Welcome to the second quarter 2021 Air Transport Services Group, Inc earnings conference call. My name is Vanessa, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Please note that this conference is being recorded. I will now turn the call over to Mr. Joe Payne, Chief Legal Officer. Sir, you may begin. Good morning, and welcome to our second quarter 2021 earnings conference call. We issued our earnings release yesterday after the market closed. It's on our website, atsginc.com. Let me begin by advising you that during the course of this call, we will make projections and other forward-looking statements that involve risks and uncertainties. Our actual results and other future events may differ materially from those we describe here. These forward-looking statements are based on information, plans, and estimates as of the date of this call. Air Transport Services Group undertakes no obligation to update any forward-looking statements to reflect changes in underlying assumptions, factors, new information, or other changes. These factors include, but are not limited to, the following, which relate to the current COVID-19 pandemic and related economic downturn. The pandemic may continue for a longer period, or its effect on commercial and military passenger flying may be more substantial than we currently expect. It may also disrupt our workforce and staffing capability, our ability to access airports and maintenance facilities, our customers' creditworthiness, and the continuing ability of our vendors and third-party service providers to maintain customary service levels. Other factors could also impact the market demand for our assets and services. These include our operating airlines' ability to maintain on-time service and control costs, the cost and timing with respect to which we are able to purchase and modify aircraft to a cargo configuration, fluctuations in ATSG's traded share price and in interest rates, which may result in mark-to-market charges on certain financial instruments, the number, timing, and scheduled routes of our aircraft deployments to customers, our ability to remain in compliance with key agreements with customers, lenders, and government agencies, changes in general economic and/or industry-specific conditions, and other factors as contained from time to time in our filings with the SEC, including the Form 10-Q we will file on Monday. We will also refer to non-GAAP financial measures from continuing operations, including adjusted earnings, adjusted earnings per share, adjusted pre-tax earnings, and adjusted EBITDA. Management believes these metrics are useful to investors in assessing ATSG's financial position and results. These non-GAAP measures are not meant to be a substitute for our GAAP financials, and we advise you to refer to the reconciliations to GAAP measures which are included in our earnings release and on our website. Now I'll turn the call over to Rich Corrado, our President and CEO, for his opening comments. Thanks, Joe, and welcome everyone. I think it's fair to say that ATSG made significant progress during the second quarter this year. Our businesses across the board improved from the first quarter. Our adjusted earnings and EBITDA exceeded our own targets and many of yours. We leased three more Boeing 767-300 freighters to external customers in the quarter on top of the five we added in the first quarter. That's halfway to our 2021 goal of at least 16 new leases this year. Seven of the 11 767s we promised to Amazon this year are now in the air, and we're flying one that Amazon owns itself and has assigned to us. Our airlines rang up 26% more cargo block hours during the quarter versus a year ago, and 11% more than in the first quarter. COVID-19 is still affecting our airlines passenger and Combi operations, but the effect on our recurring passenger operations is less than it was in the first quarter. We're ahead of the pace we set for achieving our 2021 guidance for adjusted EBITDA, which remains at least $525 million. We've assumed that the second half would be stronger than the first, and that's what we intend to deliver. I'll have more to say about our outlook shortly. Quint Turner, our CFO, is ready to review our second quarter numbers. Quint? Thanks, Rich, and welcome to everyone on the call this morning. On a consolidated basis, our revenues were up a solid 8% to $410 million in the second quarter. The principal factors were more leases and more air express flying, particularly for our customers Amazon and DHL. Our GAAP earnings of $80 million or $1.17 per share basic were strongly positive versus a year ago when a $110 million non-cash loss from revaluing warrant liabilities offset our positive operating results. We also recorded $30 million in second quarter after-tax benefits from federal pandemic relief assistance under the Payroll Support Program versus $8 million in the second quarter last year. Results for the second quarter last year also included a $39 million charge to write down aircraft asset values, primarily related to four 757 freighters that had been retired. Three of those four were sold in July. On an adjusted basis, our second quarter earnings were $4 million lower than a year ago at $28 million or $0.35 per share diluted, but they are up $15 million from the first quarter. The primary driver of the decline in adjusted earnings versus last year's second quarter was decreased passenger revenues from our airlines due to pandemic effects. Our adjusted earnings exclude, among other items, the effects of quarterly mark-to-market changes in the value of warrants and other financial instruments, as well as pandemic-related government grants to our airlines. The diluted share count used to calculate adjusted earnings per share for both the second quarter of 2021 and year-ago period reflect Amazon's decision to cash exercise warrants in May of this year. Interest expense decreased $1 million for the quarter. Rates on our credit facility balances and lower debt levels overall were principal factors. Depreciation and amortization expense increased $7 million for the quarter for more aircraft in service. Our adjusted EBITDA was $128 million, $2 million higher than a year ago. That is also up a solid $22 million from the first quarter. On a segment basis, our aircraft leasing business, CAM, performed very well. CAM's pre-tax earnings increased 15% for the quarter to $23 million. CAM owned 56 Boeing 767-300 freighter aircraft in service as of June 30, up from 40 a year earlier. CAM completed the modification of two feedstock 767s to freighters during the quarter. CAM bought eight 767-300 feedstock aircraft for conversion during the quarter. That brought the total 767 purchases to 12 for the first half. Because of continued strong leasing demand, CAM now expects to acquire five more 767s in the second half, along with its first Airbus A321-200. Revenues for our ACMI Services segment, which includes our two cargo airlines and Omni Air, our passenger airline, decreased $14 million during the second quarter to $273 million. We had a surge of charter demand at Omni last year when the pandemic shut down scheduled carriers. Those higher margin flights drove strong results for Omni in the second and third quarter a year ago. Since then, passenger charter opportunities have declined, but military flying has rebounded from the first quarter. Billable block hours were up 12% overall. On a GAAP basis, pre-tax earnings for ACMI Services totaled $45 million during the second quarter, up from $30 million a year ago. Excluding federal grants realized in each period, earnings were $6 million, down $13 million. On a sequential basis, ACMI Services earnings excluding grants improved by $13 million from our first quarter results due principally to additional flying for express package networks. Omni Air has received $83 million in federal payroll support payments this year. These funds require Omni to refrain from involuntary furloughs of its flight crews and other personnel at least through this September. Our earnings on the other activities line were $3 million, a sharp improvement from a year ago, and were driven by more fuel sales and gateway services. Additionally, maintenance operations for external customers were positive for the quarter. As we said in our release, the combination of our add-on notes offering, bank credit, facility amendment, and cash from Amazon's warrant exercise strengthened an already strong balance sheet during the quarter. We were able to pay off our $615 million term loan balance early while also increasing our revolver capacity. These changes give us significant access to capital going forward, maximize flexibility by reducing secured debt, and extend our maturities at favorable long-term fixed rates. We ended the quarter with a total debt to trailing EBITDA leverage ratio of 2.4 times under our credit agreement. With that summary of our financial and operating results for the quarter, I'll turn it back to Rich for some comments on our outlook. Rich? Thanks, Quint. ATSG's business, as we like to say, begins with the aircraft lease. It's the foundation for everything that comes after and the source of our incredible power to generate long-term cash flows. Demand for our leased midsize freighter 767s continues to be very strong, as reflected by CAM's 18% revenue growth and growing lease order backlog. The pandemic continues to affect passenger travel, so we're fortunate that the vast majority of our cash flows stem from the cargo side. Our cargo airlines performed especially well in the second quarter, generating good growth from busier schedules and expansion of some transatlantic routes for DHL. We expect our ACMI Services segment to continue to improve during the second half. That improvement will continue to depend on the restoration of revenue streams that the pandemic has curtailed, but also operating efficiencies at our airlines. As we issued guidance of at least $525 million for adjusted EBITDA this year, we noted that our plan called for us to generate approximately 43% or about $225 million of the total in the first half. We ended the half a bit better than that. Our strong second quarter leaves me increasingly confident that we can exceed our own expectations. In the meantime, our freighter leasing and flight operations for air express networks are growing at double-digit rates. We're on track with our aggressive schedule to lease at least 16 767-300 freighters this year, and at least 10 have already been specifically assigned to customers in 2022, including the multi-aircraft lease deployments to Amerijet, Star Air in Europe, and MasAir in Mexico, and the last of a four-aircraft lease order from DHL. Separately, we're also deploying three returned 767-200 freighters this year under five-year leases to Raya Airways, Star Air, and SkyTaxi. We're currently stacked with orders for customers who want to lease freighters from us as soon as we can get them. That's why we've decided to accelerate the expansion of our footprint in the dedicated cargo aircraft market, first and foremost, by acquiring more 767 feedstock to supply customers with freighters next year, but also by expanding into additional freighter types. We have accelerated our plans for CAM to add its first Airbus A321 freighter to its lease portfolio with lease deployments next year of at least three aircraft. When available for lease, our A321 will offer a large standard payload along with an operator-friendly design and will be equipped with engines that deliver fuel efficiency comparable to the most popular Boeing 737 models. We have agreed to purchase our first three A321 aircraft, one this year and two in 2022, put them through the conversion process at our Pemco facilities in Tampa, and then make them available for lease next year. We're also pursuing additional A321s for purchase next year. At the same time, we are making plans to extend our leadership position as the world's largest lessor of midsize freighter aircraft by adding another platform for growth, one that will have operational synergies with the A321. We recently acquired rights to 20 Airbus A330 conversion slots from Germany's EFW for aircraft that would begin conversion between mid-2023 through the end of 2025. While the 767-300 will remain our primary midsize freighter growth engine for many years to come, we also see the A330 as an attractive platform with customer appeal and fleet synergies with the A321. We don't anticipate investing in A330 feedstock until 2023. We believe securing conversion slots to be a wise investment, allowing us to continue to grow a leasing portfolio at attractive return targets while diversifying our lease options to customers. In fact, across three different aircraft types, we currently have rights to 67 freighter conversion slots with induction dates starting in 2022 through the end of 2025. As you can see, we remain bullish on future opportunities in our cargo leasing space. With our devotion to service quality and expanding scope of service offerings, we anticipate CAM and our cargo airlines to remain the principal source for the midsize freighter capacity and flight support that our customers will require for the e-commerce-driven networks. That concludes our prepared remarks. Quint and I, along with Mike Berger, our Chief Commercial Officer, are ready to answer questions. May we have the first question, operator? Yes, of course. As a reminder, if you have a question, you can enter the queue by pressing star then one on your touch-tone phone. We have our first question from Jack Atkins with Stephens. Please go ahead, sir. Okay, great. Good morning, and congratulations on a great quarter. Thanks, Jack. Morning, Jack. Thanks, Jack. I guess, you know, Rich or Quint, if we could go back just to the guidance for a moment. You know, the at least $525 million in EBITDA for this year. You know, Rich, as you noted, you know, you're running ahead of plan through the first half of the year. What's preventing you from maybe raising that floor, as we sort of think about the full year? Is it just some uncertainty around, you know, the pace of recovery with military flying, just given, you know, the Delta variant ramping up? Or sort of could you walk us through that kind of thought process? Yeah, I think, Jack, you know, we built some efficiencies and some already anticipated customer business coming back. A good example is one of our best customers, Vacations Hawaii, is scheduled to start flying again in September, and they've been selling tickets, and they're ready to ramp up their business again. That's planned to start in September. That's part of our guidance. When we look at that business as we sit here today, it's scheduled to go, but you know, the Delta variant is you know, apparently still growing around the country. We felt that given you know, some of the still uncertainty around the pandemic, that it was more prudent. We're real confident we're gonna hit our $525 million, at least $525 million guidance number, but we thought it would be more prudent to not change guidance at this time. We will revisit that in next quarter's call to see if it makes sense to do, given what we'll know then about the pandemic. Yeah. Okay. Jack, you know, part of that, of course, is also military passenger flying. Sure. At least, you know, to the current date, you know, subsequent to second quarter, it's continued to be, you know, good. You know, we're optimistic, as you say, that we, you know, will finish above the $525 million. As Rich says, you know, you still got, you know, the Delta variant uncertainty that kind of keeps us from being able to give a more precise number at this time. No, that makes sense, and I think everyone understands that. Just thanks for the color on that. I guess kind of shifting gears, you know, with the commentary around the 67 rights to 67 conversion slots that you talked about a moment ago and was disclosed in the release last night. You know, as you think about, you know, matching those 67 with customer indications of interest, how many of those 67 conversion slots would you say, you know, you feel pretty comfortable are spoken for at this point? Is there kind of a way to quantify that? Well, I think we've got great visibility for 2022 into 2023, where we're real confident everything that comes out of conversion and paint will go right into lease. Okay. When you get out to 2024, you know, we've got folks that are talking to us and want airplanes during that time, but we're not into, you know, LOIs or anything like that given that far out. The new platforms, we've got excellent interest in them. It's, you know, one of the reasons that we wanted to talk about it, that we've got strong interest in those. Still, our you know, the 767 remains our flagship backbone. We've got commitments on all of our aircraft coming out in 2022, as well as you know, 2023 is significantly done as well. It's, you know, when you look at years past, you know, we wouldn't be able to say we've got, you know, one to two years out locked up as far as, you know, customers looking for airplanes. It's certainly a different market today, which is great. We're looking to capitalize on that. We believe that what's fueling it is, you know, the e-commerce growth around the world. If you look at the market penetration of e-commerce, it's still small, you know, into general retail. That growth will continue to happen and continue to expand that market. There are parts of the market that are in their infancy. One is cross-border e-commerce, and that's one where barriers are being worked on to come down. You know, things like banking to do cross-border transactions, customs clearance to do cross-border transactions are still a little clunky. So as those barriers come down, that'll, you know, accelerate the cross-border side of that. Of course, cross-border generally means airplanes. Remember too, Jack, that the CapEx, you know, for a significant amount of those slots will be committed to at a later date, you know, as we get even more precise visibility on specific demand. Sure. Certainly, securing the slots based on, you know, having an order visibility that's really good into 2023, I think is a good decision. Mike? Yeah, just to maybe give you a little bit more detail around what Rich was referring to and why we're so bullish on the growth piece of it. When you look at the e-commerce and m-commerce too, you look at a country like India, for example, less than 7% of their total retail sales is e-commerce, and they had 25% growth last year. Latin America had 63%, but yet it was still only 4.7% of their overall retail sales. If you think about where our customers are and where we've looked to incrementally grow our existing customers, as well as new customers, when you start thinking about Asia, Southeast Asia, East Asia, and certainly Mexico and Latin and Central America, where not only we've developed new customers, but we also have existing customers, that's why we're very prudent as we look out to 2024 and 2025. Rich mentioned that, you know, our order book for 2022 is full, and we're almost full for 2023. We're real confident that 2024 and 2025 will continue, especially when we see what the, where the volume and the engine is, and as we continue to be an enabler for e-commerce throughout the world. Okay. Fantastic. Last question, and I'll turn it over. I believe part of your DHL contract comes up for renewal next year, especially around some of those 767-200 s. You know, where are you in discussions, you know, around an extension there? Anything you could share about it? I know you're probably hesitant to talk about a specific customer, but, you know, I think that is an area of interest for investors. I would imagine given the demand for aircraft in the market right now, it should be a fairly favorable conversation, but we'll just be curious if you could update us on that. Well, I can address you know, maybe the return piece of it. We have taken our two 767-200s back already from DHL in the Middle East. You heard in Rich's comments that we redeployed those. We'll have those out on lease, one for SkyTaxi, which will be delivered actually this week on a five-year lease. The second one is right behind that in terms of going under a C check, that will go out to Raya, that's completely under agreement. Those first 2 returns that came back from DHL in the Middle East will go right back into service on 5-year leases. In regards to the upcoming agreements that are coming up for renewal in April 2022, we're very confident at this point that we'll see renewals on both the aircraft side as well as the CMI side. In fact, we believe, Jack, that we'll be expanding the operating side of the equation with DHL in the United States. If you recall, ABX Air was our main airline that flies for DHL in the U.S. We got the CBA contract with the pilots done in December to be effective in January. That's really, you know, done a lot to give us growth opportunities for that airline. As we're, you know, working with DHL and going through both the extension of the leases in the U.S. and the extension of the operating agreement in the U.S., it's really been beneficial to us. We're looking forward to getting that done and expanded this year. Hopefully, we'll announce it by the end of this year. Okay, fantastic. That's great news. Thanks for the time, guys. Thank you. Yeah. Thanks, Jack. We have our next question from Frank Galanti with Stifel. Great. Thank you very much for taking my question. Morning, Frank. Morning. Morning. I guess I wanted to follow up on Jack's question on the 67 slots. Can you just give a sense for the financial obligations for taking those slots, and then kind of how fixed they are, should there be kind of a weaker demand in those kind of out years? There's a deposit, you know, because, you know, naturally you're tying up the conversion house, you know, from marketing that slot, and they're trying to make plans in advance. There's a deposit. It's a relatively, you know, it's not a material deposit in relationship to the into service cost of the asset. That is the amount that would be, I guess, at risk if somehow you didn't fill the slot. Of course, there would be an opportunity to move the slot to another supplier or another converter if you needed to. I think it's a confidence statement, you know, about where we see the market demand over the long term. With the additional platforms we'll have on top of the 767, we feel very comfortable that it's a, you know, it's a prudent commitment to make. Okay. No, that's really helpful. Kind of switching gears a little bit to the Omni business. Excuse me. Can you give a sense of geographic mix for that business and what I guess how those are faring generally? Is there a way to kind of quantify what Omni was generating from like an EBITDA earnings perspective pre-pandemic and kind of what is the run rate of that business relative to that? Yeah. We don't disclose, you know, other than our reportable segments, you know, which of course, Omni's in the ACMI Services segment. We don't break down individual entities, you know, in terms of their profitability, Frank. The reason we don't is because, you know, they have some customer concentration within their book of business. We don't, you know, necessarily want to talk specifically for commercial reasons about, you know, the individual subsidiaries. You know, I can tell you that in terms of the passenger hours operated, you know, we saw certainly significant improvement in the second quarter. You know, all of our pax flying, and that would include not only Omni, but the Combi, you know, the 757 Combi that ATI operates. On an hours flown basis, those were up 17% over our, you know, first quarter level, which you know. Now to give you a sense of where we stand, you know, through the first half, you know, we're looking at down 8% versus the prior year, still in the quarter. You know, versus the prior first half, we were off 28% in terms of total passenger hours. You can see, you know, the big drop was in the first quarter. Second quarter, recovering, you know, up 17% over the first quarter run rate. Of course, we're expecting continued improvement as we move through the second half in our passenger operations. Okay, great. One last one, if I could. Just trying to back into kind of a core free cash flow number from keeping the planes in the air and the business running. Can you give kind of an estimate for a maintenance CapEx number at the current fleet size, and then maybe a way to think about that as the fleet grows over time? Yeah. If you think about maintenance CapEx in terms of this year's guidance, you know, we're guiding it. As you know, we adjusted our total CapEx estimate up to around $550 million. You're probably looking at around, you know, $160 million or so of that as maintenance CapEx. That, you know, includes required heavy maintenance on the airplanes. It includes, you know, things like engine overhauls to support the fleet. As we grow the fleet, we don't expect the maintenance CapEx to grow significantly. The reason for that is because with our business model, you know, the lessee maintains the asset during the life of the lease. Typically, it is returned, you know, in a like for like sort of maintenance condition as it was at the start of the lease. That transfers that responsibility to the lessee under the lease. Our, you know, our maintenance CapEx we have is a lot of it tied to aircraft that we lease internally to our affiliate airlines, you know, and those assets are used to support the CMI flying and so forth. That's not growing, you know, as rapidly as the external lease deployments that CAM is making, which is what, you know, we're spending the majority of our CapEx on. Great. That's really helpful. Thank you very much for taking my questions. All right, Frank. Thank you. We have our next question from Stephanie Moore with Truist Securities. Your line is open. Hi. Good morning. Thank you for the question. Good morning. Good morning. Good morning, Stephanie. You know, I was hoping you could talk a little bit about the A330s. You know, I'd love to get your thoughts in terms of potential customers for those planes. I think we've talked in the past, the A321s are a nice replacements for the 757s, and that represents a large, really addressable market for conversion or replacement over time. Would love to hear, you know, your thoughts on the A330s as maybe as well as some of the economics and how it compares to the A321s or the 767s. Thanks. That's a great question, Stephanie. Thank you for asking it. Couple of things. You know, we've been looking at the A330 for a few years, and one of the things about the A330, there's two variants, the A330-200 and an A330-300, that have conversion opportunities for them. The 200 is about the same size as a 767-300. It's a little bit more expensive for feedstock, and it's got some higher operating costs because it's a heavier airplane. It's got great range, but it's not something you need in an express environment. The A330-300 is slightly bigger than the 767-300. It's got about a 20% higher cube, and about an 8%-10% higher weight carrying capability. In the express environment, where these mid-range freighters, mid-size medium wide-body freighters tend to be a solution for cube is much more important than weight. So the A330-300 looks to be a real solid solution for the same customers that the 767 is providing service for today. It's a newer generation aircraft, so I think it came out in 1996, you know, mid-1990s. You know, the 767 came out in the early 1980s. When you look at feedstock capability going into the future, into the next decade, there'll be more prevalent feedstock coming available, as the 767 over the next decade starts to wind down. We look at it as both a replacement, and then it also has you know a little bit higher cube for line haul operations, so going from country to country. As far as customers go, we've got three customers that are already engaged in the airplane. DHL I think is one of the largest users in the world of A330 freighters. Hopefully they'll be a customer of ours in the future. We've got other customers that we're talking to about the aircraft. Now, one of the other significant events that's occurred as a result of the pandemic is feedstock values for the A330 have come down significantly. It depends on which appraiser you listen to, but pretty much the two or three that I've read is in the 25% range. That was one of the key things that when we looked at the plane, it was more expensive and therefore the you know the total cost of ownership and operating was higher than what the 767 could deliver. We thought at the time that it was gonna be a good solution in the future when the economics made sense and with the feedstock coming down going forward, with the newer generation basis of the airplane, that we think it's gonna be a solution that's gonna be a long-term solution in the medium wide body segment. Yeah, Rich, the only thing maybe I'd give you a little bit more detail. There's a couple hundred airplanes that are in the prime age area that you talked about, from 13-25, that represent very good opportunities to be converted into freighters. The other reason we really like the 330 is that Omni can potentially expand into the large category to operate for the DoD, which is something that we don't have the ability to do today. We're excited about that potential opportunity with our Omni organization, as well as all the other customers that Rich referenced prior as well. Yeah, we do have the triple sevens with Omni today, but Mike's, I think, Sorry. What you're saying, Mike, is that this would be added to the large clients, right? Added to it. Yeah, Added to it. Yeah, sorry. The last thing obviously is, it's a great synergy with our A321, so we'd have a, you know, kind of a multiple aircraft solution for the same customers that we have today in the fleet for the 767-300. The A330 and the A321 have a common cockpit. What that means is small differences in training that need to be done to move a pilot between the A321 and the A330, you know, much smaller than having to go get a full new type rating for a different aircraft type. It's a smaller effort, and so there's some significant crew savings and the synergy with that. Thinking like an airline, even though we're a leasing company, we think it's a really good solution to add to the coming A321 and for the future of the medium widebody leadership that we hold. Got it. No, that's very helpful. I guess broadly speaking, you know, I'd love to hear your thoughts on really contract profitability and maybe ROIC pre versus post-pandemic, just given there's so much increased demand, increased e-commerce. Any color you can provide there would be helpful. Thank you. A couple of things. One is, lease rates have definitely hardened. You know, that plays out in a couple of different perspectives. When we're negotiating with new customers or for new airplanes for existing customers, you know, it's pretty much we've got a better negotiating position. The other thing is any lease that's coming on, that's coming due, most of them tend to be extended or we're flipping them right over once they get through a maintenance event to a new lessee because the demand is so significant. A lot of airlines that we lease to right now that have assets coming due between now and the end of next year are already talking to us about extending those. You know, it's folks that have capacity now don't want to let it go. The high demand is good for our, you know, our existing leases for extensions. The other piece of that is most of them are extending at existing lease rates, and we're actually in a position to get better lease rates. Usually, you know, on the leasing side, when you go through your second and third extension on a lease, you know, you start to, you know, the lease rate starts to go down a little bit. Now we're seeing them hold up on extensions. Great. Well, that's everything for me. Thank you. Thank you. As a reminder, if you have a question, you can enter the queue by pressing star then one. We'll take our next question from Chris Stathoulopoulos with Susquehanna. Please go ahead, sir. Good morning, everyone, and thanks for taking my question. Rich, Quint, it sounds like you have a fair, you know, degree of high confidence, if you will, in translating these 67 slots to actually putting the aircraft in service. As we think about potential EBITDA earnings through the recovery, is it fair to say that you have 120 aircraft, an active fleet at year-end? You know, could we see by 2025 north of a fleet of 180 aircraft in service? Then also thinking about the recovery, there's a lot of puts and takes here, right? Because eventually long-haul belly capacity is going to come back online at the same time your DoD and passenger utilization should go up. Could we do better through the recovery as we get towards 2025, assuming you fill out these slots here with actual aircraft? Could we do better than $5 million in annual EBITDA per aircraft over that period? Thanks. Yeah. I mean, you know, certainly, could we be above 180 in that time frame or somewhere in that zip code, Chris? Yes. We believe that's true. In terms of EBITDA contribution per tail, you know, we think of it more in terms of return on invested capital, right? We believe that as we build the fleet out, we will maintain the sort of attractive returns we get today, you know, on our dry lease investments, on our aircraft investments. As Rich described a minute ago, with the current demand environment, it's actually doing a good job of supporting higher lease rates. We hope to even add to that return on the asset investment. As you know, our business model provides an opportunity for incremental returns, you know, for building services around the lease. In our case, you know, it also depends, of course, on opportunities to provide other services to the lessee, you know, which may be as we do for DHL and Amazon, sort of the full range of services, or it could be some portion thereof, you know, like just the maintenance, et cetera. We certainly believe that our returns in this, you know, strong demand environment can improve over, you know, what we've seen historically. We're taking these steps because we think we'll certainly maintain or improve upon the returns on capital that we get, you know, for our leased assets already. Okay. Thank you. My second question. You know, the question I get a lot from investors lately is, you know, why the stock isn't working this year. It's down around 19% in what's a very constructive market for freighter demand because of all the, you know, competing belly capacities effectively sidelined. One of the areas in addition to folks asking about U.S. DoD contribution to EBITDA is, you know, why not participate in the charter market or short-term missions if there's an opportunity here to grab some rate, or perhaps just, I don't know if you can. I mean, you have such a full order book here if it's an issue of, you know, allocating a few assets here to shorter-term missions. It's just that if the consensus is that this long-haul international passenger travel is not coming back for 2023, it would seem rates are gonna stay high, and there could be an opportunity here to potentially over earn here through the recovery. Thanks. We've pretty much had a tenant that, you know, for a $30 million asset, it's a much better long-term commercial structure to get a 10-year, eight-year lease on that for the first lease and have that strong long-term cash flow than to put the aircraft on our own airline certificate and fly in a charter market. Now, the pandemic has obviously made the demand perspectives on that market different, but eventually that will come back in line. I will tell you, we have taken advantage of several charter opportunities. We put an airplane up for DHL between Hong Kong and Sydney last year. We've put two or three other international routes. We took airplanes that were flying in the domestic network and are still linking to their CVG domestic network, but are flying internationally to support their efforts. We have gotten, you know, more block hours related to that. We tend not to have excess capacity airplanes on our airline certificate other than what we need to cover our own maintenance or meet our commitments to the DoD on a cargo side. We just think long term, it's a better use of that asset to get the longer term consistent cash flows out of it versus, you know, putting it in a charter environment where we'll get You know, in this case, maybe we'd get a year and a half of robust usage, but then it, you know, we'd be back in a situation where we'd be getting intermittent usage on that, both from the crew deployment standpoint and the asset standpoint. Generally, in the past, when we've had situations like that, we've taken the airplane and leased it. We think that long term we've got the right strategy. Okay. If I could just get one more here. Then for the quarter, where were your utilization or block hours per aircraft day on the DoD and the any commercial flights? Thanks. Well, as I said, in terms of, you know, the majority of our DoD flying is passenger, and the Combi. The pax, all of our pax and our Combi flying were up 17% over the first quarter. That's still down about 8% over the prior year during the quarter, if that gives you a sense. For the first six months, those same stats are off 28%. That shows you the recovery in the second quarter relative to the first. A 17% improvement over the first quarter levels. Versus the prior year in the second quarter, we're down 8% in total pax flying. That includes a 17% sequential improvement over the first quarter. Okay. Thank you. We have no further questions in queue. I will now turn the call over to Mr. Rich Corrado for closing remarks. Thank you. Our latest commitments to convert and lease more mid-sized freighters over the next several years should make one thing perfectly clear. We expect e-commerce and other forces driving demand for our aircraft today will persist well into the future. Our employees at all levels believe that as well, and they have continued to deliver superior service during this time, and they're working together to extend our leadership in this key market. I am proud to lead them, and I'm confident that their hard work will yield superior rewards for those who choose to invest with us. Thank you, and stay safe. Thank you. Ladies and gentlemen, this concludes our conference. We thank you for your participation. You may now disconnect.