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| Statement |
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| We think we have the highest quality headroom business aviation already and that's improving all the time |
| Yet, other things equal, the strength of our borrowing program and the potential to achieve investment grade bond ratings in 2025 will support increased leverage and lower debt cost |
| And we feel very robust programs, both training and monitoring programs to ensure that we operate safely |
| We've been getting these up safely and with a very good level of quality |
| And what we're seeing right now is record backlogs at the OEMs |
| Our ambition for RapidBuilt is to continue improving on the quality of our build |
| Site acquisition, we feel like we're in a very good position, the pipeline is much more robust than we expected it to be and we're quite excited about that |
| So one benefits on the fact that there's already a cash flowing portfolio of collateral to support the next bond deal and so on and so forth, which is why we are optimistic that in 2025 when we go to the rating agencies, it will secure -- expect to secure investment grade ratings |
| Please note that as we move from 12 airports to 20 airport scenarios, we will expect the unit economics to be enhanced as the next 12 airports on average are expected to be more profitable that our first six |
| Please note the obligated group turned cash flow positive in this past quarter and is expected to continue to move in positive territory as new campuses open |
| But again, we expect very considerable benefits once that is integrated |
| There's been significant consolidation in the aircraft -- in the FBO industry under the umbrella of Atlantic and Signature Flight Support, which again if we have time in Q&A, we'll talk about why we think that's been a positive for Sky Harbour |
| So it's very efficient from our perspective |
| We're finding that works quite well |
| As Tal mentioned, by having our leasing group internal and moving -- and having a good cadence of having these campuses open in a staggered fashion, it makes it very efficient for doing this internally |
| And an allocation that we're happy with it, it's cash flowing nicely, but it's not as attractive as the opportunities that we have in front of us |
| Once the ground lease is executed, we believe the value creation for our shareholders is effectively locked in and it's all about execution thereafter |
| And importantly, increasing demand from airports, we are experiencing now pull from the airports |
| You're able to command a real premium versus our original lease up of a campus where you have really very high inventory, much more inventory than anyone's ever put on the market in one shot |
| We're in a position where we feel lucky to be able to attract very specific investors into our cap table who can really push the company forward and those are both new tenants and prospective tenants |
| Functional integration is one of the areas where we have a lot to improve |
| So there's significant insulation we think from the economic cycle |
| So the square footage of the fleet is growing up and it’s going up much faster than the actual number of aircraft in the fleet |
| In terms of rentable square footage, we continue to make significant progress in securing new ground leases |
| Briefly on the market landscape, so we're still seeing very significant tailwinds |
| This will help offset the recent increase in overall market interest rates, and the expected lower NOI yields of these fields in the future will still allow us to continue to yield 30% plus levered project pre-tax ROEs |
| And what we're finding is tenants are delighted |
| And one of the perhaps side benefits of that is that we can achieve greater than a 100% occupancy in those hangars, because we do use the FBO convention of lifetime's wingspan as the square footage of an aircraft, you can play around with the geometry and see that you can get far more than 12,000 square feet of airplane into 12,000 square feet of hanger |
| The fact that we have a rapid prototyping loop with our own manufacturing capability we think is accelerating that |
| So we work with them to constantly improve the offering and the service offering has been significantly refined as we go and we expect for that to continue |
| Statement |
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| And we had real challenges with lead times on orders and things like that |
| Now as I said earlier, there are integration challenges going forward, a lot of that will be ameliorated by having a kind of a constant flow of projects, which is about to happen |
| We also have a challenge ahead as the pipeline materializes to scale up on the HR side for development, we’ll be running far more projects in parallel than we are today very soon |
| On development, the integration of manufacturing construction is a challenge that is taking time |
| So execution will be our the biggest challenge here |
| So we have a ramp up challenge ahead of us |
| There was just so much grading to do that it looked to us like it'd be difficult to have a pencil |
| I would go to the extreme in a severe recession even if -- if the bank now owns the aircraft and it's not flying, the case for hangering it goes up not down |
| So it's very difficult to say what the average rent was a year ago, what it is today |
| Number one, I can't think of many of examples of airports that we thought were attractive to us and turned out not to be attractive |
| By the way, that was an issue of timing |
| We have seen a little bit of loosening |
| That would be a very different claim if we were in the fuel business, because if you are in a soft economy, one of the levers that you can pull as an aircraft owner is fly less, consume less fuel |
| So the way we address that at the beginning in Houston was by building smaller hangars for those aircrafts, that was a mistake |
| Operator The next question is from [Peyton Skill] who asks, can you discuss construction delays historically at OPF and currently at ADS, APA? What are the biggest factors in construction delays and how are you mitigating this risk? Tal Keinan So I can say one of our biggest issues in 2022 was access to materials |
| By the way, that's become a little bit looser |
| Again, in retrospect, the revenues are so high in that market that I think it possibly would have absorbed it |
| So we have facilities, one facility that comes to mind that we actually walked away from in retrospect perhaps a mistake |
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