04-04-2023
Kishore Korde | Air Lease Corporation
In this episode of Flightpath with Alok, we hear from Kishore Korde, executive vice president at Air Lease Corporation (ALC), an order-book lessor, principally engaged in purchasing commercial aircraft for the purpose of leasing them to airlines, worldwide. Kishore joined ALC soon after it was founded in February 2010 and is a clearly recognisable figure within the leasing fraternity. At ALC, Kishore’s responsibilities are many, including; the successful management of all South Asian lessees; controlling lease relationships with several international airlines across the globe; creating aircraft placement strategies, and assisting ALC's lessees in their fleet planning. Kishore also has extensive experience in drafting and negotiating aircraft leasing and aircraft trading transactions. Prior to ALC, Kishore was with International Lease Finance Corporation (ILFC), considered, at the time, to be the largest aircraft lessor in terms of book value and quickly became Managing Director for ILFC’s India business. Kishore is fluent in three languages and has basic skills in two more. He holds Bachelor of Science, Bachelor of Laws and Masters in Business degrees, all from the University of Mumbai, India, a Juris Doctor degree from Emory University and a Master of Laws degree from the University of Pennsylvania. Kishore speaks with Alok about how he found himself in America as a young man, and how he got his first break helping enter a world of aviation. Kishore shares some of the successes and insights he has picked up through the course of his varied and interesting career and why those just starting out on their career paths may benefit from giving aviation a look.Transcript:
Kishore: The broader, the range of experiences we have, the more value we can bring to the company. We have an order book today of close to about 400 aircraft, so they're all unionised and they vote against me. We have made some changes in the way we do things. India is viewed positively. So every deal I do, I have to customise in a way my approach based on the on the country I'm dealing with, earning people's trust, robbing a bank is not what I'm talking about.
Alok: Hello and welcome to Flight Path with me Alok. Hi everyone. Welcome once more with me at Flightpath with Alok. I'm recording the second episode of my podcast, and today I have the pleasure to host, Mr. Kishore Korde, Executive Vice President from Air Lease Corporation. First of all, welcome. Thank you very much, for making time to join me for this podcast and I'll appreciate if you can, maybe just give us a little intro about yourself. That will be great. Yes.Kishore: Well, thank-you, so much Alok, for the invitation. It's always a pleasure to talk to you and I've known you for many, many years. And what, as you grew Acumen, you know, from, strength to strength over the years so it's, my pleasure to, have this chat with you. And, as you, you know, started off, I am, you know, the origination side at ALC, that's what I would say is the bread and butter of my job description. But, that's only one facet. I also am involved in aircraft trading. And, now that I've spent, a few years, in the industry, I also involve myself in other aspects of the business. So, for example, on the financing side, I help out when needed. So, for example, this weekend I'll be at a meeting, at our annual bank meeting where we'll be meeting with all our bankers. We have bank relationships with more than 50 banks. And so I'll be part of the team that goes there, meets with them and spends time with them, explains the business. So the financing side is there. Then of course, you know, other issues that come up within the company that might need my intervention, attention, input, I pitch in. At ALC, you know, basically for us, our DNA is, basically about rolling up your sleeves and getting things done. So, we don't pigeonhole ourselves, into little slots because we feel the broader the range of experiences we have, the more value we can bring to the company. Alok: While doing that, how many days in a year or in a month you are traveling? Because every time I am communicating with you or there is something going on, you are in some part of the world. So just wondering how much you travel. You must be what super platinum tier now in a lot of airlines. Kishore: I don't know. At least I like to tell people we are supporting our lessees by actually flying on them and buying their tickets so they can, we're doing our part to keep them going.
Alok: Right, right, right. Kishore: But, as far as travel is concerned, well, you know, look who's talking? You travel probably as much as I do. But, I'd say probably a third of my time if I average it out, is, spent on traveling. But I try to strike a balance. You know, all of us have families and it's very easy to just disappear and be on the road for weeks on end. But what I try to do is I try to squeeze my travels between a working week, you know, maybe leave on a Sunday afternoon, get back on a Saturday afternoon. And while I'm on the road, I'll hit as many countries as I can, and try to make it super efficient. It's exhausting, but I'd like to be at least be home on the weekends to spend time with the family because, you know, that is also important. And you know, especially kids grow up in the flash of an eye and suddenly, you know, your elementary schooler kid is now looking at colleges and you wonder where the time has gone. So I try to be disciplined about how I travel as well. Alok: So, you know, that is I think, the right cue for me to ask you a little. How a boy from Mumbai University ended up all the way in LA and joined aircraft leasing industry. Even today in India, now there is a lot of awareness about it, but I'm sure at that time, even when I started 10-15 years back, hardly anyone knew about it. And I’m sure when you did, maybe no one knew about it. So, tell me a little bit how you ended up doing this, what I would call a niche, and building a niche career for yourself like this, please.
Kishore: Well, if I were to go back to the very beginning, yes, I grew up in Mumbai, and went to St. Xavier’s College for my undergraduate degree. I actually did an MBA. I did my law there as well, and then I came to the US for graduate school. And, to make a long story short, the graduate school, was, partly law partly business because I had a business background. I went to a University that had a well-known business school called Wharton. And, I ended up in a big law firm and that was just a regular law firm job. But, it was just a job. And growing up aviation was my passion. I just loved airplanes. I don't know why, ever since I learned to walk, my parents tell me, I probably, even before that, I was in love with airplanes. So after a few years in the law firm you know, I had this epiphany one night when I said, well, I’ve always wanted to get into aviation. I love aviation. That's my passion. But I didn't know anybody there, in the industry. I knew all about the industry because that's what I did in my spare time, read about airplanes and aviation. But I didn't really know anybody coming from India, didn't have any contacts. And I said, well, you know, I don't want to have any regrets in my life 20 years from now, I might be in the same law firm job wondering what if, you know, what if I'd done this, what if I'd done that, you know, in aviation? So I said, well, you know, let's give it a shot. If it works, it works. But if it doesn't, then my conscience is clear. At least I know I tried. I don't have to regret about, you know, well, what if I had done this or that? And so, having known about the industry and knowing, you know, all about aircraft leasing because of my interest, and ILFC was led by Steve Házy, who's also a chairman at ALC, and he's kind of like the Steve Jobs of, you know, the aviation industry in a way.Alok: He’s a legend.Kishore: And I said, well, that's the company I wanna go work for. And as I said, I didn't know anybody there. So I literally applied, cold-called them, and told them about my passion for aviation. So I guess it was, you know, 50% initiative and 50% pure luck because it just so happened that the legal department there was looking for adding some people. But, what was even more lucky for me was that the then General Council of ILFC, she had actually filled the spot and she nevertheless, for reasons only known to her, took a chance on me and gave me a job. And here I am twenty years later, still in the industry.
Alok: An amazing story that is, and I'm sure she saw the passion you had and, it's like the famous saying, right? You a hundred percent regret the shots you don't take. Kishore: Exactly. Alok: You took the shot. Kishore: So, like I said, I can take only credit for the 50% of, for trying and cold calling, but the rest of it was just pure luck being in the right place at the right time and, and why she decided to take that chance like I said, I will forever be grateful to her for that. We were just typical middle-class family from, you know, King Circle, Matunga, and nobody cared anything about airplanes. Maybe I just hit my head on the wall when I was a kid. Alok: I’m sure your folks are massively proud of you, Kishore, about what you've achieved. I'm sure about that. Kishore: Well, so they're certainly very happy because all my travel gets them their free mileage tickets to come to the US, whenever they want, so they're very happy. Right now, it’s not about me, it's about the grandkids. Right.Alok: sure, sure. Kishore: But, they're happy. Alok: If you don't mind me asking, maybe tell me a little bit about your family in LA. Kishore: So I'm the only man standing, so they have all unionised and they vote against me as a union. And you know, my youngest is in elementary school, my oldest is in high school, so I have teenagers and you know the youngest one. So depending on which room I turn into, I'm either the smartest guy in the world or the stupidest guy in the world. I'm getting the full range of opinions, depending on which kid.
Alok: This is one place your salesmanship won't work. Kishore: No, nothing. I have accepted defeat. Alok: Okay. So, you know, on the overall, as I alluded to the fact, you know, getting into the industry at the time, even now we see that, I know there's a lot of focus, we were in I-Stat and we were listening recently about diversity inclusion, how there is they want to, the whole industry is talking about increasing participation. I personally feel about that a lot because two reasons. One is obviously I would like more participation from our part of the world, but I also see that a majority of the world's slate is leased into Asia Pacific. But I don't see Asia Pacific being enough represented in lot of organizations, a lot of other places where we are doing deals with, and I’m, sure this is something you have observed too, and, and being, you know, someone who's all the way from Asia, India there. If you can maybe give us your thoughts on what you feel about that bit in the industry or what you think, your experience has been in ALC now and overall in the industry. How you see things are getting better or not, either way, you know? Kishore: Yeah. I mean, let me start with ALC and ILFC. I think we were always very focused on the diversity aspect, even before it became, you know, popular and you know, the way it is today. We always, even at ILFC and certainly at ALC, focused on having people with diverse backgrounds, diverse skills, diverse language skills, for example. Even at ILFC, I would say just in the legal department, and this was not by accident, but it was by design, we had people, of course, I spoke some of the Indian languages. We had French speakers, Spanish speakers, Russian speakers, Arabic speakers, Chinese speakers, Spanish speakers, and so this is just in the legal department, and we felt that by, you know, if we were to be a global leasing company, to help, to serve our customers better, it was helpful to have people with those backgrounds, diverse backgrounds, who could then relate to the customers that much more easier. And that extended to other departments as well. And the same is true at ALC, we have people from different nationalities, even in fact, Steve Házy our chairman, he is, he was born in Hungary. And he has a very interesting life story as well, how, you know, when the Russians took over and invaded the country, they escaped and made their way to the US. But that's, you know, a whole book in itself. But, the focus has always been on this diversity. Then in terms of, you know, male versus female roles, as you know, aviation so far has been, let's admit, a fairly male-dominated industry. Alok: Yes. Kishore: But agency, we are certainly trying to, to do our part in terms of empowering women, elevating them to positions of responsibility, so, you know, our Chief Accounting Officer, our Head of HR, our General Council, Head of Contracts, you know, probably Sarah Evans, and many more. We have our women, there be women in leadership positions in the company, and, you know, the job is not done yet. And, we certainly hope to, you know, keep improving on that. But these things are important I think, and, and it's the right thing to do. And it's also the right thing for our customers because we bring, to the table, a team that can really relate to them. And we try to match people to accounts where they are best positioned to serve the customer in the best way possible.
Alok: To encourage more diversity, not in terms of just gender, well, gender diversity is in focus, but overall background, people's background, race, language. What do you think can be done better, as an industry participant? Kishore: I think as an industry we may need to make more conscious efforts to give people the chance. And we found that ALC, back at ILFC, if you give somebody the chance, you are very often pleasantly surprised how they can blossom into the role. We have to be conscious, that there, there could be unconscious or unintended biases in the way we think and think of when we think of, you know, matching people to a particular job description. Nobody intends to consciously, you know, put somebody down, or, or ignore somebody. But all of us are human beings and I think we, you know, there's plenty of research now. We all undergo diversity training, even ourselves here at ALC. And it's interesting to see how psychologically the human mind works. And as I said, unintended, even though it's unintended, sometimes you might not be looking at a particular candidate who might actually turn out to be really good. And I think we have to make a conscious effort, to give people the chance to see if, you know, they would be a good fit. And as I mentioned at the very beginning of the podcast, you know, I am, you know, exhibit A, if that General Counsellor at I L F C hadn't given me the chance, I wouldn't be here today.
Alok: Right, let’s move the conversation onto, you know, a little different topic about the business in general. So it's a publicly traded company, right? And, it'll be great to know from you, if you can explain the business model in general, how a typically a lesser operates, what does a lesser do, somebody who's just trying to get in the industry or is curious about it. If they are the target audience, what do you think should be the message for them to hear as to what this business is all about? And coming from you, it'll have a lot of, I think, traction or value, you know, that's why I'm requesting you to collaborate on that. Kishore: Yeah, well, for somebody who has no knowledge really, or background of what leasing is, I think, the one fact that perhaps one can talk about at the very beginning is that especially post-Covid, leasing contributes to about 50% of the global airline fleet now, you know. It used to be closer to 40%, but now post-Covid, I think it's gone to around 50% and some people think it's gonna go up even higher. It’s the big secret of the aviation industry that the average person has no clue about. Most people have no idea that when they step on an Indigo plane, for example, it’s basically, owned by some lessor. So I think that's the big sort of secret in the aviation industry vis-a-vis people who are not in the aviation industry, you know? So clearly, when you hit 50% of the global airline fleet, it is a significant, you know, portion, which cannot be ignored. And so leasing obviously is now mainstream, it’s critical, it’s no longer niche. You know, when Steve Házy started ILFC back in, you know, 50 years ago, so that's one. And then in terms of the leasing models, they, of course, different lessor have different leasing models. Our model is focused on new airplanes, the latest technology, the most fuel-efficient airplanes. We have an order book today of close to about 400 aircraft. So we are an order book lessors. Then there are other lessor who also focus on new airplanes, but they don't have an order book. So they get their planes by doing sale and leasebacks with airlines like Indigo or Akasa, or now, you know, soon, you know, Air India.
Alok: So they're an SLB lessor. May I use that term? Kishore: Yes. Alok: If you are an order book lesser, right?Kishore: Exactly. Alok: YeahKishore: So, say leaseback or SLB lessor. And then you also have other players who focus on older used aircraft, midlife aircraft. So there's, you know, different types of lessor who play in different parts of the, the sandbox, so to speak. But for us it has been always, focused on being an order book lessor. For us, it has given us a strategic advantage. We are often the ones who launch new aircraft types. So at ALC, for example, we have launched the A 321 Neo LR, the A 321 Neo XLR, the 330 Neo, the 787 dash 10. So that has been our strength. And we also feel, especially in these times with the focus on ESG, we want to be, focused on the most environmentally friendly, fuel efficient aircraft that are possible. And some of the airplanes we have launched, of course, not only are they the latest technology. But in terms of how they are contributing to the environment, they are really punching above their weight. So for example, if you, if you look at the A 3 21 Neo XLR, it's a plane with a very long range. And not only is it giving you the 15%, 16% fuel savings over a 3 21, you know, CEO. But because of its range, it's actually replacing a 330. So it's, you're not really effectively looking at a 15% saving, but maybe a 30% fuel-born saving because of the range, it replaces a 330 rather than a 321 CEO, you know? Alok: Airbus will be thanking you for this marketing. Kishore: Well, that's a fact. Well, I'll send them an invoice after the podcast. Alok: I should send them this clip and say, listen, if you want the whole thing, you have to come on board as a sponsor.
Kishore: Yes. But you see what I'm saying? I mean, these airplanes are getting so much more efficient, and with added, capabilities, they really are replacing far more fuel-guzzling airplanes. So, yeah, so we try at ALC to stick to that, you know, part of the sandbox. Alok: I think you have very nicely defined difference between you as a leasing company ALC, I mean other lessers, they’re categorised into three, four categories. And an aircraft leasing company, essentially, what is the, and not necessarily talking about ALC, but in general, a leasing company. How does a leasing company really make money? Kishore: The three legs of the stool, if I were to use that analogy, are basically number one, the first leg is, try to get the airplanes, buy the airplanes at the cheapest cost. The second leg of the stool is finance them in the cheapest way possible. And the third leg is lease them out at the highest lease rate possible. And that basically are the three legs of leasing. Alok: Yeah. You have simplified it. You have simplified it too much and I'm sure there are many layers in between. But if I may just say something. You know, obviously, there is big talk about the order book from India, right? Recent orders of Air India especially, huge order. And there is talk that Indigo may be placing some orders soon, to match that. Let’s hope that happens, Inshallah, as they say. But, while that is going on, in the Indian financial and aviation journalism, the talk is all about SLBs. All they talk about is, and because I think people are looking at Indigo's success and Indigo's success has been largely built on SLB model, or at least their capital efficiencies, what is widely believed. I'm not commenting on it either way, because maybe I don't think I have full knowledge of that myself, whether that is correct, but that is the impression. And everybody's saying that possibly Tata will go that same route, they will look at doing that because that gives them capital efficiency. So, and one of the reasons is, which is said at least, widely, is that the airlines are able to get the airplanes at a better price for various reasons cause they're an operator and there are a lot of bells and whistles associated with their orders. Right? And then they're able to sell them at a premium to a lessor and then get it back as a lease. However, in ALC's case, you are placing an order and you are entering a market. So basically what I understand is essentially by using that model, you are trying, you are getting, you are deriving the same advantage and you are doing it possibly at your own terms in comparison to many other lessors. Am I right in understanding that?
Kishore: I would tend to agree. We feel that our order book gives us a strategic advantage. In that sense, we are more in control of our destiny, in terms of the supply of airplanes that we have access to. Clearly, there is a role for sale-leaseback and sale-leaseback lessors. But in that case, I would think, you know, a sale-leaseback lessor is more dependent then on the supply of airplanes from airline A, or airline B or airline C. And if for whatever reason, airline A or airline B decides not to do sale-leasebacks, then that supply of airplanes dries up. In that case, those lessors then may be forced to, if they want to keep growing, they would be forced to go to other lessors and maybe make portfolio purchases. So there are other ways for them to get access to airplanes. But for us, this has always been our focus, and it, you know, as we like to say, in good times airlines need our order book in bad times, they need our balance sheet. That's kind of the way we describe the ALC situation. Alok: That’s a great analogy, Kishore. Can you explain that a little bit? What you mean by that? Kishore: So, with respect to the first part, which is where the, you know, about the airlines leading our order book, because we are often the launch customers for a particular airplane model, we get early access to the early delivery positions. And very often, and that's where the strategic advantage comes in. We have very often been able to secure delivery positions for airplanes, which are sold out for years. You know, if you go to Airbus today and say years, you know, I have, you know, a zillion dollars, but I wanna buy, you know, some 321 Neos. Airbus will say, that's wonderful, but, you know, wait for another five, six years. That's where the, you know, that's the back of the queue. Whereas we have, by virtue of being a launch customer, as I said, we launch customer for the 321 Neo and Neo LR, the XLR, we have early positions. So even if people might have the money, they might not still not be able to get those positions and they will have to come to a lessor, like ALC or, you know, and some other order book lessor and to get access to those positions. So that's what I mean by, you know, in good times they need our order book. In bad times, they need our balance sheet because, we, again, one of the key aims for us is to build a fortress balance sheet. Obviously, airplanes are not cheap, but we also want to diversify the risk in funding sources. That's why, as I mentioned earlier, we, you know, have a bank group, and that's in excess of, 50 banks and that's just one part of it. We are an investment-grade company. We raise bonds on Wall Street. And we focus on unsecured lending. So what we are doing is financing ALC as a company as opposed to financing each airplane on an individual basis. And that gives us a lot more flexibility to help airlines, in terms of their specific needs, in, you know, in bad times airlines need that kind of support, from the lessors. And, you know, Covid has shown that the lessors significantly helped their customers, and that's where the second part of my statement comes into sway.
Alok: That’s, very well explained. Thank you. And, I think one other piece of this whole puzzle is that that allows basically airlines who are focused on a certain aircraft type on their operating model to avail your order book and launch those unique business models. If they're uniquely focused on a, like you're saying, the new tech is more ESG compliant or has more fuel efficiency, that then allows them access to those, that kind of technology more easily rather than waiting in the queue for a few years, you know? And, that’s, yeah. Kishore: Oh, absolutely. And, it's not just waiting in the queue. There, there are airlines that don't have the financial strength to buy, you know, a hundred planes. There are startups that we have helped to support, which have now grown to being huge airlines. But they started out with, you know, two airplanes, three airplanes, four airplanes, And for airlines who don't have the strength, financial strength of a British Airways or Air France, leasing becomes really the way to enter, you know, the aviation industry that they won't otherwise be able to launch if leasing wasn't there because, the residual value risk, the, you know, the cash outflows that you would, have if you were to actually buy a plane, would go away if you are just leasing it from somebody like us. Alok: A lot is happening and a lot more needs to happen, but a lot is already taking place. And, there are two topics which are of interest to me. First one is obviously the order book, the big orders getting placed, and, do you from a leasing, from a leasing industry perspective, how is India viewed now compared to what it was 10 years back, and especially after this recent order has come out, what is the perception and, what are the opportunities, if you can maybe add on that? Kishore: I think it's, safe to say that India is viewed, positively, by the leasing community. And, and the proof is in, let's just take Indigo for example. You know, they have been, leading the sale-leaseback model now for a few years, and, clearly, they don't seem to have any major difficulty in attracting people to, you know, do the sales leasebacks. They keep on happening on the flip side to keep the lessor engaged, to keep the lessors interested. The airlines also have to then do their part in terms of performing under their leases. So, you know, it's a good win-win situation for both. And then it becomes a self-fulfilling prophecy. You know, once we say, oh, this airline is performing under leases, then more people are interested in doing sales leasebacks and, and so on and so forth. So I think the perception certainly has improved since the Kingfisher days. But at the end of the day, the, you know, God forbid there's another, you know, airline failure, but the proof of the pudding will be also in terms of how, It would all pan out if in case, an airline runs into trouble. Because that also factors into, you know, the risk assessment that the credit committees at these different lessors will engage in.
Alok: Little bit of history. Obviously, Spice Jet came into a bit of trouble 2013-14 and then Jet Airways, we know went belly-up 2017-18. My experience as an asset manager in this region is that Jet Airways was far better managed from a regulation and regulatory perspective. Not trying to divert, but I know Cape Town, India is a signatory, but the Cape Town Convention Act has still not been enacted in our law, as is going on. I am aware that it is under review and it'll be enacted soon, but, you are right that things have improved, but it'll only be as good as let us see what happens next. And, you know, the other area, which I think, again, you are very close to it possibly because of your links in India and the market, you know, what is Indian government doing, gift IFF a city. India is trying to create an ecosystem where aircraft leasing can be enabled from the Indian soil. So, you know, the Indian business, space very well. Plus you are a lessor sitting, thousands of miles away in LA in US. So you are in a very unique position, personally, I think, and your perspective will really matter, you know?
Kishore: I think, you know, on the whole, these, these efforts are, are positive. Certainly, it's a recognition that, the government, sees that leasing is a big part of the aviation industry today, and should get the recognition it deserves. So it's nice to see that the government is trying to take steps to enhance and develop a leasing, you know, environment in India. Looking at, the issue from outside the country, I know people have spoken to me expressing concern about whether this would change if the next government comes in, you know, unfortunately, whether we like it or not, we still have the, you know, the legacy that, you know, cases like, you know, the Vodafone tax case have left and, and people look at those kinds of situations and say well, How do I, how will I be assured of certainty in terms of these policies staying the way they are today. Investors need that continuity, they need the reassurance that things will not change because a new government comes into, you know, into power, because that also obviously affects people's, decision-making, and the lack of certainty, or continuity plays into, you know, the risk assessment that I think, people from outside the country will, will engage in. So I think the reassurance or, or that, that, things will not change, and you know, if there are policies that are announced today, those policies will continue. Those are the kinds of things I think investors from abroad will look at.Alok: Can I just, go a little deeper into this? The government has actually created Indian government, I mean, the IFSC, which is effectively a special economic zone for financial services, you know. And, they're creating this, they've created a different of sandbox, a number of sandbox environments for different industries. One of them is aircraft leasing, obviously. What you just said is extremely valid from an outside investor's perspective. I'm just wondering that, what from your point of view would you like to see happening to put those concerns at rest? Is there something which can be done, which you feel will go a long way in giving a right message in putting some of these concerns to rest? Okay. That gives assurance, because the only other way I see it is, time will pass and somebody will take a bet and set up, but that's like a slow organic process, right? But is there something you feel which can be done from a rule-making perspective or from leg legislation or anything else which you feel, which will allay some of these concerns?
Kishore: Well, I don't know if there's a magic, silver bullet, you know, that solves the issue. I think it's a collection of different data points that people will look at. I mean, for starters, you mentioned Cape Town. You know, the concept of Cape Town has been around for more than 10 years now, and we are yet to sort of go through the entire process. We are getting there, but, you know, that for starters would be, I think something that is, you know, low-hanging fruit. Then on, on a broader level, I guess people will look at how, and, when I say this, I'm not talking of only aviation, even outside of aviation, how these, different tax laws, rules, et cetera, are being implemented, honoured, and that all feeds into what opinions people will form about, you know, the aircraft leasing space particularly it, it specifically in India. So. It's basically, I don't think an issue of one particular thing solving the, it's sort of a nationwide perception, that people will basically be looking at.
Alok: I mean, one of the things, like our company, we operate from Ireland and India and a couple of other countries. One of the things which I try to tell all the time when I am talking to the, you know, policymakers, which I must say there is, the access to policymakers, by the way, has improved a lot over the last few years in India. But when we talk to them, one of the things which I emphasise upon is that we need to move to a trust-based system than a mistrust-based system. One of the challenges I see as a business owner is that India still has that mindset of making rules to catch things rather than making rules to enable things. And it's a fine line, but I see that difference firsthand because I operate in Ireland and US, and I see how rules are enabled or business environment is enabled there. And I think I'm just trying to summarise what you just said. I think that is the part of that problem, is changing, but it's changing quite slow.
Kishore: Yes, you're absolutely right. I mean, that's a very valid point. It's a mindset that has to change. And that's why it takes time. And that's why I say there's no one thing that needs to be done. It's a mindset shift that has to happen. And the countries that are enablers in terms of helping businesses get off the ground, rather than restricting them, are the ones that you find, companies gravitating to.Alok: Okay. So this is the IFSC piece and all, and the Indian market I'm assuming as a lesser community, as you already mentioned, is quite bullish on Indian market now because of the obvious order book and everything. Now, overall in the industry, you know, this is a question maybe I would not have asked few years back, but now it is a question which has to be asked where pre-pandemic and post-pandemic, as, you know, firsthand participant, I see differences in what we do. But, what I want to understand is what are the visible differences which you see now in the industry in the way it operates? Has there been any shift? Has there been any pivot in the way of operating or the business model? Not getting into the challenges which pandemic threw, because we all ha know those challenges. We have already spoken enough about it, heard enough about it, but where do you see the shift? Is there a way which you're operating now as a lessor or as the industry operating in a different way than now post-pandemic. Kishore: Well, speaking for ALC, I don't think we have drastically changed really our way of doing business post-pandemic. The pandemic for sure has highlighted the importance of cargo. Clearly, the airlines that did well during the pandemic were the ones that had large cargo operations. So there were airlines, people are surprised to hear there are airlines that actually made profits during the pandemic, but their cargo operations sustained them. But that's more on the airline operating side. But as far as the lessors themselves are concerned, and as I said, for ALC, I don't think we have really changed our business model in any, you know, big way. I think if anything, what the pandemic did for us was positive in that it reinforced the need for the newer airplanes because the first victims of the pandemic in the airline fleets were the oldest airplanes. Airlines wanted to retire, the oldest, the most fuel-guzzling airplanes. And so from, you know, ALC's perspective, it actually helped us because now the focus was even more on getting new airplanes, In Europe, when airlines were bailed out by the governments, they were often, the bailouts were, were tied to, specific environmental goals being achieved. So they were contingent on environmentally friendly policies going forward into the future, they extracted that from the airlines. I can give you, you know, an example where we had a European airline that flew Boeing 737 800s as well as 737 maxes, and we had leased them maxes and the airline had never flown to Heathrow and they wanted to fly to Heathrow because now you know, slots were available since airlines weren't using all their slots. And Heathrow said something very interesting. Heathrow said, okay, we will give you the slot, but you can't fly the 800. You need to fly your max. Because of the environmental, you know, the environmental issues. Alok: Wow. Kishore: So this is an example where, not just governments, but even the other players in the industry, like the airports who have, you know, leverage, are exerting their muscle in terms of these environmental issues. And so for us, it actually was more beneficial because of our model of focusing on the latest new generation airplanes. So in that sense, We are not complaining. Alok: And I, yeah. And if I may say, so one thing, am I right in understanding this? One of the challenges which has happened post-pandemic is production line, right? We are all hearing about production line challenges, unavailability of airplanes, unavailability of slots. So I'm just drawing a conclusion, that basically means, an order book lessor, which, I love that term by the way order book lessor, like ALC is in a very good spot now, you know, if I may, looks like that because you have the order book, as you were saying, that you're not dependent on the airline order book, so that means a lot of airlines who need airplanes, you are able to help them today in that sense, right?
Kishore: Absolutely. Alok: Yeah. Kishore: And these are airlines that can otherwise afford airplanes, can otherwise, you know, order these airplanes on their own. I'll give you an example. Air Canada, a year ago, signed up for 15 A321 Neo XLRs, from us. And these will deliver, you know,
