Helane Becker: Just one question from me. In the past, you guys have talked about ordering just half of what the demand — when you actually forecast the demand would be. So maybe part A and part B. Part A is how are you thinking about that going forward, given the fact that the delivery delays cause so many aircraft to get pushed to the right? And b, how are you thinking about lease rate factors in scenarios where the economy would tip into a recession?
John Plueger: Steve, do you want to take that one?
Steve Hazy: Happy to do it. First of all, the leases that we do, Helane, are, as you know, are long-term leases. And generally, they’re anywhere from 8 to 14 years in length. So during the period of these leases, the global economy and regional economies can go through multiple cycles. And once the aircraft delivered, the lease rates are fixed. So whether we’re in a recession or whether oil prices are $50 a barrel or $120 a barrel, the lease rates are what they are. And there’s no sort of rehashing of lease rates during the course of the lease term. So we don’t really think that a mild to medium recession will have a great impact for the very reason you mentioned that we’ve only ordered about half of the aircraft we can place.
So as we sit here today, if we had an order book of 750 or 800 aircraft, we could easily place all of them. But our order book now is a little under 400 aircraft which means we can be more picky, we can be more selective on which airlines we lease to and also maximize lease rate revenue inflows for the next 10 or 12 years.
John Plueger: Let me just add one other comment, Helane. Just please remember that all the aircraft we have on order that Steve indicated or — on order through 2028. That’s 5 years from now. So we have a long runway with a lot of good delivery positions to offer the marketplace. And we’re also cognizant of the fact that this industry has always been cyclical, so 2028 is a fair piece away and we will see how the industry is looking over the next couple of years. But I think I’m kind of reading between the lines of your question, we feel no gun to our head whatsoever to order additional aircraft today.
Steve Hazy: In fact, Helane, if there is a recession on the horizon, that could actually create opportunities for us between now and 2028, ’29, to pick up some aircraft from a distressed airline or perhaps an entity that ordered some airplanes that wants to scale back their orders for whatever their own reasons are. So we do not feel pressure today to order more planes in ’29, ’30, ’31 because having been in this business a long time, I’m certain that there’ll be opportunities for us to have selective acquisition opportunities of new aircraft in the next 5 years over and above our order book.
Helane Becker: Okay, that’s very helpful. And then just one follow-on. Do you think the engine issues that you were talking about would drag on the valuations of new — of those new technology aircraft?
John Plueger: No, because the demand remains so strong. These are the aircraft that we have in this industry and there’s no other alternatives. The only other alternatives are for the engine manufacturers themselves to upgrade and slightly modify these engines to get them to the on-wing reliability that needs to be there. So that’s what’s happening. So no, we don’t have any concerns about that because that’s all that we have. And therefore, that’s all the airlines can order and that’s all that we can — that anyone can give.
