StandardAero (SARO) Q2 2026 earnings call transcript

Thank you and good afternoon, everyone. Welcome to StandardAero's second quarter 2026 earnings call. I'm joined today by Russell Ford, our Chairman and Chief Executive Officer, Dan Satterfield, our Chief Financial Officer, and Alex Traff, our Chief Strategy Officer. Alongside today's call, you can find our earnings release as well as the accompanying presentation on our website at irstandardaro. com. An audio replay of this call will also be made available, which you can access on our website or by phone. The phone number for the audio replay is included in the press release announcing this call.

Before we begin, as always, I would like to remind everyone that today's earnings release and statements made during this call include forward-looking statements under federal securities laws. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. Such risks and uncertainties include the factors set forth in the earnings release and in our filings with the Securities and Exchange Commission, including in the risk factors section of our annual report on Form 10-K for the year ended December 31, 2025. We assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Additionally, during today's call, we will discuss certain non-GAAP financial measures, such as adjusted EBITDA, adjusted EBITDA margin, adjusted net income, adjusted earnings per share, free cash flow, adjusted free cash flow, and net debt to adjusted EBITDA leverage ratio.

In definition and reconciliation of these measures, the most directly comparable gap measures can be found in our earnings release and in the appendix to the earnings slide presentation on our website at IRstandardAiro. com. Non-gap financial measures should be considered in addition to and not as a substitute for gap measures. And with that out of the way, I would now like to turn the call over to Russ.

Thank you, Rama, and thank you to everyone for joining our call today. I'll begin on slide three of our earnings presentation. StandardAero delivered a strong second quarter, marked by double-digit earnings growth, record margins, significant progress on our strategic priorities, and continued strength in customer demand. Revenue was up 4.6% year-over-year. Adjusted EBITDA grew 12.3% year-over-year to $230 million.

Adjusted EBITDA margin expanded 100 basis points to a record level of 14.4%, and free cash flow was an inflow of $50 million in the quarter. These results mark the earnings and margin inflection we outlined last quarter and demonstrate the operating leverage embedded in our business. Three things drove the quarter.

First, continued strong demand, productivity improvements, and pricing across our commercial aerospace and business aviation platforms. Second, learning curve progress on our LEAF and CFN 56 DFW programs, which reached profitability in the quarter. And third, the margin uplift from the previously announced elimination of low-to-no-margin material pass-through revenue on the contracts we restructured last year. Partially offsetting those was mixed from delays on certain military platforms.

Let's move now to each of our end markets. Commercial aerospace revenue grew 6% year over year. Excluding the impact of the elimination of pass-through revenue, commercial aerospace growth would have been mid-teens year-over-year growth. Demand remains at historically strong levels across the platforms we support, and we have not experienced any reduction in demand from higher jet fuel prices.

MRO capacity across the industry remains tight, and our commercial backlog continued to grow in the quarter. Business aviation revenue increased 6% year over year, supported by continued strong activity on our key midsize and super midsize platforms. Global business jet flight activity was up, and fleet utilization continues to translate into engine MRO demand at our facilities. The growth in the commercial and business aviation end markets was partially offset by military and helicopter, where revenue declined 3% due to input delays on select military platforms. That said, we remain confident in the long-term military demand outlook.

Operating tempo and flight hours are up. Defense budgets in the U. S. and across our NATO customers continue to grow, and MRO capacity remains constrained. We are seeing that in our order book. Helicopter volumes are running well ahead of last year, and our volumes on fighter and transport platforms are ramping into the second half. We remain confident in our full-year military growth outlook, and as Dan will cover, our full-year guidance continues to expect military and helicopter growth in the low double digits with growth weighted to the back half of the year. Before getting into the strategic updates, I want to provide a brief word on the broader environment.

Jet fuel prices remain elevated, and the geopolitical backdrop remains complex. To date, we have not seen a reduction in demand as a result. We track shop visit bookings, inductions, part orders, and asset trading activity closely, and all of them remain consistent with the strength we enter the year. We think that there are structural reasons for this. The MRO market remains constrained, aircraft retirements remain very low, and our customers are reluctant to give up induction slots that are difficult to get back. We're positioned on the most fuel-efficient engine platforms, and nearly 40% of our business sits in end markets that are not sensitive to jet fuel prices. We will continue to monitor the environment closely, and we remain confident in the resilience of our portfolio and our position in engine MRO.

Turning to slide four and our strategic priorities. Our priorities remain unchanged, and we made meaningful progress across each of them in the quarter. Starting with LEAP, we achieved profitability in the second quarter while continuing to ramp the program and win new awards. This is an important milestone. It is evidence we're moving down the learning curve, improving throughput, expanding repair capabilities, and scaling the program as promised. We continue to expect LEAP to reach $1 billion in annual revenue by the end of the decade and several billion in annual revenue by the middle of the next decade. We also added new customers in the quarter, and our shop visit slots continue to fill out into the next decade.

On CFM56 and CF34, demand on both platforms remains strong. Our CFM 56 Center of Excellence in Dallas-Fort Worth reached profitability in the quarter, also as promised, and we continue to add new customers and are growing its backlog. On CF34, our Winnipeg expansion remains on track for completion in the third quarter of this year. This additional capacity is effectively sold out and further solidifies our leadership in the CF34 market. We expect the expansion to begin to scale throughout 2027. While on the topic of growth, we have an exciting update for you. We recently signed a significant $180 million license expansion with one of our key OEM partners, spanning multiple turbofan and turboprop platforms. This agreement broadens our authorizations, adds new engine variants at several of our locations, improves economics on existing work, and adds component repair authorizations that benefit both of our segments.

In total, we expect it to ramp to approximately $25 million of incremental annual adjusted EBITDA over the next few years at margins that are accretive to the company average. This is exactly the type of investment we like. Strategically aligned, high return, and concentrated on platforms where we already have deep technical capability and a leading position. Dan will take you through more details on the license expansion in a few minutes.

In component repair services, commercial aerospace as well as land and marine volumes are both growing. We continue to industrialize new repairs across the portfolio, and we are migrating work across our network to further expand throughput capacity and capture the strong demand environment. Continuous improvement remains a core focus of how we operate. We remain dedicated to improving shop-level productivity, standardizing best practices, reducing variability, and ensuring our pricing reflects the value we deliver in a capacity-constrained aftermarket environment.

On capital deployment, we were active again during the quarter. In addition to the expanded license agreement, we also completed the acquisition of the Unified Turbines component repair business, which we announced in May. Unified is a targeted strategic addition to CRS as it enhances our hot section repair capabilities on engines we already support and advances our insourcing strategy across both segments. Importantly, the license expansion increases the strategic and financial benefits of the Unified Turbine's acquisition.

Integration is underway and progressing as planned. Finally, we continue to return capital to shareholders, repurchasing $40 million of shares in the second quarter, bringing our year-to-date repurchases to $100 million. We view share repurchases as a valuable tool within our broader capital allocation framework, particularly when our shares trade meaningfully below our assessment of intrinsic value. Overall, we're pleased with the operational progress made in the first half of 2026 and excited by the investments we've made for future growth and shareholder value creation. We're executing on our priorities. Our growth platforms are progressing. Our balance sheet remains strong, and we continue to see robust demand environments across the markets we serve. As a result, we are raising our 2026 guidance for revenue, adjusted EBITDA, and adjusted EPS.

With that, I'll turn the call over to Dan to walk through the financial results and our increased guidance in more detail.

Thank you, Russ. I will begin on slide five with highlights from our second quarter results. For the second quarter ended June 30, 2026, we generated revenue of $1.6 billion, an increase of 4.6% compared to the prior year period. Continued strength in commercial aerospace and business aviation was partially offset by lower activity on select military platforms. The results reflect a previously announced elimination of $300 to $400 million of low-to-no-margin material pass-through revenue in 2026. Excluding the impact of the eliminated material pass-through, the commercial aerospace and market grew mid-teens, year-over-year.

Adjusted EBITDA increased to $230 million, up 12.3% year-over-year, and adjusted EBITDA margin expanded to a record 14.4%, an increase of 100 basis points compared to the prior year period. The improvement was driven by higher volumes, pricing, and productivity, together with a margin accretion from the pass-through revenue elimination.

Net income was $97 million, representing 43.7% growth year-over-year, driven by higher operating earnings, lower interest expense, and a lower tax rate. Adjusted EPS was 40 cents up 24 year over year reflecting higher earnings and a lower share count from our share repurchase activity Free cash flow was an inflow of million in the quarter which I will come back to shortly Now moving to our segment, starting with engine services on slide six.

Engine services revenue increased 4.0% year-over-year to $1.405 billion, with growth across our three major end markets. As noted, reported revenue growth was impacted by the elimination of low to no margin material pass-through revenues. In other words, the underlying demand across the segment was meaningfully stronger than the headline rate suggests.

Engine services segment-adjusted EBITDA increased 14.4% year-over-year to $204 million, and segment-adjusted EBITDA margin expanded 130 basis points to 14.5%. There were three main drivers of this growth and margin expansion.

First, volume, productivity improvements, and pricing. Second, coming down the learning curve on our LEAP and CFM 526 DFW programs, both of which reached profitability in the quarter. And third, the margin accretion from the elimination of low-to-no-margin material pass-through revenue.

Turning to the component repair services segment on slide seven. Component repair services revenue increased 9.2% year-over-year to $195 million. Growth was tied to strong commercial aerospace growth on platforms such as the CFM56, GTF, and CF34, as well as continued growth in our aero derivative platforms in the land and marine power generation market. Partially offsetting these tailwinds were lower revenues on certain military platforms due to timing, which had a greater effect on CRS, the van engine services.

CRS segment-adjusted EBITDA was $51 million, down 0.9% year-over-year, as segment-adjusted EBITDA margin was 26.3%, down 270 basis points. The decline in margin was driven by three main items. One, our continued migration of component repair work to the back shop of existing facilities to keep up with strong commercial and market demand. Two, temporary inefficiency resulting from ramping new employees at existing CRS facilities.

And three, negative mix from input delays on select military platforms. We expect margin pressure from the work migration and labor ramp to dissipate in the second half of this year. The CRS margin pressure was timing-related and does not reflect a change in the underlying earnings profile of the segment. The commercial and land and marine demand backdrop remains strong.

New repair development continues at a strong pace, and unified turbines adds capability on engines we already serve. We are reiterating our full-year CRS revenue and adjusted EBITDA guidance, which implies a return to our expected high 20% margin profile in the second half.

Now moving to slide eight, free cash flow. Free cash flow was a positive $50 million in the second quarter, a meaningful improvement both sequentially and year-over-year. Working capital was a $56 million use of cash, and we had $7 million of major growth CapEx in the quarter. With the Winnipeg expansion, the largest component of that CapEx, as the LEAP and CFM56 Dallas Fort Worth CapEx and startup costs are winding down.

Despite a continued tight supply chain environment, we have made significant progress with our supply chain initiatives, particularly in materials management. These initiatives helped drive a strong positive pre-cash flow in the second quarter, a period that has seasonably been a use of cash.

We will continue to execute on these supply chain initiatives, but given that the industry's supply chain dynamics remain fluid, we think it is prudent at the midpoint of the year to maintain our 2026 adjusted free cash flow guidance of $270 million to $300 million.

As a reminder, our businesses typically generate a greater portion of cash flow in the second half of the year, and we expect 2026 to follow that pattern.

Turning to slide nine, our balance sheet and liquidity. We ended the quarter with net debt to adjusted EBITDA of 2.6 times, down from 3.0 times a year ago. The year-over-year improvement was driven by adjusted EBITDA growth and cash flow improvement. We remain comfortably within our long-term target range of two to three times with meaningful balance sheet flexibility, and we received ratings upgrades from both Moody's and S&P during the quarter to BA2 and BBB, respectively.

In upgrading our ratings, Moody's and S&P cited our strategic expansion investments, stable margins, consistent revenue and earnings growth, diversified global and market exposure, and an expanding positive cash flow. Our capital deployment framework remains centered on five primary avenues.

First, investments in new engine platforms such as LEAP. Second, organic capacity expansion in existing platforms such as CFM56 in DFW, CF34 in Winnipeg, and HDF7000 in Augusta. Third, license expansions such as the CF34 expansion in 2024 and the license expansion we are announcing today.

Fourth, M&As, such as the unified turbines acquisition that we closed in Q2. And fifth, share repurchases, as evidenced by the $100 million we have repurchased year-to-date, including $40 million repurchased in the second quarter.

Across all five of these capital deployment avenues, we applied a disciplined return framework with expected IRR, ROIC over time, cash generation, and strategic fit, serving as key inputs in our decision-making.

Although leverage is now well within our target range, and with clear visibility and confidence in our ability to deliver sustained double-digit adjusted EBITDA growth, we will remain disciplined allocators of shareholder capital, focused on maximizing long-term value and delivering attractive returns. Before getting to the guidance update, let me spend a moment discussing the expanded license investment. The agreement is expected to generate $25 million in incremental annual adjusted EBITDA at full run rate and at margins accretive to the company average. We expect the license to add $10 million of adjusted EBITDA in 2027, $20 million in 2028, and $25 million annually in 2029 and beyond.

About 80% of the incremental adjusted EBITDA will be recognized in engine services. Now turning to our updated 2026 guidance on slide 10. We are raising full-year revenue guidance by $50 million to a range of $6.375 billion to $6.5 billion, with this increase reflected in our updated revenue guidance for the engine services segment.

From an end market perspective, we continue to expect commercial aerospace growth in the low double digits to mid-teens range once you normalize for the pass-through material revenue that was eliminated.

We expect business aviation growth in the high single digit to low double digit range, and military and helicopters growth in the low double digit range with this growth back half-loaded.

We are also raising our adjusted EBITDA guidance to a range of $885 million to $910 million. This reflects our new adjusted EBITDA guidance for the engine services segment of $770 million to $785 million.

We are reiterating our component repair services segment revenue and adjusted EBITDA guidance, as well as our corporate expense guidance of approximately $105 million. We are also raising our adjusted EPS guidance to a range of $1.50 to $1.57, which now excludes the tax-adjusted amortization of all intangible assets and improves comparability with our peers.

This increase is supported by higher earnings and a lower tax rate and share count. Our guidance now assumes interest expense of $150 million to $160 million, a lower adjusted effective tax rate of 23.5% to 25.5%, and a lower average diluted shares outstanding of approximately $332.5 million. We are now providing adjusted free cash flow guidance of $270 million to $300 million, which for clarity excludes the acquisition cost of new licensed intangible assets, which we consider more like M&A from a capital deployment perspective.

Our CapEx guidance stays at a range of $100 million to $110 million. With that, I'll turn it back over to Russ to wrap up.

Thank you, Dan. StandardAero delivered a strong second quarter and exited the first half with increasing operating momentum. We generated double-digit adjusted EBITDA growth, achieved record margins, delivered positive free cash flow, and reached profitability on two of our most important growth programs. Our strategic focus areas are seeing meaningful progress, and we continue to find attractive opportunities to invest and deploy capital, evidenced by our license expansion agreement, the unified turbines acquisition, and continued share repurchase activity.

Demand remains strong. Our growth investments are delivering positive results, and our diversified portfolio continues to provide resilience and predictability. With increased visibility into continued double-digit earnings growth, we are confident in our increased outlook for 2026 and our ability to compound long-term shareholder value. This concludes our prepared remarks for today. I look forward to speaking with you again next quarter when Paul McElhaney will join me for his first earnings call as our new CEO.

Operator, we're now ready to move to Q&A.

Sure. Thanks, Seth. Relative to supply chain, all of our planning and our guidance assumes that there is no recovery in the supply chain from the OEMs. You know, we have the ability to work around any types of supply chain disruptions through our component repair business. We purposefully invested there. So our assumptions and our guidance include what the supply chain is doing right now. Any improvements in the supply chain would be upside for us. and in fact provides somewhat of a tailwind for our component repair business as the OEMs would begin to take advantage of our technical ability to develop new repairs So at this point we don see any deterioration and you know we have ways to keep that in check and that why our guidance really is not dependent upon any assumptions about improvements in supply chains Okay.

Yeah, I mean, the LEAP and CFM56 are strong revenue drivers for CRS, and you will ramp in concert with the internal ramp. But remember, of course, we're selling those repairs externally as well and doing a good job at it. So that's providing an extra boost.

Hey, Gavin. Russ, I think you said you expect LEAP revenue to reach several billion mid-next decade. I think that's a new comment. Could you expand just a little bit on what assumptions underpin that and what you would need from a capacity standpoint to support that? Yeah, good question. In the past, what we've said is that the ramp on LEAP, you know, first of all, the major milestone was in the first half of this year for the program to cross into profitability, which it's done exactly as planned. And next step is between now and the end of the decade, we expect it to reach $1 billion in annual revenue.

We see no reason that that number would be any different. And then as you move into the early 2030s, you start to see a shift of the work scopes moving more from lighter work scopes or C-10s towards heavier work scopes, the full-up performance restoration visits. And that's what's going to start to drive the revenue into several million dollars in the early 2030s. 30.

It includes component repair.

Yeah, 180.180 million U. S. dollars.

The thing is really about the expansion is, you know, what's feeding that $25 million. You know, the license agreement opens up new applications and new platforms we haven't serviced before. Some of them are variants of current platforms that we have. And then along with that comes the additional repairs on those same platforms. All of that is included in the license expansion. Some include improved pricing as well, some reduced costs on some items. But it really is about the expansions, those new licenses, new repairs, and improved pricing.

Hey, Miles, it's Alex. You know, our license agreements are longer-term type agreements. They're enablers to our doing business in markets. And, you know, we're always kind of working with our partners to find mutually beneficial routes to improving upon those. And so, you know, those happen when we reach agreement on them. But I wouldn't say it's sort of a constant part of doing business.

I think most of it really is on the increased earnings. The amortization move is really small, maybe like 5% of it.

Thanks, Miles.

That's a great question. You know, we've spoken about it before, and it always holds true for the business. Maintenance CapEx will always be about 1%. This year it will be about 1.3%, right? So that number you can pencil into your models. As we look at the major platform investments, we are coming off, if you compare it to 2024 at least, in 2025, CapEx is significantly lower. 2025 CapEx was $134 million. It'll be a couple $20 million or so less than that this year. Of course, now we always have great places to deploy capital. And importantly, you know, we've deployed it this quarter to $180 million of a license expansion, right? That's not CapEx, but it's a deployment of capital.

So we've got the liquidity to, you know, to put our assets to use, you know, to the best possible, you know, return outcomes. This quarter, we're very proud of the license expansion that we've done. Unless we do another major platform, there's not going to be a lot of CapEx similar to what we did for LEAP. There's a few dollars of CapEx as related to the license expansion, but not significant. We'll disclose that as we go forward.

But going forward, our asset allocation strategy remains the same.

No, there's – yeah, thanks for the question, Doug. There's not a kind of long-term basic growth rate that you should think about because, remember, our company is purposefully designed to be able to attack different segments across the aerospace industry. And each one of those segments, they operate on different maintenance cycles because the flight profiles, which create the maintenance cycle, are very different for commercial aircraft than they are for military aircraft or business aviation. So each one of those subsectors will have normal variability, and then you plow all that together.

And it would be, you know, we try to keep that natural hedge position as a condition that helps us damp the normal volatility. But there still is volatility because you're mixing three different subsegments that all have very different maintenance requirements. And I'm not sure that there's a way to completely dampen that to a precise growth rate that you should target. There is from time to time surges that occur. For instance, there could be a pop tempo in military if there's some conflict. There could be something to do with a new aircraft or a new engine being introduced. And so from time to time, you'll get surges and spikes in that normal path. But if you look over the last 40 years, one thing is for sure, if you put a regression line through the growth rate, it's going to have a positive slope, right?

It doesn't go down. It always goes up, but it just surges.

Doug, this is Rama. What we say long term is we target double-digit earnings growth. And then, so it's a combination of not just top-line growth, but also margin expansion and return opportunities for the company. So that's really kind of how we think long-term is double-digit earnings growth. I mean, we've demonstrated that, you know, our CAGR over the last 10 to 15 years has been in that range.

Thanks, Doug.

Yeah, it's really not a material shortage issue for us. It's a demand capture move on our part. The demand is growing, and as a result, the most efficient capacity that you have is capacity that you already own. So before you start building buildings and doing things like that to capture additional capacity, what you do is you use your available capacity across your entire network. So that's what we've been doing over the last six to nine months is we look at component repair capability beyond just the dedicated CRS facilities that we have in our company. We also have component repair back shops in many of our engine assembly facilities that have available capacity for us to move work, and that way we're able to handle the increasing demand faster.

But there are some costs associated with spinning those other sites up in terms of hiring and training people and getting appropriate authorizations to migrate the work from one site to another. So we are consciously doing that in order to capture the demand increase that we see coming our way over the next couple of years.

Remember when there's a conflict, the demand for new aircraft is immediate. The demand for maintenance is a lagged effect because you've got to put the aircraft out there, they've got to collect flying hours, and then the maintenance appears. So the increased op tempo over the last six months, you know, you don't see the maintenance quite yet, but it's a leading indicator for us when we see the increased flying hours on the F-110 engine, which powers the F-16 and the F-15EX, which are both in service, the T-700 engine, which flies on the Black Hawk and the Apache, which are both collecting flying hours, as well as the Chinook, and then the 80-2100 and the 1107 engines which power the C-130 air transport as well as the D-22.

Those are all aircraft that are seeing increased flight hours to the up-tempo in military. So we have high confidence that those flying hours will create maintenance events that we start to see in the second half of this year and will continue into next year.

Thanks, Kyle.

Yeah, great question, Christine. You know, as Russ has said consistently, you know, supply chain issues in the aerospace industry are not new. They're not new for you either with everyone that you've been following. This company has consistently, you know, avoided the temptation to expect an improvement of the supply chain. Okay, then let's go back to, you know, the second step underneath that. You know, supply chain issues for us are really driven by the constrained parts. When we have constrained parts, and, you know, as you know well, those are typically in castings and forgings.

You know, good materials management, you know, aligns, you know, your supply chain to the longest lead time item, which are typically those. And, you know, if you look at our cash flow, in particular this quarter, you know, we actually reduced contract assets. Remember what those are. Contract assets are the nearly complete engines that we have on the shop. Those actually reduced because we're a lot smarter about materials management on those constrained parts.

Okay. So, you know, generally the constrained parts, you know, continue to be an issue for, you know, the overall aerospace supply chain ecosphere. We know that and we're managing it well. And we're keeping our guidance estimates current with that assumption.

Yeah, we're not guiding to 2027 yet. But, you know, I would be surprised if any of us said, you know, things are going to break loose.

Thanks, Christine.

Yeah, you know, for now, this was a big effort, right? And to get to $300 million, $400 million, by the way, we're on track for that. It was a contract-by-contract effort that we've been, you know, going after. There is a larger pool out there still of low-margin pass-through revenue. We'll get to it as we can. Right now, this is where I would size it, and I wouldn't expect it to be a material impact going forward because of the very contractual nature of it.

Oh, yeah. It's a benefit for sure. Listen, I'll do this all day to reduce revenue on behalf of margins and working capital.

The biggest advantage we've had in working capital in the quarter has been the materials management, as I mentioned.

So, you know, really the benefit to the pass-through material on working capital you'll see primarily next year.

Thanks, Josh.

Hey, Ken. So, you know, as always, right, we have a very robust pipeline. And I'd say that pipeline this year has translated into more opportunities that have been coming across, be it through formal processes or informal interactions with sellers. So everything has looked great this year. We've studied every opportunity that comes across. And as always, we will be very disciplined with respect to strategic fit, and we'll pounce where there is one.

No, we have not.

Thanks, Russ. Thanks, Ken.

You know, yeah, thanks for the question, Andre. First of all, remember, you know, about 40 percent, so nearly half of our portfolio of engines that we service going to applications that are not sensitive to fuel price, like military applications. It's really just a commercial part of the business that may have some sensitivity there, but there is a normal progression that commercial airlines go through whenever there's volatility in fuel price. And we've seen major world events that we've tracked over the last 25 years where this has happened several times. And in each case, there's a pattern that's predictable and consistent.

And that pattern is that, you know, during the first 12 months, what you begin to see is airlines will pass along these fuel prices via increased ticket prices. And then after some time, and that's going on, you know, right now, and the flight loadings eventually, you know, could be impacted by that. But the flight loadings are still, the average flight loadings are operating in the mid-80%, which is very high. So ticket prices and jet fuel price pass-through have not really started to impact flight loading.

Eventually, if it continues on long enough, the flight loading starts to drop. Then the airlines will move to optimizing some of their flight routes and some of their aircraft, and they'll rotate different aircraft into different flights. That goes on for a number of months, and if it continues beyond that, then they might start thinking about optimizing some of the work scopes for maintenance. But we're a long way away from that, and typically, you know, these fuel price increases don't stick around for several years. They're typically shorter in nature than that, and so it never gets to a point of impacting the maintenance schedule. And the reason for that is because airlines, they're used to this, they're designed to handle this, and there are many levers that they can pull before they get to the lever of adjusting maintenance schedules because that is the last lever they want to pull, especially in an environment where maintenance capability is constrained.

The last thing they want to do is give up a slot that they've contracted four years in advance because then they might not be able to get it back if something changes. So we are in a very nice position relative to how that process works. And we're a couple of months into this increased jet fuel price scenario, but we still have a long way to go before we would expect to see any of this coming through all the way to the maintenance side of the business.

Hey, Andre, this is Rama. We haven't broken out what the split is going to be on the mix at the end of the decade. But what we have said is that C-TEMs are obviously heavy last year and heavy this year in terms of volumes. But as we go through the decade, you'll start seeing more of that PRSV.

And given that these are bigger revenue events, more of the revenue will be generated for the PRSVs. We haven't explicitly broken out the volume. One of the reasons we don't want to give guidance on that is this is a brand new engine platform. If this was an existing platform that had been around for a while, then we might have a better forward forecast of that before a brand new engine. we don't know about the long-term durability of the engine and when those light work scopes are going to be shifting to heavy work scopes. I mean, we have a range that we're using for planning purposes, but we don't guide on that.

Thanks, Andre.

Okay, very good. Thanks, everyone. We appreciate your continued interest and support of Standard Era. We have no further comments for this quarter. We'll look forward to speaking with everyone for third quarter. Thanks again.