Bristow Group Inc (VTOL) 2022 Q3 法說會逐字稿

Good day, and welcome to the Bristow Group Reports Third Quarter Fiscal Year 2022 Results Conference Call. Today's conference is being recorded.

At this time, I'd like to turn the conference over to Crystal Gordon, Senior Vice President and General Counsel. Please go ahead.

Thank you, Cody, and good morning, everyone. Welcome to Bristow Group's Third Quarter Fiscal Year 2022 Earnings Call. I'm joined on the phone today with our President and Chief Executive Officer, Chris Bradshaw; and Senior Vice President, Chief Financial Officer, Jennifer Whalen.

Let me remind everyone, during the call, management may make forward-looking statements that are subject to risks and uncertainties that are described in more detail on Slide 3 of our investor presentation. You may access our investor presentation on our website.

We will also reference certain non-GAAP financial measures, such as EBITDA and free cash flow. A reconciliation of such measures to GAAP is included in the earnings release and our investor presentation.

I'll now turn the call over to our President and CEO. Chris?

Thank you, Crystal, and welcome to the call, everyone. As always, I will begin our prepared remarks with a note on safety, which is Bristow's most important core value and our highest operational priority.

Over the last 2 years, Bristow team members working on 5 continents have dealt with the challenges of managing through the global COVID-19 pandemic. These men and women have adopted new personal protective equipment, implemented additional operating procedures and followed enhanced health and safety protocols, all while dealing with the pandemic effects and stresses in their own personal lives. They have done this with a dedicated focus on getting everyone home safe and healthy every day, and delivering reliable and efficient service to our valued customers. I want to commend and thank all of our Bristow team members around the world for their continued dedication to our mission and Bristow's Target Zero Safety culture. Thank you.

The company has also made significant integration progress following the merger of Era and Bristow in June 2020. As of December 31, synergy projects representing approximately $47 million of annualized savings have been completed, which means that we have already captured 94% of the target synergy projects identified with the merger.

As outlined in yesterday's press release, Bristow's disappointing financial results in Q3 FY '22 were due to a number of factors. Between foreign currency losses and equity losses from unconsolidated subsidiaries, the sequential quarter EBITDA experienced a negative variance of approximately $5 million from below-the-line noncash items. The timing of major repairs and aircraft lease return costs contributed another $5 million to this negative sequential quarter variance. In addition, we incur extraordinary costs related to the temporary relocation of operations in the Gulf of Mexico, following damage caused by Hurricane Ida, which slammed into the Louisiana coast line on August 29. These hurricane-related costs totaled over $3 million in Q3.

Thanks to a lot of hard work from our Bristow U.S. team, we returned to full operations out of our super base in Houma, Louisiana in mid-January. So while there will be some adverse effect on Q4 financial results, this impact was limited to the first couple of weeks of the new calendar year.

With that, I will hand it over to our CFO for a more detailed review of Q3 financial results. Jennifer?

Thank you, Chris. Today, I will begin with the sequential quarter comparison of Bristow's financial results. EBITDA adjusted to exclude special items and asset dispositions was $30.7 million for the third quarter of fiscal year 2022 compared to $44.5 million in the second quarter or a decrease of approximately $14 million. As Chris noted, our current quarter financial results were adversely affected by expenses related to Hurricane Ida.

We carry insurance policies that cover the costs related to damage of any aircraft or facilities. In addition, we have business continuity coverage that offset a portion of the costs related to operating from ultimate basis. However, there were extraordinary costs related to the prolonged displacement of operations following Hurricane Ida, which included hotel, travel and other operating costs. These net costs totaled $3.4 million in Q3 compared to $1.3 million in Q2, resulting in an adverse variance of $2.1 million to the sequential quarter EBITDA.

Additionally, operating revenues decreased $5.1 million, primarily due to lower utilization in government services and decreased activity in fixed wing operations due to COVID-related travel restrictions and seasonality, partially offset by increased oil and gas revenues due to higher utilization in the Americas. Operating expenses were $3.1 million higher due to higher fuel expenses, maintenance costs, and the previously referenced costs related to the relocation of certain bases due to damage from Hurricane Ida.

General and administrative expenses increased $2 million due to higher nonrecurring professional service fees. Earnings were also negatively affected by losses from unconsolidated subsidiaries of $0.9 million in the third quarter compared to earnings of $1 million in the previous quarter. In addition, we experienced losses on foreign currency of $0.8 million in the third quarter compared to gains of $2.2 million in the previous quarter or a $3 million negative effect on EBITDA.

Finally, Bristow continues to benefit from a strong balance sheet and liquidity position. As of December 31, available liquidity was $326 million and our net debt to LTM adjusted EBITDA ratio was approximately 2x.

In conclusion, in the last 12 months, we have generated $162 million in adjusted free cash flow, and as we have stated before, we believe this business model will continue to have strong free cash flow.

At this time, I'll turn the call back to Chris for further remarks. Chris?

Thank you, Jennifer. We continue to have a positive outlook on the future demand for our services. With crude oil and refined product inventories below historical averages, increasing demand trends as the pandemic effects recede and limited excess capacity in the market, the fundamentals for the oil and gas industry are very favorable. We continue to believe that a significant broad-based increase in offshore oil and gas activity will begin in earnest this year. Indeed, the recent strength in commodity prices and improving market conditions have enhanced our belief that we are on the precipice of a multiyear growth cycle.

Given the operating leverage inherent in our business, Bristow's financial results will benefit greatly from the expected increase in offshore oil and gas spending. Beyond oil and gas services, we believe compelling growth opportunities exist in government and military services, offshore wind farm support and advanced air mobility. In particular, we were pleased to announce the successful award of the Dutch SAR contract to Bristow. This 10-year contract with 2 1-year extension options will commence in November 2022 and involve providing dedicated SAR-equipped AW189 helicopters operated by highly qualified Bristow crews from 2 bases in the Netherlands.

We are currently involved in other active tender processes for additional government SAR contracts in both Europe and the Americas. And we believe Bristow is well positioned to grow our global leading search and rescue business.

We were also pleased to announce the recent completion of offshore revenue flights in the U.K. using sustainable aviation fuel. As previously noted, Bristow intends to be an early and leading adopter of sustainable aviation fuels. Combined with our adoption of electric power ground support vehicles, early partnerships with manufacturers of electric vertical takeoff and landing and short take-off and landing aircraft and other initiatives, Bristow is committed to remaining the global leader in innovative and sustainable vertical flight solutions.

With that, let's open the line for questions. Operator?

(Operator Instructions) And we'll take our first question from [Doyan Cha] from [McKay].

First, it looks like you had several kind of nonrecurring or extraordinary cost items in the quarter. And I just wonder if we use kind of the $31 million as the adjusted EBITDA number for the quarter, I just was wondering like these factors like FX, hurricane-related costs, et cetera, like what should we expect next quarter to come back, so to speak? What should we credit back?

Well, we can certainly comments on the items that impacted this quarter. So in the current quarter, there was a negative variance, at least relative to the prior quarter, of about $5 million just due to below-the-line noncash items in the form of foreign exchange currency translations, yes. And also, as we noted, this quarter was adversely impacted from extraordinary costs related to the dislocation following Hurricane Ida. That in and of itself was about $3.4 million in total cost that impacted the December quarter.

We also noted some items related to the timing of repairs and some lease return costs for aircraft that we're preparing to return to the lessors. And those 2 items themselves were about $5 million in negative variance, again, relative to the prior quarter. So some of those items, we will see, in the future. For example, we're always going to have some variance in our timing of repairs. It will be a little lumpy as we look at the portion of our fleet that's maintained on a time and cost of repair basis. Others have ended, such as the hurricane-related costs and there are others like the foreign currency exchange, which will vary from quarter-to-quarter. But again, that and the unconsolidated subsidiary earnings are really noncash items.

Got you. Now could you also -- I think last quarter, you had touched upon fuel costs being pressuring the margins a bit. I'm just wondering if that -- if you've seen a continuation of that.

And then my last question is related to working capital, if it was a source of cash this quarter. Can you give some guidance on how we should be thinking about the seasonality or what to expect next quarter?

Sure. I'll start with the working capital, the cash flow. We did benefit from working capital for our cash flow this quarter. This is really due to some timing of payments from customers that came earlier as well as higher accrued interest for our notes that we have outstanding, partially offset by some lower operating goals and a $9 million legal settlement that we had last quarter.

So on working capital, it's based on timing of payments, and we did have this bigger driver from the accounts receivable this quarter, and we will make our interest payment next quarter. So it will fluctuate from time to time.

And the first question was on pricing?

Fuel.

Fuel price. So we pass our fuel cost on to our customer. It is primarily a pass-through. We do have an airline in Australia that's a little bit different because it's based on ticket prices. But generally, our fuel is passed through to our customers.

Is the pass-through instant? Or is there typically some lag we should expect? I'm just -- again, just trying to model the next quarter and get a better understanding of that.

It's not really a lag. It's based on a formula that we use based on average fuel prices that month. So there can be some disconnect between the 2, but it typically catches itself up. So it could have a little bit in the last month of the quarter, but generally, it's in the same quarter.

We'll take our next question from John Deysher with Pinnacle.

I was just curious on the swing in the unconsolidated subsidiary income, where -- to what do you attribute to that to?

Really, the only thing that's going through there, John, is our investment in Cougar. So that's our investment in Canada. So they had some fluctuations, they had some income last quarter and not this quarter.

Okay. And I think in the prior call, you mentioned that the Airnorth fleet was going to be reconfigured by the end of this year. Is that still on track to get completed by the end of this year for Airnorth?

John, so that Airnorth fleet transition, we expect to be complete by the end of our FY '23. So it will be a little over a year from now as we work to transition some smaller regional aircraft into some slightly larger Embraer E190s, which will also will be on more favorable lease terms. We think both the capacity to carry more customers on the aircraft, especially as travel picks back up in Australia following the pandemic as well as the economics on those leases, will put the Airnorth business in Australia in a much better place following that transition.

Okay. That's good to hear. And just back to Cougar for a second. Was the decline -- was it -- was the result of the decline in hours? Or -- what was the basis for less revenue coming in through Cougar or less profit?

So I'll back up a little bit on Cougar. So just for -- to remind you, we do have lease -- we leased helicopters and facilities into Cougar. So we do have economics coming out of Cougar. It's on a cash basis today because the results have not been great. So -- but in the last previous period, they had some more unusual settlements that contributed to revenue that didn't continue into the next quarter.

Sorry, I'm not clear. When you say settlements into revenue, what does that refer to exactly?

They had some costs for the end of some contracts that happened that we noted in previous quarters, we had an impairment due to the end of contract, and they received a settlement for the ending that contract that they received in the previous quarter, which didn't recur in the current quarter.

I got you. Okay. Fine. And on the SG&A, it was up by $2 million you said for professional expenses. Could you give us some color as to what types of professional expenses you're referring to?

This is primarily related to an ongoing legal matter. Other than that, it's not part of our normal run rate of what G&A will be going forward.

Do you expect that to continue through the fourth quarter?

We may see some additional costs related to this legal matter. We may.

You may see, okay. Is this legal matter disclosed in the 10-K or the 10-Q?

No. It's not, John. So this is a claim that we're pursuing against a vendor. We think it's important, obviously, to protect the company's rights. Hard to say how this will evolve over time as it's often the case in disputes of this nature. But as Jennifer noted, this is not part of our recurring SG&A.

Okay. Was there anything in past quarters related to this dispute?

There was $0.8 million in the preceding quarter. And then the amount is a little over $2 million, about $2.3 million that we disclosed in this quarter.

All right. I would guess that if it continues in the fourth quarter, it's not resolved, you will disclose the basis for the complaint in the 10-K?

Yes. Again, it's an active dispute. So I think it's a dynamic situation. Hard to predict exactly how it will evolve within a particular quarter. But yes, as it has any impact on our business, we will disclose that.

We'll take our next question from Sam Mitchell with Empyrean Capital.

Just three for me. First, is there a specific leverage target do you have to hit before resuming share repurchases? Second, can you comment on price realization in the quarter and the overall pricing environment going forward? And then third, given a very upbeat tone on the strength of the offshore market, can you provide additional commentary on where you see potential EBITDA relative to the $240 million target you laid out when announcing the Bristow-Era merger?

Sam, thank you for the questions. So on the share repurchases, I would say we remain very comfortable with the current leverage of the company, and there's nothing about our current leverage situation that would preclude us from repurchasing additional shares at this time. So not an impact there. We're comfortable with where we're at.

On pricing, I would say, as has been our case for a while, we don't discuss specifics around pricing. But what I would say is this has not been a material driver, one way or the other for the business at this point in time. Where we are right now in the cycle is that there is still some idle capacity. What will really drive the most significant improvement for the company from a revenue and cash flow standpoint is an increase in utilization. So as additional aircraft go back on contract, that will have the biggest impact on the company's financial results. The pricing itself has not been a large variance in any recent time, nor do we expect it to be necessarily in the immediate future.

As it relates to our outlook for offshore oil and gas activity, we do remain quite positive. I think our outlook would be consistent with what you're hearing from other large players in this space, which is that we are expecting significant increases in spending from the oil and gas companies on their offshore activity beginning this year, and we expect that to be a multiyear growth cycle. We've spoken in some recent calls about the fact that the earliest green shoots we were seeing were in our Americas regions. That's really from Brazil to the Caribbean Triangle that we support up to the U.S. Gulf of Mexico. And indeed, you're now starting to see that flow through to our activity and revenues in the Americas. You'll note that Americas oil and gas revenues have been up consistently over the last 3 quarters, including a 9% sequential quarter increase. So we do have a positive outlook as noted.

With respect to the specific target that you mentioned, at this time, we're not providing financial guidance, but what we have said and we'll reiterate here is that we do believe that the oil and gas helicopter market will return to the levels of activity that we saw prior to early 2020 when the pandemic began. So the run rate that you referenced again is still within where we think offshore activity will return to as spending starts to increase again. No predictions on exact timing of what quarter or fiscal year within a quarter that, that will happen. But we do think we will get back to and surpass the overall levels of activity that existed prior to this pandemic.

We've noted before that we think it's unlikely that the overall industry will ever return to the pre-2014 levels. But certainly, that 2019, early 2020 -- not only do we think we'll return to that overall level of activity but also surpass it.

(Operator Instructions) We'll hear next from [Adam Ritzer] with -- a private investor.

Can you give us a little more of like a global outlook? I know you've talked about the Americas that's coming back strong. Can you give us a little more color on what's going on in Africa, in Europe, maybe between Norway and the U.K. and talk about that a little more specifically?

Adam, in terms of some of those other regions, again, not quite the level of activity that we're seeing come back in the Americas at this time. Africa and more specifically in Nigeria, as you know, has been one of the markets hardest hit since the pandemic began in early 2020. The overall market has contracted significantly there. I think it will be -- there will be an increase again in activity there is our expectation, but not coming back online quite as fast as the U.S.

In Europe, overall activity has been more stable, particularly in Norway. Norway activity was actually up a little bit sequentially in the December quarter relative to September. In the U.K., that market has been impacted by the decline in activity. It also is -- I think you personally will recall Adam, there's a fairly challenging competitive landscape in the U.K. given the number of competitors there. So that's also impacted our business.

I would say, again, that we are positive on the global outlook. We do think there will be a broader-based increase in offshore oil and gas spending over time. We just think the Americas is moving more quickly, and we're already starting to see the benefit in the Americas whereas spending in these other regions will probably take a little longer to come back online.

Got it. And I mean going -- touching back on what you just mentioned, the competition, have you seen any positive effects with CHC taking out Babcock. I know Babcock in the past, you guys have pointed out, they have been almost underbidding contracts just to get the revenue. Can you talk about anything going on there if it's improving at all?

Well, we continue to believe that the North Sea is -- particularly the U.K. sector, the North Sea is a market that really needed consolidation and should benefit from consolidation. There is a regulatory review going on, in particular a merger that you mentioned. That review is not yet completed. It's tended to be completed over the coming months, which will determine whether or not they'll be able to actually integrate those businesses and run them together.

So we'll follow the developments there with interest. But again, we think that, that market, in particular, really needed consolidation and needed structural change to get to a more sustainable place.

Right. And when you talked about the SAR business, I know there's a couple of large contracts in the EU. There's Ireland. And obviously, you guys are trying to renew the U.K. deal. But you also mentioned the Americas. Are there new SAR contracts in the Americas that you can talk about at all?

Yes. We're actively participating in a tender for the Dutch Caribbean Coast Guard contract. So this is a government-provided search and rescue support for the Southern Caribbean region here in the Americas. Actually, Bristow was determined to be the preliminary winner of that contract. It is going through a structured period, where people can launch challenges to that determination, but we were really happy and pleased to see that the government designated Bristow as the best provider for that future contract. We hope to secure the ultimate award of that contract soon and secure the geographic expansion of our government-provided search and rescue business into the Americas.

Will there ever be or maybe there is SAR business in Guyana and Suriname, with all that activity that everybody reads about almost daily? Is there anything there that could develop at some point in time?

So we do provide search and rescue services to our commercial customers, our oil and gas customers throughout the Caribbean region, in each of Trinidad, Guyana and Suriname. We provide SAR support to the oil and gas community drilling there. There's not, at least this time, any government contract that's up for outsourcing or bid, but we are active in the provision of search and rescue support to our commercial customers there.

Okay. So you guys just providing to your customers, not (inaudible) at this time, okay. And then the last question I had is about the balance sheet. Obviously, you guys are generating a significant amount of cash for the business from working capital. It seems like you have way too much cash and you have a ton of liquidity. It doesn't look like there's going to be anything left to do in consolidation right now or maybe there is behind the scenes. But how come you're not more active on either paying down your debt besides the notes and/or you haven't bought back stock in the last 5 or 6 months? Why do we need all this liquidity at this point in time?

Yes. So we do think Bristow is fortunate to have a strong balance sheet, including a robust liquidity position. We think there are multiple opportunities to create value with that availability. As we think about those alternatives, I'll reference a few of the ones that you mentioned. First of all, we have paid down a lot of debt since the merger closed. And just in the last couple of quarters, we paid off, cleaned up debt in Australia and in the U.K. that we had locally related to an airport that we own there. So right now, we have a much cleaner capital structure than with the case immediately after the merger, when we have the publicly traded senior notes. And then we have the U.K. SAR-related debt, which is at a very favorable rate. So we're pleased with the progress that's been made since the merger closed on really cleaning up the debt side of the capital structure.

With respect to share repurchases, the return of capital to shareholders has been a priority, and we're going to continue to look at that as one of the principal alternative uses for the available cash. We have repurchased approximately $50 million of stock since the share repurchase program was approved in late 2020. And again, that will continue to be one of the primary considerations for our available cash.

We do think that M&A and consolidation is a potential use of cash for us. And indeed, we think some of the potential consolidation opportunities that are out there could be some of the best long-term value creation opportunities available for the company and our stakeholders. That was the case with the Era-Bristow merger, and we think there could be other consolidation that would be attractive as well.

We also have some needs for cash that will be related to growing our SAR business. For example, we will bring in a new delivery helicopters to support the award of the Dutch SAR contract in the Netherlands. We are following other opportunities in government SAR contracts, as we've already talked about on this call. We're also mindful of our balance sheet strength as it relates to some of the big bids that we're pursuing. For example, some of these large government contract awards will look at the service providers' balance sheet and credit situation. So we're always going to take that into consideration.

So all of which is to say, Adam, we think we're in a favorable position now. We do have available cash to put to work. We think there are multiple opportunities, multiple alternatives to create value using that availability.

We'll take our next question from Patrick Fitzgerald with Baird.

Yes. What percent of your like increase in flight hours that you're expecting from oil and gas would be? I know it's somewhat difficult to say, production versus incremental drilling activity?

Sure, Patrick. If you look at our business today on the oil and gas side, more than 80% of our revenues are coming from production support. The exploration side is the minority. However, that's likely where a lot of the growth will come from.

To directly address your question, there will be some increase in flight hours related to production support because there's some aspect of production activities for oil and gas customers that are elective. They can choose when they want to do major projects. For example, whether it's an upgrade or a major repair on a production facility. They may defer that depending upon the commodity price environment or their capital plans. So that elective expansion or contraction of production support will drive some change in flight hours.

But as we think about growth, it's really new projects. It's really more of the exploration side, whether it's seismic or drilling or completion activities that as more floating rigs are put to work to support those activities, we'll need more helicopters to go to work to support those customer demand. Flight hours will increase. And again, even more so than flight hours, just getting more aircraft on contract as our customers need to support that kind of transportation for their increased activity will drive the increase in Bristow's revenues and cash flows.

Okay. So it's more of a you're expecting increased drilling to some extent. And then you're expecting increased volume or just kind of loosening of the purse strings at your customers? Because I mean like production as a whole is not like up significantly, and I wouldn't expect. So if you could provide some color on that, that would be helpful.

Sure. So from the baseline where we're at today, most of the growth will be driven by new activity, exploration related, again, either seismic drilling or completion activities. There will be some likely increase in the personnel onboard, the number of people that will go to support additional projects on production as well. So I just -- I note that to mention that it's not purely static on the production side, either there is flex in that spending.

But from the baseline where we're at today, especially getting additional helicopters back on contract, new exploration activity, either seismic, drilling or completion activity will be what drives that.

Okay. And then in terms of pricing power, what gives you guys confidence there? I mean is it like a utilization level that you're bumping up against that historically has provided upside with rates? Or...

Well, pursuant to our long-standing policy, we don't make specific comments on pricing for competitive reasons. But I would note that pricing has not really been a big driver in our business for a long time. It's been more about utilization of the fleet. And that's been the case since really the 2014, 2015 downturn. So will pricing increase over time, we certainly hope so, but right now in the immediate near term, it's really about getting more aircraft on contracting, increasing the utilization.

Okay. And then just -- could you just remind us where you stand with respect to the U.K. SAR 2.0? What you have to do, what we can expect to hear?

Yes. Happy to do that. So late last year, we submitted our bid. There -- it's a fairly public process. There are 2 companies, ourselves and one other left in the competition. We will be entering later this month the negotiation phase with the U.K. government as they continue their work on which provider they want to award the 2G contract to. We think we're very well positioned there to secure the win, obviously, not taking anything for granted. They stated that they will make a final determination and announce the winner of the 2G contract later this year by October of 2022.

We'll take a follow-up from [Doyan Cha] with [McKay].

With regard to your comments earlier about M&A opportunities, your leverage currently on an [option] basis is about 2x, maybe on an annualized latest quarter basis, it's higher. I'm just wondering what kind of leverage metrics are you abiding by when considering potential M&A?

Thank you for the question. And we are comfortable where we're at today, where we're at from a leverage perspective today. However, in -- depending on the transaction, we would be willing to let that go up as long as we had good visibility into the cash flows of the combined new business going forward.

Okay. And would you be looking to potentially balance such a potential transaction with both cash and equity? Or is it primarily with cash?

Well, with M&A situations, it is a two-way street. So there may be some situations with the buyers looking for a particular form of consideration. Obviously, from our standpoint, we will have our own priorities as well. So really hard to answer on a blanket basis. It will depend situation to situation.

I think we're in a favorable position as Bristow because we are, today in the industry, in addition to being the largest global player, we do have the strongest balance sheet, so the ability to use cash. We also have the best ability to access additional financing, whether that's debt or equity, we are the only publicly traded helicopter operator left in the world. So I think we have more flexibility and a more favorable -- we are in a more favorable position to affect consolidation than anyone else.

Got you. I have one last question regarding wind farms. I think you've been talking about for almost a year now. And I just wanted to see how you were measuring progress in that market? And if you could discuss a little bit how you're positioned relative to competition or other substitute forms of transportation?

Sure. Thank you for the question on that. Offshore wind here in the U.S. is a market -- a very nascent market. It really doesn't exist from a helicopter support contract today. Here in the U.S., we're actively participating right now in 2 active tender processes to support what will be new wind farm projects. So these would really be the first offshore helicopter support work in the U.S. for that industry. So we're optimistic there. I hope to be in a position to win some of that work in a market really that, again, today doesn't exist, but we expect to grow and to grow meaningfully over the next several years.

In Northwest Europe, we have provided limited amount of offshore wind support. We're currently supporting an offshore wind project out of the U.K. right now with some helicopters. In terms of a broader scale, this space, offshore wind, Northwest Europe had not been a part of Bristow's business historically. Post-merger, we have looked at ways to penetrate that. We've noted before that we will look at both buy and build options to grow our offshore wind support business in the North Sea. Pleased to be supporting those projects today. And again, we're looking actively today at ways we can further penetrate offshore helicopter support for wind projects in Europe.

Got you. So is there any difference in the kind of specs that are required or better suited for offshore wind farm support versus your fleet? I just want to get a better understanding of that aspect.

Yes, it's a good question. The answer is yes and no. So there are really two stages that you would think about offshore helicopter support for wind projects. In the initial stage, in the construction phase of the wind farm, you're typically using larger aircraft, whether that's medium helicopters or larger to support crew change for the crews that are conducting that construction work on the project. Those aircraft would really be the same models and really the same mission profile that we do today for our oil and gas customers, for their crude transportation needs.

Once the wind farm is up and running, it transitions into an operations and maintenance phase. And then the mission changes. There, the mission is more about placing the maintenance personnel down to the top of the (inaudible) to conduct the work that needs to be done, whether scheduled or unscheduled maintenance on the turbine.

And the right aircraft for that mission profile is really a new generation light twin helicopter, whether that be an H145, manufactured by Airbus or an AW169 manufactured by Leonardo. Those are the 2 most common types used today in the mature markets like in Northwest Europe.

So that operations and maintenance phase, which will go on for the life of the wind farms, so you're talking about a few decades, does involve a different type of aircraft than what we have in our fleet today. And so as we look to participate in some of those contracts, we would need to bring in some new aircraft.

And that does conclude today's question and answer session. I'd like to turn the conference back over to management for any additional or closing remarks.

I want to thank everyone for joining the call today. I look forward to speaking again next quarter. In the meantime, I hope everyone stays safe and well. Take care.

Thank you. And that does conclude today's conference. Thank you all for your participation, and you may now disconnect.