, sir. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We will now take our first question from Konark Gupta from Scotiabank. Please go ahead. Thanks, operator. Good morning, everyone. Congrats on the announcement, AJ and the team. I had a few questions. Maybe first clarification before. The new agreement seems like it is including the existing 12 ACMI routes. Is that correct? Yes, it does. Okay. However, the majority of the revenues we discuss and contemplate are incremental. Right. Makes sense. The CAD 2.3 billion, AJ, it's including the existing contracts plus the growth that you anticipate with DHL? The growth that we have agreed on or signed on is yes. Majority of that is new and incremental. Makes sense. Thanks. My first question mainly is on in terms of the mix, when we model this contract out. Currently, I think DHL was primarily doing ACMI with you, so that was showing up in the ACMI revenue line. Going forward, as you have more CMI, charter, and dry lease, in the mix, how do you plan to kind of report this contract revenues, over time amongst those segments? Look, the agreement that we have signed for five additional 767s and 777s are primarily ACMI, but they are also looking at expanding the relationship so that these are placeholders, you might wanna call it at best, is that they would be open to us taking dry lease aircraft from us, for example. Or they would also be open to, if they want to operate an aircraft that we or they already have and they want operations, they will also contact us for CMI. This particularly doesn't mean that CAD 2.3 billion is all CMI or dry lease. Those are provisions within the agreement that they would like to access all our portfolio. Primarily we see more of, I would say, 80%-90% of this business as ACMI. Okay. That's pretty interesting. Last one from me. On the warrants, it says the press release today, it's up to 9.5% of non-diluted shares. That seems like it's 9.5% of 17.2 million shares, which accounts for or equates to about 1.65 million warrants. Is that correct? Yes. Why is there an up to in there? Like, do you have to figure out the exact amount later on, or you have 1.65 million warrants? Right. When we say up to, it could be depending on how the revenue matures. They're all tied to the revenues at various levels, right? When you say up to, that means it would not exceed that. That's what that means. If, for example, if the revenue is CAD 100 million less, then the warrants become less. They're tied to revenue. That's what it means. Makes sense. Perfect. Thanks, and congrats again. Thank you. We will now take our next question from Michael Goldie from Bank of Montreal. Please go ahead. Thank you. My first question is, does this announcement impact any future CapEx plan versus kind of the more recent guidance that we've discussed? No. Actually, at that time, we could not announce. When we announced the CapEx plan, since our agreement was not finalized, we could not announce it. Ideally, we should have announced both of them at the same time. Because of the disclosure rules, this CapEx plan was sort of an anticipation of this contract being signed. We don't anticipate any more CapEx. This is actually at the high end for this particular transaction. Okay, thank you. You're receiving eight 777s in the coming years. How many is DHL taking for this agreement? Of the 777s and 767s, which are owned by Cargojet, and then which could be owned by DHL and flown on a CMI basis? All the aircraft that we contemplate in this agreement that we have mentioned are all owned by Cargojet. That's number one. We have seven 767s that are supposed to be taking delivery over the next two years. Out of that, five have been spoken for by the DHL people, and we will have two aircraft that we have highlighted in the previous two conference calls that will act as spares for our maintenance and hot spare and operational needs. All 767s are pretty well spoken for. As far as the 777s are concerned, we have an agreement initially to start out with two aircraft, add another two aircraft the following year. We're looking at up to four aircraft for DHL that we have committed, and there's four 777s that would be in 2024, 2025, that we are working on with other retail customers to build a domestic type block space agreement with certain international to certain international destinations. But that's still 2.5-3 years away. Yes, half of them, half the 777s, are spoken for with the DHL. Good. Okay. Last question, if I may. Of the CAD 2.3 billion, are you able to give us how much of that is incremental? Is it kind of around CAD 1 billion? You know, all we can say is majority of the CAD 2.3 billion will be incremental. Okay. Thank you. We will now take the next question from Kevin Chiang from CIBC. Please go ahead. Morning. Good morning. Thanks for taking my question, and congrats on the announcement this morning. Maybe if I could ask another way in terms of how to think about the incremental revenue. It looks like, you know, 346,000 of the 1.645 million warrants exercising immediately, so about, you know, 20% of it, leaving 80% to be earned. Is that a good proxy for maybe- No. -I guess the goalpost. No. Oh, no, it's not. Okay. No, it isn't. There is 2% vesting upfront in recognition of a partnership for 15 years in the relationship. That's number one. Number two, in the past two years, DHL has grown from six to seven aircraft to 12. It's a recognition of that. Number three, it's a recognition of an agreement that is now five years firm with a two-year option. Those are the three reasons that we did the immediate vesting for 2%, as a token of our appreciation for how DHL has supported us and given us the opportunity. The rest of it is for obviously for growth. I wouldn't say the revenue necessarily splits. Kevin, I can tell you that, you know what's the majority of CAD 2.3 billion, so I would look at that as incremental. Yeah. No, that makes a ton of sense. Keep in mind, every month we are adding aircraft. While we started the deal, the base was a lot less, and the incremental was a lot more. You know, there is not a month gone on where we haven't added the route. By the time we started to do the figures on the next meeting, the incremental had shifted to existing. But the key thing is that all the agreement now becomes a five-year firm agreement with a two-year option to extend, which is kind of unheard of in the ACMI markets. Okay. Actually, just a clarification. I guess all the individual ACMI contracts you have with DHL, it now falls under this. Is this like a master agreement now for all those agreements? Yes. Everything's extended now five years plus a two-year option? Yes, absolutely. Absolutely. Okay, that makes sense. You did mention, AJ, you know, you expect 80%-90% of the revenue to be ACMI. But as you mentioned, you know, they do wanna tap into your broad portfolio here. Just wondering, is there, I don't know, for lack of a better word, like a minimum split, i.e., you know, they can't generate most of, let's say, the revenue that you anticipate through a dry lease. This is your expectations of ACMI. Are there any provisions that kind of provide at least some goalposts around the potential split that they could choose, or do they have- No, no. And Kevin, let me explain to you the dry lease and CMI strategy. These are our backup strategies. These are mostly for the benefit of Cargojet. Let's say, for example, the market softens and we've got two aircraft that we can't utilize. I would immediately, my first call would be to DHL and say if they could, because they're a global company, they have 600 planes flying around, can you lease two of our dry lease aircraft? So it is a kind of a built-in protection for us. Second thing is, they might want, might not wanna dry lease. They might wanna give us a route from, let's say, Singapore to Dubai that we, under Cargojet license, cannot operate. We can take that aircraft and give it to one of the local carriers to operate on a CMI basis. Those are sort of built-in protections for Cargojet to get rid of their excess capacity or excess aircraft in case the market softens. Oh, okay. That makes a ton of sense, yeah. The primary goal of this market is wherever Cargojet licenses are applicable, and can operate, we plan to provide ACMI services. Okay. Then just last one, you know, I was trying to jot it down quickly. It sounds like, you know, obviously a big focus on your Q4 call was the fleet investment. It does feel like a lot of the near-term 767 capacity is now gonna be called on here with the DHL contract. They're looking at the further 777s. It looks like you've got good line of sight for a chunk of that to be put under this agreement. Is that kind of the right way to think about it, that you've kind of absorbed a lot of this, I guess, perceived excess capacity you're putting onto the market when you initially laid out this fleet plan, you know, when you reported Q4 results? Yes. Kevin, you're exactly right. You know, we have six 757s that we are investing in to improve the domestic service, like we talked about direct nonstops to eight cities, so they will go there. It will free up another three 767s from the domestic network, which would be primarily like we are in a dire need of backup and maintenance spares and operational spares. Those three 767s freed up from domestic will go into that. Out of the seven 767s that we are getting new ones, five are going to DHL and two would be available for future growth and our other customers that have requests in. Pretty well all 767s, all 757s have been spoken for, absorbed, and accounted for. We have four 777 s in 2024 and 2025 that we are working on either a model that we will do some Far East and Asian flying depending on what the market is. Or, as a matter of fact, we have three customers who have expressed interest in already asking for CMI and dry lease type of operations. We don't wanna take those opportunities right now because we might be leaving a lot of money on the table. I think we will certainly feel that we as a company need those four planes to grow our international brand. Rest, everything else is pretty well accounted for. Excellent. That's all my questions. Thank you very much, and congratulations again. Thank you. Thank you, Kevin. We will now take our next question from Chris Murray from ATB Capital Markets. Please go ahead. Yeah, thanks, folks. Congratulations on the agreement. Just a couple other clarifications, if you don't mind. First of all, one of the parts of the 757 into the domestic market, part of the idea was to free up some additional 767s. Just trying to get a rough idea if that's still the case. With those additional 767s that might get freed up, could they also be used in this agreement? I guess what I'm trying to understand is there room for growth over and above the five aircraft that are already committed now? Yes. That strategy of deploying six 757s and freeing up three 767s still exists. That's what the plan is. For example, if we free up three 767s, and we got seven coming, so I think that we will have a total of 10 767s. Out of the 10, we previously announced we need three planes to support our 35-40 plane operation for maintenance and spares. Out of 10 planes, three will definitely go into that direction. Five will go into DHL, so that's eight. Two will be for our charters, our growth, and other customers peak. Those would be fully utilized as well. We have full plan to use those, and we are. There is no spare 767s or 757s after our strategy is deployed. Okay. No, that's fair. And then, you know, when we talked about this back at the quarter, I mean, the concern was there was a lot of capacity and, you know, what were you gonna do? Certainly the announcement today helps understand this. Should we still be thinking, at least at the time that we talked, there were a couple of things that came out of that. One was, you know, the return on this capital, you're expecting it to be in line with kind of the historical norms we started to see, out of 2021. You know, the one commentary was that EBITDA margins on ACMI should be upward biasing overall corporate margins. Any thoughts around how we should be thinking about the financial impact of this new contract and the new activity? Look, the new contract, because of the warrant calculation was well researched, vetted, and analyzed. All I can tell you is that any margins that we pay a lot of attention and focus on the margin. I know there's a lot of cost pressures when you read the news about inflation and wage rates and fuel prices. Yes, there are pressures on the margin from outside, but as far as the pricing that we have done, it's totally in line with the current margins that we get. Okay. That's helpful. My last question really quickly. You know, this is your second warrant deal. You did an earlier agreement with Amazon. So I guess the question that we've already had this morning, you know, should we be expecting, I guess, a couple of things? One, are there any issues around or any interlocks around Amazon or this agreement which requires consents for future agreements of this type? Two, is this something that you think that as we look at the renewal of some of the larger contracts in the next few years, that we may have to see additional warrants being issued? Look, every deal is analyzed on its own. We do not need. We don't have any agreements or we never enter into agreements where we need permission to move forward and do strategic deals. Our hands are not tied in any of that respect. Any future deals, you know, our philosophy is that there has to be a significant portion of any revenues has to be growth and incremental for us to look at a warrant deal. It has to be accretive. Accretion has to be from day one. Obviously, our bankers give us a fairness opinion on these type of deals, depending on the margins or depending on the stock price and all that stuff. This is not- We're not looking to do these deals. To be honest with you, this is the biggest deal the company has done, about CAD 2.3 billion deal. Majority of it, I said, is incremental. You know, the obviously, there is some reward for 15-year loyalty. There is some reward for firming up the contract to seven-year almost. Then the major reward comes in incremental. Gonna show you that any deals, if we ever contemplate in the future of renewals, it has to have all those three elements. All right. That's fair. Thank you, folks. Okay. We will now take our next question from Walter Spracklin from RBC Capital Markets. Please go ahead. Thanks very much, operator. Good morning, everyone. Congrats on the deal. It's a good deal. I'm gonna try to, you know, a lot of the positives have been flushed out here, so I'm gonna try to think about some negatives that I might get here today and hear how you answer them. Bear with me for being devil's advocate. Is Mike still available to answer one of the questions, actually? Is he still available, AJ, or? No, Mike had another meeting. Okay. Because he was doing investor calls, but he- I mean, if you have a question, I can- Yeah, no, I mean, y eah, it was great to hear his comments. I think that was excellent having him on the call. I mean, one of the questions I often get is belly capacity and when it all comes back. Are the DHLs of the world gonna take advantage of perhaps that belly capacity? I know. Kinda like, you know, I've heard your answer to that, and presumably that's coming from him as well. You wouldn't be, you know, taking it out of the air. Certainly, that's one of the key aspects. I don't know if through your conversations, AJ, with Michael, whether he's given you added color on DHL's plans when belly capacity comes back, whether they plan on using that in any extent, excuse me, the way they did before, or are they gonna be more focused on dedicated freighter aircraft like what you provide? Walter, this has been a million-dollar question. I can't tell you what DHL is thinking internally, but I can tell you what the marketplace shares with me and what this agreement means in terms of that. DHL also has signed five 777 s to be operated by Singapore Airlines. These are all a longer-term agreement in Asia, that part of the world. It is really the way I see it, and the way I read it, that they are reducing their dependence on belly capacity a lot. Shifts have happened. DHL was also a big user of belly capacity, but I think our feeling is that for them to enter into this agreement, they feel the shift is quite permanent, unless you know certain things happen. Then obviously you don't know what the future holds, but you can only plan for what you know. The way it looks is that the belly capacity you never know when it will come back and when it will not come back and in what form it's coming back. The trend is it's not coming back in the form it used to be. Like, no A380s, no 757s, right? 767, 747. A lot of 777 s have been grounded. A lot of 737 MAXes, like you could put Toronto-London a 737 MAX now. A lot of intra-Asia is gonna be MAXes and A320s. There's a lot of capacity that's gonna come out of the market as a result, which will be a structural shift. The second part of it is that, you know, the way I look at, DHL, they are now more competitive with their competitors, because their competitors, like, FedEx and UPS, use a lot of their own aircraft and dedicated service. I think, DHL has all of a sudden enjoyed a dedicated cargo service and being competitive, and they are growing, as Mike said, they're growing crazy numbers. It's also improving their service, and we feel that yes, there is always a risk of some of that's going back to the belly business on a strategic basis, but majority of the shift, I think, has already happened, and hence they would not sign a five-year commitment on 12 planes and a contract for 777s from us and from another 757, 767 if they thought everything is gonna go back to the belly. I don't think they would have spent as much as they did on their facility in Hamilton. They would have put that in Pearson, right? I mean, if they really thought they were gonna use belly space. Exactly. You're 100% correct on that. Yeah. Second, I guess, devil's advocate question, you know, one of the key concerns about, you know, your investment before was you didn't have a contract. Well, now you have a contract. The next question might be, well, are you too many eggs in the DHL basket, right? Because a lot of your ACMI now is DHL. If I use the numbers that you gave me in terms of aircraft that's available now for other customers, let's say, I think you gave us two 767s that are going to be available that are not under this contract, and four 777s that will be available. Is that right? If you could give us a- Yes. -a revenue number, perhaps ballpark, that is still a capacity available for other customers. Is that a fair, you know, which direction would you point us there? Or is that a good question? Is that a better question for your Investor Day? Well, it's a better question for the Investor Day, to be honest with you. You got to understand that it doesn't mean there's no other aircraft. When we have three spare aircraft, they're not always being used as spare. They're gonna be used for charters. Like, I'll give you an example. People do our flight tracks and all that, they say, "How do you get so much utilization of these aircraft?" Because, you know, keep in mind, there are 18 aircraft domestically that sit from Friday to Monday, number one, that are being used for international charters, and they will be used. There's also daytime charters, like from 5:00 A.M. to 10:00 P.M., we don't need those aircraft, and we've used those aircraft very effectively for charters. It doesn't mean that they are parked domestically, they can't be used. Because we have a spare aircraft, and if the charter is returning at 1:00 A.M. and domestic flight has to leave at 12:00, we fly up the spare at that time. You know, the network flexibility of various sizes of planes at various times gives us that flexibility to put these aircraft more to work and get more utilization of those existing fleet as well. We're not capped out, and we're not only limited to the two spares and four 777s. Those are there for sure. But to take advantage of the ad hoc opportunities, ad hoc charters, which is a major part of our business, we have a lot more resources and a lot more capacity that we can do. In order to answer your question effectively, you know, we always heard number of years ago that we are too centered in the domestic. We are too reliant on, you know, kind of Post Group of Companies or FedEx or UPS, and then it came, we are too reliant on Amazon. Now if we add DHL with different services, I'm gonna get, I'm too reliant on DHL. You know, we will always be reliant on somebody, but if a customer gives you a seven-year agreement with that CAD 2.3 billion of capacity, I will take that reliance any day than having no reliance. Yeah, I agree. I guess that's great color, again. Final question here for me is on other customers. Are you in discussions with other customers? What kind of framework would this be? Multi-year contracts that you would look to arrange, or are you looking more kind of ad hoc with those customers for any capacity you might have above and beyond what the scope of this contract? Are you asking for the new four 77 7s and 767? Either one. Just new customers on ACMI or charter in general. I know you're thinking block hour business. Are those all gonna go block hour and therefore, you know, any and all customers that you'll be selling to on an annual basis? Or could you envision other ACMI contracts like the one you just signed with DHL for other non-DHL customers as well? You know, we are open to having ACMI contracts, but just keep in mind, general market ACMI contracts are not as long-term as what we have signed. DHL is in a unique position because they are a German-owned freight courier company that cannot operate in Canada or U.S., so the opportunities are a lot more. Any opportunities that we have with our traditional U.S. partners like UPS or FedEx are a bit more of short-term opportunities and ad hoc opportunities, but there are still opportunities. We also have you know certain discussions going on with customers in North America and Far East about block space agreements and we operating these flights as commercial flights on our licenses. As you know, Cargojet's model has always been to look for customers and try to block space and try to market more of the space prior to even committing the service. If our costs are not paid and there's a little bit of money on the table, you know, we do not start a service. We're very conscious of the yields. We are very conscious of we are not in a business to practice freight forwarding or air freight in our planes, or we're not here to practice loading and unloading. We wanna make money at it. Our philosophy does not change one bit in that regard. As the time goes on, as you can imagine, this deal took one year to complete. Had we not gone ahead with the investment in the fleet and not booked those slots two years ago, this deal would not have happened. Yes, there is sometimes you take the educated risks and educated guesses, but you know, being in the industry for myself 40 years, and my other colleagues sitting around this table, each has 20 to 40 years, some of them are founding members of this company. We have a very good idea of where the market is, where the business is, where to find more boxes. That's our expertise. That's our only product. We do not dabble in passenger and charters and other things. We have only one product, which is Cargojet. We don't have three levels of economy, business and first. We only have one level, which is first class cargo service, and that's what we pride ourselves to be. Well, that's great, AJ. Thanks for the color, and again, congratulations on the deal. Thank you, Walter. We will now take our next question from Cameron Doerksen from National Bank Financial. Please go ahead. Thanks, good morning, and let me echo my congratulations on getting this deal done. Really just a kind of a clarification, I guess, on earlier questions just with regard to the potential for, I guess, expansion of this agreement. I'm just wondering if there are mechanisms in the contract that you have with DHL where, you know, if three years down the road they decide they wanna add some incremental aircraft to the agreement, is that mechanism in place or would that require, I guess, an additional negotiation with them? No, no, they have a mechanism they can expand this relationship. Okay. Okay, that's good. How does, I guess, your 21 Air investment fit into this, if at all? I mean, I know that they also do some business with DHL. Is there anything with your agreement with them that you know, applies to the 21 Air investment that you have? Yeah. We have a significant interest in 21 Air, and we certainly plan to grow that investment. The U.S. market is a big market, and Cargojet obviously is a minority partner, and they will play the role as a minority partner, but has a lot of experience in air cargo and common customers. Certainly, Cargojet will use its leverage as having a bigger and better customer portfolio and more knowledge, and we would certainly be passing that on. I'm sure that this deal will rub off on our investment in 21 Air, and there will be opportunities for that company to grow as well. Okay. That's great. All my other questions were answered. Thanks very much. Thank you. We will now take our next question from Nauman Satti from Laurentian Bank. Please go ahead. Hi. Good morning, everyone, and congrats on the deal here. Thank you. Most of my questions have been asked. Just a quick clarification questions. I don't know if you do this calculation, but in terms of the block hours or the contractual revenue, how much of your revenue is now sort of contractual, and how much is sort of day to day, some opportunities come in and you sort of go and take those opportunities? See, majority of our revenue is contracted. You know, I think the only revenue that probably you can count is the ad hoc charters. That is the one that is non-contracted. I think if you looked at the track record and the graph, you'll see a hockey stick on the charter as well. I can tell you that in the past three months, we might have turned down equal number of charters that we have done. Had we had more aircraft and had more capability, our charter revenue would have doubled today. There's many charter opportunities that we cannot take advantage of, because we wanna continue servicing our existing customers, and we don't wanna take any risks and chances with our aircraft flying different parts of the world when we don't have a dedicated network. That's our key, and anything extra, we do charters, and that's probably you can consider non-contracting, and ad hoc. Okay. No, that's wonderful. I think on the last call you mentioned that for an ACMI aircraft per year, it's a CAD 12 million sort of revenue thing, or is that a little higher than that? Yeah. CAD 10 million-CAD 12 million is a good 767 yardstick for an annual revenue. Okay. I was just thinking that since you've mentioned that the CAD 2.3 billion, the majority of that would be sort of incremental in nature, so we should think that probably more aircraft may go into this fleet as well. Well, yeah, we just announced that there'll be five 767s and four 777s are gonna go into that deal. Oh, okay. That should cover most of this incremental there. Yes. Absolutely. Okay. That's it. Okay. Just one last one. I think this is not relating to this transaction, but the one that you signed with Amazon in 2019. I'm just wondering if I think that was $400 million for the first few years and then second tranche of $200 million. How did you sort of think about that transaction? How'd that play out? If there was any learnings that you've incorporated in the new one with DHL? Well, you know, we learn every hour and every day. At that time, you know, our stock price used to be CAD 80, and Amazon was the most growing company and still is. It is still part of our big plans, and they're still a major customer for us. As far as the learnings are concerned, obviously we learn from those, we learn from all of our deals we do. To be honest with you, the deals are only done if they're fair for both parties. If they're not fair, only the good deals and win-win deals close, the fair deals close. If no matter what learning you do, but at the end of the day, you know, you try and you get a win-win and a fair deal that will close. Otherwise, the deals don't close. Certainly, when we did that Amazon revenue, again, part of that philosophy was that we were too dependent on a couple of customers and too reliant, and how do we add more customers to it. That was our answer to more diversification with the largest e-commerce player in the world. Now we have added another line of business, which we have expanded. We have become very good at it. It's incremental. We have a lot of overhead covered by our existing network and existing facilities, existing people with our core network and, you know, adding ACMI on top and some CMI and other stuff is all gravy, and utilization of our overhead, utilization of our fixed costs. That's how we looked at it. Okay. Thanks for taking my questions and, congrats on the announcement today. Thank you. Thank you. We will now take our next question from Tim James from TD Securities. Please go ahead. Thanks very much. Congratulations on this great agreement for you. Thank you. I wonder if you could talk generally about the revenue sort of regionally. You mentioned that it's for DHL's requirements for Europe, North, South, Central, and Latin America, as well as Asia. Are any of those regions or destinations gonna be more dominant in this kind of CAD 2.3 billion revenue pie? Just sort of further on that, you know, how much of it actually touches Canada versus the U.S.? Well, look, I mean, we keep talking about CAD 2.3 billion, but the majority of it, or not, I wouldn't say majority, but major portion of it is going to be tied to the 777 program as well. 777s are primarily gonna be long haul, Asia to North America. Whether those flights come into Canada or the flights go into the U.S., you know, we are fully licensed to do that. And there will be a lot of long haul revenue on those planes. We are also, you know, flying 767s to China. For example, we've been doing it for the past two years. We can service China with those planes as well because there's shortage of capacity obviously there. Majority of our 767 and 767-300 program will be geared towards Europe and South America, Latin America. 777s, you can expect them to be mostly utilized to the Far East, Asia, and from that Pacific side, going over the Atlantic side to India and even new places like Bangkok and Vietnam, which are exploding right now. This sort of would give you an idea of where our fleet deployment will be. Okay, that's great. Thank you very much. That was the only question I had. There appears to be no further questions. I'd like to turn the conference back to the host for any additional or closing remarks. Thank you, everybody. A lot of questions. A lot of great questions. We appreciate the support that everybody's given us. Thank you for your patience. I know when we announced the quarter four results, we did not have all the agreements executed at that time, the timing was a bit off. We wanna assure you that Cargojet, its board, its management team take their responsibility very seriously. If we announce capital plans, I think if you looked at our track record, when we announced a major capital expansion plan, at any point we have been able to deliver the goods right behind it. When it was Canada Post, we had a major capital expansion plan. When we had an Amazon deal, we had a major capital expansion plan. Now we have a major capital expansion plan that has now certainly certain guaranteed contracts. It also leaves us room for growth. You gotta be in it to win it. Had we not signed for and had we not blocked these slots two years ago, we would not have been able to do this deal. All I can ask you is thank you for your trust, thank you for your faith in us, and thank you for your patience in us. Cargojet will continue to deliver value to its shareholders, customers, and its employees. Thank you very much. This concludes today's call. Thank you for your participation. You may now disconnect.