Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Robert Labick – CJS Securities.
Robert Labick – CJS Securities
You were just discussing the expansion of your relationship of DHL with the two new planes that went in to service at the end of March. Could you clarify if those two are now going to be under the similar multiyear, 20 year block sharing agreement and the economics similar to the other six? Or, is there a distinction between the two planes and the fixed planes?
William J. Flynn
Well, a couple of points. The two aircraft enter service for DHL in an ACMI relationship. So, similar to the other six they will perform and be contracted in under ACMI terms which, as you know, a block rate per hour and a minimum number of hours per month and per year. The term though for the two incremental is not the 20 year term for the original six, it is a shorter term.
Robert Labick – CJS Securities
Then, you probably have been hinting or just saying directly about the expansion opportunities. One of the ways which you could expand certainly is to take advantage of the options for the additional 14-8s. When would you, or what would you need to do to utilize those options? And, when would you have to make the commitment for that?
William J. Flynn
Well, we’re evaluating those options Bob and we think there is certainly real value in those options. The questions I think is really the timing of when we commit to them and while we have good pricing on that, there are other conditions that we are in the process of discussing with Boeing and negotiating with Boeing. So, we certainly would look to take aircraft in 2012, 2013, possibly 2014 so that if we’re going to execute those options we would need to do that over the next 18 months or so.
Robert Labick – CJS Securities
You’ve discussed that you’re already sold out for the [inaudible] capacity for 400s through 08 but given the dynamics with rising fuel and essentially the increased value of the 400s versus a lot of the 200s that are getting retired, what’s the renewal environment look like for 09? Or, how is that shaping up?
William J. Flynn
We have a few aircraft to renew in 2009. We don’t believe we’ll have a problem placing that aircraft.
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