Mike Berger: Yes. Let me try to unpack the market piece a little bit more, Chris, for you. So the overall market demand has certainly softened and slowed. There’s no question about it. We had the flexibility within the — in our order book, if I could put it that way that as the market faced challenges in 2023, we have the ability to bring 2024 leases and customer leases forward to 2023, okay? And that was due to the strength of our order book that you’ve heard us talk about now for some time. Given that, as we pull stuff forward, obviously, we then took the opportunity really — and you’ve had heard this said earlier, it’s to really demonstrate the flexibility in our model and throttle back down some of our growth in 2024, specifically around the 767, which will allow us to reduce our CapEx dramatically in 2024, which ultimately will lead to the free cash flow that was referred to earlier.
As it relates to the A321 and the A330, we just inducted our first A330 into conversion a couple of weeks back. We still fully anticipate to deliver the 3 A330s in 2024 that we talked about. And from — and in this year, we still will deliver 4 A321s and 5 next year. So the overall demand specifically, we just had the ability and flexibility in the model to shift things around, throttle down on the CapEx in terms of some of the conversion costs that will help us on a go-forward basis.
Paul Chase: Yes. And Chris, it’s Paul Chase here. I’d like to reiterate just a couple of things that Joe Hete said earlier. I mean, unfortunately, with some of this pullback in demand, it allows us the opportunity to look at the assets we have differently. So we are looking at aircraft that are sitting that aren’t being converted to pull those engines off and deploy those assets. So it’s allowing us to do that. But what I’d also like to say is in conversations with customers, there are plenty of customers who have noted the macroeconomic environment who intend to do business with us in the future [indiscernible] on their side, look better. So there’s still this pent-up demand as well. So I feel pretty confident.
Christopher Stathoulopoulos: On the labor piece, you spoke in prior quarters about elevated levels of pilot attrition, if you could talk to that and also plans around hiring for next year.
Joe Hete: Yes. I mean, pilot attrition is a problem throughout the industry that we’re not immune from it by any stretch of the imagination. We’re still managing to bring people in the front door. The key is to keep people from going out the back door. But when you’ve got other airlines offering significant hiring bonuses, et cetera, that becomes a challenge. But airplanes are still moving every day. We do have some service failures occasionally because a pilot got waylaid someplace or took ill, but we’re still managing to move the aircraft as according to their schedule. So that hasn’t been an impediment to the business overall. Obviously, we’ve got an ongoing negotiation with ATI. As I said earlier, I’m still drinking from a fire hose, so I haven’t had a chance to dig into it in great depth.
The negotiations are under the auspices of the National Mediation Board. So there’s no ability for pilots to walk out until you go through the whole mediation process. I’ve been down this road many times in 40-plus years, so got a lot of experience in terms of how you work through these issues. At the end of the day, you’ve got to have a contract that works for both sides. So if you’ve got on the union side asking for FedEx or UPS wages or industry-leading, and that’s not in the cards from what we get from our customers, then that’s just not something we can agree to. So the key, obviously, in the end is finding a happy middle ground between their demands and our needs to keep things on the rails.
Christopher Stathoulopoulos: Okay. And just a follow-up here. I know you’re not ready to give guidance for next year here. But if we look at the exit rate for this year and we annualize, that gets us to around $540 million. If we compare that to, I think, the low end of the guide you gave a few weeks ago, that’s kind of a high-teens growth. Quint, maybe if you could talk a little bit about the puts and takes as we think about — as we hope to put on our models today, whether this is a wholesale revision or some fine-tuning, have 14 aircraft, if I understood correctly. We have elevated depreciation, interest rates. Lease rates positively are moving higher. But it sounds like there is some slowing within cargo. Just if you could help frame the puts and takes as we think about EBITDA for next year.
Quint Turner: Thanks, Chris. Yes, the — first, in terms of the guidance sort of revision, right, because you asked about that earlier, how much of that carries over, how you think about it. Around — a little more than 40% of that, call it, $45 million guide-down since the end of September is related to Omni. And it’s not due to any loss of customers or business. It’s due to a couple of factors. First off, third quarter, and we mentioned they had an unusual service quarter, which drove a lot of costs in terms of delays. Because that drives that additional travel and crew costs that I mentioned earlier. That was a big piece of their miss for the quarter. The fourth quarter portion of the guide-down is related more to, and we mentioned in the release, the Israeli situation, we believe, will impact some passenger requirements.
Omni has a — typically a very busy October. And with the onset of the conflict occurring early in October and looking through the remainder of the quarter, we just feel like that may — had the effect of deferring some of their business until later periods. And it’s difficult to predict whether that will be by the end of the fourth quarter or spill into the first quarter. But it’s not a — like they lost some piece of business that will never occur or some customer. So I wouldn’t say that the Omni piece of that $45 million is a systemic thing that you should think about necessarily for next year. Then the other pieces of that guide-down, of course, primarily our CAM. And the largest piece of CAM, and it’s similar to Omni, I’d put it somewhere a little north of 40% of that.
And the pieces of that are the 767-200 sales, which we had targeted for the second half. I mentioned — we mentioned they didn’t sell any in the third quarter. And they have some slated, as Mike indicated, for the fourth quarter. But as you might expect, we’ve tried to take a conservative view on that because the timing has proven to be difficult to pinpoint in terms of the other party tied up to sale. And then we’ve seen some reduced flying of the 767-200s that we provide engine power customers for. And so the combined effect of that is probably more than half of the CAM’s piece of the guide-down is related to the 767-200 fleet. And then they had some later startups of new leases of 767-300s than we had anticipated. And some of that is related to that softness in the market, we believe, right?
We’ve got the MasAirs and other customers that are feeling the pinch and aren’t perhaps as in a quite the hurry to take the airplanes as it would be in a more robust macro environment. And so that’s a piece of that as well, as well as our view again trying to be conservative on the realization of customer revenues from some of those folks through the fourth quarter. And we’ve tried to take a reasonable estimate of that in terms of our revised guidance. Those were the biggest pieces of the $45 million guide-down. Now as far as the ’24 outlook, Joe and Mike spoke about the CapEx reduction, which, of course, is much easier for us to revise at this point because we know what — as Mike said, we’re not going to refill the conversion lines once the airplanes are produced at IAI.
