Operator: Thanks Catie. And our next question comes from the line of Stephen Trent with Citi. Stephen, please go ahead.
Stephen Trent: Hey good afternoon everybody and thanks very much for taking my question. Most of mine have been answered, but I was really curious about your aircraft procurement. I mean, not just for you guys but for the industry broadly, would you say, for instance, that lessors could start leaning more on obtaining planes through a little more through sale leaseback activity versus what’s previously been the case. Or is that not so relevant for you guys because you already have such strong order books from the OEMs? Just was wondering what you see as the opportunity for the space as you procure aircraft. Thank you.
John Plueger: Yes. We’ve — our business model has always been and will remain primarily as an order book-driven lessor. We have a very large order book that will go out through 2029. So we are not large players and never have been in the sale-leaseback marketplace. I don’t see, in terms of the broad distribution, it’s those who don’t have order books, by definition, we’ll have to do sale-leasebacks, but it’s never been a huge part of our business, except for we do participate indirectly in some of the managed vehicles that we run for other investors. In some cases, the sale-leaseback marketplace presents certain opportunities for them. Classically, the returns and the lease rates and the sale-leaseback part of the business has been lower than on the order book part of the business. So we guided a little bit towards our managed vehicles, but we will always remain primarily a new aircraft order book lessor.
Steven Hazy: And we believe that, that business strategy results in a lower acquisition cost of aircraft then when you step into an airline’s order with a markup to do a sale leaseback. So we believe we have significant capital cost advantage in the acquisition of these portfolios directly from the OEMs rather than through a third party.
Stephen Trent: Great, makes sense. And thanks very much for the color.
Operator: Right, thank you Stephen. And our final question today comes from Doug Runte with Deutsche Bank. Doug, please go ahead.
Q – Douglas Runte: Thanks very much for taking the question from the fixed income side of the balance sheet. A question on the order book. There’s an interesting split in the market among large thoughtful lessors as to whether you should line up at the tent at the air show to place orders or whether it’s okay to place orders extending over the horizon past 2030. I’m wondering where you come down on that given that your order book commitment ends towards 2028, 2029.
Steven Hazy: Yes. We don’t believe that joining this order frenzy is really a good strategy for us. If you truly believe that every one of those orders that have been placed in the last two years are going to get delivered on time and to the very airlines and institutions that have ordered it, then our strategy is probably flawed. But we don’t believe that those hundreds of aircraft will wind up exactly where they were intended. There will always be pockets of opportunity. There will be airlines that will not be able to honor their obligations. So we think we can supplement our backlog as and when needed to cover that period 2028 and 2029. We’re in really good shape over the next 4.5 years. So we’re less worried about new aircraft in 2030.
Douglas Runte: Great. Thank you very much for that color and a quick follow-up, a little more granular. You have quite a few 777-300 ERs coming off lease in the next two to three years. Have you engaged in placement talks with that? Does it look like they will be extended or is there potentially going to be a need to reposition those to new operators?
John Plueger: Yes, those are going to be extended for the very most part, Doug. There’s — we’re well underway on — with several large carriers in that process.
Steven Hazy: We have pulled every one of our 777-300 ER SCs, Doug, and not a single one has expressed any interest in returning them.
Douglas Runte: Wow, that’s terrific news.
Steven Hazy: Whether we extend them for 3 years or 5 years or 8 years and at what rate. That’s the variable. It’s not an if question, it’s at what rate are we extending and for what term?
Douglas Runte: Terrific. Thank you for sharing that color.
Operator: All right. Thank you, Doug. And that concludes our question-and-answer session today. And with that, Mr. Arnold, I will turn the call back over to you.
Jason Arnold: Thanks, everyone, for your time participating in our fourth quarter call. We look forward to speaking to you again in May. Greg, please disconnect the line. Thanks for your assistance.
Operator: Thank you. This concludes today’s call. You may now disconnect. Have a great day, everyone.
