Steve Hazy: And remember that the airlines are responsible for the operating cost elements, including fuel, maintenance, crewing, insurance, et cetera. And we have commitments now from all of the engine manufacturers, GE, CFM, Pratt & Whitney, Rolls-Royce to make specific improvements to all of their engines on these new technology aircraft. And those improvements will be incorporated both on the new deliveries and also on existing aircraft where engines will go into the shop. So over a multiyear period, all of these engines will be upgraded to the latest standard.
Operator: Your next question comes from the line of Hillary Cacanando with Deutsche Bank.
Hillary Cacanando: So we’ve heard that some Russian airlines have approached AerCap about purchasing plans at a discount or for potential insurance settlement. Have you been approached by any Russian airlines? And so would you even be allowed to allowed to get the money from the EU — to get the approval from the EU and the U.S. to get the money? And would that be something that the EU and U.S. would consider in the future, if not?
John Plueger: Thank you. This is John. I’ll take that. We’re not offering any commentary on that at this time. We continue to work closely on all matters related to Russia and our insurance recovery and any other possibilities. But beyond that, we’re not commenting.
Hillary Cacanando: Okay. Got you. And then you talked about the strong demand in the sales environment. Historically, your sales margins have been about 7.5% to 8%. I guess in the current environment, would you say that your sales margin could actually now be higher than that?
John Plueger: Greg?
Greg Willis: Yes, I think historically, it’s been between 8% and 10%. But with the sales that we’ve been seeing lately have been significantly higher. That again is due to the quality of the leases as well as the supply-demand imbalance for the airplanes themselves. So I think it’s a very favorable environment right now. And a lot of lessors are looking to pick up additional products from us.
Hillary Cacanando: So even higher than 10%, you would say?
Greg Willis: Yes.
Operator: Your next question comes from the line of Jamie Baker with JPMorgan.
Unidentified Analyst: This is James on for Jamie and Mark. I guess following up with Helane’s question, I want to ask on the risk management side. With the rising lease rate environment, are you guys being more aggressive in holding back more now to kind of keep more spot inventory? And how does that dynamic play out? Has that changed at all just given the macro backdrop?
John Plueger: Steve, do you want to take that?
Steve Hazy: Yes. I mean, generally, we lease aircraft anywhere from 24 months out to as short as maybe 18 months. Some of our placements, where we have multiple aircraft going to the same airline, the lead time can be as much as 36 months. So what we’re focused on now is to complete the placement of our 2024 deliveries in the next 3 to 5 months but we are being more cautious on committing aircraft in 2025 until we see: a, what the interest rate trends are for the next 18 to 24 months. And if we continue to see lease rates rising, yes, we will hold back a certain percentage of our forward orders in the next 2 years to make them available for opportunistic placements. But keep in mind that on new aircraft, we generally have to nail down the specification and configuration anywhere from 12 to 15 months before delivery.
