Bristow Group (NYSE:VTOL) Q3 2026 Earnings Call

0:00 Good day, everyone, and welcome to Bristow Group's third quarter of 2026 earnings call. Today's call is being recorded. After the speaker's remarks, there'll be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number five on your telephone keypad. At this time, I would like to turn the call over to Red Tillohan, Senior Manager of Investor Relations and Financial Reporting.

0:23 Thank you, Michael. Good morning, everyone, and welcome to Bristow Group's third quarter of 2026 earnings call. I am joined on the call today with our President and Chief Executive Officer, Chris Bradshaw, and Senior Vice President and Chief Financial Officer, Jennifer Whalen. Before we begin, I'd like to take this opportunity to remind everyone that during the course of this call, management may make forward-looking statements that are subject to risks and uncertainties that are described in more detail on slide three of the investor presentation. You may access the investor presentation on our website. We will also reference certain non-GAAP financial measures such as EBITDA and free cash flow. A reconciliation of such measures to GAAP is included in the earnings release and the investor presentation. I will now turn the call over to our President and CEO, Chris.

1:14 Thank you, Red.

1:16 I'll begin with updates on five key topics. First, safety, which remains Bristow's number one core value and highest operational priority. The company delivered on our goal of zero air accidents through the first 10 months of 2026. In occupational safety, we remain on track to achieve our third consecutive year of fewer lost work days. I would like to thank everyone on the Bristow team for their continued focus on target zero, which is our commitment to zero accidents and zero harm. Second, Bristow announced We have seen strong financial results for the third quarter, and we are reaffirming the midpoint for the company's full-year 2026 adjusted EBITDA guidance, which reflects year-over-year growth of approximately 25%.

2:09 The ability to confirm this outlook, despite macro uncertainties and continued supply chain challenges, is a testament to the complementary nature of Bristow's business segments and the benefits provided by the significant geographic and customer diversity in our business model. Third, Bristow Special Missions, formerly known as Barry Aviation, has contributed strong financial results since the acquisition closed in July, and we expect this growth to accelerate in the fourth quarter and full year 2027. This acquisition has strengthened Bristow's business by adding specialized capabilities across a range of mission-critical operations and strong relationships with key military and defense customers, better positioning the company to benefit from increased defense spending trends.

3:04 Fourth, persistent industry supply chain challenges have hampered our performance. The fact that this is a familiar theme common across the aviation sector does not make it any less frustrating. Since 2020, on-time deliveries from key original equipment manufacturers have fallen by approximately 20%. Moreover, when delivery dates are missed, they have been missed by extended intervals. Slide number nine of this quarter's earning presentation summarizes extended maintenance downtime periods experienced across the helicopter industry. We have been compelled to increase inventory levels and implement other mitigations that come at a cost to the company.

3:52 But unfortunately, key components continue to have increased turn times and arrive late from the suppliers. While we are experiencing these challenges across Bristow's business, the most acute impacts can be seen in delayed aircraft modification programs for the company's new search and rescue contracts. These delays and their associated knock-on effects are depressing current margins in our government services segment. While the most readily visible effects may be contractual performance penalties, these penalties dramatically underestimate the total impact. The full knock-on effects of these delayed contract transitions include, but are not limited to, lost revenue opportunities, manpower and time spent chasing parts, Cannibalization of the company's internal fleet to keep aircraft flying and delayed aircraft lease returns, not to mention retaining additional headcount, overtime expense, and costs for outsourced third-party maintenance support.

5:00 Looking forward, based on detailed discussions and work with our key vendors, we expect these supply chain issues to stabilize during 2027. facilitating a return to historically strong margins in our government services business. Fifth and finally, Bristow's overall business is continuing to perform well despite the supply chain headwinds. Our offshore energy services business has continued to demonstrate robust profitability and we believe positive offshore energy fundamentals and the tight supply of relevant offshore helicopters combined for more favorable industry conditions and we've seen in more than a dozen years. I'll take some time to discuss more of the drivers poised to benefit the company later in this call, but for now, I'll hand it over to our CFO for a detailed discussion of Q3 results. Jennifer.

5:55 Thank you, Chris, and good morning, everyone. Before we begin, I would like to highlight that the financial results for Bristow Special Emission, Inc., or BSM, from July 13th onwards are included in our consolidated financial results. following the successful closing of the acquisition in July. As a reminder, special missions, MRO, and UAS business results are included as a part of our government services segment, while the results for on-demand cargo and other remaining BSM services are reflected as a part of our other services segment. Looking at the sequential quarter financial results on a consolidated basis, Bristow's total revenues were approximately $26 million higher in Q3 compared to Q2 while adjusted EBITDA was approximately $10 million higher this quarter.

6:45 We have tightened our guidance ranges for the remainder of the year and updated certain segments and consolidated ranges as reflected on slide 13 of our presentation. We are also affirming our 2026 adjusted EBITDA guidance midpoint of approximately $310 million. Turning now to our segment financial results and outlook. Revenues in our offshore energy services or OES segment were $5.6 million lower in Q3, primarily due to lower utilization in Europe and higher penalties in Africa, partially offset by higher utilization and rates in the Americas. Adjusted operating income in OES was $2 million higher this quarter, due to lower total operating expenses of $8.3 million and general and administrative expenses of $1.1 million, offsetting the lower revenues.

7:37 The decrease in costs was primarily driven by lower utilization levels in the North Sea and lower global fuel prices. Given the North Sea is one of our higher cost markets in which we operate, these decreased costs coupled with successful contract resets and growth over the past few years in key markets such as the Americas and Africa have led to margin expansion. Our OES segment adjusted operating income margin was 27% this quarter compared to margins in the low teens when we first began to reset our contracts towards the end of 2023. Our OES contracts are now effectively fully reset with full year impact of the more recent rate adjustments to be seen in 2027.

8:26 Given the continued performance of our OES business, we are tightening our 2026 guidance and increasing the adjusted operating income guidance range to $240 to $250 million for this segment. Moving on to government services, revenues for this segment were $17.8 million higher, primarily due to the acquisition of BSM, which contributed $16.9 million of revenues in the quarter. Revenues on the UK Search and Rescue Contract were $1.6 million higher as a result of lower penalties and increased fuel revenues. Revenues on the Irish Coast Guard Contract were $0.7 million lower due to higher penalties related to aircraft availability. Adjusted operating income was $2.5 million higher primarily due to the revenues from BSM partially offset by higher operating expenses of $13 million and General and Administrative expenses of $2.4 million, both of which were driven by the inclusion of BSM and ongoing contract transitions.

9:31 While government contract transitions have continued to progress and penalties have decreased in the UK this quarter, overall penalties related to aircraft availability, which has been adversely impacted by continued supply chain challenges, have remained elevated throughout this year. As Chris noted, the knock-on effects of these supply chain issues have been more significant than the penalties themselves. The net impact of these factors is included in our revised government services segment adjusted operating income range for 2026. At this time, we are updating our 2026 revenue guidance range to $470 to $490 million and the adjusted operating income guidance range to $35 to $45 million for this segment.

10:17 As noted on our previous call, some of these transition costs will extend into early 2027, and margins on these government SAR contracts are expected to recover over time. As a reminder, these are typically 10-year base contract periods plus option years, and we still expect to generate attractive long-term cash flow yields on these important government services mandates. 2027 and beyond will also benefit from the full year impact of the BSM acquisition and the new opportunities that are expected to arise from Bristow's new multi-mission government services offering. In our other services segment, revenues were 14 million higher this quarter, primarily due to the inclusion of BSM revenues of 9.2 million and higher activity in Australia, resulting in higher revenues of 4.8 million.

11:11 Adjusted operating income for this segment was $7.4 million higher in the current quarter, mostly resulting from the increased revenues, partially offset by higher operating expenses of $4.7 million and general and administrative expenses of $1.9 million, both of which were largely related to the inclusion of BSM. We are affirming our 2026 other services revenues and adjusted operating income guidance ranges of $155 to $175 million and $25 to $30 million, respectively. Lastly, the $4.5 million increase in corporate expenses this quarter is attributable to higher professional service fees related to the acquisition of BSM. But otherwise, our corporate costs remain consistent.

11:58 During the quarter, we launched a new initiative aimed at retiring our legacy enterprise resource planning system and implementing a new ERP system over the course of the next year. Once live, the new ERP system is expected to save the company a meaningful amount of annual costs while offering more robust capabilities than our existing system. The new ERP is expected to go live in 2028. We are excited to launch this project and will provide material updates as we progress. Turning now to capital allocation, cash flows, and liquidity. Our primary sources and uses of cash during the third quarter included approximately 103 million of net cash used to acquire BSM, which is subject to additional purchase price adjustments, about 29 million on shareholder returns, which include 25 million of share repurchases and nearly 4 million in cash dividends, 20.8 million of capital expenditures primarily related to progress payments on OES-configured AW189 aircraft on order, ongoing contract transitions, and normal course maintenance capex, principal and interest payments of 24 million, and net proceeds on an aircraft sale leaseback transaction of 19 million.

13:19 Net cash provided by operating activities increased by 20 million this quarter, while working capital showed an improvement of 17.7 million during Q3. Bristow continues to maintain a healthy cash balance and strong liquidity position. As of September 2026, our unrestricted cash balance was $233.4 million with total available liquidity of approximately $287 million. As we continue to execute on our capital allocation program, we were pleased to return capital to shareholders this quarter through opportunistic share buybacks and additional dividend payments. The company repurchased 550,000 shares of common stock for $25 million at an average price per share of $45.64, with $96 million remaining available under the repurchase program.

14:15 Additionally, on October 29, 2026, Bristow declared a dividend of 12.5 cents per share of common stock, payable on November 27, to shareholders of record at the close of business on November 13th. At this time, I will turn the call back to Christopher for the remarks. Chris?

14:35 Thank you. As noted earlier, I want to spend some time discussing industry fundamentals and the trends supporting a positive outlook for offshore energy services. Referencing slide number 14 of the earnings presentation materials, While the spot prices for crude oil and natural gas may swing up or down based upon the day's headlines, our OES customers plan their activities and expenditures based upon long-term views for commodity prices and expected financial returns. The global demand for oil and gas is expected to increase more than 12% over the next 15 years. But where will the incremental supply come from and how secure are those barrels? Like many industry observers, we expect offshore projects will receive an increasing share of future upstream capital investment.

15:29 Deepwater projects are favorably positioned, offering attractive relative returns within the asset portfolios of oil and gas companies. Moreover, recent geopolitical events have placed an enduring emphasis on where hydrocarbon supplies are located, and the established offshore energy basins that Bristow Services represent some of the most attractive and secure sources of supply. As seen on slide number 15, offshore project final investment decisions, or FIDs, are on pace to exceed $110 billion this year, following $70 billion in 2025, which would represent a year-over-year increase of more than 60%.

16:17 The outlook for next year is another 30% increase to total FIDs of approximately $144 billion in 2027. Slide 16 shows growth in the offshore rig count and utilization levels, with the utilization rate for global floating rigs expected to reach 96% next year. While the vast majority of Bristow's OES revenues, roughly 85%, support long-term production activities. An increase in the working number of offshore drilling rigs drives additional demand for helicopter services, and successful discoveries represent future production work. Slide 17 contains additional information from Westwood Global Energy Group, which presents a comprehensive overview of the current global offshore energy infrastructure, including production facilities, drilling rigs, and offshore wind installations, as well as expectations for growth in the number of these offshore platforms over the next 10 years.

17:25 As you can see, these trends point to a significant increase in demand for offshore energy logistics services, supporting a positive outlook for Bristow's business. Finally, slide 18 is an updated look at offshore helicopter capacity from Steve Robertson at Air and Sea Analytics. As you can see, effective utilization rates for the relevant models of heavy, supermedium, and medium helicopters remain at or near full utilization. This supply dynamic provides further context to the strong financial results that Jennifer reviewed earlier. In conclusion, the combination of the positive offshore energy fundamentals and the tight supply of relevant offshore helicopters represents more favorable industry conditions than we've seen in more than a dozen years.

18:21 With that, let's open the line for questions. Michael? At this time, I would like to remind everyone, in order to ask a question, please press star then the number five on your telephone keypad. If you would like to withdraw your question, press star and then the number five once again. We'll pause for a moment to compile the Q&A roster. The first question is from Josh Sullivan from Jones Trading. Your line is now open.

18:46 Hey, good morning.

18:47 Good morning, Josh. You know, just given the complexities on the aviation industry supply chain, you know, obviously most of it's out of your hands. But, I mean, what can you do to kind of protect yourself from the issue while you wait for the OEMs to, you know, get their get their solutions in line and begin delivering on time. And what can Bristow do in this time period?

19:14 Yes, we are taking steps to mitigate the situation as best as possible. We have increased inventory levels. We have retained additional headcount. We're spending more on overtime. We've added a second shift to the hangar that's working through the aircraft modification programs for those new search and rescue contracts Unfortunately, all those measures come at an additional cost to the company, and you're seeing the impacts of that in Bristow's Q2 and Q3 government services financial results, thankfully being offset by strength in other parts of the business. In addition to those measures, on the customer side, we have made some progress in getting relief. on availability issues that are not under Bristow's control related to those supply chain issues you referenced.

20:06 You see some benefit from that in new OES contract terms. On the government side, we've had success with our largest customer and also getting some relief on KPI penalties during this transition period, which has provided a cap on those penalties that we expect to endure at least through Q1 of 2027. So that's helped some. The main thing, though, is really working in concert with our key suppliers to help get through this aircraft modification program and to a more normalized supply chain picture were all stabilized in 2027. So we're really focused on working through that picture with them.

20:56 And then if we think about the balance of the dynamic between OEM new deliveries versus aftermarket parts, which is the bigger industry issue today?

21:07 Yes, by far, it's really the aftermarket and the availability of parts for existing aircraft. We have had some delays in new aircraft deliveries, as you referenced, and that's not a welcome situation, clearly, but nowhere near as impactful as the overall issues with aftermarket parts availability that we need to keep the existing fleet working and operational for our customers. So it's really that focus on getting parts on a more timely basis.

21:43 and then I guess, you know, kind of leads into another question. You know, your, Bristow's leadership in the advanced mobility market, you know, upcoming flights with Electra, other partners, data, Elroy, et cetera. As we think about the supply chain issues with the legacy aviation industry, you know, your diversification into the AM market and their supply chains, you know, is that an emerging advantage

22:07 I think it could be on the margin once those aircraft are certified and operational. Thankfully, most of those aircraft designs have less complexity, many fewer working parts. It's one of the reasons that their operating costs are expected to be dramatically lower than current generation aircraft. So fewer moving parts should translate into more reliability. of operations. So to your question, there could be a benefit there. I think overall, though, and to draw out maybe a bit bigger picture, I mean, one of the main benefits that we have at Bristow is our scale and diversification. We're having the supply chain issues we've discussed with our current suppliers.

22:54 However, we are their biggest customer really across the board. So the benefits of that scale mean that, you know, we are at the front of the line. Unfortunately, right now, it's really just a math situation where there are not enough parts to go around. But I think we are favorably positioned relative to the rest of the industry. And then importantly, on the diversification front, the number of different customers, the number of different geographies, and importantly, the number of different end markets, which is part of your original question, Josh, I think is a benefit for the overall portfolio in Bristol's business.

23:28 Okay. Thank you for your time. Thank you. Our next question comes from Savanthi Seth from Raymond James. Your line is now open.

23:39 Hey, good morning, everyone. Could you elaborate a little bit more, maybe, Jennifer, you know, on the ERP implementation? Just, you know, what drove the decision, kind of what gives you the confidence around the one-year timeframe, costs that we should consider around the implementation, and what you're expecting in savings?

23:59 Sure. Good morning. The implementation will require a one-time investment, but we expect it to deliver recurring savings of several million dollars a year once it's fully in place. Beyond the savings, the project will modernize our finance processes and systems with built-in AI and other new capabilities that will make us more efficient and better at making decisions across the organization. and I guess address the confidence. We do expect it to go live in 2028, so a little more than a year from now, but these more modern technologies have a streamlined way of being able to get that implemented in that time, so we have some pretty good confidence in that.

24:45 And just on the cost drag, any way to quantify that or help us appreciate what that could be to 2027?

24:55 Well, we're early in the project and scoping it all out, so a little too early to give numbers yet. We will call that out as we go, but we're a little early to call out the numbers quite yet.

25:09 Got it. And if I might follow up on one of Josh's questions, can you provide specifics around which parts or aircraft models you're seeing kind of the most supply chain delays and maybe along with that, Just the comfort in meeting the government services, you know, having that trail off here in early 2027, because it seems to be taking longer than maybe you thought last quarter.

25:36 Yes, and happy to address that. I'll talk mostly about aircraft models. The list of parts really can change month to month or sometimes week to week. But in terms of aircraft types. It is primarily in the Leonardo models. By way of reminder, all of the new aircraft going to work on the Irish Coast Guard contract are AW189 super medium helicopters. And the majority of the aircraft for UK SAR 2G are AW189s and to a lesser extent 139s. So really, again, the Leonardo products. In terms of what gives us some comfort on that timeline. We've spent an extensive amount of time in working sessions with them, really in Italy, on the production line, as well as at our bases.

26:34 They've also come out and had joint meetings supporting us with our end customers, those government customers, which has been helpful for the end customer to hear the message directly from the OEM. But they are making significant investments into their supply chain, as you'll be familiar. They have a complex network of subcontractors that amalgamate to form a supply chain for a given aircraft model. They've been putting a lot of investment into those suppliers, those subcontractors, on new parts orders to help build up key inventory levels. they're also making investments to diversify the sources of supply to give you maybe just one case study or example there the windscreens so these are literally the windshields for the aircraft the industry has really been too concentrated in a single source supplier there that's had issues both from timing and then quality control and so one thing that Leonardo's done is made an investment to put a second source of supply on business, and actually now after that a third to help provide some better resiliency into that key component. And then overall, we think the incentives are in place to get this fixed and normalized.

27:57 As a reminder that the same aircraft that we're ordering from Leonardo, who by the way is a key player in the European military-industrial complex, are the same aircraft models that European militaries are reliant upon for their defense posture against geopolitical threats. So we think all the incentives are aligned to get this fixed and to a more stabilized situation. It's just unfortunately not going to happen overnight. Based upon all those discussions and steps that I mentioned, our best information at this time is that we should be at a more stabilized and so on. So, we do have a couple of things that we're working on.

28:40 One of them is that we're going to be able to get more demand from the existing fleet. We're going to be able to get more demand from the existing fleet.

28:59 A high effective utilization rate for Bristow's fleet, and it's similar to the broader industry stats that were summarized in the presentation materials. However, we do have some available aircraft. For example, we have some S-92s that we're moving out of the North Sea, which is a more mature market, into markets like Africa and the Americas to meet customer demand and growth there. We also are taking delivery of new Super Medium Aircraft. As a reminder, we had seven of those on order. Really, none of those have contributed meaningfully to reported financials to date, so that's all still to come. We are one of the few operators with an order book and the ability to meet that incremental customer demand, so that will provide growth as we look at 2027 and beyond. And then I guess the final note there is As Jennifer referenced, 2027 will see more of the full period benefit of the contract rate resets that have occurred during calendar 26.

30:07 Very helpful. Thank you.

30:11 Thank you. Our next question comes from Alex Reigel from Texas Capital. Your line is now open.

30:20 Thank you. Regarding your comments about additional OES demand, do the current supply chain challenges place Bristow opportunities in the OES space at risk at all?

30:34 They certainly could if it impacts our ongoing aircraft availability levels. However, we are managing through that as best as possible. As noted, we have also achieved some better contractual terms, which have carved out and many more. And I think it's important for us to be aware of that. I think it's important for us to be aware of that. And I think it's important for us to be aware of that. And I think it's important for us to be aware of that. And I think it's important for us to be aware of that. And I think it's important for us to be aware of that. And I think it's important for us to be aware of that. And I think it's important for us to be aware of that.

31:22 And then can you speak to the special missions business? How is it tracking to initial expectations and comment on any kind of integration that's occurring right now?

31:34 Sure. As far as where it's tracking, it's on track to perform for 2026. We highlighted some of that in the prepared remarks of where it did contribute for this quarter. and it's moving as expected. We do expect that to accelerate in 2027. The business is doing well and has more opportunities now than it had to date. And then as far as the integration piece goes, because BSM is a fixed wing business, its operations do not overlap too much with the helicopter business. So we were always expected limited operational integration. but the back office integration is progressing well with no meaningful issues today.

32:23 Great. Thank you. Thank you. Our next question comes from Steve Silver from August. Your line is now open.

32:32 Thanks, operator, and thanks for taking my questions. First of all, can you talk a little bit about the composition of the current fleet after the recent sale leasebacks and periodic aircraft sales over time? and just your current thinking around when you're expecting the remaining aircraft on your order book to be delivered.

32:50 Sure, I'll take the first part of that. And good morning, Steve. So in terms of the composition of the current fleet, we think Bristow remains very competitive with the aircraft models that we have and the new additions to the fleet, which include those new generation super medium aircraft principally. So a good balance on the heavy and super medium model mix, also on the medium side with the largest operating fleet of AW139s, which is really the category leader in the medium space around the world, recently supplemented by the addition of a new H160 model from Airbus into that medium category. So overall, we continue to think we have a very competitive fleet, the right mix of aircraft to meet customer demand.

33:36 And Jennifer, do you want to touch on timing?

33:38 Sure. So we have two aircraft left in our order book, and we do expect one of their AW189s, and we do expect one this month and the other one in 2027. We also hold options for more aircraft, and we would exercise them only if customer demand supports it and the commercial terms were right, and any of those aircraft that were ordered under those options we delivered at a later date.

34:04 Great. And you just mentioned special missions expected to accelerate growth in Q4 and in 2027. Just curious as to whether there are any particular catalysts or projects worth calling out there?

34:17 Happy to address that. And I guess as a preface, we're really happy with how that business is performing today. When you do an acquisition, as much diligence as you do up front, you never really know exactly what you're buying until you are on the inside. and we've been really pleased to date with what we've seen and the performance of the business to date and the outlook both for Q4 and 2027. In terms of opportunities, starting first on the other category, their on-demand cargo business or ODC business is really performing well above expectations and so long as supply chain issues exist, and geopolitical tensions strain trade routes.

35:05 We think the tailwinds for that ODC on-demand cargo business will continue to be good. Then more on the special missions basis, what we're seeing really is an opportunity set, whether it's on intelligence surveillance and reconnaissance or ISR missions or troop movements that looks ripe for growth. if capital is available. So I think over the last few years, they've had limited ability to add aircraft to their fleet to pursue some of those growth opportunities. I think with our support, looking at bringing in some more leased aircraft, potentially some owned aircraft, there's going to be more of an opportunity to capture growth in that mission profile likely throughout the Americas as well as other areas outside the continental United States.

36:01 That's helpful. Great. And one more for me. So free cash flow was solid in the quarter. Share repurchases picked up quite a bit in Q3. So I'm just curious. I mean, the company has stated consistently that the goal was to be opportunistic on share repurchases. But I was wondering if you could expand a little bit on maybe the timing of the activity this quarter and really your current thinking on capital allocation, trying to balance additional share repurchases and debt reduction.

36:30 Sure. As you noted, our share repurchases are done on an opportunistic basis. We hadn't done as many of those up to date because of a lot of reasons that we've discussed in the past. We had a big capital investment in aircraft related to the UK SAR 2G contract and the Irish Coast Guard contract. Those have largely completed. and we were able to deploy capital to expand our government services business with the purchase of BSM, investing in the fleet on the OES side with the new purchases of AW189s that will go to work for customers. Again, share repurchases, the $25 million we did this quarter, again, it is done on an opportunistic basis.

37:18 Timing is, we're not doing it programmatically, so that will just as we move along. And then we did. And we are consistently working through our dividend program and continuing to declare dividends on a quarterly basis.

37:37 Great. Thanks for the color. Thank you. Our final question today is from Colby Susser from Daniel Energy Partners. Your line is now open.

37:48 Hi. Thanks for having me on. Can you expand on the key drivers behind the updates on the guidance ranges, noting the midpoint was affirmed, and what risks or opportunities do you see for the remainder of the year?

38:02 Yes. Good morning. First, we were pleased to reaffirm the adjusted EBITDA midpoint for full year 2026, which I think is a testament to the significant diversity that we have in the business from an in-market customer and geographic standpoint. So happy to be able to reaffirm that. In terms of some of the drivers on some of the range changes, first on the government services side, really the supply chain issues that we talked about during the call would be the primary one. And then on the OES side, those changes were really supported by the strong industry fundamentals and the tight supply-demand dynamic that exists with relevant offshore helicopter models globally.

38:47 In terms of risk certainly geopolitical developments, the macro side with the commodity price, anything there is always a risk that will be exposed to. Foreign exchange rates are another one that can impact our business, particularly with the big government contracts where we are paid in the local currency under those particular contracts. And then on the opportunities front, I think supply chain, which has obviously been a big hindrance to the business recently. To the extent that those issues do stabilize, that will be an opportunity to free up aircraft and the business for better performance.

39:32 Makes sense. And as a follow-up, looking at the utilization levels you highlighted earlier on slide 18, if these aircrafts are effectively fully utilized and contracted out, How are you thinking about picking up any incremental ad hoc short-term exploration work in 2027?

39:51 Yes, and thank you for the question. I appreciate the opportunity to clarify that. The information on slide 18 is really industry-wide data that comes from a third-party source, which we think does the best job of tracking industry data on this metric. For Bristow overall, our fleet is similarly positioned. However, there are some differences. For example, we do have some available S92s that we will move out of the North Sea, which is a more mature market, into some other markets where there is additional demand from customers in places like Africa and the Americas. So we'll be able to meet that growth and their demand there.

40:39 We do also have the new deliveries that we spoke about, those new super mediums coming into the fleet, which really haven't contributed meaningfully to reported financials to date. But they have now mostly been delivered. And as those go to work, that will drive growth for us and meet demand for our customers. And we're one of the few operators who actually does have an order book and the ability to bring in those aircraft. and then beyond that as we think about part of your original question which relates to short-term drilling exploration opportunities, we do have the ability to share aircraft to support ad hoc and short-term work with aircraft that might be under other contracts but we can use available flight hour capacity to support additional customers as well.

41:31 Thanks for the color. I'll turn it back. Thank you. This concludes our question and answer session. I'll now turn the call back over to Chris Bradshaw for closing remarks.

41:42 Thank you, Michael. Thanks, everyone, for joining the call on what's, you know, I guess been a slow couple of news days. We appreciate the interest. Look forward to speaking again next quarter. In the meantime, stay safe and well. This concludes today's call. You may now disconnect at any time.