David Eslami

David Eslami asked for more color on the expected margins in the power business, specifically why FTAI anticipates earning high margins in its part of the value chain. He also inquired about the role of strategic M&A in the power business and whether it is necessary to achieve the stated margin targets.

Answer

CEO Joe Adams expects power business margins to be as good or better than aerospace products, primarily because FTAI can repurpose nearly fully depreciated turbine assets for a new 10-20 year life, giving it an unmatched input cost and supply. He also cited FTAI's existing repair capabilities and sourcing of used serviceable material as key advantages. Joe Adams stated that FTAI's growth is primarily organic, and while M&A opportunities to accelerate growth at reasonable costs would be considered, they are not necessary to achieve the margin targets for the power business.

David Eslami asked about FTAI Aviation's expectations for margins in the power business, specifically why the company anticipates high margins. He also inquired about the role of strategic M&A in the power business, and whether it is necessary to achieve margin targets or if the strategy is standalone.

Answer

Joseph Adams, Chairman and CEO, FTAI Aviation, stated that power business margins are expected to be as good or better than aerospace products due to leveraging nearly fully depreciated assets, unmatched low input cost and supply of turbines, and existing repair capabilities. He clarified that the plan for the power business is standalone and based on organic growth, with M&A only considered if it accelerates or makes execution faster/cheaper.