Good morning, ladies and gentlemen. Welcome to the Cargojet conference call. I would now like to turn the meeting over to Ms. Pauline Dhillon. Please go ahead, Ms. Dhillon. Thank you, operator. 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, Scott Calver, our Chief Financial Officer, Sanjeev Maini, our Vice President of Finance. After opening remarks about the quarter, we will open the call 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, Adjusted Earnings Per Share, and Return on Invested Capital. Please refer to our most recent press release in MD&A for important assumptions and cautionary statements relating to forward-looking information and for reconciliations of non-GAAP measures to GAAP income. I'll now turn over the call to Ajay. Thank you, Pauline. Good morning, everyone, and thank you for joining us on our Q4 earnings call. I wanna begin by sharing a few thoughts on the economic climate. Although the central bank started to raise interest rates last March, the impact on consumer behavior is just beginning to be felt. We saw this in our December peak period, which was slower than last year. We expect the consumer to remain cautious and retail sales to remain subdued in the near future. However, I wanna put Cargojet's last 3 years in context. Our Adjusted EBITDA for the year ending 2019 was CAD 156 million, and we ended 2022 with EBITDA of CAD 330 million. This is an increase of 111% over 3 years. There is a perception that all of the growth was COVID driven. Let me remind you that these 3 years, we have brought in a major strategic partner, DHL, and diversified our business into ACMI as a strong pillar. This new revenue improves the mix between our flagship domestic business versus the lines of business. Charter, although cyclical, continues to be an important and opportunist business that helps us utilize our assets when they're not supporting our domestic overnight network. We have also been prudent in managing cash flow and capital expenditures. Given the nature of our business, we have always structured our capital expenditures and their plans with flexibility and optionality. With the changing economic conditions at the present time, we are exercising that very flexibility by deferring capital expenditures previously announced by approximately $400 million. This will involve the major portion of this will involve not 2, but 4 777s. We will have a reduction of 4 777' s from the 8. Scott will have further comments on this particular matter. I also wanna highlight that while we have done that, we have maintained our flexibility with MROs for conversion slots which are premium, and we will hold on to that and defer them by 12 to 18 months or 2 years if we need to see the economic climate, what kind of conversions we it would want. Scott will provide more color on this, as I mentioned. As an entrepreneurial company, we have always been focused on cost management. As the pandemic hit, we were focused on meeting the demand and deployed resources and added costs to successfully manage the opportunity. At that time, our simple principle was we need to handle the volume, which was overflowing, and it had to be done at any cost. Now we find ourselves dealing with a different set of economic environment and have shifted back to our basic routine of focusing on every dollar we spend. Every dollar we're spending is under review. As such, we have several initiatives underway that will reduce costs and now allow us to remain focused on our goal of maintaining historical margins. We're also focused on right-sizing of our network, our fleet, and our human resources to match the demand out there. At a macro level, e-commerce has now become part of a normal consumer behavior. A lot of more essential goods are being ordered online versus selective online buying occurred prior to COVID. The job market continues to be resilient, and inflation is starting to show some signs of weakness. It also worth noting that our business is underwritten by some of the world's largest logistics brands such as Purolator, Canada Post, UPS, Amazon, DHL, TFI International, and Liver Health Group. There's an old saying, you're as good as the company you keep. These are resilient businesses and will continue to be the backbone of our global trade and commerce. In the Q4, we announced the renewal of UPS contract in mid-January. We announced the Canada Post and Purolator contract extension in January as well. These contracts are long term. They were not, they were expiring in March 2025. Having heard of our investment partners, we purposely extended these contracts to 2029 and 2031, locking up these customers and ensuring that there is no competitive impact on our business. This also solidifies Cargojet's leadership position in the Canadian overnight air cargo market. We have now extended all our strategic customers. We have managed 2 down cycles before when Cargojet was a much smaller organization with limited options to manage costs. Today, Cargojet is much larger, much more optionality in managing the economic cycle. You may recall we started to prepare for this cycle back in January 2021, when we solidified our liquidity and our balance sheet by raising CAD 365 million in equity. We remain confident in our long-term growth strategy and expect to resume our capital expenditures and growth initiative as we come out of the economic cycles. Just as our team demonstrated resilience in managing rapid growth driven by pandemic, we are equally capable of managing the down cycle with similar rigor and discipline. One of the biggest lessons we have always learned in our business is it's never as rosy as it seems, and it's never as gloomy as it appears. Therefore, we will stay focused on our long-term mission of creating shareholder value and managing our short-term volatility. I will now pass on the call to our CFO, Scott Calver, for an update on business. Thank you. Thank you, AJ. Good morning, everyone. I will focus my remarks today on 3 topics. First, our results. Cargojet posted yet another strong quarter with a 13.2% increase in our revenue. Our diversification strategy is paying dividends as demonstrated by the strong growth in our ACMI business. Our domestic business started to see some weakness late in the Q4. The softer margins in Q4 compared to last year reflect our deliberate decision to not disrupt peak operations that are crucial for our customers. There are a number of pandemic era extra costs that need to come out of the business, and we have embarked on a careful plan to streamline all cost line items across the business. Towards the end of November and throughout December, Cargojet and our customers experienced volumes that were lower than anticipated. The recently released economic data clearly shows a decline in consumer spending as the month of December progressed. After consultation with our strategic customers, the consensus was to consider December slowdown as the beginning of a trend, a trend that ultimately could be a recession with reduced customer spending. Which brings me to my 2nd topic, our balance sheet. We are paying equally strong attention to keeping a strong balance sheet, and we have made several decisions to temporarily bring down our overall CapEx spend by CAD 320 million-CAD 400 million, as Ajay mentioned, compared to what we shared with you at our Investor Day last September. As part of our previously stated diversification and growth strategy, Cargojet undertook to add Boeing 777 long range, fuel efficient aircraft to our fleet to expand international reach, strategically enhance our domestic network, and to broaden capability for long range charters. This aircraft allows Cargojet to selectively add international routes that synergistically connect with our flagship domestic network. A total fleet of 8 777s were planned, with the 1st 4 777s to be deployed with DHL as part of Cargojet's strategic agreement, and with the remaining 4 to expand our international reach. The 4 aircraft embarked for DHL will continue conversion, but recent forecasts for the slowing global economy will curtail our capital expenditure and defer taking delivery of the final 4 777 freighters as previously announced, while maintaining full access to our conversion delivery slots. Arrangements with our MRO partners give us flexibility to maintain access to these valuable wide-body aircraft conversion slots, while at the same time better timing our capital commitments considering the global recessionary risk. The feedstock market for 777 is expected to remain strong, allowing Cargojet to initially divest feedstock of 2 777s, freeing up cash to be used to pay down debt, while retaining optionality on conversion slots for the 2024 through 2026 should the economic climate turn positive earlier than expected. To summarize, the 1st 4 777s for DHL are still planned. The 4 that are designated for general growth, we did not buy feedstock for the 5th unit, so that's deferred. The 6 and 7 units are related to the LOI, as previously noted, and the 8th unit will be deferred, as previously discussed on the last results call, and this feedstock may be sold as well. The impact of the CAD 320 million-CAD 400 million deferral to our 2023 growth CapEx spend will be a net reduction of approximately CAD 100 million-CAD 125 million, and it could be slightly higher if we sell that last feedstock. The remainder of this deferral will impact mostly 2024, if required. The 3rd topic, the resilience of our business model. As AJ mentioned, in mid-January, we announced the Canada Post and Purolator contract extension. This contract was to expire March 2025. The agreement was extended to September 30th, 2029, with an option to extend to September 30th, 2031. This early extension solidified Cargojet's leadership position in the Canadian overnight market. We have now extended the contracts for all of our strategic customers. These contracts were extended well before their contractual termination date, they extend out to 2027 and beyond. These are solid examples of our value proposition. During peak COVID, the demand of air cargo led to Canadian passenger airlines entering the air cargo market with the launch of their own dedicated freighters. As demonstrated with our 100% customer retention rate, our business model has once again passed the competitive stress test of our customers evaluating their options and renewing long-term contracts with Cargojet. All domestic and ACMI contracts contain minimum volume guarantees. These provide further support to Cargojet during softer economic cycles. In conclusion, we have rapidly responded to manage the business during this down cycle. We have taken rapid steps to preserve margins, profitability, and to maintain a strong balance sheet. We have a strong team that can execute our cost control initiatives, we look forward to updating you on our progress in coming quarters. This concludes our opening remarks, we will now open up the call to questions. Thank you. We will now take the questions from the telephone lines. If you have a question and you are using a speakerphone, please lift the handset before making your selection. If you have a question, please press * 1 on your device's keypad. You may cancel your question at any time by pressing * 2. Please press * 1 at this time if you have a question. There will be a brief pause while the participant register for questions. Thank you for your patience. The 1st question is from Konark Gupta from Scotiabank. Please go ahead. Your line is now open. Thank you, operator. Good morning, everyone. Good morning. Good morning, AJ. My 1st question is on the ACMI. You know, given the DHL ramp up that's been going on, what was primarily the driver for the revenue decline in Q4 versus Q3 sequentially? Would you expect this Q4 ACMI revenue run rate to continue in 2023 or should it increase the new aircraft offset by maybe block hours going down? I'll get Jamie to answer that. Good morning, Konark. Good morning, everybody. I mean, part of the reason we saw a reduction in ACMI flying in Q3 was just a redeployment of a reaction by DHL globally from the softness that we saw here domestically and globally rearranged some flying. As an example, you know, for most of the year, we were flying 2 aircraft on routes from Cincinnati to Vancouver to Shanghai. When there was softness in that market in the Q4, those aircraft would be deployed to new routes to Central and South America. That reduction in block hours still well above the minimum number of block hours per month, lower than what it would have been comparatively to the previous quarter. In terms of 2023, we'll continue to see strong growth on the overall ACMI business in 2023, combination of the result of the annualized benefit of the 3 new routes that we started at different points in 2022 for DHL that you'll see the full annualized effect in this coming year. Okay. That's very close. Thanks, Jamie. With respect to the fleet, I probably missed the CapEx number, if you guys laid it out on the call here. The prior guidance I remember on CapEx for 2023 was CAD 320 million-CAD 370 million. With the fleet changes you announced this morning, which included, I think, 2 777 sales as well as I think some conversion slots, where does the CapEx go from that guidance for 2023? It's Scott here. I'll take that one. It's gonna reduce by in a range of CAD 100 million-CAD 125 million. Now, as AJ mentioned, we do have optionality to sell that feedstock for that 8 777's, so that it could even be expanded off that range. Currently, right now we're planning in that range of CAD 100 million-CAD 125 million reduction from what was previously disclosed. Okay, that's great. Thanks, Scott. Is that just to confirm that CAD 100-CAD 125 reduction inclusive of the 2 777 sale proceeds? That's right. Absolutely. Okay. No, thank you. Okay. Then, last 1 for me. You know, with the kind of macro environment that you guys are seeing here, clearly you called out that the peak season being softer than expected could be a trend, with the ACMI growing in 23, domestic, you know, may be softer than maybe initially thought, would you still expect 2023 to be a growth year from both revenue and EBITDA standpoint, given the commentary in the MD&A that the margins are likely to be stable? Konark, yes, we expect the 2023 growth to be a growth year, but certainly not a double digit growth year. We expect that it will continue to grow. That's what our customers are telling us, but it won't be like a hockey stick that we have seen in the past 3 years for sure. It'll be in the mid-single digits, probably. That's what we're looking at on. On the 777' s, I also wanna clarify that, just to make it clear that we had We had originally bought 4 777' s for non-DHL purposes, out of those we canceled 1 agreement. We had 3 feedstock already. 2 have been sold out of that. 1 is in the process of selling. That's where the major reduction of, you know, almost CAD 400 million is going to come from 777' s and its related costs. When we say we are canceling it, we are canceling the buying the feedstock or selling it, we are maintaining the current conversion slot, we are still in the market should things improve. Okay. Thanks for the color. Thanks. I appreciate it. Thank you. The next question is from Cameron Doerksen from National Bank Financial. Please go ahead. Your line is now open. Good morning. Thanks very much. Maybe just to go back on the CapEx question. You gave some good details around 2023. Just wondering if you've got kind of a new expectation. Obviously, there's some moving parts here, but I just wonder if you have a new expectation for 2024, CapEx. Okay. Maybe if I just back up a little bit because we'll just anchor with what we previously disclosed last year, where it was gonna be approximately CAD 1.1 billion. When you see our Q4 results and what we spent in 2022, we spent just over CAD 600 million, and about CAD 480 million of that was growth capital. We already spent CAD 480 million of the CAD 1.1 million in growth capital. When you look at the deferral that we announced, and as AJ said, it could be as high as CAD 400 million. Most of that will impact the 2024. Now we don't know. Like, we don't know if it's a 6-month deferral, 12-month deferral, or an 18-month deferral. We're just really as nimble as possible here to have all optionality that if this recession doesn't happen or it starts to turn in Q3 of this year, we're going to pivot right back to growth like what we demonstrated in 2020, 2021, and 2022. To answer your question, about CAD 100 million-CAD 125 million in 2023, with the remainder mostly being in 2024. Again, there is that optionality to expand from that 320-400. A lot of that could impact this current year as well if we sell that last feedstock for that 777. Okay. No. That's, that's clear. Scott, maybe another question for you. Just to, you know, obviously you guys had, I guess, what you would call excess costs in 2022, a lot of which are not gonna repeat in 2023. Can you just maybe talk through, I guess, you know, so some of the details there as to what you expect to see from a, from a total cost sort of reduction based on some of the, I don't wanna call them one-time costs, but some, I guess, excess costs that aren't gonna recur that happened in 2022? Absolutely. With 2022 being a record year for year-over-year growth, we just couldn't grow fast enough to service our customers the way they wanted to be serviced. When you can't grow fast enough, you do everything pretty much at any cost. Now, you know, that's overstating it, but we ran very high costs for overtime and for training and to some extent for temporary employees. When you look at training, it's kind of a double whammy here because the training was very, very expensive. If we remember earlier in the pandemic, the training was very minimal because we were hiring pilots that were already certified to fly 757s or 767s because they were laid off from passenger airlines. That was a very different dynamic than what we experienced last year. We went from being able to train pilots measured in days to training pilots measured in months. When you're taking several months to train a pilot to be certified to fly a 767 or 757, in the meantime, you're running overtime to backfill for those positions. We've ran very, very high cost to onboard all that revenue growth last year. As we noted, we started to make plans in December. They settled into place in January and to a larger extent in February to deal with those 3 things: overtime, training, and temporary employees. There are other things as well. I must add that when we saw the slowness, it wasn't in October and November as much as in December. We already had built schedules, network, and everything getting ready for December, and we did not see the volumes that we normally see in December. The 1st sign, the slowness, as were in literally in December, and we're at the cost structure, the network was all built up, so it's very difficult to change everything on a day-to-day basis because you expect that, okay, the volumes don't show up on December 5th, but they might show up on the 6th or 7th. You can't take the cost down that quickly. But what on top of the cost that Scott is talking about, we are also now right-sizing the network. Keep in mind, we do have a fairly good flexibility to switch between 767s if we need to consolidate, more cargo and also split certain routes into 757, for more operational efficiency. That exercise is ongoing right now, and we expect that, you know, within the Q1 we'll make tremendous adjustments in our cost, training, overtime, right-sizing the fleet, and basically, freezing everything else that does not produce at all. Okay. No. That's great color. Thanks very much. Thank you. The next question is from David Ocampo from Cormark Securities. Please go ahead. Your line is now open. Thanks. Good morning, everyone. Scott, maybe a quick clarification just to kick things off. On the margin commentary that it should hold flat, are you expecting margins to hold flat with the Q4 or the overall margin level that you guys experienced in 2022? Getting back to the 2022, just our historical type of EBITDA margin in that 30% to 34%, 35%. Okay. Got it. You guys provided some pretty good commentary on the CapEx assumptions there. What's the financial impact to the EBITDA line, ‘cause you guys did provide or previously provided 2026 targets on EBITDA? We will push those out. Right, Scott? I mean. It's a, it's a deferral, and again, we're just gonna be able to pivot in either direction quickly. We don't know if it's a 6-month, 12-month, or 18-month deferral. Really you're pushing those things out, I would say, on the average of about 1 year. If you look back to that long-term plan, 2026 was a pretty light year for CapEx anyways. It's almost just shifting 24 to 25 to 26, just for round shifting. We're still very, very committed. We just can't emphasize enough what AJ was talking about there, that we're retaining our conversion slots. That's what's most critical to this business, is that we can get the feedstock quickly, but we've still got our conversion slots so that we can go ahead as planned. Right. I guess your assumption is that you could still hit that $500 million-$550 million of EBITDA, but it may not be 2026, but 2027 or 2028. We didn't know there was gonna be a global recession last summer and last September when we had that investor day. Otherwise, we probably would've been less bullish on the 2023. Our key thing was that we still believe in a good business case for us expanding, but only if the market sort of creates that opportunity. If it's not, you know, even when we built the business plan about a year ago, we knew that if there is an issue, we can get rid of some of these costs and airplanes very quickly, and which we did, while maintaining that we are in the game, but we don't have the cost associated to being in the game. Got it. Maybe just as a final one, when you think about your infrastructure investments for the 777' s, like new hangars and whatever other infrastructure-related investments you have to make, with the deferral of the 777' s, can you still hit your Return on Invested Capital targets with less scale? We will have some deferrals on hangars that we wanted to build for, and tooling and training and. That's all been deferred. Also keep in mind that one of the things we're looking at is if we do build the hangar for 777, it'll be able to take 2 767s also. That, those hangars would be very useful to us, no matter which part of the country we build in, the Vancouver, whether we build in Hamilton or whether we build in Halifax. Those hangars with can take 777s and if, let's say, for example, we don't need it for 777s, then we can put 767s in it for our heavy checks. Those would not go waste. Hangars is a good. We are short of hangars now even for our 767s. Most likely the hangars will go ahead, but it's not gonna be just a 777 hangar. It's gonna be a hangar for. Keep in mind we're operating almost 4 aircraft now. We only have 2 hangars in Hamilton. We could use 2 hangars somewhere else. Okay. That's it for me. Thanks a lot, guys. Thank you. The next question is from Kevin Chiang from CIBC. Please go ahead. Your line is now open. Morning, Kevin. Good morning, everybody. Thank you for taking my question. you know, maybe to start off with, lot of good details on some of the moving parts on the employee expense line, you know, you talked about the OT, the training and the use of temporary employees. If I could... If I look at, if I maybe just crew cost as a percentage of revenue extra charge, you know, you're tracking around 12%+ in 2022. You know, you know, sub 10% in 2019. Do you see an opportunity to throttle that line item to maybe back where you saw in 2019 from an intensity perspective or is that cost, you know, just structurally higher here as a% of revenue, just given the growth profile of the company over the past couple of years here? Thanks, Kevin. That's exactly what we did during planning season, is we benchmarked back to 2019, because that's when our primary focus was cost controls just before that massive growth where we doubled the size of the company in a short period of time. T hat's exactly the plan here. Obviously, there's been some inflation since then, but with critical mass, with the size, with the new simulator in Hamilton to reduce training, all this stuff's gonna get us back to our roots where... We've always said it. I think on every call I've been on with Jamie, he talks about how we manage our cost per block hour. We manage everything to the minute. That's exactly what we're describing here, is really getting back to our roots and what we demonstrated in all those years leading up to 2019. Kevin, let me add something more to it, that 1 thing that changed in 2020 was the duty regulations by Transport Canada. That part of it, you know, we wouldn't be able to overcome because that's what the government is and the duty regulations are. However, we have our own SIM now, which saves us travel days, training outside hotels, you know, airfares, all that. You know, we're trying to find how do we make up for those extra costs for the duty regs, and we are constantly focused on that. Our training costs will come down, our other costs will come down, and we want to get closer to the 2019 levels. 1 thing that we will not be able to do is there will be some costs that won't be able to cut, which is the new duty regulation. We are trying to offset with other types of savings. No, that's a great reminder and great additional color. Maybe just more of a housekeeping question. Again, just on the employee expense line or the employee line. The headcount number was up pretty significantly sequentially from Q4 versus Q3. And just when you report that headcount number, would that include temporary employees, you know, some of that variable labor you might be able to pull on, or is that just full-time employees? And if it is the former, are you able to quantify how many temporary employees you would have used during peak season of Q4 or of 2022? That excludes our temporary employees. What you saw there was some flexing up for peak with part-time employees. There's a little bit of noise there in terms of they're not exactly a full-time equivalent. Okay. That's helpful. That's it for me. Thank you very much. Thanks. Thank you. The next question is from Chris Murray from ATB Capital Markets. Please go ahead. Your line is now open. T hanks, folks. Maybe turning back to some of the newer contract wins with Canada Post. Just, you know, if you go back a couple calls, we had talked a little bit about, you know, maybe having to adjust pricing or things like that. Can you walk us through, you know, how the structure of those contracts look, and if there were any major changes from how they were, how they were designed, the last time you signed them? You know, some of that information, Chris, you can appreciate are confidential. We're bound by the confidentiality with the customer, and we also don't want to get into too much contract stuff, especially with, you know, a lot of competitors trying to get into the business, which is kind of tough because we have them locked up, but we don't like to release a lot of confidential information. The contracts were done 7, 8 years ago. The market has changed a lot. You know, our financial profile has changed somewhat as well, and I think we want our customers to grow. 1 thing I can tell you is that there are enough growth incentives for the customers to take advantage of the unused space and grow in those areas. That would be the basic difference that I'm able to tell you or share with you, is that we have created some value-added features into our customer contract that, you know, some of the growth could be at a lesser of a price for them to go sell areas that they normally don't look at. For example, there might not be, you know, stuff being sold from Winnipeg to Vancouver, for example. They've never looked at it as they would always be selling Hamilton, Vancouver. We have said, "Look, we have some space from there, and why don't you go look in the market and see if we can get more business." You might say, "Okay, are you getting a discounted growth?" Yes, we're getting a discounted growth, but that's coming in areas that are not being used. Overall it'll be net positive. Those are some of the things that we have offered our customers some incentive to go out and develop more business on areas that we could use as filler space as well. Okay, that's helpful. Just thinking about the fleet, if I kinda compare the Q3 fleet plan to Q4, the number of 757 seems to have stepped up a little bit more. I think you've got 4 additional aircraft coming early in 2023. Can you talk a little bit about your ability to use the 757 in the domestic market and your ability to use that aircraft to flex down if you need to, so if we do get some softness. Would the 767s in the domestic market then, would they just turn into maintenance spares, or is the plan still to find something profitable or to do with those even in this climate? Chris, one of the things we never had the luxury in the past 3 years to have maintenance spare, operational spares, hot spares, as our customers had asked, because there were no aircraft available in up to 2022. The 757 and the 767 gives us flexibility now to have a spare of each kind to maintain our service levels. It also gives us a maintenance spare for, you know, when the planes go into C checks, but also the flexibility of monitoring our network on a daily basis, almost that if you only have 80,000 pounds going to 1 station, we can put the 757 on and save a lot of operating costs rather than putting a 767 on. Similarly, if the volumes are more 1 day, we can switch it to a 767. A combination of that strategy will help our overall cost structure to be better. Also keep in mind that, you know, with the growth we saw in the past couple of years, especially in even in the domestic market, we were very, you know, focused on in terms of having the right number of aircraft flying for our network and leaving us at 757s and 767s for charter work. There is a lot of opportunity for those. Yes, we did buy some extra 757s, but most of them are doing the network or acting as spares or, so, our domestic fleet is fully pretty well deployed except 2 767's, which we feel, you know, one of them is being leased now by our partner in the U.S., at 21 Air, because they needed that aircraft, so we had the flexibility to place one of our 767-300 there. I think, we are also in discussions with many other clients to place the next one. There is a couple of spare aircraft that we have more than what we need, but we are confident that those particular aircraft will be placed in the next coming months. Okay. That's helpful. Thank you. Thank you. The next question is from Walter Spracklen from RBC. Please go ahead. Your line is now open. Hi, everyone, and good morning. This is James McGarragle. I'm on for Walter this morning. Okay. Good morning, James. Hi. Good morning. I just have a quick housekeeping question to start on the fleet expansion. I know you spoke to the 777s earlier on the call. I just wanna clarify that right now the only planes that are not contracted with DHL are 3 767s, and that you have the option to cancel 2 of those. Do I have that correct? Yes. Perfect. I know, my other question was on DHL. I know they announced an increase to the South American investment and that cargo, which got a new route from that as well, so congrats on that. You know, it seems like DHL is investing heavily for future growth despite some, you know, immediate term volume headwinds. Is this kinda consistent with what you're seeing from your other large customers? How are they talking to you about their capacity needs longer term? Are they still bullish on the e-commerce outlook into 2024 and 2025 just given some of the recent headwinds we're seeing? Let's take the e-commerce element first. Yes, the e-commerce people are bullish, but as I had mentioned in the call earlier, they're not bullish with the hockey stick growth. They're more looking at, you know, anywhere between 5% and 10% type of growth going forward. That's what our customers tell us. That's number 1. Number 2, is DHL investing in spite of all the, you know, rhetoric out there about recession and everything. Let me say this to you. DHL or any international carrier, whether it's UPS, FedEx, their business, and again, I don't get into the business from what I can see and what I can tell and what I've been told is the biggest issue or driver for them has been the China business. If everybody's down 37%-44% on the China lane because of China's no COVID policy, the factories were closed, the trade relationships have been bad, that has been the major problem for all companies like DHL, is the China business. Europe has remained strong. Mexico, South America remain strong. If China does not improve, obviously it's a problem globally that everybody would face. I'm sure you have seen articles come out in various publications about empty ships and empty planes out of China. That is the major problem. 1 area is dragging pretty well the whole world on shipping. The good part is that a lot of companies are now shifting focus from China and going to, for example, India. You know, their iPhones are being made in India now. Glove business is moving from China to Vietnam. you know, robes are being made in Thailand now. There is a lot of shift of industrial stuff that was made in China to reduce the dependence on China to other countries. When these things start functioning well, it will take some time to adjust, but, you know, it'll settle down that China will maintain some, but they would certainly lose some shipping to other countries. That is the major culprit in this whole exercise as far as the shipping is concerned. It's not a global phenomena. Yes, people bought less in December on e-commerce because people were too busy spending their disposable income on travel because that's where you saw the big money was being sent, or restaurant or resorts, because people were locked up for 3 years. People were stocked up for 3 years and locked up for 3 years. That's why we saw the decline in December. Our customers still feel that, as for the e-commerce side of it'll come back up. As far as the ACMI side of the trade is concerned, yes, until the China things improve, it will be a bit lower. As I said, alternate markets are coming up, and there will be shipping, if not from China, from somewhere else. I appreciate the color, and I'll turn the line over. Thank you. Thanks, James. Thank you. The next question is from Tim James from TD Securities. Please go ahead. Your line is now open. Morning, Tim. Good morning, everyone. Thank you very much for the time. My 1st question, I just wanna look at the Return on Invested Capital. I'm wondering if you can talk about how you see that trending in 2023 and then maybe in the 2 or 3 -year period beyond that, relative to what you reported for the full year 2022. Tim, Sanjeev here. We still expect that in 2023 it will be in the teen, low-teen to mid-teen range. We expect that as our ACMI business will grow, our return should grow along with it. It all depends on economic environment, when that growth will happen. We will be able to maintain this Return on Invested Capital, what we have reported in the current quarter. Between 13%-16%. Okay. Thank you. My 2nd question. Thinking about the market environment going forward over the next couple of years, should we kind of view the general global environment when thinking about how likely you would be to use those conversion slots that you've maintained? Could there be sort of unique opportunities that maybe go against the general, you know, headwinds that we see in the global air cargo market that maybe provide you with what you need to say, "Hey, let's go ahead and take up and use those conversion slots? Let me put it to you this. Those conversion slots can also be sold, transferred, and, you know, deferred. We're not married to saying that we are gonna use them. We'll use them only as we've always done is. You know, in this case, we had 8 of them coming, 777s, and 4 were sort of committed and 4 were for our growth. You know, being sort of on a cautious side and maintaining flexibility, we were able to, you know, sell the 4 and maintain the slots. For greater. If we find that the market is not maturing, there's enough people lined up to get conversion slots because we have the early 2024, 2025 conversion slots. There's quite a bit of demand for those conversion slots. We would be happy to either sell them if the market didn't mature, or we could convert the plane and sell the plane or dry lease the plane. You know, fly commercially or do an ACMI. There's a lot of options. I think what we have seen in this market is if I had these 777' s in a, in the COVID environment, 2021, 2022, we would be looking at, you know, $500 million of EBITDA today. In our organization, we don't wanna lose the flexibility of ramping up with a very little cost associated with it, and that's the model we have created. Okay. That's helpful. My final question, you've provided some good, you know, pieces of information on the DHL business and the opportunities there. I'm wondering if you can sort of reflect on their behavior, like, in terms of routes and capacity and the supplier group that they have. You know, anything you've learned now that we've seen kind of a turn or a weakening in demand. Has their kind of use of your fleet, of your capabilities kind of aligned with what you anticipated? Have you sort of learned anything or any general observations you could provide to us there? Jamie, you wanna take that? Thanks, Tim. I think it's been exactly what we've been articulating for the last couple of years. Obviously, our relationship, we have, you know, we have an operating agreement, 5-year operating agreement with DHL, which is unique. Nobody else has that type of ACMI agreement in the world. We obviously are the, if not number 1, if not number 1 or number 2 in terms of on-time performance and reliability, which has enabled DHL to enhance its service level to its customers around the world. Of course, we have a financial agreement with the warrant deal that we have, so there's an incentive for them to reach certain revenue milestones. We've seen exactly what we had been articulating for the last couple of years. There were some changes in the ACMI DHL flying in 2022 that I alluded to earlier, where we switched some routes, or they switched some routes that were operating for most of the year out of North America into Shanghai, China. When that demand dried up, those routes were switched, and we kept the aircraft on other routes into Central and South America. In actuality, one of the routes we actually replaced an American carrier that was flying there. That was what we anticipated and had articulated to the market that we would expect, and it's what we would continue to expect in 2023 and 2024 as we go forward. Great. Thank you very much, Jamie. Thank you. Once again, please press * 1 on your device's keypad if you have a question. The next question is from Stephen Trent from Raymond James. Please go ahead. Your line is now open. Good morning, everyone. Thank you. Thanks for the time. I'm gonna stay on the macro theme that Tim was touching on here a moment ago. I think as you suggested, the mainline carriers have been bringing on their own dedicated cargo aircraft of late, but you've been, you know, quite successful at extending all of your ACMI contracts with your big partners here. I'm just trying to wrestle between those 2 dynamics and hoping you could speak to some of the supply side dynamics in terms of future capacity coming from those other carriers and whether that impacts your ability to deploy new aircraft or not at all. Thanks. Jamie? Okay. I think, just to clarify, you're specifically talking about other domestic cargo operators like Air Canada and WestJet. If so, I mean, on the, WestJet hasn't even started operating for 737. They're still parked in Calgary. I think they've intended to, or proposed an intended domestic schedule, which really doesn't match up, doesn't compete at all with our, from what we've seen from our domestic overnight network. Really, you know, part of the reason that we extended and renewed the agreements with our major customers was to alleviate that competitive question that people had. In terms of Air Canada, I mean, they're operating 767s, but as we've, as we've noted before, you know, and where we see those aircraft flying are primarily, not primarily, they're exclusively on international routes where Air Canada Cargo had strong belly cargo capacity and demands pre-COVID, where they continued to support those belly cargo, historical belly cargo customers, during COVID, flying passenger aircraft without passenger. Then those routes that had a good example would be from Bogota, Colombia, to Toronto, connecting to their international network, where now as passenger travel has been reinstated, it's reinstated with more narrow-body aircraft that don't have the cargo, belly cargo carrying capabilities that the aircraft that we're operating on that route pre-COVID. They use that to compensate and ensure that the cargo demand that they have. Again, those aren't markets that we compete in. We're very confident in, obviously, our domestic and our ACMI business and our capability of competing on a reliability level. We have a 20-year+ track record to stand on. It really is the demand environment that is critical in terms of deploying the aircraft going forward, nothing to do with the supply side, as you see it. Correct. Very helpful. Thank you. Thank you. The next question is from Fadi Shamoun from BMO Capital Markets. Please go ahead. Your line is now open. Hi, this is Michael Goldie on for Fadi. How is Q1 '23 tracking so far, both in the domestic network and ACMI? Is softness extending from December, or is there some sort of improvement? Jamie? Yes. Morning, Michael. No. Excuse me. I think the certainly the peak period in the, in, as AJ was alluding to earlier, you know, when somebody you- of a unique peak period for us, it was very strong in October, November, and then we just saw after US Thanksgiving, you know, some deterioration in demand that impacted us in December, which, you know, historically December is usually the heaviest month. I think that plateaued in December and what we've seen in January and February so far on the domestic side is a little bit flat, a little low digit, as we commented earlier, low single digit year-over-year revenue growth. The ACMI business is still up because of the nature, very fact of the 3 additional routes that I noted before, that we started for DHL in 2022, that will get the full annualized impact in 2023. Although on a macro level, maybe on lower block hours, still well above the minimum, just because of the nature of the routes that we started flying those aircraft versus what we may have been flying them in 2022. Okay. How is the charter market looking right now? I think you're able to get more than expected revenues there in the Q4. Is that continuing into the new year or coming out of peak charter opportunities or are a bit lighter now? No, demand for charters has remained very strong. We took advantage of the opportunity in Q4 because of, particularly in the month of December, where again, historically, because of the peak season, capacity demands for the domestic network and for the ACMI network, we actually historically always embargoed ad hoc charters during the month of the latter part of November and December because we typically need those aircraft and crews to support the peak volume needs of our domestic and ACMI business. When we saw that softening, we freed up aircraft and crews, and we took on additional charter business, ad hoc charter business in the month of November and December, significantly higher than the year than we would normally have in Q4. We're seeing that trend continue into January and February, and we're gonna take advantage of that opportunity by freeing up additional aircraft. As AJ said, we're bringing aircraft into the fleet to replace our operational D Check and hot spare, but we'll also designate aircraft and have more flexibility to designate aircraft as dedicated to charters going this year. The demand is, for at least for the 1st month and a half has stayed very strong. Okay, perfect. Thank you very much, guys. I mean, keep in mind, in 2022, we had lots of in January, February, we had a lot of PPE and China charters because people were running out of masks and others. Sorry? You know, we don't have that kind of charters today where supplies for COVID are still being carried. You know, there would be some differential. But as the market generally goes for charters without the COVID impact, we're seeing, quite a few charters going on. Good. Thank you. There are no further question registered at this time. I would like to turn back the meeting over to the moderators. Thank you, everyone. Appreciate you joining us for today's call. Have a good week. Thank you. The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.