John Holmes: I think you’re correct in terms of material out of parked aircraft, but we haven’t seen the elevated levels of retirements that have been forecasted for many years, particularly at the beginning of the pandemic. As OEM production rates come up and as airlines reflect their aircraft, we do expect to see more retirements over time, although that dramatic jump that many talked about for so long, we don’t expect that. But we do expect that curve to steepen over the next few years, and that will provide more material for our USM business.
Robert Spingarn: Okay. Thanks so much.
John Holmes: Great. Thanks, Rob.
Operator: Thank you. Please standby for our next question. Our next question comes from the line of Josh Sullivan with Benchmark Company. Your line is open.
Josh Sullivan: Hey. Good evening.
John Holmes: Hey, Josh. How are you doing?
Josh Sullivan: Just on the government services side, what does the recompete outlook, like over the next 12 months or so?
John Holmes: For existing programs that we’re on, off the top of my head, I don’t — I’m not aware of any major recompetes for programs that we are currently on. However, there are a number of recompetes in process right now for programs that we are not on, and we are a bidder on those programs. To the extent we’re successful, that would be a net new work for AAR.
Josh Sullivan: And can you just expand on the comment about the NDAA language that allows more access to air services?
John Holmes: Yeah. We talked a little bit about that last quarter and ultimately ended up in the most recent version of the NDA that was passed was language that requires branches of the DoD to consider buying used parts anytime they go to the market. And so our used parts offering, which, as you know, has been very successful in the commercial market, now as agencies as they look to buy parts are required to give that a look. And we expect over time as these agencies become more educated on the benefits of buying USM that could be a growth market for us.
Josh Sullivan: And then, are there any opportunities for Trax in the government sector?
John Holmes: That’s a great question. Yes, we believe so. They do a little bit of work in the government area already. As a matter of fact, the FAA itself is actually a Trax customer, but we believe, again, similar to the commercial market, there are doors in government agencies, but because of our presence, we can help open for Trax.
Josh Sullivan: And then, on the distribution on the commercial side, availability look like coming from the OEMs. Any supply chains getting better? Just any comments on what you’re seeing there?
John Holmes: I’d say it’s stable. It’s been stable over the last few quarters and when we think about supply chain for our business, certainly availability of labor, we kind of put in the supply chain bucket. But as it relates to parts availability, from the OEMs and repair turnaround times both of those elements have stabilized in the last few quarters. Lead times still are longer for the most part than they were pre-pandemic. So we just adjusted our buying patterns to account for that. And similarly, as we manage parts in the USM business that we send out for repair, we’ve accounted for longer turnaround times as we look to buy and market material.
Josh Sullivan: Great. Thank you for the time.
John Holmes: Great. Thanks, Josh.
