Helane Becker: Let’s see, I have two questions. The 1 question, Quint, can you — when you talk about aircraft that you have placed or that are going to customers or where you have customers signed up, can you talk about it in terms of committed revenue over that time frame? Like can you say we’ve already had committed revenue of X billions of dollars over the next X number of years? Are you able to say that?
Quint Turner: Yes. I mean, it’s a good question, Helane. We talk about the 20 aircraft, for example, that we’re looking that we are targeting for deployment in ’23. On an annualized basis, you’re talking about around $70 million of revenue for those placements. And if you look at 2024, it’s probably more like about $85 million to $90 million on an annualized on top of that. And we have, as Rich said, excellent visibility on that. On those placements, we’ve got customer commitments, I think, for all but 2 or 3 of those.
Helane Becker: And then my follow-up question is, I think — I don’t know if it was you or Rich, you said in your prepared remarks that you have inflationary cost pressure in some of your ACMI businesses. Is that reimbursable by your customers, those cost pressures?
Quint Turner: Well, certainly, there’s escalators that are built into our customer contracts. We’ve all seen inflation in the recent years that has outpaced, I think, what most folks would have in their contracts. But having said that, I mean, I think it’s important to say that when you look at ACMI Services, I mean, it’s made tremendous progress throughout the pandemic for ATSG’s airlines. And what we have projected in ’23, for example, their contribution in terms of adjusted EBITDA is about 12% higher than it was in 2021 and in 2023. Now 2022 was an excellent year, right? They had — there were some opportunities for — where customers needed charter flights and things that were higher margin than we might see in ’23 due to the macroeconomic environment.
And then, of course, in ’23, with perhaps less commercial opportunities, you may see some of the airlines who participate in the government flying, the craft program. They may fly their — more of their entitlements. Some of those airlines may have been opting to fly commercial trips when the rates being offered for those types of trips were really high on the — and now there may be less of those in a slower economy in ’23. So we anticipate that Omni, while it’s going to do well in ’23, but it may not have as many opportunities to fly and clean up some of the entitlement not flown by some of the other carriers.
Rich Corrado: Helane, the things that — there are reimbursables in those ACMI agreements, things like permits, like landing fees, those types of things. Fuel is a big reimbursement. But the things that have impacted us on an inflationary basis are things like travel costs because we have to position pilots all over the world, maintenance costs for maintenance technicians or maintenance contractors. Those costs have been rising over the past few years. And those are built into the rates. They do get escalated, as Quint said, in the general agreements year-to-year. But it’s just a matter of whether that escalation keeps up with where the inflationary pressure may be in the different cost items.
Quint Turner: And on the military and the DoD type flying, those contracts are more akin to cost-plus. And so rates are adjusted. There’s a look-back, though. There’s usually a lag, right? In the year the inflation is occurring, you may not get the reimbursement. But when rates are reset in subsequent years, those adjustments are made. So that’s a risk mitigator but it creates a dislocation.
