AerSale Corporation (NASDAQ:ASLE) Q2 2023 Earnings Call Transcript

Nicolas Finazzo: We haven’t provided specific margin profiles on the overall assets. What I can’t say is, if you look at — looking at the midpoint, the overall decrease, that is almost all attributable to the margins on those three overall assets. Without getting into specific margins on those specific assets. And then Martin, could you maybe, characterize for us, based on maybe the last couple of years, even what the base level of EBITDA is in the business X aircraft sales and engine sales. I know it’s part of the mix. but I’m just curious, if we were to strip that out, what the underlying business does in terms of MRO and the like.

Martin Garmendia: I think, as Nick has noted, that’s challenging in that if you compare back to the period of COVID obviously, our component MROs, our USM business, pretty much everything that supported the kind of commercial or passenger side was off. and that was offset. In fact, we had a mix on being majority passenger driven to cargo driven kind of overall. So, we were able to react and go where the demand was, which was in the passenger overall market. And now, as we’re seeing kind of a shift back into that, the passenger side has much stronger demand, we’ll shift back into those overall items. So, it’s kind of hard to kind of note what a traditional item are, excluding whole assets. Because again, whole assets is just one way that we monetize our feedstock. And had we not done that, we would have monetized those assets through the USM or leasing channel.

Gautam Khanna: And last one from me, when you guys acquired the 757s, one of the advantages you had was they were parked at a facility you control. Do you have anything in the pipeline that’s currently parked at one of your centers that could be sold and that could also offer kind of this hometown advantage, if you will, because you’ll know the asset better than the competition and the like. I didn’t know if anything was coming out of the desert that them that might be for sale that’s within your facilities in the Southwest.

Nicolas Finazzo: Not of the scale of the 757 transaction we did with American. That was a big chunky transaction. But there are aircrafts that are located in our facilities, both in Goodyear and Roswell, both places that we’re aware of and that we’re submitting bids on those aircraft in those locations. We are closing on aircraft that are located in our facility. And we have aircraft that are flying into our facility that ultimately will end up being sold as part out aircraft. So, we’ll kind of have a first good look understanding of the condition of those aircraft as they get there. And people are flying airplanes into our facility knowing that we’re interested in buying them, and they just like to know the fact that, well, at least I put it in their facility. If they’re the best bidder, it’s right there. It’ll be easy for them to close. And I think that’s an advantage that we have. Big, chunky group of aircraft, not yet a bunch of individual ones. Yes.

Gautam Khanna: Thank you.

Martin Garmendia: I would add. I think definitely, our advantage now is the ability to buy equipment that needs work. I think we’ve noted in the Q1 call that the material that’s coming out right now is not material that easily can be put back into service. So now, our competitive advantage is truly using our multi-dimensional model. And that we can extract the value much better than folks can on that type of equipment. And that is truly being our competitive advantage in this point in the cycle.

Gautam Khanna: Appreciate it. Thank you, guys.

Nicolas Finazzo: You’re welcome, Gautam.

Operator: There are no further questions at this time. I would now like to turn the floor back over to Nick Finazzo, AerSale’s CEO, for closing remarks. Nick sir, go ahead.