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Aircastle was formed 7 years ago, as a green field aircraft leasing company by a private equity firm called Fortress. We were basically a build versus buy decision. And we were custom tailored to kind of start fresh with the capital structure, with the portfolio and with the team. And over this last seven years, we built up to being a fairly substantive company. 144 aircrafts with a big spread of business all over the world, we had a different strategy. We kind of view ourselves fundamentally as investor. We don’t really feel like we need to follow the pack as long as we see good value.We’re relative value players at the end of the day, and so we’re looking for good relative returns, after considering risk. We do focus having said that, on what’s the current technology. Now, current technology changes all the time, but our focus right now is biased in general, towards the front part of a production run. In general, the theory is that last off the line is usually, least likely to host value. And the converse is true. We finance ourselves and Mike will spend a lot of time talking about that, that’s one of the things that makes us different is that it is a very conservative capital structure, and we see the market today as being particularly interesting, particularly attractive from investment opportunity perspective, it is particularly those areas that we’ve been focusing on. And what’s kind of unusual is, that usually when you most want money, it’s hardest to get. And that’s probably true for those who are relying on banks for financing. It’s not true in the bond market. So it’s a good set of circumstances, so if we take the step back and look at the investment thesis. It’s a growth industry, positive long term fund rentals. We’re focused on a modern aircraft type. Our portfolio is extremely diverse, a good spread of risk in terms of geography, in terms of customers, in terms end users being cargo and passenger. We’ve got a terrific servicing record, I’ll take you through, and our cash flows and our capital structure are very solid.
So summary on the market, last year we saw a nice recovery from a very deep down turn that we began exiting from a 2010. Growth in our sector is fundamentally GDP driven and what’s helped is that the emerging economies China, Turkey, Brazil, elsewhere are driving, the world economies. They in turn are driving the aircraft leasing space, accounting for bigger share of the pie, and they are also a part of the economy where the aircraft leasing penetration is higher than in the developed world.The passenger market was actually stronger than the freight market, in fact in my view, kind of surprisingly strong given, the headwinds, in the global economy. So revenue passenger kilometers which I view as a measure of demand or consumption, up almost 6 percent last year. Freight market down a little bit. Truth is when you have adjust for fares and yields, it’s all that worsen that. In terms of freight market, we think that the bottom might have been reached recently, truly I say that for sure, but that sort of what feels like. I think we’ve got a little bit more of softness in terms of passenger. The supply of parked aircraft and, as a supply and demand equation as always, is a different story depending, on what you’re looking at. As far as narrow bodies, we’re concerned about the production levels going up. There are some short terms effects by bankruptcies and the like, but I think the production levels are longer term which you have to worry about. Different story with wide bodies, where there have been production issues with the new 787, there’s a ramp up to, there’s delays in introduction of new aircraft types and it’s a different story in that market. And we feel more bullish about those as investors as a consequence. Read the rest of this transcript for free on seekingalpha.com