They need to be repaired. Puts those engines in the shop. The shops are backed up and there’s just not enough good engine USM to supply their requirements for the amount of engine shop business that are going in. And that doesn’t seem to matter whether it’s narrowbody or widebody. Widebody hasn’t suffered as much due to the substantially widebody market is the freighter side. And we didn’t see a much decline in the demand for widebody engines or widebody engine parts. So, we see the requirement for USM continuing to stay extremely strong. Now affecting USM it kind of — it’s just two sides to that story with the delay and delivery of new aircraft, which we’re definitely experiencing both with Boeing’s issues with the FAA and with Airbus’s narrow body issues with the multiple amount of engine problems they’ve had with the A320neo.
That those aircraft are not displacing the older flight equipment that is staying out there. The result is it’s a diminished amount of used aircraft that are coming into our market, which would bolster our availability of USM material, that’s the negative side. The positive side is because those aircraft keep flying, there’s more demand for USM material. And that’s the basis that I make the statement that there’s never — well, certainly at this point in the market there is not enough good use service and material. To feed the narrow body engine market for both the A320 and the 737. So, we are — we had the first two months of this year, we had a very, very high level of USM — of all feedstock acquisition across everything we typically deal and double what we did in all of last year in the first two months of this year.
And we’re trying to figure out what is causing that and one could be cost of funds have gone up for investors to invest in this space and for those that can’t find ways to extract substantial value out of all feedstock at all levels that’s the cost of funds is impinging on their margin and maybe sending some of those people away, plus there’s a number of investors that have been overpaying since 2018. That probably have lost their funding sources and no longer have the ability to buy assets in the market. So that’s — those are two reasons why we can think of that we’ve had such success in the first two months of the year, coupled with a substantial improvement in again, on the demand side, a substantial improvement in demand, but it’s the availability that was surprising.
We were very surprised to see that level of feedstock acquisition in the first two months of the year. So, we’re very optimistic about the balance of the year, if things continue at this rate, we continue to buy the rate that we’ve been buying. It is probable we’ll increase guidance for the balance of the year. So, all in all, I’d say if you can get the right feedstock at the right price and you can extract the greatest value out of it and I think that’s the — the AerSale machine does that. I think the opportunity for substantial feedstock growth here this year and in the coming years is significant and we look forward to it.
Bert Subin: Really good color. Thanks so much, Nick.
Nick Finazzo: You’re welcome.
Operator: Our next question comes from the line of Ken Herbert with RBC. Please proceed with
Ken Herbert: Hi, Nick. Hi Martin. Good afternoon.
Nick Finazzo: Good afternoon.
Martin Garmendia: Hi, Ken.
Ken Herbert: Hey Nick, maybe just to start off, could you update us on the — of the 12 755, it sounds like there’s been some delay with the PDUFA process, does the guidance assume nine of the 12 are moved — sold or put into your lease pool this year? And how should we think about the completes on some of these conversions and where you stand in the process?