Fireside Chat with ATSG's Rich Corrado

This video features the Fireside Chat session with ATSG President and CEO Rich Corrado during this year's virtual Cargo Facts Symposium. For all the coverage on the Symposium, click here . A transcript is available below. This transcript has been generated by software and is being presented as is. Some transcription errors may remain. Frederic All right. Hello, everyone. Please join me in welcoming rich Corrado to this fireside chat session. So rich Corrado has been president and chief executive officer of, as you probably know, at SG since May 2020, where he's responsible for the the goal setting and overall oversight of all of ATF G's diverse business interests. Corrado joined atsg as a chief Commercial Officer in April 2010, and was elected Chief Operating Officer in September 2017. But it's been around in the in the air cargo space industry for quite some time. He's got a degree in economics from Harvard and an MBA from from Boston College. Rich, welcome. Nice to have you here today. Again, Rich Corrado it's great to be here. Frederick, I really appreciate the opportunity to speak to all the folks today, I'd like to first say congratulations to everybody that's in air cargo right now. Because although although what we do has been in significant demand throughout this pandemic, it has been a challenge, it has been a challenge to maneuver the environment and to get things done and air cargo has been it's been in the spotlight, which is great. And I think it tested everybody's mettle. And folks have stepped up and I think it's great for air cargo, that we met these challenges. And certainly we have we have more in front of us. But I just want to congratulate everybody watching today. Frederic So rich, thank you. Yes, Jays got a fairly unique business model. I mean, you got pains to explain that you're actually a leasing company, not an airline, even though the bulk of your revenue still come from the, from the airline business. And what do you think is the strength of this model way where you're combining the leasing business with an icmi business with a services business that includes maintenance and includes conversions that includes hub operation? Rich Corrado No, there's really, you know, when I the way I think about it, there's really three strengths to what we do. You know, we've got we've got the leasing company, we have 106 aircraft we'll have in service by the end of the year 86 of those are freighters. We looked at least the aircraft first and then we look at CMI services as a supplemental service. We have two full service Mr. Rose, we can do conversions. Have you maintenance line maintenance or leasing company also offers powerful By the cycle service, which is a really nice add on that, that D risks, getting into the airframe. And then we have a logistics group that that does a lot of different things, everything from managing store operations, to GSC to MHG. We do do we run service centers for the Postal Service and gateways for Amazon. So we look to put these things together that to provide solutions to folks that want to get into the 767 freighter. So first, the obviously the thing is differentiation, the first strength were significantly differentiated for many of the leasing company in the business where you can provide these types of services to folks, why would you lease an air 767 freight or anywhere else, we do have over two thirds market share in the 767 leasing business where the world's largest dry less sore of freighter aircraft overall. The second strength is that these these incremental services provide incremental term returns on top of the base lease so we invest all of our capital and most of our capital in airplanes and conversions. And we get a return on that based on the lease, but then when we can fly the aircraft and we can provide maintenance services for the aircraft or engine leasing those things provide incremental returns, so we enhance the profitability of the company. And probably the most significant thing is the resilience of our business model. If you look at the segments that we do service, the leasing, whether the market, you know, it has a downturn or not, the lessee has to pay for the lease of the aircraft despite how they may be utilizing it. When you look at the flying that we do the CMI flying most of it if not all of it is for is for Express networks and e commerce providers. And so those are much more insulated from the from the general downtrend and an economic cycle because they have time definite and de definite service requirements that are hard to back off from so they need to service those markets. And the last thing about a third of our revenue comes from flying for the government and the US military. So when you look at those three segments, they're about 90 to 95% of our EBITDA. And despite, you know, if you have an economic downturn, you know, those things are gonna hold up a lot longer. A great example is 2019. If you look at 2019, Air Cargo was significantly challenged, given the the trade disruption and and different things that were going on Frederic why the market was down about three 4%. Right. Rich Corrado Right. It was a significant downturn, globally. But we had a record year, we had a record year and leasing, flying, our business grew and we had a record year. So just just goes to show that the strength and the resilience of the business model. Frederic Yeah, I mean, I guess the government side is a bit hard for others to replicate. I mean, you have I mean, to an extent you're similar to what Atlas does, although the aircraft focuses is different, you probably start you've got of a Solutions Group. In in Europe, that is a massive collection of different airlines, charter brokerage, business, ground services, and so on. But it doesn't seem to have the same same leasing full service model focus that you have, but do you think this particular model is something that leasing companies? I mean, you came to it as an airline first and then turned into a leasing company, but do you think it's something that that leasing companies should be looking into, to get into more if they want a sustained source of competitive advantage? Rich Corrado I mean, obviously, I'm not gonna, I'm not gonna advocate for that. But you're right we we develop this business model around necessity when DHL back in 22,009 decided to get out of the domestic business. We we were saddled with, you know, 10,000 and not saddled with but we had 10,000 employees, we had an airline with over 100 aircraft, we had a large maintenance base with over 1200 maintenance technicians. And we had a huge airport services group that became our logistics group. And our goal at that point in time was to keep as many people employed as we can. And so we created these businesses, we created the MRO, we already had a very small leasing business, we probably leased about four or five airplanes at that time. And then the logistics group was formed out of our airport services group. So we everybody hi shingle, and we started trying to everyone tried to grow on their own and also with a combination of the solutions. The great thing is the model really took hold and has provided a lot of value and provide a lot of returns for our shareholders. But I don't think leasing companies are going to have the most leasing companies or financial institutions and they look for return on capital. We are witches as an airline, and you know, a maintenance provider. When you're in the maintenance side of the business of the logistics side of the business that's basically asset light selling labor. And I just don't think most leasing companies are built to be able to look at those types of things and Trying to get a return on. Frederic And one of the questions, I've got a few questions that that are coming in as well. And I'll throw a few of those into our conversation. One question was, you know, how do you mean, you might say there isn't. But, you know, how do you resolve the inherent conflict? For example, with a prospective conversion customer or your customers overall, given that you're a major operator and and the lessor at the same time? I mean, how do you how do you balance? How do you balance that? Rich Corrado Yeah, I mean, a great example of how, you know, look, we look to leak dry lease the aircraft, that's what we want to do with the asset, if you're going to invest in a 20 year asset, getting a one year HDMI contract really doesn't do any good thing for if you get a seven to 10 year lease, and you can reject another lease after that. And that's how you want the return. So we don't look at cmaj flying or acmf, flying, if you will, is something that we're out there trying to sell on its own, necessarily, although we you know, we've put up two HDMI rods for DHL, due to the pandemic that are flying and international routes, we'll do those things, most of the HDMI flying we do is in our wetsuit, what we call our wet to dry program, we run the wet to dry program for Amerijet, we've done it for Northern air cargo, we've done it for Riah in Malaysia, and essentially what we've done is we fly for them first, and then they they can value the economics of the aircraft, they can see if that's something that they want to get into themselves, and then we facilitate helping them get into the aircraft. So I don't see a lot of we don't compete with a lot of our lessees, we actually facilitate them to grow their business. Frederic And on the on the topic of brokering we've seen recently that, that you started placing more aircraft outside North America, particularly with a straw in in, in in Kenya and, and mass air also in in Mexico. And is that way where you see the future growth opportunities for your business outside North America? Or is it a bit of a bit of both? Rich Corrado Well, the great thing about an airplane is you can market and sell at anywhere, right? So what we're looking to, and we've always had this marketing plan that we're looking to market, the 767. And in the future, the a 320 21 in the markets where regional jets will prevail. And those are markets that, you know, you're looking at a three hour they're about cycle leg, you're looking at an express network, those types of things. In Asia, you've got a lot of countries that are surrounded or approximate the water. And so you've got to fly to get to some fairly large economies. So that's an error we try to get in if you recall, we had a joint venture going on in China for a while. So we've always tried to market in those areas where we think that that the the aircraft fits, obviously, the United States is one of those markets because of the geography and because of the density of business units, Canada and then of course, you know, the NAFTA group into into into the USA, but you know, we're looking we're anywhere in the world where the aircraft fits Frederic there, it as much as you can disclose that. Are there any other business areas that you that you're not in at the moment that you're looking into? I mean, for example, providing airline operations outside outside North America, is that something that you would consider doing or not really because ultimately, your core business has been leasing? Rich Corrado Yeah, I mean, usually we've done that in the past, again, to facilitate the leasing business. And usually when you're operating outside of the United States, you've got you know, traffic rights issues, and you've got cabotage rules that you have to be you know, you have to account for so it's a little more difficult. We've done it, um, certainly, it's a but it's a little more difficult. Usually what we'll try to do, as we've as we've done with you know, with masiero and with RIAA, me RIAA, my Cirrus flying for DHL and and and Riaz flying for DHL as an example, we'll look to facilitate I mean, we flew the riot DHL route for a year in the 767 before Riot sec, a 767. So we'll do that type of flying overseas, but again, looking to lease the asset because that's the core business and the core return return on the smart way to deal with the 20 year asset. Frederic mean you know you're saying obviously the focus is the 767 or we'll talk about the 767 in a in a in a in a second would be me if we didn't talk about the six in one but let's talk about the eight through 21 for a minute. I mean you're saying that the focus is obviously the student you have the the STC approved for the for the precision three to one conversion then then they'll be more focused on marketing that aircraft given the the operating markets for that aircraft and given the Europe is a prime operating market for that. I mean, would you would you look at getting into airline operations in Europe to actually support that tool? Or is that something that is just not going to be necessary? Because there's enough operators in the market that can pick up and fly? for customers that Yeah, Rich Corrado yeah. Again, operating in Europe, intra Europe for us is difficult because of the because of because of the regulatory and cabotage and traffic rights situation, you can do it with a hub exemption, as ups does in Cologne. So they fly, they fly into a hub in Cologne, and then they're able to fly some routes, as long as they're not stopping twice in a country that can fly those routes. So we don't have a plan right now to do any of that type of flying. Certainly we, you know, we wouldn't, depending on the opportunity, it's something we would evaluate, we generally again would like, you know, we look to find a partner in the area that would make more sense would have a lot easier road, as far as a lot more flexibility as far as where they could fly in a different region than we would as a US based carrier, and look to partner with them and lease the aircraft into that market. It's what we originally had with with the West Atlantic group in Europe. And they, you know, they got their fleet up to six aircraft at one point in time. Frederic It's about what is it that two ounces, the rest Atlantic? So Rich Corrado yeah, they've got to at this point. Frederic Um, let's talk about the 767. Is there is there a life after the 767? Rich Corrado Yeah, well, I hate the borrower, or the premise of a quote from Mark Twain, but the the rumor of the demise of the 767 has been greatly exaggerated. You know, there's, there's, you know, probably a little less than 200 feet SOC aircraft in the 1991 to 1999 age group that are available, both power and G power No, we we run the predominantly we've leased and, and, and operate a GE fleet, we do have three proud powers, they're fine aircraft, they do the mission the same, obviously, you want free fleet have free fleet commonality as much as you can get it. And then you've got probably another hundred and 50 feedstock aircraft that are younger than that, that will eventually come available. So there's a lot of Seven, six sevens left, they're still building the factory freighter, GE still building the engine. So this, this aircraft is going to be around for a really long time. That said, I mean, So it's, it's, uh, you know, it's going to be around for quite a while, given all the feedstock that's available, you know, and you look at the pandemic, and what that's doing, you know, to potential awaken airlines looking at at their fleets. I would not be what I want to be on the passenger side now and making a decision making a decision about whether I, I find c checks for my aging fleet or take deliveries that I've got scheduled or potentially, you know, rights to, you know, do I want a newer airplane right away? Do I hang on to the older one, you know, there's it's really a difficult decision depending on where they are and how much they own the aircraft means all those types of things that you you know, what you think is going to come out of the pandemic, what you think you're going to look like when you grow up? All those things are difficult decisions to predict. But But long story short, the feedstock price should come down as well. Eventually, we haven't seen a lot of aircraft on the market right now. The last two guys we made were were two aircraft each. You know, we're, you know, we normally like to buy a nice round of airplanes, we bought 25. American back in 2018, as an example, but we just haven't seen that that density of feedstock or someone releasing their fleet at this point. Frederic But I mean, they do think it's going to go and fall and there will be a lot more of these ones and two twosie type buying opportunities rather than the larger scale buying opportunities. Rich Corrado I think it'd be a little bit of both. I mean, you've got some large fleets out there, you still have you know, Lufthansa, you've got Delta, you've got united ama, you've got some folks with some large fleets Air Canada, still out there. But then there's a lot of folks with, you know, two or three aircrafts. So it just depends on on Frederic these large fleets at the moment as well, from what I know. But I mean, that's, you know, feedstock values, probably of the top values have come down a bit, but the stock values of the ac 30s have come down even more. So the declining values on a 330 feedstock has been been much larger than the decline in value on 767. please correct me if I'm saying something wrong here, okay, that's bringing the two of them closer in terms of an overall Cost potential, Rich Corrado sir, it does. And I think the a 330 300, not the 200, necessarily, I think the 3300 is going to be a pretty good aircraft. It's it, you know, right now there's a few of them out there, as you know, and they are being used differently, they're not being used as a, as a network freighter so much as they are being used for, you know, General air cargo, or air cargo are used on longer haul routes. I mean, the a 330 has, you know, has really good legs compared to the 767, if you will, in carrying it the same payload, it can fly farther. And it's got a little bit more cube. So when you look at it, it's gonna be a great aircraft, the problem is, Frederic you're gonna get the 200 on the longer. Rich Corrado Right, the the thing to think about, though, is most of your 767. If you look at this globe, the cycles globally, on the Seven, six seventh grader is probably about three hours or less. So you don't really don't, you don't really need that range. And then most of your large users of network flying aircraft are already flying the 767. And so you know, they'll be looking to augment those fleets with seven, six sevens not swapping over the a 330 until they need to, until you're out of seven, six sevens. folks that are that are already flying an Airbus if you've already got an Airbus fleet on the passenger side, and you're looking to get into the freight business. And certainly it would make sense for the a 330. At that point in time, but braking in future Frederic Express carriers except SF Express, but Rich Corrado yeah, a 306 hundreds, I think most of them fly. So, you know, I just think it's, it's gonna take a little bit more time, I think the price has to come down, which it has on the feedstock side. But you know that that is just the user, the folks that need those aircraft can still get the 767. Yeah, Frederic our thinking was sort of at that inflection point would be around 2024. Around that time for when when they start to gather a lot of steam, just because of the way the feedstocks are there and the relative relative feedstock situation, as develop. I mean, do you think the pandemic may have brought some of that forward? Rich Corrado It brought down for the 330, it has 767 hasn't really come down at all, that we've seen, we, you know, we like I said, we just looked at two different buys. And the pricing was still hanging up there. And if you look at some of the analysts and some of the folks who do, you know, estimating and on aircraft, I mean, they're projecting in some cases that the 767 Prater, 767, passenger jet is actually the feedstock prices going up. Because of the demand on the freighter side is is significant. Now it's going to one large fleet drops, you're going to see that change fairly quickly. But I do think that the a 330 has come closer quicker because of the pandemic. Frederic Mean, well, it's sort of switch focus a little bit, but still, obviously everything related to the pandemic at the moment. And do you see growth in demand exhilarating for medium, wide bodies, as well as narrow bodies as a consequence of a pandemic? Or are we just seeing a normal growth trajectory that we would have seen? anyway? Rich Corrado Ah, well, it's a good question. You know, if you looked at the statistics about how the how the ecommerce was, was going to be growing on a global basis, it was projected to be significantly growing anyways, there was a study though, that IBM retail index put out in August, you know, basically measuring the impact of the pandemic and their assessment was that it is drag the demand for ecommerce five years forward. And if you look at the numbers that are popping out, if you look at UPS, growth numbers, you know, Amazon's Prime Day was up 45% over last year, as a good barometer. So the, the, you know, the pandemic is growing. I mean, the pandemic has caused e commerce to grow a little bit quicker, but it was it was already growing. We came into this year, and we projected that we would place eight to 10 newly converted Seven, six seventh graders, we're gonna place 12 and we're gonna release another three. So we're gonna place 15 we've already got 15. On the books for next year, we've got 11 that we've already signed with Amazon, we've got another four that we're finalizing, right now. And and we may be able to deliver a few more than that depending on on our ability to find feedstock, and we have the thoughts. But anyway, so the point being is is that's an acceleration, that's people and the good thing about our business models are taking these aircraft for long term leases. They're not just taking them because they need an you know, an ECM route or they need an aircraft for short term because of the pandemic. So the folks that we're dealing with and and Our demand order book, if you will, is larger than that. We've got folks on several continents looking for seven, six sevens that they want delivered all the way up to 2024. So they're they're banking on the fact that this ecommerce trend, although the pandemic has accelerated, it is going to be here to stay. You know, one of the one of the other things that study showed is the fastest growing products. In Econ, we're out the hall. There's no surprise there no home improvement items and groceries. Well, those are three things that really is that those are the fastest growing ones. And you think about it, those are simply those are pandemic related heavily, right? Lord knows we all need to drink because of the pandemic. And then groceries or something folks don't want to go to the grocery store. So they'll order online. Another study kicked out the fact that, you know, 60% of the new adopters do e commerce. So someone who never used e commerce before and they started maybe someone taught their parent how to order groceries online or whatever, are going to continue to use e commerce. So you've got this whole group of folks that might have never been online shoppers, they've been introduced to it because of the pandemic and they're gonna continue to online shop going forward. Frederic Yeah, I mean, you're right. I mean, if we look at take ups, for example, and they normally have all of their integrators ups has bar, with the exception of SF Express, actually, but if we're looking at North America, UPS generally generates including the grounding product, about 50% of the shipments in business to consumer, they said in the in the second quarter that it was it was 69% of their of their shipments were business to consumer. Of course, they had a huge increase on on on b2c, and they had a 20% drop on, on b2b b2b b. So there's various fixing, DHL that that usually has about 30% of its TDI volumes. And as businesses, you were saying, they're up to about 45%. So there's definitely been a been a shift in the market. I guess the question is, is it going to stay at 49? Or 45? Or 69%? Or is it going to fall back down to some, some more reasonable level perhaps a little bit higher? Rich Corrado I don't think it's gonna fall back. nominally, I think it's the growth is slow. For sure. I think, like I said, if you look at those, the higher growth products or things that, that there's there's, you know, easy substitutes to, you know, as long as you feel safe, right. And so folks are going to go out and shop and go to the grocery store, or, you know, touch the fruit and all that other stuff, right. So I think some of the growth will dial back, but it's still going to be a high growth, I mean, look, the retail outlets, if you look at the two years before, before the pandemic of 2018, and 2019, I mean, retail, brick and mortar stores were down 8000 and 10,000. closures, you know, related because the e commerce business have taken that away, now that's obviously going to accelerate, you're going to see a lot more retail, brick and mortar closing and etc, etc. And that's why a lot of that ecommerce will stay and continue to grow. But not I don't think at the level that it's at now, it'll probably take a flatness and then then pick up growth again. Frederic I mean, retail shops to go back to then, yeah, obviously, that growth isn't gonna go back to the, to the retail side, I mean, a lot of, I guess a lot of the commodities that you're talking about, like the groceries or, or, or even the booze, probably a lot of that doesn't even affect their cargo networks, it's more of a consumer food type stuff that's gonna affect that because the grocery is more Same, same day type stuff. But we are I mean, at least with so far, we're looking at dedicated type air operations. I mean, it's still all about store about Amazon, I mean is more and more in the US. By the end of by the end of next year, they'll have something like 8185 aircraft under the under their control, most of them leased from you actually, probably the majority leased from you, we're seeing much more operations in in the us by our count. Shipping term tonnage was was up by about almost 50%. This year in Europe, they've just started operating their first 737 800. And so it's interesting to see what's happening there. But But so far, it's really been confined to them. And I really see Alibaba doing more charges than they were doing last year. But yeah, the question is, in your mind, are we going to see some of these other ecommerce platforms start Amazon store dedicated operations, or is it just going to stay Amazon? Rich Corrado Well, wait. Let me address the Amazon question first from an atsg perspective. And that is if you look at our if you look at our business, so by the end of this year, we'll have leased 31 aircraft and Amazon we will have at least over the same period of time from 2016 to now. We will leased 36 aircraft is to other customers and that's anywhere from DHL to ups to Amerijet northern Air Cargo Rial Malaysia cetera cetera. So when you look at that, yeah, yeah, Amazon's, you know, kind of an outlier as far as growth goes, but the rest of the rest of the business is growing. That's that's about seven or eight aircraft a year to other folks. Right. So to us that says that the market is healthy, that the the in terms of e commerce, etc, etc. Now, back to your question, which is there anybody else out there like an Amazon? I mean, Amazon, I think I think they're ecommerce businesses eight to 10 times bigger than Walmart, US was number two. And, you know, we've, we've had some conversations with Walmart, but I just don't think there's enough scale there. to, to, to do what Amazon is doing. Now, all that said, there are some retailers and some other you know, not non aviation entities around the globe, that are looking for dedicated building a long term lift, and network style fulfillment, but you're talking about two to four aircraft, something along those lines, not, the closest thing you'll probably find is the channel network in China, where, you know, it's a it's a separate entity than Alibaba, but it's facilitated by Alibaba as volume. And there's a number of different players in that network. So it's not one retailer saying I'm gonna use this dedicated network. But you know, there's a lot about, you know, we, we still believe there's a lot going to be a lot of opportunity to express type, you know, network providing freighters in China going forward. Frederic That's good. Thank you for writing that because it's good context as well, you know, with every great talking e commerce, e commerce and Amazon at the time, but there's a lot of, there's a lot of growth that's happening outside that is that as well. And even if we're looking at the, at the growth rate of different e commerce platforms, not just you know, Alibaba, JD and Amazon, the big three, but some of the sort of the mid size and, and regional platforms, there's been some significant significant price there as well. And with that comes potentially require, Rich Corrado and we've got the, we've got the vaccine in front of us, which, you know, aircard is gonna play a heavy role in facilitating the, you know, the mobility and the, you know, the deployment of how that's going to flow throughout the globe. So that's the challenge Frederic vaccine. That's, that's the billion dollar question, isn't it? How much a frame that's actually going to get around? You know, where is it going to come from? Where is it going to go? over? What period is it going to be? And, you know, there's been some wildly differing estimates of the number of free flights that we would need anywhere from, you know, a few thousand to 218 19,000. I think 80 90,000 is a bit off the scale. So I think there will be some, some demand for that as well. And that benefits companies like yourself, and everybody who essentially has capacity. So Rich Corrado sure, it's gonna it's gonna the, you know, the large aircraft haulers are getting, you know, they're gonna be Oh, intercontinental, and you're gonna need to move it in country as well. So it's gonna be a full full challenge. Yeah. Frederic And why have you shown very little interest, if any interest at all in large, wide body fighters so far? Rich Corrado Yeah. Well, I the first, the first reason for that is if you look at when I talked about our resilient business model, we talked about network flying. I mean, if you look at network flying, for example, in the US, you know, whether there's a there's an economic downturn, you know, DHL UPS and FedEx has to go to Billings, both Boise, Butte and Buffalo, whether the planes have full or three quarters full or whatever. So they're not, it's not, it's not going to be a significant freight impact. But when you have a downturn, and you're flying large, seven, four sevens or triple sevens, and there's an economic or global trade dispute or an economic downturn, you know, what was five days a week may go down to two or three days a week, or the lane may change or it may hop through some different places, and you're much more open to volatility in the market. So we've never liked having to spend a lot of money on a big freighter and have have it exposed to that type of volatility. Now that that said never say never one of the reasons that we purchased on the on the year as a passenger carrier, but they do fly Seven, six sevens and triple sevens and our thought process on that was look, let's, let's, you know, get on the end of the fall. There's been a fantastic acquisition fantastic company for us. And then, you know, we've we've hit on some CMI opportunities as an example. So you know, leasing in somebody else's airplane flying that and going forward, we'll continue to look at the market and look for those opportunities where again, we can if we can get a long term opportunity, then then that's what best fits with with what we do. Frederic Talking about acquisition opportunities. Do you think there's going to be more acquisition opportunities coming up in the market now over the next 12 to 18 months? Rich Corrado Well, it's interesting, because if you, you know, we, we, we were involved in so many different segments. So we look at the MRO segment, as an example. And we look at things that are going on, they're leasing, airline operations. And one thing I can tell you is, if it's not cargo, there's a significant amount of risk in anything that you that you look at. And that includes the MRO business, we, if you look at our room, Mr. of business, when the pandemic hit about three weeks after all these shutdowns occurred, you know, most of our passenger customers just stopped and pulled their aircraft down. And we had a we had holes in our hangars, we had to fill. Luckily, we have our own fleet. So we were able to keep our our MRO utilized in our employees working. So it just is there's just a lot of risk right now in the market. If you're looking at an m&a and on anything that's, that's, that's related to ancillary services. On the cargo side, I really can't comment on that. We're a public company. But certainly, it's a it's a safer bet these days. Frederic And you've got your results announcement in a few days as well. So you gotta be careful what you say today, Rich Corrado I can think about what I've already said. Frederic Well, we got a 20 22nd delay on the light side, you better be quick. Rich Corrado That's right. Frederic Okay, I think we're about we're almost out of time, actually. So I'm just gonna have a look if we got any, any any other questions that were that were coming? Here. There was one there was one question, perhaps. Yeah, we talked about big claim, but what about what about really little ones? I mean, is the feeder market one that that he has, you know, potential interest in as well? Is that an area where you see that his development potential or? No, because we're just competing against trucks? Rich Corrado Well, you know, we well, we look to do when we look at m&a acquisitions, like we did with Omni, or we bought Pemko. Back in 2017. As an example, we look for opportunities to diversify our revenue, so that we can spread the revenue out among different customers, and it needs to fit with our return hurdles, you know, what we expect to return on investment. And so when you look at it, when you look at opportunities, like feeder airlines, if they fit into that profile, then it's something we would be interested in looking at. The other thing is it does synergize Well, with a customer base, but then again, we're not diversifying our revenue, because we might be getting more revenue from ups as an example, if the feeder market flies for, for ups. Generally speaking, in looking at, you know, those types of operations, a lot of them, not a lot of them, but I know some of them get their aircraft from the company that they fly for. For example, FedEx might lease some of the smaller aircraft into some of these feeder groups. So it doesn't really fit with what we do, which is, you know, look to spend money on the metal and at least over time. The video recording is also available in podcast audio form:

Fireside Chat with ATSG’s Rich Corrado

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