John Plueger: Sure, vary — if I had to put an average, our lease extensions are about three years on average, they vary. We’ve had some as short as one, some as long as seven. So that varies, number one. Number two, if there’s a prefixed option, pricing option that the airline so long as they’re not in default and so long as they’re current without — if they exercise that option and a predefined rate was given in that option, yes, we have to honor it. However, I will say that options are not often exercised necessarily by themselves. Oftentimes, they are — they come up in the context of further deals with ALC. It’s a tool that we have. And so I would just say that often times, you can’t look at an option on a single aircraft.
Oftentimes, we’re talking about new aircraft or expanding the fleet or doing other things. And in that context, we might tell an airline, well, you have an option here that which rate is too low for us. And so if you want to go on and add a few other aircraft here and there, we need a little bit of a better deal. I don’t know, Steve, do you have anything else to add on that?
Steve Hazy: Yes. I think, Jamie, there’s actually a relatively small percentage of our leases have fixed rate extension options.
Jamie Baker: Okay.
Steve Hazy: But as John mentioned, we generally developed cocktail that includes new airplanes coupled with the extension of existing aircraft and redesign the lease rate profile on that aircraft.
Jamie Baker: Okay. Understood. Appreciate that clarity. And second, and this one might sort of be from left field, but this EU directive, 2008-101-EC, are you guys familiar with it? Basically, there was an article that Mark and I saw regarding Norwegians — or not Norwegians failure, flyers failure, basically suggesting that lessors are responsible for any unpaid emission payment obligations. Is that something we need to ponder? The article piqued our interest. And if it’s not something on your radar, no problem.
John Plueger: The short answer is not really on our radar, because we have been advised that the country of Norway specifically has no current laws to enforce that EU guidance.
Jamie Baker: Okay. Very straightforward. Thank you, gentlemen. Appreciate it.
Steve Hazy: And by the way, the acceleration you heard, Jamie, was the lease rate accelerating to higher levels
Operator: Your next question will come from the line of Ron Epstein with Bank of America. Please go ahead.
Ron Epstein: Hey, good afternoon, guys. I’m just curious, why didn’t your rental flight equipment number actually go up? I mean, it went down, but your fleet is bigger. And what was in the number last year that made it bigger than this year with a larger fleet? Maybe you could clear that up.
Greg Willis: Ron, there’s a couple of things going on, right? I mean, you have some of the holdover effects from the COVID era lease restructurings, as well as the effects of the Russia situation, right? We had a fleet of approximately 20 airplanes that weren’t — that are still stuck in Russia that aren’t able to generate revenue right now.
John Plueger: Yes. It’s actually 21 airplanes. We got one back, and that one back we’re getting, we’re still preparing for use. So that — taking out 21 airplanes from your earnings is significant.
Steve Hazy: Yes, the aircraft we sold, which don’t generate rent revenue any longer but gave us a profit on the disposition.
Ron Epstein: Got it. All right. So the rest are still under your fleet count? You know they’re not — they’re just sitting there doing nothing for you.
