Park Aerospace Corp. (NYSE:PKE) Q2 2024 Earnings Call Transcript

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That’s what they’re saying. You run an airline, you don’t make that much money to begin with. You don’t want airplanes grounded, that is death for an airplane, you can never have an airplane grounded. That’s why it’s such a serious issue. Now let’s go on to Slide 22. And this also comes for the company. It’s not somebody’s opinion. The inspection and repair work is expected to take up to 300 days per engine. So we’re talking about rounding airplanes for a long time, a very tough situation. It’s difficult to fully comprehend the full implications of the crisis and where it’s going, but the story may not be over, maybe far from over. My take on it is, whenever it seems like a crisis can’t get any worse. It does. That’s just my take on it. Will this crisis lead to significant additional A320neo Aircraft family market share gains for LEAP-1A engine?

Many believe it will, what do you think? I mean the dilemma is that people are ordering these airplanes, a lot of them. They got to choose which engine they’re going to go with – so think about that a little bit. Let’s go on to Slide 23. So the top item that’s still in the A320neo family. This is the A321XLR. I just want to highlight that. That’s it – suppose to be, what? Entry in to service in the second quarter of next year, Boeing doesn’t have response. And this is a real important program for Park. A lot of – we see a lot of writing about it now. I think people in industry are getting pretty excited about this aircraft. We covered it in more detail in the past, and I won’t do that for you. But it’s definitely, we would say a plus.

Comac 919 with those LEAP-1C engines. Comac plans to achieve a production rate of 150 C919 aircraft a year within five years. That’s what they say. That’s not some analysts. That’s what they say. No, when we get to our outlook, I think on Slide 34, we’re only assuming 100 so just keep that in mind. They don’t currently have over 1,000 orders and two 919 aircraft are currently in service with China Eastern. Let’s go with a nice picture of it here. Let’s go on to Slide 24, still on the 919. China Eastern recently announced an order of 100 additional 919 aircraft to be delivered between 2024 and 2031. It’s the largest 919 order to date. And then GallopAir of Brunei recently announced order of 15, why would I even tell you that? 15 orders doesn’t sound that much.

The reason is because until now, the Comac airplanes have been considered to be China market airplanes only, like they sell a lot of these, but only into the China market. Well, obviously, Brunei, if you know your geography, that’s not a part of China. So that’s why I thought I’d highlight that very interesting. And then let’s talk about the Comac ARJ21, that’s the regional jet with those GE CF34-10A engines. For the Comac, 112 aircraft have been delivered and service, 775 open orders. And here you go, GallopAir of Brunei, they announced an order of 15 these airplanes. So again, previously thought to be a China-only kind of market, but Brunei’s not in China. So here’s a nice picture of the ARJ21, a regional jet. Let’s go on to Slide 25. Okay.

So the 777X with 9x engines. We talked a lot about the – last few quarters about the issue with the fan case redesign, if the fan case redesign is successful, then the case wrap won’t be needed. I’ll give you my perspective based upon things I know, which is, I guess, considerable. I think that chances of that happening are kind of fading away. So I think just – my opinion is, this will be a real important exciting program for Park for a long time to come. Planned entry into service 2025, currently an active program for Park, if you know that, this is currently an active program for Park. I don’t want to say too much more about it, but I feel quite encouraged that this is not going away, and it’s going to be moving up a potentially significant program for Park.

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