Question-and-Answer Session
Operator
Certainly. (Operator instructions) And our first question comes from the line of Bob Labick with CJS Securities. Please go ahead at this time.
Bob Labick – CJS Securities
Good morning.
Jason Grant
Good morning, Bob.
Bill Flynn
Good morning, Bob.
Bob Labick – CJS Securities
First, you gave us a context to understand the impact, if you are unable to place the 400s as they come back to you, and I know you are actively seeking to place them. But previously you had guided to pre-tax income of $130 million in 2009. You only gave us a context as a delta. Is that 130 still the rate starting point for the Delta guidance that you just gave us.
Bill Flynn
Bob, that would be the right starting point.
Bob Labick – CJS Securities
Okay, great. That is very helpful. And then you discussed the LOI claims, could you talk about it may be just a little more. You discussed moving potentially from March to October, but if you found a home for those planes before October at the earliest. Can you place the planes then or they are up in the year, I guess, for six months no matter what. How is that arrangement working out right now?
Bill Flynn
So, as we talked about it in our lost earnings call, we entered into an LOI unit and customer for placement, and our expectation then was that the craft would essentially go right into service for that customer upon return. The customer has amended the LOI, and given the market conditions, has indicated to us that October 2009 at the earliest as I've said. If we had a firm placement for that aircraft – for those aircrafts, before that date, we would place the aircraft.
Bob Labick – CJS Securities
Okay, great. And could you discuss the various options, just proudly speaking not obviously customer specific, but you are looking at for the 400s as they come back, I mean are there dry lease options, are there other markets. What are the potential – you mentioned you don't want to go on to a 5 or 8-year ACMI contract at the bottom of the market, but what are the options you are looking at?
Bill Flynn
Well, as we said we are continually marketing our aircraft to customers, and we have a steady ongoing dialogue with a range of customers. We prefer an ACMI placement. We think particularly in this market would give us the best margins and the best returns and build a long-term relationship that we want to have. So, we are in dialogue with other customers. I think it is the first point to make. If – the other point we said in our script and in our release, we are not going to bottom price this aircraft. We don't need to bottom price the aircraft, because I would say, somewhat unlike a dry lessor, we have an alternative placement for the aircraft that will yield us attractive margins and returns in our AMC, if we don't find an attractive contract immediately in ACMI. And if there were a dry leasing opportunity that made sense and yielded the kind of returns that we estimate we could otherwise achieve, certainly we consider it. But those I think are the range of marketing options that we are working today Bob.
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