RE: JP MORGAN5 Aug 2022 11:54
Panos Kakoullis (Executives)
…And in terms of the LTSA, you're right, back at the -- back in Derby on the 13th of May, we sort of talked about in the medium-term being around about a GBP 500 million number on the LTSAs. It is going to be meaningfully more than that this year. You quoted the GBP 433 million for the first half of this year. It's going to be, again, meaningfully more than that as those engine flying hour receipts come through.
The relationship of that with actual shop visits happening and some of that LTSA creditor effectively ending up being -- taking through revenue, that's one of the sort of judgments that we have to take, but it will be meaningfully more than the GBP 500 million this year.
Question
David Perry (Analysts)
And just a follow-up on that. The GBP 500 million a year then, do we -- is that an average? If it's much better this year, is it lower in the future years? Or is it just this year is a one-off and it's still the GBP 500 million a year going forward?
Answer
Panos Kakoullis (Executives)
I think we said GBP 500 million by the medium-term, so over the next few years, it is going to be higher levels than that, depending on trajectory of engine flying hour receipts and the level of shop visits going forward.
Answer
D. East (Executives)
Yes. I mean I think an elevated rate in the short term is a logical consequence of the sector is recovering from COVID, flying is starting to happen and the shop visits are going to follow. I mean don't forget, we've got a load of shop visits that pre-COVID would have happened over the last year or so, that have effectively been delayed, and that's what's causing the LTSA increment to be at a higher rate right now.
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