John Goedin

John Goddin asked Scott Kirby to revisit his thoughts on the future shape of the industry structure, considering recent M&A among smaller carriers and the expectation of more, and what equilibrium might look like.

Answer

Scott Kirby, CEO, outlined his vision for the industry structure: low-cost carriers shrinking to their niche (large leisure markets), two dominant brand-loyal airlines (United and Delta), and other carriers finding success in non-hub markets. He believes this structure will emerge regardless of consolidation. Goddin also inquired if United would consider M&A given a seemingly accommodative DOJ, but Kirby declined to comment on M&A specifics.

John Goedin asked HEICO to revisit its multi-year aspirational target of 15%-20% net income growth, given recent strong performance, and whether there are any indications of a sharp deceleration in growth rates.

Answer

Eric Mendelson affirmed that the 15%-20% target remains aspirational, with subsidiaries having consistent organic growth targets and a strong acquisition pipeline. Carlos Macau emphasized HEICO's 35-year history of 18% compounded bottom-line growth and stated that no impediments are foreseen for achieving 15%-20% growth over the next three to five years. Victor Mendelson added that HEICO's under-leveraged balance sheet and cash generation provide significant acquisition firepower.