2009-2010 Guide To Financing and Investing in Aircraft, Engines and Airlines

Fing FC09:FGuideFC 3/6/09 13:41 Page 1
THE 2009-2010 GUIDE TO

FINANCING & INVESTING IN
AIRCRAFT, ENGINES & AIRLINES
FINANCING IN A HARD MARKET Sponsored by:
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2009-2010 Issue
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FinGuide 2009 TOC New:FIN GUIDE TOC 4/6/09 12:56 Page 2
AIRLINE FLEET C O N T E N T S
MANAGEMENT
Financing in a hard market . . . . . . . . . . . . . . . . . . . . . .4
Engine leasing in a sticky climate . . . . . . . . . . . . . . . .8
Airline consolidation faces close anti-trust scrutiny 18
Consolidation for better regulation . . . . . . . . . . . . . .20
MANAGING DIRECTOR
Philip Tozer-Pennington: philip.tozer@ubmaviation.com Competition, cartels and consolidation . . . . . . . . . . .26
Tel: +44 (0) 207 579 4840
EDITOR Investing in CFM engines . . . . . . . . . . . . . . . . . . . . . .30
Jason Holland: jason.holland@ubmaviation.com
Tel:+44 (0) 207 579 4849 Silver lining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
LEAD CONTRIBUTOR
Christian J Kjelgaard: cjkjelgaard@yahoo.com Fleeting thoughts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
Tel: +1 001 212 924 3829
JOURNALIST Lessor focus: Bavaria . . . . . . . . . . . . . . . . . . . . . . . . .54
Mary-Anne Baldwin: Mary-Anne.Baldwin@ubmaviation.com
Tel: +44 (0) 207 579 4843 Developing the US Aviation industry . . . . . . . . . . . . . .58
SPECIAL CORRESPONDENTS
Africa: Kaleyesus Bekele Lessors riding out the storm . . . . . . . . . . . . . . . . . . . .64
PRODUCTION
Phil Hine: Production Manager, phil.hine@ubmaviation.com Lessor focus: AWAS . . . . . . . . . . . . . . . . . . . . . . . . . . .70
Tel: +44 (0) 207 579 4852
Kalven Davis: kalven.davis@ubmaviation.com
Tel:+44 (0) 207 579 4851
Recovering aircraft from a defaulting lessee . . . . . .74
DISPLAY ADVERTISING
Philip Tozer-Pennington: philip.tozer@ubmaviation.com
Lessor focus: Babcock & Brown Air . . . . . . . . . . . . . .78
Tel: +44 (0) 207 579 4840
Operating lease update: Independent power . . . . . . .82
AIRLINE FLEET MANAGEMENT
(ISSN 1757-8833) – Online: 1757-8841) (USPS 022-324)
is published bi-monthly.
Brain drain hits african airline industry . . . . . . . . . . .88
Subscription records are maintained at
UBM Aviation Industry Press, Ltd. Lessor focus: AERCAP . . . . . . . . . . . . . . . . . . . . . . . . .92
2nd Floor, Ludgate House, 245 Blackfriars Road,
London, SE1 9UY, UK.
2008: an aircraft financing odyessy . . . . . . . . . . . . . .98
UK annual subscription cost is £150.
Overseas annual subscription cost is £170 or $300 What’s on order: troubled times for
All subscriptions enquiries to:
Paul Canessa: paul.canessa@ubmaviation.com aircraft manufacturers . . . . . . . . . . . . . . . . . . . . . . . .100
Tel: +44 (0) 207 579 4873
Fax: +44 (0) 207 579 4848 Manufacturing liquidity . . . . . . . . . . . . . . . . . . . . . . .108
Website: www.aviationindustrygroup.com
Published bi-monthly by UBM Aviation Industry Press Limited.

Movements in the European blacklist . . . . . . . . . . .112
Printed in England by Symbian Print.
Airline Fleet Management™ is a licensed trademark of UBM Aviation

The ten commandments . . . . . . . . . . . . . . . . . . . . . .116
Industry Press Limited. All trademarks used under license from UBM
Aviation Press Limited. State aid developments in the transport sector . . .118
©1999 – 2009, UBM Aviation Industry Press Limited. All rights reserved.
Islamic finance: plugging the liquidity gap . . . . . . .124
Airline Fleet Management, part of UBM Aviation, has used
its best efforts in collecting and preparing material for inclusion in Airline
Fleet Management but can not and does not warrant that the
Aircraft transactions: June 2008 - June 2009 . . . . .127
information contained in this product is complete or accurate and does not
assume and hereby disclaims, liability to any person for any loss or damage
caused by errors or omissions in Airline Fleet Management whether such
errors or omissions result from negligence, accident or any other cause.
This publication may not be reproduced or copied in whole or in part by Aviation Industry
any means without the express permission of UBM Aviation Industry Group supports Orbis
Press limited.
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Editorial main:FIN2009 2/6/09 14:31 Page 4
Financing & Investing in

Aircraft & Engines
Philip Tozer-Pennington looks at aviation financing thus far during 2009.
FINANCING IN A HARD
MARKET
Summing up the past 18 months in the banking sector!
THERE IS NO SIMPLE LIST OF BANKS CURRENTLY CONDUCTING BUSINESS that

can be drafted and shown today; if we were to do this then we More specific to aviation finance though is the fact that it is still
would not give a true picture of the current market at all. not seen as being a strategic activity within many banks.
Instead we should ask which independent banks are the most Therefore, when they are pushed to de-leverage and when they
active in the market at this time? have to make some choices they will most likely choose to sup-
DVB, as one example, has closed $600m of deals over the past port their regular domestic strategic customers as opposed to
four months for airlines as diverse as American, Philippine, and something that can be seen as a little bit more exotic or even
Korean. DVB also has a further $600m of transactions currently dangerous, such as aircraft finance.
in the pipeline. Many other banks such as Calyon, Standard So there are a number of institutions around the globe, where
Chartered and BNP say that they have deals in the pipeline, but aviation finance was not at the top of the list, that have pulled
you need to look through any deals that are posted in this mar- out of the aviation market as one of their first strategic moves
ket with care and ask – are these deal amounts actual dollars at after the collapse of Lehman Brothers in September 2008.
risk? There is now another factor: a mostly untold story, mainly with
I have singled out DVB because its deals show real dollars at Europe, where governments are taking strategic stakes in the
risk. They are not ECA-backed like many of the other deals that capital structure of banks. They are then asking those institu-
are being flagged-up from banks where the residual risk is well tions to support/put their country before going abroad for
under the posted amount. So when asking which banks are in exotic transactions.
the market doing business you first need to consider what you
mean by doing business, but it is clear that all banks have gone So what does this mean?
– or are going – back to basics in their approach. Strictly speaking, for French, German, Dutch and UK banks, it
means that they are not permitted to finance a Boeing aircraft
How has the credit crunch affected the for an Asian carrier. The expectation is that a European bank
availability of aviation finance? will support Airbus first and second their own country.
There are two main impacts of the credit crunch on aviation The overall tightening of the credit markets has reduced aircraft
finance: it has caused a de-leveraging race amongst the finan- financing liquidity and increased risk spreads. However, with
cial institutions. Even if you do not discriminate against aviation significant reductions in LIBOR, all in all funding costs are still at
finance versus any other class of business, the banks are very attractive terms. In line with general global de-leveraging,
required by the regulators and compelled by the deterioration advance rates on aircraft deals have been reduced by five to ten
of their capital structure to reduce their assets – this is of course per cent.
de-leveraging.
4 S Guide to Financing & Investing in Aircraft & Engines

Pre-delivery financing has returned to a much more limited craft values means that banks must ask for more equity and
availability than we have seen in the pre 2004-2007, high liq- most of the airlines and lessors understand this.
uidity, era. Overall, while there is less aircraft finance liquidity
and the risk premiums are higher, the aircraft portfolios have Does this mean that such airlines will have to seek other fund-
continued to perform, especially when compared to most other ing, or will they have to resort to leasing as the only means
asset classes. Another indicator is that Calyon has seen a surge available?
in customers approaching it, even though it is well known that
this bank is far from being the cheapest option on the market. In normal circumstances the lessor would play the role of lender
Customers have realised that the “shopping around” option of last resort for those too weak to be able to attract financing,
has disappeared for the moment and currently you have to take but the credit crunch has affected lessors just the same as
what you can get. everyone else. So in this market an airline that cannot find
financing on a given aircraft is very unlikely, in most circum-
From 30 banks operating in the sector during the first quarter stances, to obtain finance through a lessor on sale and lease.
of 2008, we are now down to about 11 banks actually doing Export credit and sale and lease back options are still available
deals with three additional banks ready to move back into the we must remember. Leasing will continue to play an important
sector, we are told. Of this number, five (in all) banks would fall role, but Export Credit will become/is the market maker.
into the category of known aviation finance house.
How will OEM-backed finance institutions
Are finance terms and conditions becoming more rigorous and satisfy the ongoing debt requirement?
therefore excluding certain airline operators, when this would The manufacturers are working very hard on this at the
not have done previously? moment. There is no doubt that seven or so months ago both
Airbus and Boeing were still in a state of denial. Banks were
Increasingly, there is now a move towards quality and banks talking to the two big manufacturers about credit crunch and
want to see this with a good mix of credit/asset with a conser- funding gap worries etc, but the manufacturers did not seem to
vative structure. This does mean that second tier and classic air- see the problem, or at least if they did, then they were not will-
craft are no longer attractive. ing to talk about it to the banks.
We are in a world with tighter aircraft finance liquidity - we are Since the turn of the year, however, both Airbus and Boeing
therefore in the lender market. This means lenders can be very have been working very hard indeed with banks and clients to
selective in what aircraft and what credits they will fund. Since work on solutions wherever possible. The OEMs suffer a general
the majority of current deliveries are 737 NG / A320 family and limitation which is something familiar to Boeing, but not so
777 aircraft (on the larger side) their customers are clearly in a much to Airbus; this is the sole recognition problem, which is
more advantageous position because these aircraft families are pure accounting. For example, on the sales recognition side, if
asset gold standards in their respective classes. you put a significant amount of money aside to finance your
own client to buy your own aircraft it might be that you cannot
As for financier’s focusing on stronger credits, this clearly is recognise the sale. This in turn has a detrimental impact on all
expanding the need for Export Credit for the remaining carri- the ratios of the manufacturer such as revenue and turnover
ers. With some 80 per cent of Boeing backlog eligible for ExIM, etc, for that reason the contribution by Boeing and Airbus to
this creates an important safety valve for airlines who have dif- the finance of their clients will have to be limited; there is no
ficulty attracting the limited commercial financing currently on question of this.
offer.
So what can the OEMs do?
There is no doubt that airlines with a C-credit type situation are OEMs are trying to team-up with banks and propose some kind
finding it near-on impossible to find finance. The current pre- of structure where they absorb the junior trench with the banks
vailing banking policy excludes many airlines, operators and doing the senior. This is generally seen as the best way to go in
lessors, along with some of the aircraft which are not new, clas- a bad market at this time, it is a win-win situation because from
sics are virtually a no go area for all at this time. So many air- a senior leverage perspective it is probably a very good deal,
lines, lessors and classes of asset are on the black list where and it is fair to say that the presence of Boeing or Airbus as the
they would not have been pre-2008. junior in any kind of financing is giving an extra layer of pro-
tection besides the number of dollars which are ahead of you
However, some very good assets are coming onto the market as senior lender.
that are priced very attractively, but they are still not able to
find financing. There is particular stress in the market at this So to make a long story short there is limitation because there
time for those seeking to refinance 747-400s. The market is is an accounting rule which prevents them from pouring large
very rigorous at the moment in terms of leverage, repayment, amounts of cash into their clients. The big manufacturers all
asset, and price. Most, if not all, banks are not interested in understand this as do the banks. So the OEMs have moved
classics and do not think that anyone in their right mind will from denial to a partnership with the banks that in effect means
finance classics at this time. we shall see junior/senior arrangements as being the way for-
ward in this market.
That being said, one bank (DVB) financed a deal just last month
for four 737-400s at a very good price. On the engine side we Boeing Capital and its counterparts here within the EU are confi-
are looking at the value in just the same manner, what are the dent that they will be able to satisfy the debt requirement during
engines, where will they be used and what the outlook is for a 2009 and into 2010. While the manufacturers anticipate having
particular type. Banks are able to cherry-pick deals at will and to directly fund a number of aircraft in 2009 (having not funded
this will not change in the foreseeable future. It is not because any in the last several years), they believe the overall volume
the banks want to be awkward but because the volatility of air- requirement will be less than what we saw post 9/11. Boeing
Guide to Financing & Investing in Aircraft & Engines S 5


Aircraft & Engines
Capital, for example, were financing about $3bn per year for however, carrying out a top down and bottom up analysis of
three years post 9/11 and at that time they did not have the depth each aircraft that is on order. The company maintains that avail-
of infrastructure, or indeed the balance sheet, that they have ability of financing will not drive aircraft delivery rates. Boeing
today, moreover they were financing aircraft such as the 757 and Capital’s European counterparts declined to comment on this.
the 767 which are coming towards the end of the lifecycle. So are there any additional problems on the horizon that we
Now, as mentioned before, Boeing Capital find that they are need to consider when talking about airlines seeking finance?
financing 737NGs and 777s – Gold standard aircraft. Even then It is becoming clear that the European Union Emissions Trading
Boeing Capital state clearly that the level of funding required Scheme will affect the very core building blocks of aviation
from them is nowhere near what was required post 9/11. So finance:
Boeing is upbeat. 1. Airline Business models
2. Aircraft values
How will export credit agencies react? These will undoubtedly be affected by any “green regulation”.
These agencies need to double their support from 2008 levels. The aviation working group has handed the EU a critique of the
They are open to capital market funding. All the major ECAs ETS and its shortcomings. The regional solution that is the ETS
have said that they are prepared to nearly double their support will affect all airlines but it is the EU fleet lean issue which
levels relative to 2008. causes the most concern.
In the end the export credit agencies have been given the task A simple summary of fleet lean can be thus: if an airline leases
of supporting the sale of their national manufacturers and in and operates an aircraft and then gets into debt and goes bust
normal circumstances they contribute five six or seven billion then any aircraft operated (not owned, by that airline can be
per year but, talking with Bob Morin and hearing what his seized. Then any costs owed to Eurocontrol or an airport oper-
European counterparts have to say it is clear that we could be ator can be set against seized aircraft.
above the ten billion dollar mark this year for each of the But the most dramatic part of this legislation is hidden in the
export credit agencies. That is above ten billion for each, which detail, as always: if an airline goes bust with debts and other
is a significant move. banks and lessors manage to take back possession of their
The challenge for these agencies is great, not due to the assets by getting their aircraft out, but you do not, then all
amounts of money that we are talking about, but because the debts of the airline will be set against your aircraft, effectively
different authorities are pouring billions upon billions into the wiping out the value of the asset. This process obviously has the
system. But it is a challenge for these agencies on the actual exe- same overall impact on the engine lessor as it does with the
cution because these teams are small and they need to apply for owner of any asset. The overall effect of this legislation will be
the normal due diligence, credit analysis, etc. So is it a realistic that only airlines with strong balance sheets, liquidity and good
target for these agencies to move from six or seven billion dollars business plans will be able to obtain finance.
of funding to ten billion? Or even twelve? In terms of work force But more importantly, this means that lessors will have to take
and resources I think it is a very big challenge for them. a second look at all assets currently out on lease, and ask ‘is the
operator and therefore the asset, secure?’ Future lease agree-
Will there be a reduction in new aircraft ments will have to be far more stringent and sale and leaseback
deliveries as a result of a shortage of credit? may not be a viable option any longer, as this is usually a last
These are difficult markets, of that there can be no doubt. We resort liquidity boost for an operator.
know that aircraft demand is correlated against global eco- Investors and asset owners beware – the EU will become a very
nomic conditions as global GDP has contracted, so aircraft high risk zone, with some banks likening risk factors to many
demand has fallen in line. African countries. Investors in aviation are lobbying the EU for
This said the first half of 2008 saw amazing performance by the a u-turn on this legislation, or at the very least transparency
aviation industry, the global economy was falling, oil was at from Eurocontrol and the like so that investors will be able to
$147 a barrel and yet aircraft were still being ordered at record see which operators are behind on their payments. As it is, the
levels – so what does this mean for the industry going forward? fleet lean legislation is one of the most barbaric legal imple-
We are yet to find out, but it is generally agreed by many of the mentation issues ever for the aviation industry. The bottom line:
banks that 2010, not 2009, will be the year when the manu- airlines within the EU will be a higher risk and therefore financ-
facturers’ orders books come under serious stress. Therefore ing will be more expensive or non existent for some airlines.
2010 is the year seen as being the worst for cancellations.
Many operators are going to simply say “sorry but I cannot take Finally: The message from the banks that have pulled
delivery of this aircraft”. back from the aviation sector?
For many it will not be a question of “I can try to defer for one
year, two years or three years”, or simply “I can try to restructure “We will be back…………………..”
the agreement”. There will be no options for many. We already
have one case as an example – that of Lauda Air where they sim-
ply said “here is my deposit, I do not care that it is lost, I simply
cannot take delivery of this aircraft”. We will see more of this!
So the answer is yes, some orders will continue to disappear
due to lack of funding which in turn will reduce the financing
requests coming in for orders. The cycle has a way to run yet.
Boeing Capital, for its part, does not believe capital availability
will be the determining factor of their production rates. Traffic “Or will they?”
and market demand will be the driving force in shaping the
delivery skyline. Boeing Captial has chosen to try and keep out We hope that you enjoy the 2009/2010 Guide to Financing &
of the funding gap debate, instead they have tried to under- Investing in Aircraft & Engines and wish you all the very best
stand for themselves if there is a risk of significant capital for the months ahead.
requirement that is not being addressed, and their conclusion
is that they do not see that being the case today. They are,

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Aircraft & Engines
Engines have been costed above their intrinsic value and the price of new engines and short-term lease
agreements are on the up. Demand has kept engine lessors comfortable – for now – but with airline
bankruptcies, fleet and route cuts, and order postponements and cancellations on the increase, the need
for engines is dwindling. Mary-Anne Baldwin looks at how this is affecting the engine leasing market.
8 Guide to Financing & Investing in Aircraft & Engines

ENGINE LEASING IN
A STICKY CLIMATE
AN INCREASING NUMBER OF ENGINES ARE HITTING THE mar- tuate. If more and more struggling airlines fall by the way-
ket and threatening to flood demand and so engine les-sors side, a surplus of engines will hit the market – potentially
have a number of sticky issues they must tackle in order to pushing supply in excess of demand.
preserve good ground in an increasingly shaky market.
Yet despite the expectation that bankruptcies will con-
The parting out of a stored aircraft and the sale of its work- tinue, many of those occurring during 2008 were due to
ing components is one such issue – since the engines are the high oil prices – a phenomenon which diminished in impor-
most valuable components of the aircraft, it is these that tance as oil prices fell. Oil prices now appear likely to stay
owners have the greatest desire to sell off. “On an old air- fairly low for a while. Also, while airlines are still struggling
craft like a 737-200, “90 per cent of the value is in the financially, they are becoming better-equipped to deal
engine… and you don’t even bother to overhaul them,” says with a spike in fuel costs in the long term – benefiting from
Alain Maestracci, vice president of business development for a more efficient worldwide fleet, better contingency plan-
BCIO Aircraft Leasing. ning and remedies such as passenger fuel surcharges. In
terms of oil it seems the road ahead will be far less rocky –
Much of an engine lessor’s profit comes from leasing spares at least for those that have been wise enough to stay
which sit unused, as back-ups, in hangars. “It’s quite com- ahead of the curve on fuel hedging.
mon for them [airlines]… to [already] have two or three
engines sitting in the hangar that they do own outright,” It is hard to predict how great the future supply of used
says Joseph O’Brien VP of sales for Engine Lease Finance engines may be and with no registry currently in existence,
Corporation: “As aircraft parting-out makes engines more the number of engines on the market can only be guessed at.
readily available for outright purchase at low prices, airlines According to Maestracci, 15 of the largest aircraft lessors con-
are increasingly likely to pick up bargains from other carriers trol 4,800 aircraft – representing at least 10,000 engines on
and aircraft owners instead of leasing; the trend is therefore the market. Pascal Picano, senior VP of sales and marketing
likely to hit engine lessors’ revenue hard.” at GA Telesis, estimates there to be 59 operators of the CFM
56-5A and 10,022 engines in operation. The General Electric
Another trend likely to drown lessor profits is lower inter- CF6-80C2B, meanwhile, has an estimated 104 operators and
est rates, which in the UK have fallen to as little as 2,330 engines in operation; while the IAE V2500 has 108
1.5 per cent and in the USA as low as zero. Airline bank- operators with 2,826 engines in use. The PW 4056 has 35
ruptcies form yet another factor causing lease rates to fluc- operators, using 924 engines.


Aircraft & Engines
Some believe the market can contain an increase in engines.

Sonny Stern, director of sales for the Americas at MTU
Maintenance, argues that the number of spare engines is deplet-
ing, with today’s fleet of narrowbody and widebody aircraft
being supported by about 15 per cent of spare engine coverage.
However, he predicts that by 2025 there will be only 9 per cent
coverage. Stern also predicts that limited capital will lower out-
right ownership of spare engines by airlines from the current 50
per cent level to 25 per cent. This will create a surge in the rate
of engine leasing, he says.
If Stern is right, the current dearth of spare engines will mean

those freed up by aircraft groundings in the short term will still
be in demand. But, unlike previous downturns, the current crisis
is affecting the airline industry on a global scale: Few areas are
likely to remain financially secure and able to benefit from the
availability of aircraft and engines. A limited number of aviation
growth areas throughout the globe could mean that a surplus in
discarded engines is less likely to be absorbed by the market.
What’s in a name: understanding market per-

ception
Another difficulty engine lessors must conquer is the perceived
extra value of some engines over others. While engines them-
selves hold high values in comparison with all other aircraft com-
ponents and indeed aircraft themselves, there remains some
Views are split over the effectiveness and safety of engines with apprehension as to certain engine types and lessors must stay
components manufactured by Parts Manufacturer Approval awake to perceptions of engine types when looking to acquire
(PMA) suppliers. The Federal Aviation Administration (FAA) and lease them.
actively seeks to assure airlines that engines equipped with PMA
parts are just as safe and effective as those with just OEM parts,
but while on an official level PMA-equipped engines have the
same worth and capabilities, market belief will continue to rate
engines with only OEM parts as having better value.
An online poll conducted recently by AFM (see page 44 to 46)

shows that while the majority of people polled view PMA
engines as being as effective as OEM engines, almost the same
number perceived the PMA engine to be of lower market worth.
Of those surveyed, 54 per cent viewed PMA parts as not being at
all detrimental to an engine. However, 31 per cent said the inclu-
sion of PMA parts has a negative effect on an engine’s perform-
ance, and 56 per cent said their inclusion reduces the value of an
engine.
But it is likely that PMA parts will rise in popularity during the cur-
rent economic climate. PMA parts became more popular during
the post-9/11 recession because they are generally less expen-
sive. However, additional PMA part-related maintenance con-
cerns and attributed costs mean that airlines with large aircraft
fleets are still reluctant to acquire aircraft with PMA parts if their
fleets have a majority of OEM-only engines.
Lessors must look to their market to see what aspects of an engine

are most desirable and indeed which engines best hold these traits.
AFM’s poll findings reflect current demand for each engine type
currently on the market. We ranked 20 engine types on four char-
acteristics. The CFM56-7B powering the 737NG family was the
most popular engine polled, receiving the highest votes for opera-
tional success, investment potential and value for money. The
Engine Alliance GP700 for the A380F was perceived to be the
most fuel-efficient engine. Of those poorly rated, the PW6000 for
the A318 was ranked the least favourite in terms of operational
success; the JT8D 727 was deemed to carry the lowest return on
investment; the Rolls-Royce Trent 500 powering the A340-500 and
A340-600 was considered to be the least value for money; and the
JT8D engine was rated the least fuel-efficient on the market.

FPA_check:AFM 13/5/09 10:20 Page 3
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Aircraft & Engines
AFM Engine Leasing Poll

1. OPERATIONAL SUCCESS
Most 6 5 4 3 2 Least
CFM56-7B 737 NG 36% 45% 9% 0% 9% 0% 0%
GP 7000 A380/F 20% 10% 20% 30% 0% 10% 10%
RB211-535 757 20% 0% 0% 30% 0% 20% 30%
CFM56-3C 737 Classics 17% 33% 17% 8% 17% 8% 0%
V2500-A5 A320 11% 11% 11% 22% 22% 11% 11%
V2500-A1 A320 11% 0% 11% 22% 22% 11% 22%
CFM56-5B A320 10% 40% 40% 0% 10% 0% 0%
IAE V2500 A320s 10% 0% 20% 30% 20% 0% 20%
RR Trent 700 A330s 10% 0% 20% 20% 20% 10% 20%
JT8D 727s 10% 0% 10% 30% 0% 10% 40%
CF6-80 747-400s; 767s 8% 46% 8% 23% 8% 8% 0%
CF5-80C2 A300s 0% 36% 9% 18% 9% 18% 9%
CF6-80E1 A330s 0% 30% 20% 20% 0% 20% 10%
PW200 757 0% 22% 22% 11% 11% 11% 22%
CFM56-5C4 0% 20% 20% 30% 20% 10% 0%
CF6-50 747-200; -300 0% 10% 30% 0% 30% 20% 10%
PW4000 A330s 0% 10% 20% 20% 10% 30% 10%
RR Trent 900 A380/F 0% 10% 10% 20% 10% 20% 30%
PW6000 A320s 0% 0% 10% 30% 0% 0% 60%
RR Trent 500 A340s 0% 0% 9% 27% 0% 27% 36%
2. INVESTMENT POTENTIAL
CFM56-7B 737 NG 55% 18% 18% 0% 9% 0% 0%
CFM56-5B A320 27% 45% 18% 0% 9% 0% 0%
GP 7000 A380/F 20% 10% 20% 20% 10% 0% 20%
V2500-A5 A320 10% 20% 10% 20% 10% 10% 20%
IAE V2500 A320s 10% 10% 10% 30% 20% 0% 20%
PW4000 A330s 10% 0% 20% 20% 20% 10% 30%
RR Trent 700 A330s 10% 0% 20% 20% 10% 10% 20%
V2500-A1 A320 10% 0% 10% 10% 20% 10% 40%
CF5-80C2 A300s 9% 18% 9% 9% 18% 27% 9%
PW200 757 9% 9% 18% 0% 18% 9% 36%
CF6-80 747-400s; 767s 8% 33% 17% 8% 8% 17% 8%
CF6-80 E1 A330s 0% 20% 20% 20% 10% 10% 20%
RB211-535 757 0% 20% 0% 0% 40% 10% 30%
CFM56-3C 737 Classics 0% 18% 18% 27% 27% 9% 0%
RR Trent 900 A380/F 0% 11% 11% 11% 11% 33% 22%
CFM56-5C4 0% 10% 60% 10% 10% 10% 0%
CF6-50 747-200; -300 0% 10% 10% 0% 20% 20% 40%
JT8D 727s 0% 0% 11% 0% 0% 22% 67%
PW6000 A320s 0% 0% 0% 30% 0% 30% 40%
RR Trent 500 A340s 0% 0% 0% 10% 20% 40% 30%
3. VALUE FOR MONEY

CFM56-7B 737 NG 50% 20% 10% 20% 0% 0% 0%
CFM56-5B A320 33% 22% 22% 22% 0% 0% 0%
GP 7000 A380/F 22% 22% 0% 44% 0% 0% 11%
CFM56-5C4 11% 11% 56% 0% 11% 11% 0%
CF6-80 E1 A330s 11% 11% 11% 33% 11% 11% 11%
V2500-A5 A320 11% 11% 11% 33% 11% 0% 22%
CF5-80C2 A300s 11% 11% 11% 22% 22% 22% 0%
IAE V2500 A320s 11% 11% 11% 11% 33% 0% 22%
CF6-50 747-200; -300 11% 0% 11% 0% 11% 56% 11%
V2500-A1 A320 11% 0% 0% 22% 11% 11% 44%
PW200 757 10% 0% 20% 10% 10% 10% 40%
CF6-80 747-400s; 767s 9% 27% 18% 18% 9% 9% 9%
CFM56-3C 737 Classics 9% 9% 36% 36% 9% 0% 0%
PW6000 A320s 0% 22% 0% 0% 11% 11% 56%
RR Trent 700 A330s 0% 11% 11% 22% 22% 0% 33%
PW4000 A330s 0% 11% 11% 22% 11% 11% 33%
RR Trent 900 A380/F 0% 0% 22% 22% 11% 0% 44%
RB211-535 757 0% 0% 22% 11% 11% 22% 33%
JT8D 727s 0% 0% 11% 0% 22% 11% 56%
RR Trent 500 A340s 0% 0% 0% 22% 11% 11% 56%
4. FUEL EFFICIENCY
GP 7000 A380/F 38% 25% 12% 25% 0% 0% 0%
CFM56-7B 737 NG 25% 50% 25% 0% 0% 0% 0%
CFM56-5B A320 25% 25% 38% 12% 0% 0% 0%
PW6000 A320s 14% 29% 0% 14% 0% 14% 29%
V2500-A5 A320 12% 25% 0% 38% 0% 12% 12%
CF6-80 E1 A330s 12% 12% 25% 0% 12% 25% 12%
IAE V2500 A320s 12% 12% 12% 50% 0% 0% 12%
PW200 757 12% 12% 0% 0% 38% 0% 38%
CF5-80C2 A300s 12% 0% 25% 25% 25% 12% 0%
PW4000 A330s 12% 0% 12% 12% 12% 25% 25%
CF6-80 747-400s; 767s 11% 33% 11% 0% 0% 33% 11%
CFM56-5C4 0% 25% 38% 38% 0% 0% 0%
RR Trent 700 A330s 0% 12% 12% 25% 25% 0% 25%
RR Trent 900 A380/F 0% 12% 12% 25% 12% 0% 38%
V2500-A1 A320 0% 12% 12% 12% 12% 12% 38%
CF6-50 747-200; -300 0% 12% 0% 12% 12% 38% 25%
RR Trent 500 A340s 0% 12% 0% 0% 50% 0% 38%
CFM56-3C 737 Classics 0% 0% 62% 12% 25% 0% 0%
RB211-535 757 0% 0% 29% 0% 14% 14% 43%
JT8D 727s 0% 0% 12% 0% 0% 25% 62%

FPA_check:AFM 20/5/09 12:08 Page 3
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Aircraft & Engines
AFM Engine Leasing Poll

5. To what extent do you see the inclusion of PMA parts as being detrimental to an engine?
Detrimental 31%
Undecided 15%
Not detrimental 54%
6. To what extent do you think that the inclusion of PMA parts within an engine reduces the value of the whole?
Very much 54%

Undecided 23%
Very little 23%
The leasing game

While at present the outlook is gloomy for engine lessors, the
post-9/11 recession did much to guide and teach airlines how
best to manage their operations and to tackle the effects of
lower demand. It is just unfortunate that the period between the
two recessionary periods was not long enough for many airlines
to secure firm financial footing and recoup on equity. Yet in this
sense engine lessors are better-equipped than their aircraft-lessor
counterparts. The perceived length of an engine’s working life is
greater than that of an aircraft, so engine lessors have less con-
cern over asset depreciation and tend to focus less on the return
of equity than do aircraft lessors.
Despite UK Prime Minister Gordon Brown’s recent referral to the

economic crisis as a full-on “depression”, some retain a sense of
optimism – not just hoping, but believing, that the economy will
pick up this year. IATA has predicted that industry losses for 2009
will amount to $2.5bn – just half of those it has estimated for
2008.
While lessors have shown a willingness to support their cus- Aircraft leasing is about keeping the aircraft in use as much as
tomers during these tight times, it is likely they will have to possible. Most operating leases are for a minimum of three years
develop their understanding natures somewhat further to allow and the average is five to seven years, though they can sometimes
for short term deferrals on payments, restructured payment pat- stretch to 12 years and even longer periods. However, in today’s
terns and liaison for unsecured loans. market it is likely that airlines will have more sway in acquiring the
operating leases better suited to them and will be better able to
According to Stern, during 2008, operating leases covered 76 per specify the lease periods they actually wish.
cent of the leased aircraft market, while finance leases took only
24 per cent of an estimated 9,300 to 9,500 active leased com- Despite the weakened market, engine leasing is profitable. On a
mercial aircraft worldwide. Operating leasing has gained a lot of Rolls-Royce RB.211-535E4, short-term lease rates often reach
ground since 2000, when operating leasing took 51 per cent of $4,000 per day with additional charges of $300 per hour plus $200
the market and finance leasing took 49 per cent. In 2008, the per cycle, says Maestracci. Leasing two CFM56- 3C1s may cost you
overall proportion of leased aircraft, at approximately 49 per more than the lease on a 737-300 to put them in, he says.
cent, was nearly the same as the proportion of those held under
outright ownership, at 51 per cent.
Bridging the funding gap

John McMahon, executive VP of sales at Genesis, views a lack of
trust between banks as the primary reason for the funding crisis.
“We are in a very strange time frame right now – the system is fro-
zen,” he says. “The system is looking for a new outlet.” McMahon
believes that although banks won’t lend to each other at present, a
centralised bank will launch the “flow” of cash, kick-starting a new
“system” whereby banks start lending to each other once again.
Tony Diaz, executive vice president at CIT Aerospace, says: “The

governments around the world are pumping literally hundreds of
billions of dollars into the system and it’s not coming out the other
side. It’s because the banks are hoarding that money. I don’t know
whether its distrust or dishonesty, I think it’s just there’s a lack of liq-
uidity and a real fear and concern over what’s the next issue.”

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Aircraft & Engines
CIT, of course, wishes to fill that gap; its application to become a O’Brien continues: “The sale and lease-back market is probably
bank is explained by Diaz. “Our plan is to move to become a bank triple or quadruple what it was a year ago. We’ll probably end up
holding company. The reason for that is that the funding model doing about 20 transactions this year. For us it’ll be over $300m,
for not just the aerospace business but all business – 75 to 80 per which is significant for an engine lessor... We’re typically doing
cent through commercial paper – doesn’t work any more,” he $8m-$10m per engine.”
says. “We’re looking at more of a deposit-based funding model,
not unlike what Morgan Stanley had done, Goldman Sachs and Bruno Castolla, senior vice president at Shannon Engine Support
others.” offers his perspective: “We support airlines all over the planet.
There are a few operators with whom we would have difficulties
ELFC’s O’Brien notes: “When we see a $100m or $150m trans- to enter into agreement with, generally because they would have
action it’s quite common for us to bid on it and then keep half and financial or technical issues, but we would try to work around
move half into other ventures. Those ventures cannot get the lend- this ...Our lessees need us more than ever during a downturn and
ing now – so it’s turned our strategy upside down. So the question we should ...make sure that they survive and keep their opera-
for us is; do we grow our portfolio while the opportunity is there on tions running. We need to understand what their problems are
sales or leasebacks when it’s hard to find purchasing sources?” and that their business is sustainable. If that is the case, we do our
O’Brien says of the increasing threat of lessee defaults: “We are maximum to work with them and restructure deals in a satisfac-
very worried about it, but we have been very fortunate with it so tory way for both parties.”
far. The default rate for us has been relatively low: There are
maybe four or five accounts that we have issues with; there are O’Brien is less optimistic, believing that “a quarter or third of the
only one or two that are in a liquidation or bankruptcy type [global] orderbook will go away. I think lessors and airlines have
mode. That’s two out of 57 customers, so we’ve been very fortu- over estimated. There was a frenzy of ‘Oh, I can’t get an order
nate.” But, he says, “As we write more of this business, it is only position because there was so much competition,’ but the pen-
natural that some of them will have credit problems.”Adds dulum has swung back the other way.”
O’Brien: “What we’re finding now is that we’re getting full
reserves on deals – I think a lot of lessors will tell you ‘We will While an increasing number of engines is coming into a dimin-
never write them without reserves,’ but the fact is, they do … ishing market, lessors will take a direct hit to their orderbooks.
When you’re leasing an engine you’ve got an asset and a rental Some of course, will take a lighter hit than others, but all must
stream. We look at the rental stream as the risk, not the asset. We take on board the philosophies of damage limitation, staying
won’t do a deal with you unless you do [give a reserve], because mindful of the many pitfalls surrounding them if they are to pro-
it’s just incremental exposure.” tect themselves.

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Aircraft & Engines
The European airline industry is undergoing a new wave of consolidation, as is illustrated by recent trans-
actions such as Iberia’s acquisition of Vueling and Clickair, as well as Lufthansa’s proposed acquisition of
SN Brussels Airlines.
AIRLINE
CONSOLIDATION
FACES CLOSE
ANTITRUST SCRUTINY
AIRLINE MERGERS AND ACQUISITIONS MUST, HOWEVER,

receive approval from antitrust regulators before they are
allowed to proceed. In most cases, airline mergers are reviewed
by the European Commission. National competition authorities
will be competent where the merger does not have a community
dimension, as was the case in the acquisition of GB Airways by
easyJet.
In cases where the merging parties are competitors, the

European Commission will only grant clearance and allow the
merger to proceed in exchange for acceptable remedies.
Remedies are usually required on routes where
the transaction leads to monopoly or signifi-
cantly reduces competition. Typically, this is the
case where the merged entity will have a high share of passen-
gers transported or of slots available on these routes.
Commitments normally take the form of slot releases. For exam-
ple, Iberia had to release a certain amount of slots on identified
routes in order to acquire both Vueling and Clickair.
The aim in requiring such a commitment is mainly to facilitate

the entry of new competitors and to maintain competitive pres- In particular, the European Commission fears that the merger
sure on the newly merged, expanded airline. However, the would lead to a monopoly situation on a number of routes
European Commission will carefully assess whether the remedies between Brussels and Germany. The Commission has now
offered are adequate to address the competition concerns iden- opened an in-depth investigation into the take-over and will only
tified. The European Commission recently rejected commitments give the go-ahead if Lufthansa is able to come up with revised
that were proposed by Lufthansa in the course of its proposed commitments. Observers will be watching developments in this
acquisition of SN Brussels Airlines, on the ground that these case closely as this may set a precedent for how remedies will be
were insufficient to alleviate competitive concerns. assessed in the future.

check_FPA:ATEM 5/12/08 08:29 Page 3
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Aircraft & Engines
The European Commission has released a set of proposals aimed at reforming existing regulation on
European aviation liberalisation. Kay Vasey, a solicitor at law firm Field Fisher Waterhouse, assesses
industry reaction to the Commission’s new ideas.
CONSOLIDATION FOR
BETTER REGULATION
THE CURRENT FRAMEWORK FOR AVIATION LIBERALISATION IN Why is reform needed?

the EU was established by Regulations (EEC) No. 2407/92, While it is true that the Third Package has been successful in
2408/92 and 2409/92 – commonly referred to as the ‘Third many respects in transforming the EU aviation industry, EU trans-
Package’. Since the introduction of the Third Package, air transport ministers argue that the industry still suffers from problems
port in the EU has experienced unprecedented levels of expan- stemming out of divergent application and interpretation of the
sion and over the past decade, the market has been transformed. provisions of the package. Accordingly, the European
One or two of the inefficient national monopolies have been Commission undertook a public consultation prior to preparing
swept away and the EU has seen the emergence of low-cost air- its proposal (EEC) 2006/0130 (COD) for further reform in which
lines largely following the model developed over many years in three main areas of concern were highlighted:
the US by Southwest Airlines.
• Inconsistent application of rules leading to distortions of com-
The Third Package petition;
The Third Package contained three major legislative measures. • Competition distortions affecting market efficiency due to the
First, it harmonised the requirements to be satisfied by any airline absence of a level playing field; and
wishing to obtain an operating licence in an EU member state. • Passengers suffering due to lack of price transparency or to
Second, from April 1997 airlines holding an EU operating licence discriminatory practices on the basis of place of residence.
were able to operate freely anywhere within the EU. Finally, EU
airlines were given freedom to set their own fares subject to the What reforms are being proposed?
power of Member States to regulate excessively high fares detri- After extensive consultation with the industry, the European
mental to users and to halt any downward spiral that could jeop- Commission published its proposals for further reforms, covering
ardise the financial balance of all carriers. a wide variety of areas including:

1. Reinforcement of the requirements for the grant and 6. Promotion of price transparency for passengers.
revocation of operating licences. An important element of the proposed reforms relates to airline
The Commission’s proposals highlight that some Member States pricing transparency which has been a source of considerable fric-
are less stringent than they should be when assessing the finan- tion, particularly in the UK, for some time now. In order to remove
cial health of airlines, and make a link between the financial the uncertainties that have permeated the market, and to avoid
health of an airline and its exposure to safety risks, arguing that potential distortions of competition, airlines should no longer be
poor or failing financial health of an airline not only poses a able to exclude taxes, charges or other fees from their advertised
threat to customers’ money in the event of bankruptcy, but also fares. In other words, the advertised fares should be fully inclusive.
to their safety. The proposed reforms require Member States to In addition, the Commission has suggested proposals to eliminate
reinforce the supervision of operating licences and to suspend pricing differentials dependent upon the customer, country of resi-
or revoke licences if the requirements of the applicable regula- dence or travel agent’s place of establishment
tions are not, or cease to be, met. In addition, it is proposed that
power is conferred on the Commission to revoke operating Airline view
licences where a Member State fails to do so and that national The International Air Carrier Association (IACA) members are
aviation authorities shall be able to issue a ‘temporary licence’ strongly opposed to the idea of a ‘temporary licence’, which
pending financial reorganisation of an airline. The Commission could be given to airlines that are in financial difficulty. They
also outlines future plans for the European Aviation Safety believe this would most likely compound the airline’s problems by
Agency to take on a role as a licensing body responsible for air highlighting its difficulties with the consequent significant risk of
operators’ certificates and air crew licences. major loss of customer and investor/financier confidence.
2. Strengthening the requirements for leasing aircraft. The airlines are supportive of the proposals relating to safety,
The Commission notes that there are divergent applications of especially the recommendation that more stringent financial
rules and practice in relation to the leasing, particularly wet leas- checks should be applied to airlines when considering their oper-
ing, of aircraft between different Member States. Concern has ating licence applications or renewals.
been expressed that safety assessments of aircraft that EU oper-
ators are proposing to wet lease in from third (non-EU) countries They are also largely in favour of ensuring licensing and safety
are not pursued with the same rigour in all Member States. standards are standardised across the Member States. There is
Article 13 of the proposed reforms would impose upon national also notable support for the idea of a single European licensing
aviation authorities a much greater obligation to ensure that EC and safety body and the potential for EASA to take over this role.
safety requirements and standards are met in relation to any In relation to wet-leasing, the airlines emphasise the importance of
non-EU wet-leased aircraft. It also places a six month limit on wet-leasing to their business. Again, they would like to see the
the duration of a lease from third countries, which will only be interpretation of wet-leasing rules standardised across the EU.
allowed in exceptional circumstances and renewable only once Whilst they believe that the proposed six-month lease period is not
in a second non-consecutive period of up to six months. unreasonable, and argue that the current guidelines (normally not
more than a traffic season) are sufficient, they feel that there should
3. Clarification of the rules surrounding public service obli- be some flexibility in the rules for exceptional circumstances. For
gations (PSOs). example, where the lease is to cover a replacement aircraft follow-
A PSO is a permitted and subsidised monopoly to run a particu- ing a serious aircraft incident and it is likely that the recovery of the
lar service for the benefit of the public. An example of such a original aircraft will take longer than six months.
route would be services to the Scottish highlands and islands.
Such routes are clearly important to local communities and Unsurprisingly, all airlines are strongly in favour of determining their
would be unlikely to be run in a completely free market. The pro- own fares and fees without outside interference, be it from national
posed reforms seek to simplify rules surrounding PSOs and thus bodies or the Commission itself. British Airways has commented:
attract more tenders for such routes.
“Firstly, the marketplace is the best way to set fares, free from
4. Removal of inconsistencies between the intra-EU avia- governments, and secondly, if there is to be regulatory interven-
tion market and services to third countries. tion on fares, it must be done on a European wide basis and not
The Commission is also proposing that any remaining restric- just by a single member state. There is no need whatsoever for
tions existing in bilateral agreements between Member States intervention when adequate competition exists as on routes from
be lifted and that access by airlines of third countries to the London to Europe.”
intra-Community market should be managed in a coherent
manner through negotiations at Community level. What this
means is that non-Community air carriers would not be permit-
ted to exercise traffic rights, combine air services or enter into
codeshare arrangements in respect of intra-Community routes
except where permission is granted by an agreement concluded
by the Community with a third country.
5. Clarification of rules applicable to traffic distribution

between airports.
The proposals would require that traffic distribution rules in
respect of airports serving the same city should respect the prin-
ciples of proportionality and transparency. This is intended to
prevent discrimination between carriers in relation to access to
airports.

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Aircraft & Engines
From the opposite end of the airline spectrum Ryanair has said that safety standards are not compromised by failing financial condi-
that it, “is greatly concerned by the Commission’s comments on tions; contrastingly the CAA believed that instable financial standing
the issue of reviewing air carrier’s calculating of their fares. The automatically equates to sub-standard safety provisions. The CAA
emphasis appears to be on “abnormally low or non-existent also saw the idea of a temporary license as irrelevant:
(“free” tickets)”. The connotation is that there is something
wrong with offering very low or “free” fares (i.e., all the passen- “From a safety regulation perspective, it is the CAA’s view that
ger pays are the taxes). These fares are far from being non-exis- “tightening up” should not be necessary. In reality, if the requi-
tent as consumers are well aware”. site safety standards are not being met, the National Authority
responsible should take appropriate AOC action. Effective safety
Many of the air carriers have expressed concern about the risk of checking should occur regardless of the conventional or tempo-
distortion of competition that could arise from excessive use of rary nature of the licence.”
PSOs. Several respondents would like PSOs to be restricted to the
routes that are absolutely vital for the regions served. In contrast In addition, the CAA noted that such a licence could also be
to the majority of airlines, Ryanair was also critical of the concept damaging because it would deter investors from keeping funds
of PSOs, arguing they were often used by governments to give in the airline and lead to a loss in public confidence, thus speed-
subsidies to national airlines. ing up an airline’s demise.
However, both the CAA and JAA agreed that the ability for EU
Airports airlines to wet-lease aircraft is an important ingredient in the suc-
The airports surveyed were particularly interested in the impact cessful operation of an airline. They support proposals that would
of the proposals regarding traffic distribution and the removal of make the process easier, but the CAA in particular was not in
obstacles to bilateral agreements with third countries. favour of wet leases for periods longer than six months because
of safety concerns (arising from the confusion of who is respon-
Some, such as Shannon Airport (and connected entities Shannon sible for maintenance: regulators in the country of registration or
Development and Shannon and District Chamber of Commerce), country of operation).
were concerned about the potential impact an ‘Open Skies’
transatlantic flight policy would have on the region, and sug-
gested that, “the impact that this would have on balanced Conclusions
regional development within Ireland would certainly lead to Despite some misgivings, the second reading of the proposed
heavier concentration on traffic into Dublin and to the east coast reforms was completed on 9 July, 2008, and the Commission’s
at the expense of Shannon Airport and the West of Ireland”. final decision and signature is expected in the autumn. It was
almost inevitable that the proposed reforms would not meet with
universal approval from all elements of the European aviation
Regulators industry. However, they will be a useful step forward in bringing a
Amongst the regulators who responded to the consultation were greater degree of clarity and certainty to important areas of avia-
the Joint Aviation Authority (JAA) and the UK’s Civil Aviation tion regulation and will certainly help to level the playing field
Authority (CAA) who had differing reactions to the Commission’s across the EU for airlines and customers alike. Whilst the intention
proposals. The JAA felt that the tightening up of procedures regard- of the Commission’s proposed reforms has a sound basis, only time
ing an airline’s financial standing would be a positive step to ensure will tell whether the new measures will achieve their goal.

check_FPA:AFNM57 15/9/08 11:29 Page 3
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Aircraft & Engines
John Cassels and Kay Vasey of Field Fisher Waterhouse take a whistlestop tour of anti-trust rulings in aviation.
COMPETITION, CARTELS
AND CONSOLIDATION
THE DEEPENING CRISIS IN THE AVIATION INDUSTRY IS BEING relaxation of foreign ownership rules and an increase in the num-
heralded by many as the most severe since the age of mass air ber of open skies agreements.
transport began in the 1970s. IATA has forecast that the global The extent of recent collaborations and consolidations in the
airline industry will experience $5.2bn in losses this year, and airline sector is highlighted by the flow charts accompanying
continue to operate at a loss of $4.1bn in 2009. A string of air- this article, which identify key regulatory interventions by the
line failures in the usually stronger summer months has sig- EU/UK and US authorities since 2000. These largely reflect
nalled that the winter months look likely to see more carriers go the development by groups of traditional legacy carriers of
out of business. Although oil prices have fallen back from the three ‘super alliances’: Star Alliance; oneworld; and SkyTeam.
highs of more than $140 per barrel during the summer months, These alliances are intended to enhance the ability of mem-
the airline industry is still in the eye of the ‘perfect storm’, hav- bers to offer integrated services across the globe, while at the
ing to endure much higher than budgeted fuel costs whilst same time reducing their costs through joint purchasing and
demand falls. First, the credit crunch applies its tourniquet and marketing. Low-cost carriers do not participate in these
now the threatened global recession begins to bite. In alliances because their business model is a simple point-to-
September, CEO of British Airways, Willie Walsh, described a point one that does not need the benefits the alliances offer.
gloomy outlook:
The SkyTeam grouping is led by Air France/KLM and Delta
“We are in the worst trading environment the industry has ever Airlines. The merger of the latter, announced earlier this year,
faced and must take action to offset the combined effects of the with Northwest (also an existing member of SkyTeam) has been
continuing global economic downturn, weakened consumer cleared in the EU because it will “not significantly impede effec-
confidence and high fuel prices… We have already seen 30 or so tive competition in the European Economic Area or any substan-
airlines go bust this year and it would be fair to expect a similar tial part of it”. The merger will create the world’s largest airline,
number of casualties worldwide over the next three to four with the overlaps in Delta and Northwest’s activities occurring
months.” mainly in the US. Nonetheless, the current economic climate is
likely to impact upon anti-trust enforcement and the US author-
In this environment, airlines will look at many ways of trying to ities will probably grant anti-trust immunity rather than blocking
ensure their survival, varying from reducing costs whilst trying to the deal and facing the risk of either Delta, Northwest, or both,
maintain revenue, market stimulation by means of special low- failing.
fare offerings – a particular favourite of the low-cost carriers – to
the more radical solution of consolidation to achieve the Air France and KLM, also previously members of SkyTeam,
required cost savings and synergies perceived to be needed for merged in 2005. Following that merger, Christine Ourmiere, UK
survival. The pressures upon airlines in such desperate circum- Manager of Air France-KLM, said: “Air France and KLM are con-
stances also foster collaboration which can be lawful, but which solidating their relationship with Northwest and Delta, moving to
can also lead to unlawful collusion, with extremely costly conse- a four-way joint venture, so consolidation is not only an interest-
quences. ing story, it’s a reality in the world in order to reduce cost, be
stronger, and bring more synergies to optimise your margin.” She
Collaboration and consolidation added, “You take a risk in being the first to move in this direction
In September the director general of IATA, Giovanni Bisignani, but we have seen the industry moving in this direction for the last
said that “consolidation is a must, and probably this emergency four years.”
situation is a good opportunity for governments to understand
that we need the freedom to run our business as a normal busi- Within the oneworld alliance, it is proposed that members British
ness. Governments must understand that the flags on the tails of Airways and Iberia merge. The consideration of that proposed
the planes are killing an industry.” IATA is calling for a further merger by EC and US competition and anti-trust authorities is

also likely to be influenced by the current economic circum- see why Ryanair/Aer Lingus can’t go ahead.” For now, the low-
stances. The need for consolidation in Europe amongst its legacy cost airline is adopting a wait-and-see approach “because there
airlines has been recognised for some time now. Quite apart is a lot of consolidation coming and that may force the EU to
from the Air France/KLM merger, Lufthansa has in the fairly change its position”. Ryanair’s CEO, Michael O’Leary, declared
recent past acquired control of Swiss and is about to acquire con- in July that the airline currently has no need to merge with
trol of Brussels Airlines, both transactions that either have or are another carrier, boldly adding that it would be one of only five
expected to receive the requisite regulatory approvals. And even main airlines left in Europe following the expected industry con-
today there is speculation about either Lufthansa, Air France/KLM solidation.
or even British Airways taking a stake in a “rescue” of the woe-
ful Alitalia. Although Ryanair’s expectation is that “the European
Commission will rubber-stamp approval of these mergers”,
In addition to the proposed British Airways/Iberia merger, Neelie Kroes, the EU Competition Commissioner, has said: “At a
those two airlines together with their oneworld partner, time of consolidation in the European airline sector, the
American Airlines, have applied for anti-trust immu- Commission must make sure that consumers have a competitive
nity/approval for a range of proposed joint activities of the choice of airline services.”
kind approved for Air France/KLM and Delta/Northwest with
SkyTeam, and Lufthansa/United and others within Star The European Commission also has concerns about the pro-
Alliance. The prospects for BA/American/Iberia of obtaining posed takeover of Martinair by KLM and has opened an in-
clearance and immunity for their proposals does seem to be depth investigation into the deal. The Commission has until 22
appreciably better now than on the two previous occasions January, 2009, to take a final decision on whether allowing the
when BA/American sought immunity. That is a consequence of consolidation of the two main scheduled airlines operating pas-
the current economic situation as well as the greater freedoms senger services to various long-haul destinations out of
created by the EU/US Open Skies Agreement of 30 March, Amsterdam would significantly impede effective competition in
2008. However, there will still be stout and vocal opposition the EU. Preliminary market investigations have shown that there
from competitors. For example, Delta has declared itself on a would be a substantial reduction in competition on those
prospective waiting list for London Heathrow slots in the event routes.
of approval of the British Airways-Iberia-American Airlines
deal. Richard Anderson, CEO, noted that Delta is opposed to Some airline operators have indicated in the current market con-
the proposal unless regulators require the re-distribution of a ditions that they are not so keen on merging. Only one month
significant number of slots to other competitors at one of the after commencing merger talks in August, Thomas Cook pulled
world’s busiest airports. Similarly, Sir Richard Branson, chair- out of discussions with TUI Travel and Lufthansa about a merger
man of Virgin Atlantic Airways, has written to the two US pres- of its charter airline Condor with TUIfly and Germanwings, citing
idential candidates to warn that the proposed alliance would a lack of “financial upside” for the merged businesses given the
“damage competition on trans-Atlantic routes and result in market conditions and difficult considerations including owner-
significant job losses”, adding that it was “very dangerous” to ship structure, branding and conditions for TUIfly pilots. Thomas
believe that consolidation was the best response in the current Cook remains confident that Condor will continue to flourish as
weak economic climate. He was, however, later reported to a standalone airline whilst TUI Travel has said it is continuing to
have stated that he sees “considerable logic” in Virgin Atlantic explore alternatives for its German airline operation and will
merging with bmi, to create a “formidable competitor” to update the market in due course.
British Airways, although he confirmed there had not been any
formal merger discussions with bmi.
Cartels
Whilst anti-trust authorities on both sides of the Atlantic assess Collaborations have also brought much unwelcome attention to
transactions with reference to their competitive impact – and the some airlines where such collaboration is found to have
competitive impact of airline mergers is assessed by reference to breached prohibitions on price fixing arrangements. British
the impact on specific routes – the wider economic difficulties Airways and Virgin have been embroiled in ongoing regulatory
within which the SkyTeam and oneworld deals are being pursued investigations on both sides of the Atlantic into the fixing of fuel
is important and relevant context. Consolidations in the banking surcharges and air cargo price-fixing arrangements. Such investi-
sector that would only a few months ago have been unthinkable gations can give rise to very significant financial liabilities: deal-
are clear testament to the importance and relevance of economic ing with the investigations is extremely resource intensive and
context and political will in merger control. private actions for damages will almost inevitably follow both in
the US and EU where unlawful collusion has been found or
Why then did the Commission block Ryanair’s proposed acquisi- admitted.
tion of Aer Lingus? That deal would have brought together two
airlines that currently compete vigorously on routes to and from
Ireland and which constitute the main competitive constraint on The future
each other on those routes. The merged entity would have Further significant consolidation amongst airlines is inevitable.
accounted for 80 per cent of all intra-European traffic to and The shape of that consolidation will be determined in large part
from Dublin; it would have a monopoly on 22 of the 35 routes by the European Commission and the US Department of
on which Aer Lingus and Ryanair currently compete; and it Transportation. The current economic crisis will most likely
would have market share of over 60 per cent on remaining force a radical restructure, which will hopefully result in a
routes to and from Ireland. Remedies offered by Ryanair were stronger and more resilient global airline industry. But, opera-
insufficient to alleviate the Commission’s concerns. Despite the tors must ensure that their collaborations do not fall foul of
failure of the takeover, Ryanair remains bullish about its rules against illicit cartels. Friendships and relationships across
prospects. Chief financial officer Howard Millar stated recently: the industry require clear legal boundaries within which to
“With the situation in Italy of Air One and Alitalia, and looking flourish and should not be approached lightly, especially in
at the series of mergers going on right across Europe, we don’t times of crisis.


Aircraft & Engines
Key EU/UK Regulatory Interventions since 2000

Parties / Deal Outcome
bmi—Lufthansa—SAS Notified 2000 Cleared until 2006 on condition of:

surrender / release of slots and
Joint venture covering flights to / Cleared 2001 ground facilities at Frankfurt.
from London Heathrow / Stansted and
Manchester from EU destinations.
Air France—Alitalia Notified 2001 Cleared until 2007 on condition of:

surrender / release of 42 pairs of slots
Airlines take 2 per cent stakes in each other Cleared 2004 on certain routes; requirements
and code share on routes between relating to FFP / interlining with new
France and Italy. entrants; elimination of exclusivity
provision restricting parties from entering
into arrangements with other airlines.
British Airways—American Airlines Notified 2001 Conditional upon US—UK open skies
(oneworld) agreement.
Investigation closed
Codeshare, schedule and fair 2002 after US DOTs dismissal
co-ordination on 9 routes between US and London.
bmi—United Airlines Notified 2000 Cleared until 2010 subject to lifting of

(Star Alliance) restriction preventing bmi from flying
to US from London Heathrow.
Alliance expansion agreement: route and schedule Cleared 2001
co-ordination; integrated marketing, advertising (by OFT)
and distribution network; co-branding; increased
codesharing and co-ordinated pricing; revenue sharing;
integrated cargo services; sharing of airport facilities.
British Airways—Iberia—GB Airways Notified 2002 Cleared until 2009 on condition of:
surrender / release of slots and ground
Co-ordination and integration of commercial Cleared 2003 facilities on routes between London and
and marketing strategies, distribution methods Spain; restrictions on increasing
and practices worldwide including codesharing, frequencies /capacity / slots on certain
price co-ordination, common network routes; requirements relating to FFP
planning, and revenue and profit sharing. / interlining with new entrants.
British Airways—SN Brussels Airlines Notified 2002 Cleared until 2008 on condition of
Co-operation on all routes, particularly between surrender of slots and ground facilities
London and Brussels on pricing, scheduling and capacity. Cleared 2003 at Brussels National Airport for a new
entrant on Brussels—Manchester route.
Air France—KLM Notified 2003 Cleared subject to conditions:
Concentration Cleared 2004 surrender of slots at Amsterdam or Paris

to allow new entry on certain routes.
Lufthansa—Swissair Notified 2005 Cleared subject to conditions:
Concentration Cleared 2005 surrender of slots at numerous Swiss,

German and Scandinavian airports to
allow new entry on certain routes.
Ryanair—Aer Lingus Notified 2006 Transaction would have significantly

impeded effective competition in common
Concentration Blocked 2007 market as a result of the creation of a
dominant position for Ryanair and Aer
Lingus on 35 routes from and to Dublin,
Shannon and Cork.
Delta Airlines—Northwest Notified 2008
Concentration Cleared 2008
British Airways—Iberia—American Airlines EU investigation

(oneworld) launched August 2008
Co-ordinate prices, capacity, schedules and

routes between EU and US, Mexico and Canada.

Key US Regulatory Interventions since 2000 (involving EU airlines)

Parties / Deal Outcome
United Airlines—Austrian Airlines—Lauda Air Submission 2000 Cleared subject to conditions: prior approval
—Lufthansa required to operate under common brand
(Star Alliance) Immunity granted 2001 subsequent agreements to be filed with DoT;
Codeshare on international services. must withdraw from IATA coordination
on specific routes; reporting requirements.
British Airways—American Airlines Submission 2001 Conditional upon US—UK open skies
(oneworld) agreement.
Codeshare, schedule and fair coordination on 9 Parties’ notice to
routes between US and London. dismiss granted.
Delta Airlines—Air France—Alitalia— Submission 2001 Cleared for initial 5 years subject to
Czech Air (SkyTeam) conditions: prior approval required to
Co-ordination of international services. Immunity granted 2002 operate under common brand; subsequent
agreements to be filed with DoT; must
withdraw from IATA coordination on specific
routes; exclusion of pricing, inventory, yield
management and pooling of revenues on
particular routes; exclusion of CRS activities
as owners / marketers; reporting requirement.
United Airlines—Austrian Airlines—bmi— Submission 2001 Cleared for initial 5 years subject to conditions:
Lauda Air—Lufthansa—SAS prior approval required to operate under
(Star Alliance) Immunity granted 2002 common brand; subsequent agreements
Co-ordination of international services. to be filed with DoT; must withdraw from
IATA coordination on certain routes;
participation of bmi subject to US-UK open
skies agreement; prices, inventory and yield
management excluded.
Delta Airlines—Air France—Alitalia—Czech Air— Submission 2002 Cleared until 2007 subject to same conditions
Korean Air (SkyTeam) as Delta Airlines—Air France—Alitalia—
Codesharing and frequent flyer reciprocity on all Immunity granted 2002 Czech Air deal.
international services
American Airlines—Finnair Submission 2002 Cleared for initial 5 year period subject
to conditions: prior approval required to
Codeshare, joint scheduling and pricing on all Immunity granted 2002 operate under common brand; subsequent
international services. agreements to be filed and must withdraw
from IATA tariff co-ordination on certain routes.
American Airlines—Swissair Submission 2002 Cleared for 5 year period subject to

Codeshare, joint schedules, fares, joint marketing for all conditions but partnership ended in 2005
international services. Immunity granted 2002 when Lufthansa acquired Swissair.
American Airlines—SN Brussels Airlines Submission 2003 Cleared for 5 year subject to conditions:
prior approval if operating under common
Codeshare, co-ordinate sales, marketing, prices, Immunity granted 2004 brand; file any subsequent agreements with
yield management, routes for all international services. DoT; withdrawal from IATA tariff co-ordination
on certain routes; reporting requirements.
United Airlines—Austrian—bmi—LOT Polish Air—Lufthansa— Submission 2004 Cleared for 5 year subject to conditions:
SAS—Swissair—TAP prior approval if operating under common
(Star Alliance) Immunity granted 2007 brand; file any subsequent agreements with
LOT, TAP and Swissair joining existing Alliance. DoT; withdrawal from IATA tariff co-ordination
on certain routes; reporting requirements;
United Airlines—Air Canada participation of bmi subject to US-UK open
skies agreement.
Delta Airlines—Northwest—Air France—Alitalia—Czech Air Submission 2007 Cleared for 5 year subject to conditions:
—KLM (SkyTeam) prior approval if operating under common
Co-ordinate on pricing, scheduling, distribution and information Immunity granted 2008 brand; file any subsequent agreements with
systems, pool costs and revenues on transatlantic routes. DoT; withdrawal from IATA tariff co-ordination
on certain routes; reporting requirements.
Delta Airlines—Northwest Submission 2008

Merger
British Airways—Iberia—American Airlines (oneworld) Submission 2008

Co-ordinate prices, capacity, schedules and routes between EU
and US, Mexico and Canada.


Aircraft & Engines
Since CFM International came into being nearly 35 years ago, customers from every corner of the globe have
taken delivery of nearly 20,000 CFM56 engines for installation on mainly Boeing and Airbus narrowbodied airlin-
ers. This incredible statistic emphasises the fact that every three seconds a CFM-powered aircraft takes off on
yet another flight, somewhere around the world.
INVESTING IN CFM ENGINES

SINCE CFM INTERNATIONAL CAME INTO BEING NEARLY 35 YEARS AGO, cus- TRUEngine programme in mid-2008 to help the industry more
tomers from every corner of the globe have taken delivery of accurately to appraise used CFM56 engines and to enhance the
nearly 20,000 CFM56 engines for installation on mainly Boeing resale value of these assets. As a result, the programme has
and Airbus narrowbodied airliners. This incredible statistic been very well received by airlines, lessors, and appraisers
emphasises the fact that every three seconds a CFM-powered worldwide.
aircraft takes off on yet another flight, somewhere around the
world. To date, more than 2,250 engines in service with Aer Lingus,
AirAsia, Continental Airlines, KLM Royal Dutch Airlines,
Airline investors and financiers – not to mention the banks and Malaysia Airlines, and Southwest Airlines, have already been
more recently a wider variety of peripheral financial institutions granted TRUEngine status. In addition, several more extensive
– love the fact that CFM engines are essentially simple to own fleets of engines are currently being evaluated, and more
and operate with an enviable despatch reliability rating of names will be added to this list in the coming months.
99.97% and an unequalled ‘time on wing’ before maintenance
is required. Indeed, something like 80 per cent of the -5B and - "The industry asked CFM for better ways to determine the
7B fleets still have to make their first shop visit. value of engines as they are redistributed in aircraft fleets," says
Eric Bachelet, president and CEO of CFM International. "The
Cost effective; rugged; reliable; environmentally friendly; con- TRUEngine programme allows the industry to evaluate used
stantly improved; fuel efficient; popular with pilots and trav- CFM56 engines more easily by serial number, based on data
ellers…these are all descriptors that are music to the ears of the currently not widely accessible."
men and women wielding an airline’s cheque book at the time
of purchase. The TRUEngine status is available for all CFM56 engines meeting
The residual value is an important element of an engine’s over- the criteria. Once an engine is qualified, the serial number of
all lifecycle. This is one major reason why CFM launched the that engine is entered into a searchable Web-based database.

To qualify for TRUEngine status, the engine configuration, and its 50/50 parent companies (GE and Snecma) would rather
engine overhaul practices, spare parts and repairs used to serv- invest in developing even better products and in new, cutting-
ice the engine must be consistent with CFM requirements for edge technology like TAPS (twin-annular pre-swirl) combustors,
that engine model. In addition, all maintenance must comply 3-D aerodynamics in the compressor and turbine modules, and
with CFM-issued engine manuals and other maintenance rec- advanced 3-D woven RTM (resin transfer moulding) fan blade
ommendations. The qualification data is obtained through a technology. All these will feature on CFM’s all-new LEAP-X
combination of fleet operational and maintenance records. engine that it slated for a full engine demo test in 2012 and
potential certification by 2016.
Commercial jet engines are typically in service for more than 25
years and change ownership at least once in their operational The CFM56 engine in all its forms is particularly strong in the
life. An individual engine's configuration, material content, USA, Europe, CIS and Asia and this results in excellent repre-
maintenance history - and supportability - impact overall value sentation across the segmentation of the engine. And demand
as it changes ownership. remains strong even in this period of ‘credit crunch’ and global
financial meltdown.
The TRUEngine designation also facilitates CFM's ability to pro-
vide technical support. Jet engines contain multiple, complex Stéphane Garson, CFM’s GM product marketing in Europe, says
systems whose interactions must be carefully controlled. CFM's that the vast majority of current orders have held strong
engine support is built on technical expertise for genuine although he concedes that the next batch of orders may be
CFM56 parts and configurations, as well as data gained from more difficult to establish. “Most of the engines we make are
the vast operational history of the global CFM56 engine popu- delivered directly to the airframers,” he explains, “so we may
lation. well see some effect due to the international downturn in over-
all traffic. It’s possible that deliveries and also the aftermarket
So TRUEngine status means higher residual values, enhanced could suffer – but already we’re starting to see some clues that
reliability and the peace of mind brought by knowing that only the downturn could have bottomed-out.
original manufacturer specified parts have been used during “CFM has a different business model. We look at a lifecycle
on-wing or routine shop maintenance. cost of our engines over 15 to 20 years and invest both in our
future and the future profitability of our customers. Our ‘AAA’
Taking a different approach rating by the International Bureau of Aviation is important to
Although CFM doesn’t disclose any figures other than the pub- us, too – and our customers tell us that it’s important to them
lished and publicised ‘list price’, discounts are purely on the as well.”
basis of order quantity, rather than being a huge incentive to
buy - often followed by exorbitant maintenance and spare parts With deliveries solid for 2009 – albeit with some question
packages. marks still looming over 2010 – the future for CFM
International and its engine is far from standing still. GE and
At a recent conference in New York, a speaker from CFM Snecma have invested heavily over the years in developing
explained that rather than offer huge incentive discounts, CFM technology that has helped CFM’s customers to buy and fly the


Aircraft & Engines
most reliable and cost-effective engines in the history of avia- The engine also meets the new International Civil Aviation
tion. Organisation (ICAO) Committee of Aviation Environmental
Protection standards (CAEP /6) that took effect in early 2008.
New engines, new upgrades
With oil prices in a near constant state of flux, jet fuel remains These benefits are achieved through improvements to the high-
one of the largest contributors to airline operating costs. CFM’s pressure compressor, the combustor, and the high- and low-
sizeable investment has provided technology that is helping to pressure turbines.
lessen that burden. At the same time as CFM was developing new engine lines, the
company was also introducing new technology upgrade pro-
Since 1996 alone, the company has introduced three new grammes (CFM56-3 Advanced Upgrade; CFM56-5C/P; CFM56-
engine models (CFM56-5C/P, CFM56-5B Tech Insertion and 5B/-7B Tech Insertion).
CFM56-7B Tech Insertion).
Again, these programmes have provided an average of a one
On average, these engines have provided a one per cent per cent improvement in fuel consumption.
improvement in fuel consumption, as well as improving aircraft
NOx and carbon emissions, while improving time on wing. To date, more than 25 per cent of the CFM56-3 fleet has incor-
porated the Advanced Upgrade. For 20-aircraft fleet, this
Tech Insertion, which is now the production configuration for package can save operators more than 700,000 gallons of fuel
CFM56-7B and CFM56-5B engines, had a highly successful and nearly 7,000 metric tons of carbon emissions annually.
entry into service in 2007 on both the 737 and A320 families.
CFM completed certification of the advanced CFM56 Tech
To date, approximately 2,300 CFM56-5B and –7B Tech Insertion Insertion compressor upgrade kit, technology that will also pro-
engines have been delivered to nearly 200 customers around vide operators of mature CFM56-7B and CFM56-5B engines
the globe. Through May 2009, this fleet has logged a com- with up to one per cent lower fuel consumption along with
bined total of more than six million flight hours and 3.5 million lower maintenance costs.
flight cycles without a single engine-related event.
For a 20-aircraft fleet, Tech Insertion could save as much as
Over the engine's life cycle, CFM56 Tech Insertion could provide 275,000 gallons of fuel per year. This lower fuel consumption
operators up to one per cent better specific fuel consumption, would also reduce carbon emissions by 2,600 metric tons per
which translates to better fuel burn and with longer time on year.
wing through an equivalent 15 - 20° C additional exhaust gas
temperature margin; and between 5 and 15 per cent lower This technology also provides longer time on wing and lower
maintenance costs (depending on the thrust rating) through maintenance costs while meeting the new International Civil
enhanced durability. Aviation Organisation (ICAO) Committee of Aviation
Environmental Protection standards.

“
For a 20-aircraft fleet, Tech Insertion could save as
much as 275,000 gallons of fuel per year. This lower
fuel consumption would also reduce carbon emissions
by 2,600 metric tons per year.
In addition to the compressor kit, CFM also offers a full Tech

Insertion core upgrade, as well as high- and low-pressure tur-
bine hardware, for the more than 7,250 CFM56-5B and
CFM56-7B engines that were delivered prior to the production
shift in 2007. The emissions benefit can only be realised by
incorporating the full Tech Insertion core upgrade (compressor,
combustor, turbine).
The new hardware is installed during a regular shop visit. High-

pressure turbine hardware has been available since July 2007
and incorporation has grown steadily. In 2008, approximately
80 per cent of the spare parts orders for CFM56-5B & -7B
engines were the Tech Insertion hardware.
By refitting just 20 aircraft with Tech Insertion engines, airlines

have been able to budget for savings of around $786,000 in
annual fuel costs (based on jet fuel at $4 a gallon) compared to
the base CFM56-5B or -7B models. ment in fuel consumption, which, in turn, equates to a two per
As well as this huge benefit, CFM56 Tech Insertion engines are cent reduction in carbon emissions. Additionally, the enhanced
reducing customers’ maintenance costs by around 12 per cent -7B will provide up to four per cent lower maintenance costs,
thanks to its longer-life components and extended time on- depending on the thrust rating.
wing.
Again, CFM is using advanced computer codes and three-
Indeed, if CFM had never produced its -7B Tech Insertion dimensional design techniques to improve airfoils in the high-
engine, airlines flying 737s would have consumed an extra and low-pressure turbines to improve engine performance. In
1.8bn gallons of fuel and released around 17m more tons of addition, CFM is improving engine cooling techniques and
CO2 into the atmosphere at an additional cost of more than reducing parts count to achieve lower maintenance costs.
$4bn! A sobering thought…
The first engine is schedule to begin ground testing in
Most recently, in April 2009, CFM launched the new CFM56- September of this year. In early 2010, the –7BE configuration
7BE engine enhancement programme, scheduled to enter air- will begin flight tests at GE Aviation facilities in Victorville,
line service in mid-2011 to coincide with Boeing California, paving the way for engine certification in the third
Next-Generation 737 airframe improvements. quarter. Flight tests on the Next-Generation 737 are planned
The CFM56-7BE-powered Next-Generation 737 enhanced air- for later in 2010, followed by aircraft certification and entry
plane/engine combination will provide a two per cent improve- into service in mid-2011

AF59DPScheck:dps AF59 8/6/09 08:19 Page 2
AF59DPScheck:dps AF59 8/6/09 08:19 Page 3
NEEVER
VER MIND 20:20
MIND
OUR
O UR V
VISION
ISION G
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Wiithh eyes clearly focused
on tomorrow,
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nership has now been
partn
extended through
through 2040. We We look forward
forwaard to the future. ToTo
setting indus
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el burn and emissions.
To
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deliverinng the next-generation engine
engiine for narrow-body
aircraft. Be far-sighted.
faar-sighted. Visit
i www.cfm56.com/agreement
Visit www.cfm56.com/agreement now. now.
*CFM, CFM56 and the CF
CFM
FM logo are all trademarks of CFM International, a 50/50 jointt company of Snecma and General Electric Co.

Aircraft & Engines
Caught out badly on their fuel-price hedging positions by a 75 per cent-plus fall in oil prices in less than six
months as the world recession hit, many of the world’s major airlines posted steep losses for the last three
months of 2008. As global economic clouds continue to darken in 2009, however, the one silver lining for air-
lines is that fuel prices should remain far below their mid-2008 peak. Chris Kjelgaard reports.
SILVER LINING
REELING LIKE A PUNCH-DRUNK BOXER FROM A ONE-TWO-THREE fuels competing for the portion of the refinery’s fractionating
combination of soaring fuel prices, the onset of the deepest capacity not given over to gasoline. Other fuels such as heating
world recession since the 1930s, and then a precipitous drop in oil and diesel compete with jet fuel for fractionating capacity and
the price of oil that mocked their fuel hedges, many of the usually they are demanded in much greater quantities than is jet.
world’s leading airlines were as pleased to see the back of 2008
as a losing fighter would be to leave the ring after being knocked John Heimlich, chief economist for the Air Transport Association
out in a prize bout. of America, is largely in accord with Cordle’s view. “I think what
we saw last year was a tremendous amount of volatility with
But while the world’s economic woes only deepened during the regard to the fuel-price side” of the airline economic picture, says
first quarter of 2009, making the chances of a quick comeback Heimlich, who held off throughout the first quarter from making
less likely for most airlines, the fundamental supply-and-demand his usual annual economic forecast for the US airline industry
relationship between global economic performance and the price because of the huge uncertainties now dominating the global
of crude oil should give hope in what otherwise is set to be a bad economy. “It now looks like there is a reasonable amount of sta-
year for the air transport industry. bility with regard to price; the volatility has shifted to demand,”
he says, with every week bringing a new round of bad economic
Jet fuel prices are volatile, depending in any given market on day- news from all over the world.
to-day factors such as climatic temperatures, natural disasters,
accidents affecting refineries and pipelines, the short-term pro- Softening demand
portions of refinery capacity allocated to different distillate fuels The softening industrial demand for oil in the US and other
and – most important of all – the global political situation as it economies should bolster analysts’ forecasts that oil should stay
affects major oil-producing countries. However, analysts’ fore- relatively inexpensive this year. In January, Deutsche Bank’s chief
casts for crude oil prices throughout 2009 are fairly tightly energy economist Adam Sieminski reduced his forecast for the
grouped into a range of $40 to $60 per barrel, according to average 2009 price for West Texas Intermediate (WTI) crude by
Vaughn Cordle, CEO of Virginia-based consulting firm $2.50 to $45. Sieminski forecast an average price per barrel of
AirlineForecasts. $45 in the first quarter of the year, $50 in the second quarter,
$45 in the third quarter and $40 in the last three months of the
Forecast range year. “I think in part the US, especially at Cushing (a big US
“We cover a lot of [forecasting] organisations, around 70,” says pipeline hub), is awash in inventory,” says Heimlich.
Cordle. “What’s reasonable is a range of $40 running up to
maybe $60 as we see more fiscal stimulus [in the USA], averag- In Sieminski’s opinion, however, prices will strengthen going for-
ing out to maybe $50 this year and $60 next year.” Meanwhile, ward. Looking ahead to 2010, Sieminski forecast an average
he says, the “crack spread” for jet fuel is likely to fall as much as annual WTI price of $55 per barrel; and pushed his forecast aver-
25 per cent from its unprecedented 2008 peak of $24-$25 to as age price up to $80 for 2011.
low as $18.
How does this outlook square with other informed views? Quite
The crack spread is the additional price that oil companies charge well, it seems. By mid-February, Stephen Depow, an investment
to refine jet fuel from crude oil. From day to day, and location to adviser specialising in fuel contracts for Wellington West Capital
location, it largely depends on how much of a refinery “run” is in Fredericton, New Brunswick, felt the precipitous fall that had
dedicated to jet-fuel production rather than to other distillate seen crude oil prices decline from a peak of $147 per barrel in

mid-2008 to just $35 in less than six months was reaching a floor. sulting firm IBA Group, states: “I can’t see in the current climate
Prices should start to climb as excess inventories at oil supply that governments are going to be keen to see oil prices increase.
hubs such as Cushing, Oklahoma (a major settlement point for I think there will be governmental pressure on OPEC to keep
WTI on the New York Mercantile Exchange), gradually stop build- prices down.” Even at today’s low oil prices though “a number
ing and start being drawn instead, says Depow. of airlines are trying to keep their heads above water”.
Oil prices bottoming out Fuel-price factors internationally

“There are lots of little things in trading that can change things Internationally, other factors will affect the basic prices that air-
on any one day, but in general the market appears to be forming lines in different areas of the world pay for their fuel in 2009. An
a bottom,” Depow told Airline Fleet Management on February important factor for non-US airlines is foreign exchange rates.
20. The crude-oil production cuts announced by the members of Since oil is priced in US dollars, the recent strengthening of the
OPEC (the Organisation of Petroleum-Exporting Countries) “are dollar against various other major currencies has helped correct a
working their way through”; and, meanwhile, “a lot of [oil- competitive disadvantage under which the US airlines have
extraction] projects are being held back” because recent low oil laboured for several years.
prices have not made it worthwhile for the developers to sanc-
tion the investment required. “It doesn’t help our bills per se – there’s no change in the cost of
fuel,” says Heimlich. “It just reduces our competitive disadvantage
“Last week there was a slight draw for the first time [in months] regarding Asian and Latin American carriers. What changes is
and once we get a few weeks of inventories not building, even their cost of fuel. The competitive advantage, which used to be 50
though there is still an excess of oil on the market, at least things to 60 per cent at times last year and could be $50 a barrel, has
will come under control,” Depow stated. “From there, the cuts abated greatly – though there is obviously still a gap.”
should have worked their way through by summer and in general
there should be higher demand for the whole spectrum of distil- For US airlines, he says: “The hope is that we can increase our non-
lates – except heating oil. In the second half and into 2010, dollar-denominated revenues, where we would have an advan-
because of the low price, demand should start to make a come- tage, repatriate in dollars and this then translates into an effective
back.” fare increase without having to do a fare increase. But it’s a tough
environment in which to increase our non-US point of sale.”
Meanwhile, says Depow, if the oil price starts looking like it has
bottomed out and is on its way up, “It is likely that fund flows Another factor is that WTI is only one of two major crude-oil
will increase towards energies” trading after having moved heav- benchmark price measures, the other being Brent. Recently sup-
ily away from oil into gold in late 2008. A return into oil “empha- ply factors saw the prices of Brent and WTI move in opposite
sises the move” upward, he says. directions – while the price of WTI was trending down to what has
appeared to be a bottoming, the price of Brent was moving up.
So what does this mean for the price of jet fuel? Recall that the
price of crude oil is only one of the two main components of the The longer term
distillate’s price: the crack spread is also very important. A third However, this is not important in the longer term, says aviation
factor must also be taken into account: the taxes that state and economist Adam Pilarski, senior vice president of Virginia-based
national governments levy on fuel purchases. consulting firm Avitas. “Oil prices are international in dollars, so
some people benefit from a cheaper dollar – but, overall, oil
Crack spreads and jet fuel prices prices have very high volatilities,” he says. “So unless one [price
While in late January jet-fuel crack spreads in the USA “were still benchmark] goes to $25 and the other to $150, it’s unimportant.
bouncing up and down in the low 20s, consistent with 2008, in In the short term, if they move in different directions, it doesn’t
theory they should soften this year as more and more refinery mean anything. There can be big regional differences, such as
capacity comes online outside the US,” says Heimlich. [Hurricane] Katrina and a fire in a refinery in Rotterdam.
Individual benchmarks may depend on different things.”
“There will be pressure for US crack spreads as refiners continue
to respond to weak gasoline margins, which will cut refinery Adds Pilarski: “In aviation we are more concerned about the long
runs,” he adds. “By default this reduces everything else as well term. In 2008, when prices became super-high, fuel became the
as gasoline. I would think [2009 crack spreads] will end up in the largest expense for aviation. In the 1980s, when we had the pre-
low teens rather than the low 20s. That’s still three to four times vious high numbers, that was not the case – labour was still the
more than the historical average of $5, and jet fuel is still more highest. This is the other thing that is important. You can argue
expensive than gas and diesel. Jet fuel is the most expensive with labour – you can’t argue with oil. If you’re in deep trouble,
transportation fuel.” you can go back to labour. You can’t go back to the oil compa-
nies and say ‘we in aviation have problems’. You can only buy or
Add the taxes that airlines pay on every barrel of fuel purchased not buy.”
to the crack spread and the basic price of crude oil, and the per-
barrel price paid in 2009 by US (and other international) airlines The meteoric rise of oil prices last year actually did the world’s air-
should largely be within a range of $60 to $85 – for the US airlines a service, says Pilarski: “Luckily for the airline industry, high
lines, “probably a 62 to 64 per cent reduction in the jet fuel cost” oil prices happened before the economic meltdown. The first
compared with 2008, says Cordle. This assumes there is no major eight or nine months of the year were not good; the last three or
international crisis, and on a regional scale does not take into four were a disaster. There were highly negative [traffic] numbers,
account the effects of potential supply disruptions such as a not related to oil but related to the economy. But the airlines had
refinery fire. already started parking planes – not because they could sense the
economy slowing, but because of high oil prices.”
Owen Geach, commercial director of Surrey-based aviation con- This was particularly true for airlines in the US, notes Heimlich.


Aircraft & Engines
“Because of the domestic weakness last year and currency

exchange rates, and the disproportionate toll this took on the US
airlines, I think we are a little better prepared than our non-US
competitors for 2009 – but only 2009,” he says. “But there are
still significant issues for 2010 and beyond. I think we have taken
our lumps a little bit earlier than others. Other international mar-
kets lagged the US a bit in deteriorating.”
The post-recessionary period

After 2009 – when for the first time in recent memory IATA
expects the US airlines to lead all of the world’s carriers in terms
of profitability, simply because as the first to encounter problems
they cut capacity and costs before all other airlines did – the abil-
ity of the global airline industry to withstand higher oil prices
could once again quickly become a significant concern as the
Airlines and fuel-price hedging developed world looks to emerge from recession.
TO HELP MANAGE THEIR EXPOSURE TO UPWARD MOVEMENTS IN FUEL PRICES, While Pilarksi believes that Saudi Arabia and other leading OPEC
such as the unprecedented price movement the air transport industry experi- nations are “interested in oil prices being fairly high, but not high
enced in the first half of 2008, many airlines engage in fuel-price hedging activ- enough so there are real incentives to find alternatives, and so
ities. They do so both in order to make their fuel costs more predictable for from a pure economic point of view there is no justification for
financial and commercial planning purposes and also to attempt to pay prices for $100-and-above oil prices,” these nations may not represent the
their fuel that are lower than spot-market prices. prime fuel-price threat to airlines in the immediate post-reces-
sionary period.
However, hedging by an airline represents a bet on oil-price movement against
other insider parties that are often better informed on price trends than the air- “Politically a faction in the oil industry is very much interested in
line itself – particularly when it hedges on a short-term basis in reaction to an short-term high oil prices,” says Pilarski. “Unconventional lead-
upward price movement in an attempt to keep its fuel cost down – and large ers” such as Russia’s Vladimir Putin, Iran’s Mahmoud
accounting losses can result. Many airlines that carried out short-term, reactive Ahmadinejad and Venezuela’s Hugo Chavez “are all spending
hedging – known as ‘tactical hedging’ – in the second half of 2008, when oil large amounts of money to buy popularity, and because of this
prices fell dramatically over a short period, found their efforts lost them a lot of there is a chance when we get out of the recession that oil prices
money. may go to a higher level than is justified – for instance, to $70 a
barrel”. He states: “I actually believe the recession will be with us
However, some airlines – Lufthansa is a good example – carry out planned, strate- a year and, when it stops, oil prices will go up to $70.” At such
gic hedging programmes on a rolling basis, every month building up their hedg- prices for crude, jet fuel could easily reach $100 per barrel, forc-
ing gradually for each forward month to a time horizon that might be, say, 18 ing carriers to maintain restrictions on capacity and continuing to
months to two years out for each month. That way, the airline is hedged sub- make life difficult for airlines and aircraft manufacturers alike.
stantially in the near future, but less so at the long-term horizon, when price
uncertainty is likely to be much higher.
No reason to see mid-2008 levels again
The process of hedging involves a variety of financial risk-management tech- But while stressing that any major political trouble – particularly
niques and financial derivative products such as call and put options. in Saudi Arabia or another Middle East nation – could have severe
Combinations of such techniques and derivatives can create financial risk-man- repercussions for oil prices, Pilarski believes that, all things being
agement instruments and programmes of such Byzantine complexity, and bear- equal, there is no reason oil should shoot up again to the levels
ing such implications for cash and balance-sheet management, that a specialised seen in mid-2008.
area of accounting (known as hedge accounting) has evolved to cover compa-
nies’ hedging activities. In the US, Special Federal Accounting Standard (SFAS) “I totally disagree with the long-term view of some analysts that
133 was crafted specifically to direct in detail the manner in which companies oil prices will go to $150 to $300,” he says. “The best solution
should account for their hedging activities. for high oil prices is high oil prices. If oil prices stay very high for
the longer term, we’ll come up with alternatives. At $100 a bar-
Because jet fuel is a specialised commodity that is produced in relatively low- rel there are plenty of alternatives and plenty of money to go into
quantities compared with other distillate fuels, options and futures contracts on it.” Additionally, he believes, oil-demand arguments based on
jet fuel itself are not traded in commodities exchanges or in the over-the-counter China’s former double-digit-percentage annual growth rate are
market (though jet fuel swap contracts are available). However, the distillate fuel spurious. “These are Looney Tunes. Even when China’s economy
heating oil has a high correlation with jet fuel and is traded as the base future was growing 10 per cent for the average product, oil demand
contract for all distillate fuels, so airline hedging programmes make use of both was only going up five per cent,” he comments.
heating-oil and crude-oil futures and options to help manage their risks on fuel
price itself. What is certain, says Pilarski, is that “we in aviation will probably
be one of the last users of oil”. He concludes: “We try things in
Large airlines that are particularly big users of jet fuel also use privately negoti- aviation because there is a lot of abuse [from anti-aviation envi-
ated ‘differential contracts’ with counter-parties to help match the difference ronmentalists] right now, especially in Europe and particularly in
between the price of a physical barrel of jet fuel on a given date and the per- England. But, in the long term, if cars move away from oil there
barrel heating-oil or crude-oil futures prices the airlines use as the basis of their will be a lot less demand – and there will be less of an economic
fuel-price hedging programmes. incentive for aviation to find alternatives.” So oil prices are likely
to remain of the most acute interest to all airlines for the imagi-
nable future.

check_FPA:ATEM95 26/8/08 15:04 Page 3
AMOS: MADE IN SWITZERLAND

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Aircraft & Engines
FUEL-PRICE HEDGING: A Glossary of Terms

Basis: The difference between the spot price and the futures price Forward Price: The delivery price in a forward contract that
of a commodity. The associated term ‘basis risk’ is the risk to a causes the contract to be worth zero.
hedger arising from uncertainty about the basis at a future time.
Futures Contract: A legally binding contract traded on a futures
Call Option: An option that gives the buyer the right, but does exchange to buy or sell a commodity or financial instrument
not confer the obligation, to purchase (“go long’’) the underlying sometime in the future. Futures contracts are standardised
futures contract at the strike price on or before the expiration according to the quality, quantity, and delivery time and location.
date. The seller of a call option is, however, obligated to sell the On its last trading day a futures contract settles into a forward
underlying futures contract at the strike price if the buyer chooses contract.
to exercise its purchase option. Also known as a cap.
Hedging: A programme of trading of financial derivative instru-
Cap: See Call Option. ments designed to reduce risk. In practice, this means offsetting the
price risk inherent in any cash market position by taking an equal
Ceiling: On selling a call option, the maximum price that a com- but opposite position in the futures market. Hedgers use the futures
pany will receive for the fuel volume under contract. markets to protect their businesses from adverse price changes. In
the case of jet fuel-price hedging, hedging involves trading of con-
Collar: A portfolio of two options with the same underlying risk tracts and options based on crude oil and/or heating oil as well as
factor and expiration date: a long call with a higher strike price jet fuel itself, because option instruments for jet fuel are not traded
and a short put with a lower strike price. For airlines, this estab- on exchanges or over the counter.
lishes maximum and minimum prices for all the fuel volumes con-
tracted under the options. Ineffectiveness of a Hedge: To the extent that a fuel derivative
instrument’s estimated fair value changes from one period to
Collateral: The cash amount a buyer must post to cover fuel another and this value differs from the estimated price of the
hedge losses at current prices. As hedges settle, collateral is associated jet fuel to be purchased, both on a cumulative and on
returned to cover cash-settled losses. a period-to-period basis, ineffectiveness of the fuel hedge can
result, as defined by the relevant hedge-accounting regulation
Cost of Carry: For physical commodities such as oil and fuel, the and measured by defined financial tests. This can result in the
cost of storage space, insurance, and finance charges incurred by immediate recording of non-cash charges or income to represent
holding the commodity. the change in the fair value of the derivative (a process known as
‘marking to market’), even though it may not expire or settle until
Differentials: Price differences between classes, grades, and a future period. If a derivative contract ceases to qualify for hedge
delivery locations of various stocks of the same commodity. accounting, the change in the fair value of the derivative instru-
ment is recorded every period in the income statement in the
Differential Contract: In the US, any airline hedging its jet fuel period of the change.
price with a futures instrument on the NYMEX also has a basis risk
with which to contend. Bulk pipeline sales or cargo volumes of jet Initial Margin: Also known as ‘Original Margin’. The minimum
fuel in the US trade at a differential to the base heating oil con- required value on deposit in an account to establish a new futures
tract. So a differential to that price is negotiated for the physical or options position, or to add to an existing position. Initial mar-
barrel. If the airline chooses to hedge, it must have a programme gin amount levels differ by contract.
to buy futures contracts and another to buy the jet fuel differen-
tial to those futures. In-the-Money-Option: An option with intrinsic value is said to
be “in the money”. A call option is in the money if its strike price
Floor: When a company buys a put option – that is, the option to is below the current price of the underlying futures contract. A
sell fuel at an agreed price to a counter-party at an agreed date – put option is in the money if its strike price is above the current
this establishes a minimum price that the buyer will receive for the price of the underlying futures contract.
fuel volumes under contract. This is known as the floor.
Maintenance Margin: The minimum value required in an
Forward Contract: A private, cash-market agreement between a account in order to continue to hold a position. The maintenance
buyer and seller to exchange (buy or sell) an underlying instru- margin is typically less than the initial margin, and differs by con-
ment for a fixed forward price at a specific, future delivery date. tract.
In contrast to futures contracts, forward contracts are not stan-
dardised and not transferable. Margin Call: A call from a clearing-house to a clearing member,
or from a brokerage firm to a customer when the balance in the
Forward Curve: In the context of oil or fuel price, the price at margin account falls below the maintenance margin level.
which traders will actually buy and sell oil or fuel today for deliv-
ery at some point in the future. The forward curve is not a fore- Market Risk: The risk of loss from being on the wrong side of a
cast of oil or fuel prices. The forward curve is ‘backwardated’ bet about a market move.
when traders are prepared to pay more for prompt delivery of oil
or fuel than they are for delivery in the future. The forward curve Marking to Market: The practice of revaluing an instrument to
is ‘in contango’ when traders pay more for oil or fuel loading in reflect the current values of the relevant market variables. When
the future than for delivery of the commodity within 2-3 weeks. performing hedge accounting, airlines estimate fair values for

Spot Price: The cash market price of a product for immediate

delivery. However, a spot contract price is often agreed in the for-
ward month – that is, the month before delivery.
Spread Option: An option where the payoff is dependent on the

difference between two market variables.
Strike Price: The price at which the buyer may purchase or sell
the underlying futures contract upon the exercise of an option.
(Recall that the buyer of a put option has the right to sell the con-
tract at the strike price at the exercise date).
Strategic Hedging: A long-term, rolling, consistent hedging

programme designed to shield a company from adverse market
impacts and to make its fuel costs more predictable for planning
purposes. Airlines that employ strategic hedging, such as
Lufthansa, typically build up their hedges in monthly increments
on a rolling basis from a set period as far in advance as two years.
Swap: The exchange of a sequence of cash flows that derive

from two different financial instruments. When an airline uses a
swap contract for fuel-price hedging, it and a counter-party agree
to the airline purchasing an agreed amount of jet fuel over a
given period of time for a given fixed amount. If the airline’s
financial derivative instruments and forward jet fuel prices prior actual cost in the market for the agreed amount of fuel over that
to the time that the instruments settle and the time that jet fuel period is higher than the contracted fixed price, the counter-party
is purchased and consumed. Estimating the fair values of deriva- must pay the airline the difference. If the airline’s actual cost is
tives and forward prices for jet fuel results in changes to their val- less than the contracted fixed price, it must reimburse the
ues from period to period and will determine how they are counter-party.
accounted for under the relevant hedge-accounting regulation
(in the US, this is SFAS 133). Tactical Hedging: Fuel-price hedging carried out on a short-term
basis and entered into because of volatility in the market.
Option: A contract giving the holder the right, but not confer- Essentially, tactical hedging is a company’s bet against a counter-
ring the obligation, to buy (a call option) or sell (a put option) a party that it knows the price of oil or fuel at a future date better
futures contract in a given commodity at a specified price at any than the counter-party does – an assumption that many airlines
time between now and the expiration of the option contract. found to their cost was unwarranted during the latter half of
2008.
Option Premium: The price of an option. The sum of money
that the option buyer pays and the option seller receives for the Zero-Cost Collar: Also known as a “costless collar” or “zero-
rights granted by the option. premium collar”. When a company buys a call option to protect
the maximum price it pays for oil or fuel within a given period, it
Option Spread: The simultaneous purchase and sale of one or can finance the cost (or premium) needed to buy the call by sell-
more options contracts, futures, and/or cash positions. ing a put option at a lower strike price – that is, it sells the obli-
gation to buy fuel within the same period for a set price. Like
Out-of-the-Money Option: An option with no intrinsic value, other two-way collars, the zero-cost collar establishes a minimum
i.e., a call whose strike price is above the current futures price or price and a maximum price at which the company will buy the
a put whose strike price is below the current futures price, is said fuel volume under contract within the contracted period.
to be “out of the money”. But since prices can change with time
and price volatility, an out-of-the-money option can become “in 2-Way Collar: A combination of a sold call option and a pur-
the money”. chased put option. The purchased put establishes a minimum
price (the “floor”) and the sold call establishes a maximum price
Put Option: An option to sell a commodity, security, or futures (the “ceiling”) that a company will receive for the fuel volumes
contract at a specified price at any time between now and the under contract.
expiration of the option contract. With put options, the termi-
nology can be confusing: a company that buys a put option actu- 3-Way Collar: A combination of options: a sold call, a purchased
ally buys the right to sell the underlying asset within a given put and a sold put. The purchased put and sold put establish a
period for a given strike price. A company that sells a put option floating minimum price (the “floating floor”) and the sold call
is selling the obligation to buy the underlying asset within a given establishes a maximum price (the “ceiling”) that a company will
period for a given strike price. receive for the fuel volumes under contract.
Settle (or Settlement Price): The last price paid for a commod- 4-Way Collar: A 4-way collar is a combination of options: a sold
ity on any trading day. The exchange clearing-house determines call, a purchased call, a purchased put and a sold put. The pur-
a firm’s net gains or losses, margin requirements, and the next chased put and sold put establish a floating minimum price (the
day’s price limits, based on each futures and options contract set- “floating floor”) and the purchased call and sold call establish a
tlement price. floating maximum price (the “floating ceiling”) that a company
will receive for the fuel volumes under contract.


Aircraft & Engines
US AIRLINE FUEL PRICE HEDGE POSITIONS

UAL Corporation
1Q fuel price, and fuel price hedge positions and collateral for 2009
The table below details the Company’s hedge positions as of January 16, 2009.
Hedging % of Expected % of Expected Average Price Where Average Price Where Average Price Where Average Price Where
Instrument Consolidated Mainline Payment Obligations Payment Obligations Protection Begins Protection Ends
Consumption(i) Consumption(i) Stop Begin
1st Quarter 2009
Calls 18% 21% N/A N/A $77 bbl (ii) N/A
Collars 9% (10%) 11% (12%) N/A $109 bbl $118 bbl N/A
3-Way Collars 25% (29%) 30% (35%) N/A $104 bbl $118 bbl $143 bbl
4-Way Collars 2% 2% $63 bbl $78 bbl $95 bbl $135 bbl
1st Quarter 2009 Total 54% 64% N/A $104 bbl $104 bbl N/A
1st Quarter 2009

Purchased Puts to Cap
Downside Purchased Puts 35% 42% $57
Full Year 2009

Calls 12% 14% N/A N/A $76 bbl (iii) N/A
Collars 5% (6%) 6% (7%) N/A $111 bbl $123 bbl N/A
3-Way Collars 18% (22%) 22% (26%) N/A $102 bbl $117 bbl $147 bbl
4-Way Collars 1% 2% $63 bbl $78 bbl $95 bbl $135 bbl
Full Year 2009 Total 36% 44% N/A $103 bbl $104 bbl N/A
Full Year 2009 Purchased
Puts to Cap Downside
Purchased Puts 17% 20% $54
(i) % of expected mainline and consolidated consumption represents the notional (ii) Call position average includes the following two groupings of positions: 9%
amount of purchased calls in the hedge structures. Certain 3-way collars and col- of consolidated consumption with protection beginning at $106 per barrel; and
lars included in the table above have sold puts with twice the notional amount of 9% of consolidated consumption beginning at $50 per barrel.
the purchased calls. The % in parentheses represent the notional amount of sold
puts in these hedge structures. (iii) Call position average includes the following two groupings of positions: 5%
of consolidated consumption with protection beginning at $106 per barrel; and
7% of consolidated consumption beginning at $53 per barrel.
The table right outlines the

Company’s estimated collat- Price of Crude Oil, in Dollars per Barrel Approximate Change in Cash Collateral For Each
eral provisions at various $5 per Barrel Change in the Price of Crude Oil
crude oil prices, based on
the hedge portfolio as of Above $105 No Collateral Required
January 16, 2009. At or Above $85, but Below $105 $45 million
At or Above $25, but Below $85 $60 million
Below $25 $40 million
For example, using the table above, at an illustrative $35 per barrel the Company’s required collateral provision to its derivative coun-
terparties would be approximately $780 million.
The company estimates the following fuel prices for the first quarter based on the closing forward curve on January 16.
Mainline Fuel Price (Price per Gallon) 1 Three Months Ending March 31, 2009
Mainline Fuel price including taxes and excluding impact of hedges $1.73
Mainline Fuel price including taxes and cash net gains or losses on settled hedges 2 $2.22
Mainline Fuel price including taxes, cash net gains or losses on settled hedges,
and impact of non-cash, net mark-to-market gains or losses on settled and unsettled hedges 2 $1.83
1 Based on the January 16 closing forward price
2 Includes only the hedge gains/losses that are accounted for in the fuel expense line
In addition to the impact of fuel hedges on fuel expense, a portion of the company’s total fuel hedge impact is recorded as a non-
operating expense. The company estimates that $81 million in cash fuel hedging losses and $69 million in non-cash, net mark-to-mar-
ket fuel hedging gains will be recorded in non-operating income / expense for the first quarter based on January 16 closing forward
curve prices.
The company estimates it will have the following amounts posted as fuel hedge collateral at each quarter end:
Based on Jan. 16 closing forward crude oil prices.
Projected Fuel Hedge Collateral Balance at Each Quarter End

Jan. 19, 2009 Q1 2009 Q2 2009 Q3 2009 Q4 2009
$780M $615M $315M $110M $25M

AMR Corporation alent), with 42 percent subject to an average floor of $1.97 per gal-
lon of jet fuel equivalent ($68 per barrel crude equivalent). AMR has
35 percent of its anticipated full-year consumption hedged at an aver-
Fuel Expense and Hedging age cap of $2.59 per gallon of jet fuel equivalent ($94 per barrel
While the cost of jet fuel remains volatile, AMR is planning for an crude equivalent), with 32 percent subject to an average floor of
average system price of $2.04 per gallon in the first quarter of 2009 $1.94 per gallon of jet fuel equivalent ($67 per barrel crude equiva-
and $2.06 per gallon for all of 2009. AMR has 45 percent of its antic- lent). As of Jan. 16, the average 2009 market forward price of crude
ipated first quarter 2009 fuel consumption hedged at an average cap oil was more than $51 per barrel. Consolidated consumption for the
of $2.58 per gallon of jet fuel equivalent ($93 per barrel crude equiv- first quarter is expected to be 677 million gallons of jet fuel.
Alaska Air Group (as of January 29, 2009)

Future Fuel Hedge Positions
Approximate % of Expected Fuel Requirements Approximate Crude Oil Price per Barrel
First Quarter 2009 50% $81
Second Quarter 2009 50% $71
Third Quarter 2009 50% $76
Fourth Quarter 2009 50% $76
Full Year 2009 50% $76

Fourth Quarter 2010 24% $78
Full Year 2010 33% $67

Full Year 2011 11% $80
*All of our 2008, 2010 and 2011 positions and the majority of our 2009 positions are call options, which are designed to effectively cap our cost of the crude oil com-
ponent of our jet fuel purchases. With call options, we benefit from a decline in crude oil prices, as there is no downward exposure other than the premiums we pay
to enter into the contracts.
Continental Airlines
Fuel Requirements (Gallons) 2009 Estimate

1st Qtr. Full Year
Mainline 337 Million 1,417 Million
Regional 73 Million 297 Million
Mainline Fuel Price per Gallon (including fuel taxes and impact of hedges) $1.99 $2.13
Fuel Hedges – As of January 26, 2009

Maximum Price Minimum Price As of January 26, 2009, the Company’s pro-
jected consolidated fuel requirements were
% of Expected Weighted Average % of Expected Weighted Average
hedged as follows, excluding recently termi-
Consumption Price (per gallon) Consumption Price (per gallon)
nated contracts with Lehman Brothers:
First Quarter 2009
WTI crude oil call options 26% $2.54 N/A N/A
WTI crude oil swaps 20% 1.09 20% $1.09 Based on the forward curve for WTI as of
WTI crude oil collars 11% 3.32 11% 2.39 January 26, 2009, the Company estimates
Total 57% 31% that all of its fuel hedges (including the impact
of residual unrecognized loss on the fuel
Second Quarter 2009 hedges with Lehman Brothers) would result in
WTI crude oil collars 34% $3.48 34% $2.61 a net increase in fuel expense of $0.33 per
Total 34% 34% gallon in the first quarter 2009 and $0.25 per
gallon for the full year 2009. For the un-
Third Quarter 2009 hedged portion of its consolidated fuel
WTI crude oil swaps 5% $1.31 5% $1.31 requirements (excluding the effect of fuel
WTI crude oil collars 10% 3.21 10% 2.40 hedges with Lehman Brothers) the Company
Total 15% 15% is assuming an average cost of jet fuel (includ-
ing fuel taxes) of $1.70 for the first quarter
Fourth Quarter 2009 and $1.92 for the full year 2009.
WTI crude oil swaps 5% $1.36 5% $1.36
Total 5% 5% The Company has no fuel hedge contracts
beyond 2009.
Full Year 2009
WTI crude oil call options 6% $2.54 N/A N/A As of January 26, 2009 the Company had
WTI crude oil swaps 7% 1.17 7% $1.17 $187 million of cash collateral posted with its
WTI crude oil collars 14% 3.40 14% 2.53 fuel hedge counterparties.
Total 27% 21%


Aircraft & Engines
Delta Air Lines (including Northwest Airlines)

Fuel Price and Related Hedges
During the December 2008 quarter, Delta hedged 58% of its fuel consumption, resulting in an average fuel price of $2.90 per gal-
lon.8 Included in the fuel price is $507 million in fuel hedge losses in the fourth quarter.
Three Months Ended

Dec. 31, 2008 ($M)
Operating Non-Operating Total
Non-cash, out-of-period loss $91 $10 $101
Loss (gain) on settled contracts $507 (1) $506
Total net losses $598 $9 $607
The table below represents the fuel hedges Delta had in place as of Jan. 23, 2009 (see Note A for additional information about Delta’s
fuel hedges):
Avg. Jet Fuel Equivalent* Fuel Price/Gal.*

Percent Hedged Cap Floor (at today’s fwd. curve)
Q1 2009 80% $2.81 $2.43 $2.34
Q2 2009 85% $2.45 $2.09 $2.17
Q3 2009 55% $2.19 $1.22 $2.10
Q4 2009 32% $2.24 $1.05 $2.00
* Includes tax and transportation costs of approximately $0.17/gallon.
Note A:
The tables below represent additional information about fuel hedges Delta had in place as of Jan. 23, 2009:
2009
Legacy Positions: Q1 Q2 Q3 Q4
Call 6% 6% 18% 15%
Collar 40% 33% 3% -
Swap 9% - - -
Total 55% 39% 21% 15%
Avg. crude call cap $90 $90 $82 $86

Avg. crude collar cap $122 $122 $127 $-
Avg. crude collar floor $108 $108 $118 $-
Recent Positions:
Call 1% 5% 12% 4%
Swap 24% 41% 22% 13%
Total 25% 46% 34% 17%
Avg. crude cap $45 $55 $59 $61
Total hedge percent 80% 85% 55% 32%
minimize the potential for the Company to provide additional cash col-
Southwest Airlines lateral deposits to counterparties. The Company accomplished this
reduced hedge by entering into additional derivative contracts – basi-
The Company has utilized financial derivative instruments for both cally by selling zero-cost collars and fixed-price swap derivatives. This
short-term and long-term time frames, and typically utilizes a mixture strategy enables the Company to participate in further price declines
of purchased call options, collar structures, and fixed price swap via the sold derivatives, which should materially offset further declines
agreements in its portfolio. In recent years, as fuel prices have risen, in value of the Company’s previously purchased derivatives. If prices
the Company has held fuel derivative positions that have resulted in rise, the Company no longer has the protection it had in place prior to
significant gains recognized in earnings. However, as of December 31, reducing its hedge.
2008, the Company held a net position of fuel derivative instruments
that effectively represented a hedge of approximately 10 percent of its The Company had estimated obligations at December 31, 2008,
anticipated jet fuel purchases for the years from 2009 through 2013. related to its fuel derivative positions for the years 2009 through 2013
Prior to fourth quarter 2008, the Company had held fuel derivative (based on the contractual settlement date of those derivative instru-
instruments for a much larger portion of its anticipated fuel purchases ments). Although the fair value of these positions can fluctuate signif-
for these years; however, due to the recent precipitous decline in fuel icantly based on forward market prices for crude oil, heating oil, and
prices, the Company significantly reduced its hedge in order to mini- unleaded gasoline, the following table displays these estimated obli-
mize fuel hedging losses related to further oil price declines and to gations as of December 31, 2008 (in millions):
2009 2010 2011 2012 2013 Total

Fuel derivative obligations $246 $239 $236 $146 $125 $992
The total net fair value of outstanding financial derivative instruments fuel derivative instruments as cash flow hedges, as defined in Statement
related to the Company’s jet fuel market price risk at December 31, of Financial Accounting Standards No. 133, Accounting for Derivative
2008, was a net liability of $992 million. The current portion of these Instruments and Hedging Activities, as amended (SFAS 133). Under SFAS
financial derivative instruments, or $246 million, is classified as a com- 133, all derivatives designated as hedges that meet certain requirements
ponent of “Accrued liabilities” in the Consolidated Balance Sheet. The are granted special hedge accounting treatment. Generally, utilizing the
long-term portion of these financial derivative instruments, or $746 mil- special hedge accounting, all periodic changes in fair value of the deriv-
lion, is included in “Other deferred liabilities.” atives designated as hedges that are considered to be effective, as
defined, are recorded in “Accumulated other comprehensive income
Upon proper qualification, the Company endeavors to account for its (loss)” until the underlying jet fuel is consumed.

US Airways
Mainline Guidance 1Q09E 2Q09E 3Q09E 4Q09E FY09E
AvAvailable Seat Miles (ASMs) (bil) ~16.6 ~18.1 ~18.9 ~16.9 ~70.5
C- CASM ex fuel, special items & 1+5% to +7% +1% to +3% +1% to +3% +3% to +5% +2% to +4%
profit sharing (YOY % change)
CaCargo / Other Revenues ($ mil) ~310 ~340 ~345 ~325 ~1,325
FuFuel Price (incl hedges and taxes) 2.35 to 2.40 2.17 to 2.22 1.96 to 2.01 1.83 to 1.88 2.07 to 2.12
($/gal)
FuFuel Gallons Consumed (mil) ~260 ~282 ~296 ~267 ~1,105
PePercent Hedged 38% 24% 10% — 18%
W Weighted Avg. Heating Oil Collar 3.32 to 3.52 3.52 to 3.72 3.44 to 3.64 — 3.41 to 3.61
Range ($/gal)
W Weighted Avg. Jet Fuel Equivalent 3.41 to 3.61 3.65 to 3.85 3.57 to 3.77 — 3.52 to 3.72
(incl, transport, and refining margin)
($/gal)
W Weighted Avg. Estimated Crude 121.87 to 130.27 136.29 to 144.69 131.91 to 140.31 — 128.39 to 136.79
Oil Equivalent ($/bbl)
EsEstimated Jet Fuel Price ~1.58 ~1.62 ~1.71 ~1.77 ~1.67

Assumption (unhedged, incl
transport) (($/gal)
ImImpact of Fuel Hedges 0.71 0.49 0.19 — 0.34

(Gains)/Losses ($/gal)
January 2008 to February 2009 (Spot prices of Kerosene type jet fuel)
450.00 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
400.00 263.83 280.84 312.90 342.48 395.15 396.21 403.74 341.73 310.42 236.58 193.42 143.18 143.56 127.44
350.00 253.07 264.32 299.02 330.43 377.84 392.49 396.39 327.37 286.89 213.71 179.60 139.53 141.71 125.66
cents per gallon
300.00 266.59 276.85 326.47 355.55 378.13 392.21 397.09 330.79 329.54 243.39 195.23 147.41 153.89 130.61
260.47 272.82 312.45 336.46 373.76 387.82 388.63 327.06 337.49 231.47 187.96 137.51 146.92 125.94
250.00
260.35 276.70 318.00 337.94 383.82 395.59 387.42 326.03 294.25 222.29 184.47 137.46 144.34 130.57
200.00
Amsterdam-Rotterdam-Antwerp (ARA)
150.00 Singapore
New York Harbor
100.00 U.S. Gulf Coast
Los Angeles
50.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
Month


Aircraft & Engines
Airline Date of Info Position Remarks

AIR BERLIN 27 Nov, 2008 In Q1 2009, Air Berlin was 78% hedged at On 27 Nov, 2008, Air Berlin said it was “using cur-
$1,000-$1,100/tonne; in Q2, 59% at approx rent market situation to further strengthen its hedg-
$1,000/tonne; in Q3, 37% at approx ing position for 2009”, and would procure
$1,000/tonne; in Q4, 6% hedged at $1,000- “additional fuel options with cost limiting effects
$1,200/tonne. (volume Ø +4% for 2009)”.
AIR FRANCE-KLM 6 Feb, 2009 Hedged 43% for FY2009-10 (ending 31 March Air France-KLM was carrying out no new hedging
10), giving final purchase price of $67/bbl of jet as of October 2008. It unwound a portion of its
fuel. Hedged 18% for FY2010-11, giving final hedging contracts after December. Group said that,
purchase price of $72/bbl. Hedged 21% for overall, its exposure to fuel-price volatility was
2011-12, giving final price of $72/bbl. halved.
AIR NEW ZEALAND 22 Jan, 2009 In second half of FY2009 (ending 31 March At 22 Jan prices, average Singapore Jet fuel price
2009), Air NZ was approx 72% hedged with would be $88/bbl for second half of Air NZ’s
average effective floor of $85.10/bbl of WTI FY2009, compared with average of $123 in
crude. First half of FY2010 is approx 20% first half.
hedged with average ceiling of $68.47 and
average floor of $45.20 per barrel of WTI.
ALASKA AIR GROUP 25 Feb, 2009 AAG is 50% hedged for 2009 at an approxi- Quarterly hedge levels as of 25 Feb 2009: 1Q09,
mate crude oil price per barrel of $76. It is 33% 50% at approx crude oil price per barrel of $81;
hedged for 2010 at an approx price of $70 and 2Q09, 50% at $71; 3Q09, 50% at $76; 4Q09,
is 11% hedged for 2011 at an approx price of 50% at $76; 1Q10, 42% at $68; 2Q10, 34% at
$80. $68; 3Q10, 29% at $67;' 4Q10, 24% at $78;
1Q11, 17% at $91; 2Q11, 15% at $73; 3Q11,
11% at $74; 4Q11, unhedged.
AMR CORPORATION 25 Feb, 2009 35% of 2009 consumption hedged at average AMR is planning for an average system price of
cap of $2.59/gal of jet fuel equivalent ($94/bbl $2.04/gal in 1Q 2009 and $2.06/gal for full year. It
of crude oil equivalent, with 32% subject to had 45% of expected 1Q consumption hedged at
average floor of $1.94/gal of jet fuel equivalent average cap of $2.58/gal of jet fuel equivalent
($67/bbl of crude oil equivalent). ($93/bbl of crude oil equivalent), with 42% subject
to average floor of $1.97/gal ($68/bbl crude equiva-
lent).
BRITISH AIRWAYS 6 Feb, 2009 For FY2009-10, 50% hedged with average floor At a fuel price of $60/bbl and $:£ exchange rate of
at crude oil price of approx $84/bbl $1.50, BA expects FY2009-10 fuel bill would be
£2.75bn, £250m-£300m less than FY2008-09.
CONTINENTAL AIRLINES 26 Jan, 2009 For full year 2009, 27% of expected consump- In 1Q09, Continental hedged 57% of expected con-
tion hedged in max weighted average price sumption at max weighted average price range
range of $2.54 to $3.40/gal. Also 21% hedged of $2.54-$3.32/gal, and hedged 31% in min price
at minimum weighted average price range of range of $1.09-$2.39/gal. In 2Q09, it has hedged
$1.17 to $2.53/gal. Max price hedge includes 34% at max price of $3.48/gal and hedged 34% at
6% WTI crude call options at ave. $2.54/gal; 7% min price of $2.61/gal. In 3Q09, CO has hedged
WTI swaps at ave. $1.17/gal; and 14% WTI col- 15% in max price range of $1.31-$3.21/gal and
lars at ave. $3.40/gal. Min price hedge includes hedged 15% in min price range of $1.31-$2.40/gal.
7% WTI swaps at ave. $1.17/gal and 14% WTI In 4Q09, CO hedged 5% at max price of $1.36/gal
collars at ave. $2.53/gal. and hedged 5% at min price of $1.36/gal.
DELTA AIR LINES (INCL. 22 Jan, 2009 In 1Q09, Delta hedged 80% of expected con- In 2Q09, Delta’s expected fuel consumption is 85%
NORTHWEST AIRLINES) sumption at an average jet fuel equivalent cap hedged at an average jet fuel equivalent cap of
of $2.81/gal to floor of $2.43/gal. At the then- $2.45/gal and a floor of $2.09/gal, at a $2.17 for-
forward curve, fuel price was $2.34/gal, includ- ward price/gal. In 3Q09, DL is hedged 55% at cap of
ing tax and transportation costs of approx $2.19/gal and floor of $1.22/gal, at forward price of
$0.17/gal. $2.10. In 4Q09, DL is hedged 32% at cap of
$2.24/gal and floor of $1.05/gal, at $2.00/gal for-
ward price as of Jan 23, 2009.

Airline Date of Info Position Remarks

EASYJET 20 Feb, 2009 For the year to 30 Sep 2009, easyjet is 73% Each $10/tonne movement in fuel price impacts
hedged at $1,094/tonne. For the year to 30 easyJet's full-year unhedged fuel cost by $4.6m.
Sep, 2010, it is 27% hedged at $926/tonne. EasyJet's average effective fuel cost per tonne was
In first half of FY2009, easyJet’s estimated $948 for FY2008 ($840 average in first half and
fuel cost per tonne is $1,040. $1,031 in second half).
LUFTHANSA 2 Feb, 2009 Lufthansa applies rule-based strategic hedging Lufthansa's annual fuel consumption is some 8.3m
with a time horizon of 24 months, mapping the tonnes, generating more than 17% of group operat-
average of crude oil prices over time. LH hedges ing expenses. Its hedges are predominantly for crude
5% of planned consumption per month in oil, supplemented by contracts for the price differen-
Brent collars up to a hedging level of 85% and tial between kerosene and crude. Lufthansa uses
with a lead time of 24 months. As a result the standard instruments such as forward contracts and
forward six months are hedged to about 85%. options. For FY08, LH’s hedging level was only 72%,
due to loss of contracts with Lehman Brothers. LH
decided not to enter contracts for the remaining
13% because of the favourable oil-market conditions
it encountered towards the end of FY08.
RYANAIR 10 Feb, 2009 In FY2010, starting 1 April 2009, Ryanair is Ryanair’s fuel price/tonne in FY 09 (ended 31 March
75% hedged on fuel price in 1Q at $660/tonne; 2009): 1Q, $1,170; 2Q, $1,320; 3Q, $1,170; 4Q,
in 2Q, 75% hedged at $650/tonne; in 3Q, unhedged.
50% hedged at $660/tonne; 4Q, unhedged.
SINGAPORE AIRLINES 2 Feb, 2009 For the period 1 January to 31 March 2009, SIA’s fuel-hedging gains for the first nine months of
44% of SIA Group fuel requirements, or FY2008-09 (ending 31 March 2009) were $191 mil-
approximately 3.7 million barrels, were hedged lion.
at an average jet fuel price of $131/bbl.
SOUTHWEST AIRLINES 16 Jan, 2009 “As of December 31, 2008, the Company held As of 31 Dec, 2008, Southwest’s cash collateral obli-
a net position of fuel derivative instruments gations for fuel derivatives for the years 2009-2013
that effectively represented a hedge of approxi- totalled $992m (based on the contractual settlement
mately 10% of its anticipated jet fuel purchases dates of those derivatives). Obligations for 2009 were
for the years from 2009 through 2013.” $246m, for 2010, $239m; for 2011, $236m; for
Statement was made in Southwest’s 2012, $146m; and for 2013; $125m.
10-K annual results filing to SEC.
UAL CORPORATION 29 Jan, 2009 36% of consolidated and 44% of mainline con- UAL uses a combination of calls, puts, collars, 3-way
sumption. Average price where payment obliga- collars and 4-way collars to hedge. In Q1, 54% of
tions begin is $103/bbl and average price where consolidated consumption was hedged at $104/bbl
price protection begins is $104/bbl. In 2009, and 35% was subject to puts with payment obliga-
17% of consolidated consumption is also sub- tions ending at $57. With crude at $45/bbl, UAL’s
ject to puts with payment obligations ending at posted cash collateral requirement in 2009 would be
$54. approx $660m; at $35/bbl, it would be $780m. In
1Q, UAL’s mainline fuel price including all taxes, and
gains and losses on settled and unsettled hedges was
$1.83/gal.
US AIRWAYS For 2009, US Airways is 18% hedged at For 1Q09, 38% hedged at $3.32-$3.52/gal weighted
weighted average heating oil collar range of average heating oil collar range ($3.41-$3.61/gal
$3.41-$3.61/gal. Weighted average jet fuel weighted average jet fuel equivalent incl. transport
equivalent, incl. transport and refining margin, and refining margin). 2Q09, 24% hedged at
is $3.52-3.72/gal. Crude oil equivalent is weighted average jet fuel equivalent of $3.65 to
$128.39-$136.79/bbl. $3.85/gal. 3Q09, 10% hedged at WAJF equivalent of
$3.57-$3.77/gal. 4Q09, unhedged.


Aircraft & Engines
Most major US airlines are facing difficult decisions about how and when to renew their fleets, among the
oldest in the world. In 2009 the US majors are expected to be the most profitable carriers in the world for
the first time in many years, but they are cutting capacity as fast as they can as they see traffic melt away.
Chris Kjelgaard looks at the prospects for US re-fleeting.
FLEETING THOUGHTS
IT HAS BEEN MANY YEARS SINCE THE MAJOR US AIRLINES, recently conducted by AirlineForecasts led CEO Vaughn
as a group, have led the world’s air transport industry in Cordle to the conclusion that the nation’s airline industry will
terms of profitability, but that is exactly what is expected break even and possibly post a $2bn-$3bn combined operat-
to happen in 2009. Beset in the space of months by soaring ing profit this year. IATA, meanwhile, forecasts that the US
fuel prices – which pushed airfares to levels fewer and airlines – most of which are IATA members – will achieve a
fewer people could afford – and the onset of their nation’s $3.6bn operating surplus in 2009. Airline equity analyst Jamie
worst recession since the Great Depression of the 1930s, Baker, of JP Morgan, wrote recently that if fuel cost $70 a
the US majors had little choice but to slash capacity almost barrel on average in 2009 the US airlines should be able to
overnight in order to survive. record a $9.2bn operating profit.
But, having felt the effects of the global economic melt- If achieved, this would be their biggest-ever annual sur-
down before airlines in other parts of the world, the big US plus, notes aviation economist Adam Pilarski, senior vice
carriers are now better positioned to benefit from the late- president of Avitas – adding that if Baker’s forecast is on
2008 plummet in oil and fuel prices than most of the air target, and if the jet-fuel price stays below $70 a barrel, as
transport industry. Although consulting firm Boyd Group it was in early 2009, then the US airline industry would
International’s baseline 2009 forecast for US airport stand to better even the $9.2bn figure that Baker foresaw.
enplanements expects passenger numbers to drop by some
seven per cent to around 700 million, and AirlineForecasts The tantalising possibility of fleet renewal
sees US airline revenues falling off by 10 per cent, or $12bn, As a result, the major US airlines might hypothetically find
the expected $25bn reduction in the US carriers’ combined themselves in a position to consider a move that most have
fuel bill compared with 2008 should see them at least put off throughout the long, dark financial years that fol-
break even and possibly do much better than that. lowed the 9/11, 2001 terrorist attacks and the simultaneous
US recession: embarking upon large-scale renewal of their
Forecasts of US airline profitability in 2009 differ quite widely. fleets. Once global pioneers in working with manufacturers
An in-depth analysis of US macro-economic conditions to specify and order the latest-technology commercial air-

craft, the US airlines have seen their status slip as a result of ment orders, did express itself in at least one order,” says
their financial travails throughout the last decade to the Craig Jenks, president of New York consulting firm
ignominious point where the average age of the US fleet Airline/Aircraft Projects. “American substantially brought
was in 2008 the oldest of any in a world region. This was forward its order for 737-800s. Clearly the financial com-
exemplified by the 35-year average age of the 75 McDonnell munity was begging them to do so,” to begin replacing the
Douglas DC-9s in the then-Northwest Airlines fleet (71 of 300-plus MD-80s in its domestic fleet. By the end of 2008,
which remain in service); the elderly 747-200F freighters American had grounded 43 MD-80s, according to UK avia-
operated by the same carrier; the huge numbers of 15-to-25- tion consultancy IBA Group.
year-old 737-300s, 737-400s, 737-500s and MD-80s found
throughout the majors’ fleets; and the sizeable chunks of 737 Classics being eliminated from US fleets
mainline domestic capacity accounted for by older 767-200s At the same time as American started replacing its MD-80s,
and 757s. other US majors began grounding their fleets of older 737s.
“We’re on the path to total elimination of 737 Classics”
So, with the exception of some of the fast-growing, low- from the US fleet, says Jenks. “Continental, United and US
cost airlines – whose fleets were almost new – and some Airways are all exiting the 737 Classic – all of them driven
growth capacity acquired in recent years by the bigger by the fuel situation.”
majors (particularly Continental), by 2008 it seemed there
were compelling reasons for the US airline industry to con- There are two notable exceptions to the trend – Southwest
sider re-fleeting en masse. And, at one point in mid-year, as Airlines and Alaska Airlines. Southwest has a large fleet of
fuel prices soared to unprecedented levels, a large-scale re- 737-300s and a smaller fleet of 737-500s, but isn’t intending
fleeting seemed imminent despite the US airlines’ lack of in the short term to ground most of them. “Southwest had
creditworthiness. Across the board, the major US carriers a different fuel price from the others” in 2008, notes Jenks:
found there was a compelling need to ground older air- The airline’s consistent profitability throughout the years
craft simply because of the fuel costs they represented. allowed it to hedge in advance much of its 2008 fuel con-
“Fuel [price], which was a very strong motive for replace- sumption at prices far below the mid-year peak, where other,


Aircraft & Engines
according to data compiled by ATW Online. All of the big six net-
work airlines cut mainline domestic capacity by double-digit per-
centages, with Northwest – now part of Delta – and United
leading the way with 17.9 and 12.5 per cent cuts respectively.
For about a year, from the time the US recession is now known to
have actually begun in late 2007, through the mid-2008 frenzy of
high oil prices until the wheels came off the global economic jug-
gernaut in the last three months of the year, the US majors found
a higher-yielding alternative use for some of their surplus domes-
tic capacity: redeploying suitable aircraft – particularly 757-200s
and newer 737s – into short-to-medium-haul international mar-
kets.
Continental, American and Delta all dedicated substantial num-

bers of 757s and 737s to international routes, finding the 757 an
excellent aircraft for start-up and secondary transatlantic routes
and the 737-700, 737-800 and 737-900 (in Continental’s case)
useful for serving destinations in the Caribbean, Central America
and northern Latin America. American Airlines used the opportu-
nity presented by a slackening in domestic demand to begin
replacing its 33 ageing A300-600R widebodies with smaller 737-
800s as the core aircraft on its extensive network of US-Caribbean
routes.
less-fortunate or less-savvy competitors hadn’t. Alaska Airlines,

which shed its once-considerable fleet of MD-80s throughout the
Softening international traffic
However, with the global economic meltdown has come the
tough years the US industry experienced from 2002 to 2007 in a
growing fear that international traffic is softening, particularly in
successful effort to remain financially stable, is gradually shrink-
the high-fare premium-class cabins that represent the main com-
ing its 737-400 fleet, but plans to still be operating 23 of the type
mercial driving force on most long-haul international routes. Not
at the end of 2010.
only is this a concern for US airlines that have switched capacity
from domestic into international markets (for instance, it may
But a combination of factors quickly acted to stifle any thoughts
have influenced American to replace older 767-200s on domestic
of mass fleet renewal among the US airlines in 2008. When fuel
routes with 767-300ERs from its international network), but it is
prices dropped as precipitously as they had risen, and as the
also a worry to those US carriers which still have widebody orders
effects of the US bad-home-mortgage financial crisis began to
outstanding from pre-downturn days.
make themselves felt throughout the national (and then the
global) economy, the whole fleet-renewal equation changed for
Continental still has two new 777-200ERs due for delivery in 2010,
the airlines. No longer was replacement of fuel-inefficient aircraft
which Jenks says are targeted for its Newark-Shanghai route.
their prime consideration – capacity reductions extending for
(While Continental also has 25 787-8s and 787-9s on order, their
years became their immediate goal.
delivery dates – already postponed because of Boeing’s widely pub-
licised 787 supply-chain teething troubles – are far-enough away in
Now, for instance, rather than ordering new aircraft for fleet
the future that they are of little concern in the current global eco-
renewal, Delta and American are looking to prolong the lives of
nomic crisis. Similarly, while American signed a purchase agree-
their MD-88 and 757 fleets respectively, says Owen Geach, com-
ment with Boeing in October for up to 100 787-9s in a deal that
mercial director of IBA Group. “Personally, I would be surprised if
is contingent on the airline obtaining approval from its pilots to fly
we saw a significant order from a US major in the next 12
the type, the first aircraft isn’t due for delivery (under Boeing’s lat-
months,” he says. “They’re scaling down rather than growing.”
est revised delivery schedule) until the second half of 2013, nearly
five years away. The last of 42 initial aircraft wouldn’t be delivered
until 2018, and the last of 58 additional aircraft for which
Capacity cuts now serving a different function
American obtained purchase rights wouldn’t be delivered until
“The cuts that were driven by fuel prices are now serving a dif-
2020.
ferent function,” says Jenks. “The cutbacks became driven by the
downturn. The big difference is that the replacement motive is
Of nearer-term concern are the widebody orders placed by the
much weaker. The urgency of the fuel motive is not there any
newly combined Delta and Northwest. By the end of 2010 Delta
more. What we really have is, for the first time ever in the US air-
is due to take delivery of eight 777-200LRs, which Jenks says
line industry, a consensus – not only among the majors but also
were originally to be allocated to Delta’s planned new Atlanta-
the low-cost carriers – that capacity restraint is a good thing. It
Mumbai route and other non-stop routes from Atlanta to China.
has become almost a dogma. For the first time ever, everyone is
However, the increasing competitive threat posed by the market-
putting profitability before market share.” He says the only real
share-driven Gulf carriers – particularly in winning economy pas-
exception is Allegiant Airlines, a niche low-fare airline which spe-
sengers who find the Gulf airports an easier and quicker way to
cialises in serving secondary airports at southern-US sunspot des-
connect to a multitude of Indian destinations rather than negoti-
tinations from tertiary airports at smaller US cities, using a
ating the difficult connections at India’s main gateway airports
growing fleet of cheaply acquired MD-80s.
Mumbai and Delhi – “may be having an impact on Indian
routes,” says Jenks. This, and the slowing of China-US trade and
The US majors’ mass groundings in 2008 resulted in a 9.6 per
China’s manufacturing-driven economy, could potentially affect
cent year-on-year decline in domestic capacity by January,
Delta’s appetite for 777-200LRs.

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Aircraft & Engines
US MAJOR AIRLINES’ NEW DELIVERIES

Northwest’s 787s in doubt
IN 2009 AND 2010 Meanwhile, as the US launch customer for the 787, Northwest
brought to its merger with Delta an outstanding order for 18
With the notable exception of United, which has absolutely no aircraft on order early-delivery 787-8s, including three of the first five production
at all and by the end of 2009 will have grounded its entire fleet of 94 737-300s 787s. Northwest specifically ordered its 787s for the Detroit-
and 737-500s, as well as its six-oldest remaining 747-400s, every major US airline Shanghai route and other USA-China markets, so “range was
has some new aircraft due for delivery in the 2009-2010 period because of orders rather important in that order,” notes Jenks. However, as a result
placed with manufacturers and lessors before the momentous events of 2008. of zero-fuel weight problems caused by a design need to
strengthen the 787-8’s centre wingbox, Boeing admitted that
AirTran Airways is scheduled to take four more 737-700s this year (though two early 787-8s would have a substantial range shortfall.
have already been sold to a foreign airline) and 55 in all by 2016. Alaska Airlines
has 17 more 737-800s due by the end of 2010, though with eight 737-400s and This made them unsuitable for the missions planned by
seven 737-700s leaving its fleet the net result to its mainline fleet will be an addi- Northwest, and after the Delta-Northwest merger took place,
tion of only two aircraft. American is taking no fewer than 76 new 737-800s by Delta was quick to say publicly that it was considering dropping
2011 to replace grounded MD-80s and A300-600Rs on a one-for-one basis, to the 787 order in favour of more 777-200LRs. Now, however,
produce a net reduction in capacity. with a possible lessening of Delta’s interest in obtaining addi-
tional 777-200LRs, “it has gone very quiet,” says Jenks.
In addition to its two 2010 777-200ERs, Continental is adding 24 737-800s and
737-900s by the end of 2010, with most of them due to replace 737-300s and 737- In some cases, airlines looking to reduce capacity have been
500s. (Continental is installing blended winglets on at least some of its remain- able to negotiate sale/leaseback transactions to manage the
ing 737 Classics, but this is to enhance their resale value.) The Houston-based downsizing of their fleets efficiently. This is particularly true of air-
airline has also agreed to lease four more 757-300s, and is pioneering a blended lines wanting to reduce their 757 fleets, because FedEx has iden-
winglet installation and certification programme for the model so that (report- tified the highly capable 757 as the aircraft it wants as the
edly) it can operate the 757-300 on transatlantic routes. replacement for its elderly 727 freighters, and investors are
happy to buy 757s with stub leases attached for near-term con-
The combined Delta-Northwest has outstanding orders for five 737-700s, 30 737- version to freighters. Wayzata Investments recently bought 15
800s, five A319s, two A320s and 10 CRJ900s, in addition to the eight 777-200LRs 757s from UAL in such a deal, and on behalf of Citicorp Jet
and 18 787-8s the world’s largest airline is carrying in its orderbook. However, Trading and Leasing bought 10 Northwest 757s with the same
not all of these aircraft are due for delivery by the end of 2010. JetBlue Airways, purpose in mind.
meanwhile, will receive three new A320s and eight Embraer 190s this year (two
of which have been sold, though the sale of two others fell through due to con-
ditions in the credit markets) and three of each type in 2010. JetBlue has out- Financing and leasing new deliveries
standing orders for another 52 A320s and 59 Embraer 190s, though from 2007 Airlines taking delivery of new jets this year and next have been
onwards the airline began deferring deliveries of many of its aircraft to as late able to finance most of their deliveries – Continental, for instance,
as 2016. in an enhanced equipment trust certificate (EETC) deal arranged
before 2008 and others (such as American and US Airways) with
Similarly, while as of January Southwest had orders for 104 737-700s and options bank financing backstopped by financing from Boeing or Airbus.
on another 62 outstanding through 2018, the low-cost leader is only adding 13
in 2009 and will actually reduce the size of its fleet overall by two aircraft this However, any US airline that might be contemplating a major
year to 535 737s by retiring or returning to lessors a total of 15 737 Classics. US fleet renewal order will have to deal with aircraft financing and
Airways is taking 18 new A321s and five new A330-300s in 2009, but is reducing leasing markets that are uncertain at best, says Phil Seymour, IBA
the size of its fleet by four aircraft to 350 by retiring/returning eight 737-300s, Group managing director. “GECAS and other leasing companies
four A320s and 15 757s. all potentially are facing issues, and ILFC has a major issue with
its parent company,” he says. “We’ve got the perfect storm in
aviation. The aviation financing sector, the leasing companies
and the airlines are all scratching their heads to find ways of
financing aircraft deliveries.”
IBA Group’s Geach adds: “BOC is looking to buy companies and

is occupied with the [Chinese] domestic fleet. GECAS is offload-
ing aircraft to dilute its regional fleet and lessee concerns. If you
look at previous cycles, ILFC has stepped in, but in the past it
could borrow money at attractive rates.” That is just the tip of the
iceberg for ILFC, facing the possibility of its bank term lending
covenants turning round and biting it with substantially increased
interest rates if ILFC loses its double-A credit rating, he says. Some
analysts have even suggested ILFC, which has orders for 90 air-
craft outstanding, could be the fifth or sixth most likely candidate
for an order cancellation.
Export credit agencies’ role crucial

“The role of the export credit agencies is going to be crucial in
this, but what will it be?” asks Geach. “They’re really going to
have their work cut out to finance the existing orderbook,”

though with national treasuries “underpinning what they do”

there is some likelihood that the ECAs will be able to step up to
the mark to make sure financing deals on many new deliveries
will get completed.
That said, the US airlines can’t look to Ex-Im Bank to finance their
Boeing aircraft. Commercially, “in Europe we’re probably down
to half a dozen banks” that are willing – or able – to finance air-
craft deals, says Geach. “Citicorp in the US historically has been
active, and there are pockets of lenders in the Middle East. In the
US, it’s probably down to the historic financiers of much of the
financing requirements of the US airlines – the pension funds.”
(One factor that could boost pension-fund interest in aircraft-
based asset financing is the steep tumble in the Dow Jones
Industrial Index since its peak in October 2007, the fall exceed-
ing 50 per cent by early March.)
think a replacement programme is in the top 10 of any US airline
For airlines that haven’t already closed them, EETC structures executive’s ‘to do’ list” right now, he says.
aren’t likely to prove the answer in the near term, says Geach. Jenks has a similar view. Despite the ability of US airlines to take
“EETC structures came under a lot of criticism. With these struc- advantage of any holes in Boeing and Airbus delivery slots, he
tures, appraisers had their arms twisted and a number of them says: “There’s the old rule of thumb, that you need one year of
have unravelled, so it’s unlikely we’ll see a flurry of activity” any
time soon.
US airline passenger jet fleet – one year change
“I don’t think the [problem of] confidence in the general economy
and the lack of confidence in financiers is going to be solved Mar-08 Mar-09 Change
overnight,” says Seymour. “We are seeing new entrants [to the Boeing 737 (NG) 773 806 33
aviation finance market] – we’ve had banks we had never heard of
Bombardier (Canadair) CRJ 678 648 -30
two years ago asking what the aviation market is all about – but
there are fewer competitors in the financing sector now.” Boeing 757 548 515 -33
Boeing 737 (CFMI) 545 419 -126
Embraer ERJ-145 498 485 -13
A bail-out for the 747-8?
However, Seymour thinks it is conceivable that a major US fleet Boeing (McDonnell-Douglas) MD-80 477 430 -47
renewal order could come in an unexpected way – and for an Airbus A320 375 378 3
unexpected aircraft; the 747-8 passenger jet. Airbus A319 302 279 -23
Boeing 767 271 267 -4
“Boeing executives are under severe pressure to get some of
those aircraft ordered,” says Seymour. “I would imagine they’re Bombardier (Canadair) CRJ700 214 212 -2
putting all sorts of incentives on the table – including the engine Boeing 777 128 130 2
manufacturer [GE, for the GEnx powerplant that is the sole
Boeing 717 123 110 -13
engine choice for the 747-8]. I think Boeing needs to see a sub-
stantial order in the next year – otherwise, we may well see that Bombardier (Canadair) CRJ900 94 131 37
programme being put on hold.” Boeing (McDonnell-Douglas) DC-9 94 70 -24
Embraer ERJ-135 86 38 -48
While the idea of an order for the 747-8 from a major US airline
is not immediately obvious, the chances of such a deal – involv- Embraer 170 76 76 0
ing United or Delta-Northwest, perhaps – are all the more likely Embraer ERJ-140 74 74 0
“when you look at the other equipment coming in on transpa- Boeing 747 48 45 -3
cific routes”, in Seymour’s view – “if you look at more and more
Embraer 190 46 60 14
A380s coming in these routes, and gaining significant accept-
ance, particularly in the premium cabin.” Embraer 175 44 90 46
Airbus A330 41 41 0
Seymour believes it possible that, just as the US government has
Airbus A300 34 22 -12
done in standing behind its automobile manufacturers, the federal
government and the banks will be “looking at the aviation sector Airbus A321 32 36 4
and the value [it represents] to their country – and in the same way Boeing 737 (JT8D) 24 12 -12
the US supported the motor industry, Boeing and GE will say,
Boeing 727 18 2 -16
‘Support us’,” by providing financial assistance for US airlines “to
order some decent aircraft”. The US’s recent record of trade pro- Boeing (McDonnell-Douglas) DC-10 17 17 0
tectionism argues that this could happen, he believes. Boeing (McDonnell-Douglas) MD-90 16 16 0
Fairchild/Dornier 328JET 16 4 -12
An unlikely scenario? Perhaps. Otherwise, however, Seymour
Airbus A318 11 11 0
thinks the chances of a US airline coming up for a major fleet
replacement order soon are slim, despite the opportunities they Boeing (McDonnell-Douglas) MD-11 4 4 0
might have to find aircraft at attractive prices if big holes start TOTALS 5707 5428 -279
appearing in the Airbus and Boeing orderbooks. “Let’s say I don’t
Source: Ascend


Aircraft & Engines
“We always have to go a special route,” says Karsten Sensen, CEO and managing director of Bavaria
International Aircraft Leasing. Mary-Anne Baldwin talks to Sensen about the unique nature of his company.
end of the last downturn – of course, by the end of 9/11 – and

we got the aircraft in the wonderful upturn of the past three
years. Fortunately we won’t get any aircraft this year. But maybe,
at the end of this year or the beginning of next year, when we
feel we are at the bottom [of the downturn] but there are signs
the aviation industry will improve, we will place orders. So we are
a little bit more anti-cyclic in our strategy.
If you look at our history – we started doing business in 1980 and

I’ve been with the company since 1990 – we’ve been through a
couple of ups and downs in aviation, and I think it proves that this
LESSOR FOCUS: concept is not a bad one… There are very few leasing companies
that have survived over such a long time. And what’s the reason?
The reason is, in many cases the business case was focused on
high leverage and if you try to get the highest leverage, you will
BAVARIA
take the highest risk if something goes wrong – for instance,
the unexpected repossession of an aircraft. We don’t have the
funding to bridge this situation… so that’s what we try to avoid.
Of course the resulting business case is, in many cases, not as opti-
mised as with highly leveraged companies, but we are limited.
Q: Will you be taking advantage of the falling price of air-

craft or any of the parked aircraft currently available?
BAVARIA INTERNATIONAL AIRCRAFT LEASING IS ONE OF THE Even if you get a low-priced aircraft now, you have to place it and
leading independent aircraft leasing companies. The company it’s always difficult to raise rentals. So we do not want things to
first operated as Bavaria Fluggesellschaft in 1958 and in 1969 be complicated [at present] with the situation where we have an
entrepreneur Josef Schörghuber bought Bavaria, later merging it asset that we have to market. It is not our strategy [to buy up cur-
with the charter carrier Germanair in 1974. The company then rently low-priced aircraft], but it is also not our strategy to cherry-
traded under the title Bavaria Germanair until 1977, when it sold pick. Our strategy is that we place purchase orders for aircraft;
its airline operation to German airline Hapag-Lloyd. Now its pri- these aircraft have our specification, our definition. And our
mary business is arranging operating leases, which range in term specification and definition is that we will be able to place these
from three to eight years. The company also provides finance aircraft all over the world.
leases of eight to 12 years, and becomes involved in sale-and-
leaseback transactions. We place orders when we think ‘now is the right time’… we do
this all on speculation, and then we market the aircraft about one
Headquartered in Munich, Germany, Bavaria has a portfolio of 30 year before delivery. The advantage is that we have each aircraft
jet aircraft, which includes 737-300s, 737-700s, 737-800s, 717- specified in a way that we can place it to China, [or] we can place
200s, A320s and Bombardier single-aisle jet aircraft. Its aircraft it to Europe. If you do a cherry-picking you’ll have aircraft sitting
are leased to clients in Australia, Europe, Brazil, China, Great all over the place, even if they’re new. Even if [an aircraft is] spec-
Britain, Germany, Hungary, India, Italy, Mexico, Portugal, Russia, ified for an airline but is good for operation by another airline,
Spain, Turkey, and the USA. that doesn’t necessarily give you the optimum opportunity to
have it operated by an airline somewhere else.
Q: How do you distinguish yourself against other aircraft
lessors in terms of your services and ethos? Q: What is your market and how active are you in carving
The difference is we are purely private and we would like to keep out a specific market segment?
our independence as much as possible… that means we do not Because we are small and we cannot provide direct competition
rely on third-party funding. Of course, we have to refinance our with big lessors who are buying many more aircraft from many
aircraft in a very conventional way via banks, but not via any kind more countries and probably getting a much better price, we
of investment companies whatsoever. always have to go a special route. Our focus is second-tier carri-
ers – if an airline says ‘we need to lease two aircraft this year’
As we are private this limits our resources for investment. We do [instead of requesting a larger order] then this is for us.
not have unlimited funding, so we must be very careful what we
are doing. So far our gross is not comparable with a lot of public We also play in markets where other lessors are much more reluc-
leasing companies, but we think we have a very sound growth tant. The first airplane we placed [in Russia] was in 1993 – I think
and a very sound financial background. we were one of the first [to do so]. We placed the first Boeing air-
craft into Russia. Also, in terms of new aircraft, we tried to get
We are not really following the mainstream – we try to make our strategic positions, so although we were very small, we were the
decisions when not everyone is holding aircraft. We did not order first leasing company to get the new-generation Boeing 737 and
in the last three years when everybody wanted to get aircraft and place them in Russia, and this was a success story. We did this in
it was very difficult to negotiate. We ordered our aircraft at the India, and we placed the first new aircraft in China in 1993 also.

And even though the 717 was not a success story, for us it was.
We got these aircraft in 1999 and 2000 and placed them in
Australia to a small company which has now been purchased by
Qantas. We will have Qantas as our 717 lessee for another nine
years, until the year 2018, when the aircraft are 18 years old.
Q: Which aircraft are you looking to build into your port-

folio next?
These days, we are thinking very seriously about the [Bombardier]
CSeries. It might be the right aircraft for us; we are not quite sure
right now, but it’s of great interest. Geared-fan engine technol-
ogy is a very good compromise and I think the next-generation
aircraft may go this way. It is very difficult to achieve these fuel
burn and emissions advantages on bigger engines, so it might be
a good intermediate step. So we are following this up and if we
think the time is good we will make the strategic decision to be
in the front row. The Mitsubishi Regional Jet is quite exotic; it may
be a good aircraft for us but there’s not the technology yet.
Q: What strategies and concepts will you hold close during

the current downturn?
We feel quite good about our remaining customers. Of course,
we don’t have a crystal ball. But our customers are well settled in
their areas, they have good infrastructures, they are long-term
existing customers, so we feel quite comfortable with them. Of
course, this is not the first crisis we’ve managed. We consider our
lessees as business partners. If we are convinced their concept is
fine, their strategy is fine, but they have to overcome one, two,
maybe three difficult years… in the past we were very much will-
ing to find advanced solutions rather than declare default and
get aircraft back. We are used to this down-and-up rhythm and
we always try to find solutions.
The present situation is so unique we really haven’t anything else


Aircraft & Engines
BAVARIA’S AIRCRAFT FOR LEASE / SALE
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Engine Type CFM56-7B22 MTOW (lbs) 149900
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to compare it with, but any downturn has an end and then you
have a recovery stage. If you look into the past – although [past
recessions] aren’t comparable – I think, and I’m not the only one
saying this, that we will overcome this current situation over the
next two years. During this period of time, it will be very difficult if
you get aircraft and have to lease them. It will be very difficult if
your lessee’s contract expires. But fortunately all our contracts are
much longer, so we should be able to overcome this quite easily.
The most difficult thing is that – with all the assistance the US
government [and] the European governments are giving to the
clientele, supporting their financings – the fact is that if a com-
pany needs all this assistance to get funding together, you’re
starting on a very weak basis. I do believe that a lot of companies
getting aircraft on this very weak basis will have problems over
the next one or two years. Then you have big disasters. You have
big aircraft with high financing [costs] and to get this cured is a
real challenge.

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Aircraft & Engines
The US airline business probably distils all the ills afflicting the aviation industry as a whole at present. Old
aircraft, exorbitant fuel prices and a slack economy present a glum picture. Yet there is hope, writes Peter
Morris, chief economist at Ascend.
DEVELOPING THE US
AVIATION INDUSTRY
YEARS AGO AND LOST IN THE WILDS OF IRELAND, I MET A
farmer from whom I asked directions. “Limerick?” he said. “If I
were you I wouldn’t start from here.” I think the US aviation
industry appreciates what he meant. More than three decades
after facing the turmoil of deregulation, the resulting explosion Taking the long view
of competition, and being dragged to the edge of a financial Despite the current level of crisis, it is worth a reassuring look at
abyss in 2002-4, it has downsized, streamlined and squeezed to the long-term fundamentals. Air travel is a critically important
return to profit. No sooner had this seemingly impossible feat resource for the US economy, responsible for over $1,200bn of
been achieved, when along came a tidal wave of fuel price direct or indirect output, and around nine per cent of US jobs.
increases combined with a weak economy, threatening to swamp Airlines and aviation suppliers that survive the current problems
most of the airline industry. will be well placed to improve their businesses in the future.
Domestic and international air networks provide massive and
Without doubt, given a choice, the US airline industry would not continuing competitive advantage for the US economy against
‘start from here’. Faced with high and increasing levels of debt, low other global competitors such as India and China.
cash reserves, aged fleets, a softening customer demand and an
unenviable record for capital destruction, anywhere would be bet- While recent US aviation market growth has slowed in the light of
ter than here. both price increases and the deterioration of the travel experience,
the US will remain for the next decade and beyond by far the
Yet this is the only choice – to find a path when there appears to biggest world aviation market. Future market growth will con-
be no road back or ahead, and no way to stand still. Just what tinue, driven by GDP growth. So what characteristics will ensure
are the options? long-term survival of airline suppliers to meet this market need?

First, the successes

Whatever the criticisms of the US Chapter 11 option, it has pro-
vided an umbrella for several of the majors to reinvent their busi-
nesses over the 2002-5 period. As a result of restructuring
measures taken while under this protection, costs have been
slashed, productivity increased and overall profitability restored.
This success inevitably came at a price, both for staff who found
their terms and conditions significantly eroded; the travelling
public, who found falling service levels, fuller planes and rising
fares; and shareholders, who found much of their investment
destroyed. Passenger load factors on board many of the airline
majors climbed to reach an average of 82 per cent in 2007 – an
astonishing 10 points higher than the apparent ‘peak’ load fac-
tor levels of 2000.The system has never operated so efficiently,
although the challenge now is how a system that has been
squeezed to the limit over the last five years can accommodate
the further challenge of fuel prices doubling within a year.
The long and winding road: US airlines must find a way ahead
when there is no way back and no way to stand still
The unanswered issues
Despite the industry’s success in developing its survival skills, a
number of key underlying issues have still not been resolved by Airline deregulation opened up a new world of competition for
the recent return to overall profitability of most US airlines. These domestic airlines in the US, but did not end the close interest of
include: regulatory framework and political interference; fleet US legislators in air transport. The US airline share ownership lim-
age; and consolidation. These issues seem set to dog the indus- its effectively block any overseas capital interest, and do a very
try until they are addressed. effective job in delaying the start up of new US-based initiatives
such as Virgin America. While various arguments from job pro-
tection to home security issues are advanced to support the cur-
rent legislation, it does effectively prevent a desperately needed
flow of capital to revitalise the industry. As US investors look at
the startling record of capital destruction by the industry, there is
unsurprisingly a reluctance to make the same mistake again.
A capital inflow is particularly needed to renew the US majors’

fleets, which have become among the oldest in the world. It is
estimated that the capital replacement cost for the US fleet over
the next 10 years is $110bn. With Northwest, Delta, American
having around 50 per cent of their fleets over 15 years old, US
Airways 40 per cent and United around 35 per cent, fleet
renewal to reduce fuel costs has become an imperative. A NW
With 50 per cent of Northwest, Delta and American Airlines DC9 consumes twice as much fuel per seat as a modern nar-
fleets over 15 years old, a capital inflow is needed to renew rowbody, and no amount of write-down on the original asset
the US majors’ fleets appears to work at these fuel prices. On transatlantic services,
for example, airlines with the older fleet can be paying over
$15m more p.a. than their competitor for fuel in the same pas-
senger markets. While the low-cost airline model is often based
on the latest fleet technology, the majors will find themselves
increasingly competing with higher costs, older aircraft and
higher customer prices. This is not a formula for success. While
it is admittedly unlikely that there would be a huge rush of
potential investors if the US were to open up its aviation markets
to broader competition on both the domestic and international
front, the sheer size and scale of this market would always be
likely to attract investors. These could range from the stronger
alliance partners such as Lufthansa, Air France/KLM and British
Airways, to the more ambitious and aspirational global players
such as Emirates, Aeroflot or Air China. From a customer point
of view the increased diversity would seem to be only a good
thing, and for investors it would bring the reassurance of glob-
ally backed expert players that would be in the business for the
long haul. Even for employment it seems that there would be
few negatives, since domestic US services will always need US
employees. However, investors will be cautious and it is highly
likely that the relentless reduction in real airline fares seen in the
past three decades will start to tail off, since both the real costs
of fuel and capital will now reflect the markets.


Aircraft & Engines
The subject of airline consolidation has come up repeatedly –

some view it as the only option. While the idea of achieving
economies of scale through airline merger is theoretically attrac-
tive, the reality seems quite the opposite. Merging two financially
desperate airlines seems more likely to create a third desperate
airline than it is a surging new business model for the industry.
The previous decades are littered with the case stories of US air-
line consolidations that failed or were ineffective. How the
merger of Delta and NW fleets to create a new behemoth with
over 450 aircraft over 15 years old will create efficiencies is cer-
tainly not clear to us. A major stumbling block will always be
staff acceptance, and time and again the internal effort required
on such matters has usually undermined a great proportion of
the benefits that might have been achieved. It seems that the
Chapter 11 provided a way for several of the majors to rein-
challenges on this front, combined with lukewarm signals from vent their businesses over the 2002-5 period
legislators have put such mergers on the back burner for now.
However, in the case of Continental Airlines there may be an
exception that is well placed to negotiate from a position of
New World: volume growth vs profitable
strength, and thus makes it an interesting consolidation target
growth
The global airline industry has achieved growth of around twice
Choosing the right tactics the rate of GDP through the simple expedient of economies of
A common call among the US Airlines has been that there is ‘too
scale: greater efficiency, fuller planes and lower prices.
much capacity’. With the US airline industry headed for a loss
Meanwhile, key input costs such as fuel and aircraft costs fell in
this year if fuel prices continue at current levels, it is tempting to
real terms, and customer appetite for increased aviation services
agree. However, a more appropriate comment might be that
grew significantly. The US market has been the first to experience
there is ‘not enough capacity at the right price’ for the market.
all these elements from deregulation through to market maturity,
Despite years of cost cutting and rationalisation the US majors
and perhaps supplies some indicators to the watching world as
have unit costs per available seat mile (ASM) in the range 13c-
to what could be in store for the aviation industry overall. In the
16c in 2008. In contrast Jetblue and Southwest show operating
new US world of stagnating GDP and traffic growth rates and a
costs in the range of 9c per ASM – more than a third lower, even
partial decoupling of traffic growth from GDP, two routes to air-
with higher fuel prices. In relative terms this gives them a signif-
line success seem possible. The first is through the low-cost
icant market advantage, which is further reinforced by the effi-
model, which is likely to continue its expansion through the sim-
ciency of their fleets and overall business models.
ple expedient of having the lowest price. For those airlines with
higher costs the new focus will have to be on ‘shrinking in to
The market problems for the US majors are highlighted in the US
profitability’, a tactic employed successfully by British Airways in
Majors Domestic Markets graph. Revenues have fallen since a
many sectors in recent years. The result will be that routes and
peak in 2000, and passenger numbers are about the same level
flights that lose money will increasingly be dropped; clearly, with
as in 1988. There has been a significant jump in load factors as
projections of capacity reductions of around 10 per cent for sum-
the airlines have had to do ‘more with less’. At the same time
mer 2008, this is already becoming a reality.
Southwest and other low-cost airlines have managed to increase
their business profitably on a lower cost base.
The further sting in the tail of the fuel price for many majors is
that the economics of the regional jet aircraft used by many of
them to provide hub feed is now very much under threat. Even
with the latest regional jets operating costs per seat have risen
dramatically, and some stark choices are going to have to be
made as to whether to cut service or revert to ATR operation.
This is a further factor that will weaken the hub-and-spoke
model, but could also potentially drive a renegotiation of scope
US Majors Domestic Markets, 1980-2008 clauses with pilots. Desperate times will call for desperate meas-
ures.
350
300 So, if we had to sum up the various factors, what would we say?
250 Apart from safety and security oversight, it is surely time for the
Pax legislators to stop interfering in the airline sector, either directly
RPM or indirectly.
200 ASM
Revenue
150 The fuel price crisis focuses more than ever on the right business
model for markets, and the need to restore profitability again
100
Source: ATA: Excludes Southwest Fleet replacement is a problem that will not go away, and a life-
and Express carriers cycle costing of options reinforces this.
50
06
00
02
04
0
84
86
88
90
92
94
82
96
98
Finally, the industry needs to plan for the worst, since that
8
20
20
20
20
19
19
19
19
19
19
19
19
19
19
appears to be what has constantly surprised it in the past. But in

every market there are winners and losers, and choosing the
right business model for the right market is key.

check_FPA:AFM_58 12/11/08 16:21 Page 3
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Aircraft & Engines
If there is a single beneficiary of the perfect storm that includes record jet fuel prices, fallout from
the sub-prime mortgage debacle, slowdown in the world economy and delays in deliveries of new,
fuel-efficient Airbus and Boeing aircraft, it is the aircraft leasing sector. Whether this is a short-
term phenomenon or a long-term trend is yet to be seen. But a quick look at the order books of both
Airbus and Boeing indicates that aircraft lessors are bullish on the prospects of the operating lease
market. Jim Smith reports.
LESSORS RIDING
OUT THE STORM
SINCE 2007, WHEN THE REALITIES OF AN ALTERED GLOBAL eco- Lessor significance
nomic climate began to transpire, airlines worldwide have been Aircraft leasing companies can be roughly divided into three cate-
faced with the prospect of cancelling or delaying deliveries of gories. The first category includes lessors with strong corporate
new aircraft or sub-leasing aircraft to other carriers. At the same parents, such as Aviation Capital Group (ACG), a wholly owned
time, lessors have played a dominant role in acquiring new air- subsidiary of Pacific Life Corporation, parent company of Pacific
craft directly from manufacturers and through sale-and-lease- Life Insurance; Aviation Lease and Finance Co (Alafco), majority
back transactions as well as purchasing second-hand aircraft owned by regional powerhouse Kuwait Finance House; BOC
from carriers and other leasing companies. Aviation (formerly Singapore Aircraft Leasing Enterprise or SALE),
now a unit of Bank of China; Dubai Capital, the aircraft leasing
The operating lease market is growing, according to John arm of Dubai Aerospace Enterprise (DAE); GE Commercial Aviation
McMahon, chief executive officer of Ireland-based Genesis Lease. Services (Gecas), a unit of worldwide conglomerate GE; and
“Many airlines do not have the balance sheet strength to support International Lease Finance Corporation, the leasing subsidiary of
the large-scale acquisition of aircraft but they can use cashflows insurance giant American International Group (AIG).
from operating the aircraft to support a lease. In addition,
lenders may feel more comfortable lending to a lessor with a The second category includes listed companies, such as AerCap,
diversified portfolio of airline customers and the capability to Aircastle, Genesis Lease and soon-to-be-listed AWAS.
remarket the aircraft – should it be necessary – rather than direct
to a single airline. Aircraft leasing is part of a broader trend The third category includes a plethora of small aircraft lessors.
towards the separation of the ownership of high capital value ‘First-tier’ lessors continue to be big business for aircraft manu-
assets from operation of these assets.” facturers, especially Airbus and Boeing, as these companies build
up fleets to satisfy increasing global demand for aircraft.
AerCap Holdings is equally upbeat about business going for-
ward. “The proportion of the global fleet under operating lease In early January, DAE confirmed a $10.9bn order for 100 Boeing
has increased from 17 per cent in 1990 to 30 per cent in 2006. aircraft comprising narrowbody and widebody aircraft, firming
The industry believes that operating leases will continue to up a November 2007 letter of intent (LOI). DAE also penned a
become more popular and that 40 per cent and more of the memorandum of understanding (MOU) in November 2007 with
global fleet will be subject to operating leases over the course of Airbus for 100 aircraft, including narrowbody and widebody
the next 10 years,” according to Frauke Oberdieck, a spokesper- types. Rumours are that DAE may place another order within 18
son at the Netherlands-based lessor. months for about 50 A330 and 777 aircraft.

DAE entered the aircraft leasing arena in November 2007 with There is little doubt that the business is a good bet for lessors,
the simultaneous announcement of the acquisition of eight lessees, and the banks that provide the former with finance.
A330-200 aircraft from Emirates under a sale-and-leaseback “Operating lessors are a key sector for a number of banks,
scheme, and the acquisition from Gecas of a total of 20 aircraft, including DVB Bank,” says Bert van Leeuwen, managing director
comprising 737 and A320 aircraft. and head of aviation industry research at DVB. “We have seen
the market share of operating leases increase over time and it
In Asia, meanwhile, BOC Aviation plans to triple the size of its would appear to the casual observer this takes away market vol-
fleet to 300 aircraft over the next five years, taking advantage of ume from the banks. However, many of the operating lessors
sale-and-leaseback opportunities that would allow the lessor to need bank financing themselves for their aircraft acquisitions, so
acquire aircraft without being captive to the long lead times for the majority of the market share taken by the operating lessors
new orders precipitated by bulging manufacturer order books. is actually coming back to the banks.
Estimates are that Chinese airlines will take delivery of 800 aircraft
over the next five years, with sale-and-leaseback transactions “In many cases the involvement of an operating lessor creates
expected to account for about 20 per cent of that total. another layer of comfort for the banks as operating lessors will
be well equipped to manage and remarket the aircraft in case of
In the ‘second-tier’, lessor AWAS placed a firm order in January a default by the lessee. However, it is important that the lessor
for 75 A320-family aircraft with 25 options, after placing a firm has a well-diversified portfolio to prevent being dragged down
order in December 2007 for 31 737 aircraft with 19 options. by the default of one or two lessees. In some cases banks have
AWAS also ordered six A330-300 aircraft in March 2008. acquired operating lessors themselves, providing them with a
captive funding source. DVB deliberately has not taken this step
Finding finance and does not have its own operating lessor to prevent potential
The top-tier of lessors benefits from the ease with which it can competition between the bank and an important client group
raise capital to fund aircraft acquisitions. A banker with a large [the lessors]. DVB Group, however, via its Deucalion connection,
European bank active in financing aircraft lessors and who asked frequently teams up with operating lessors to invest equity in
to remain anonymous tells AF&NM: “I see no major capital-rais- new transactions,” van Leeuwen continues.
ing issues with the first category of lessors. We continue to do
business with some lessors in the second category, provided that “Operating lessors are approximately one-third of the aviation
a deal is well-diversified and well-secured. portfolio of HSH Nordbank,” according to Mathis Shinnick,
global head of transportation at HSH Nordbank. “They are very
“However, we believe that growth among lessors in the second important to our business. Their approach to asset management
category is limited by a lack of access to equity markets for the and financing requirements fits with our business model very
time being. For category three lessors, you have to be careful. well. It is important to note that operating lessors have perfected
While some of these lessors have decent aircraft portfolios, oth- a very comprehensive asset management capability that is not
ers have portfolios overloaded with 737 Classics, the values of only efficient for airlines but also for the financial markets,” he
which will drop substantially. adds.
“All lessors will have to pay higher margins than in the past; Sale & leaseback
there are no more AAA-rated monoline-wrapped deals with very Aside from the outright leasing of aircraft to operators, sale-and-
low margins. This will reflect the increased airline risk and asset leaseback transactions can also be mutually beneficial to lessors,
risk,” the banker adds. lessees and banks active in the market.
“The sale-and-leaseback market is driven by several factors,”

Tied in: financial constraints are forcing airlines to lease aircraft
instead of buying says van Leeuwen. “First, some airlines want to free up liquidity.
Second, in the past two to three years, investors, private equity,
hedge funds and new and expanding lessors were outbidding
each other for the privilege of adding aircraft to their portfolio.
We believe in many cases that buyers were overpaying for these
aircraft. Third, for airlines the sale-and-leaseback structure is an
excellent instrument to transfer the asset risk in vulnerable asset
types to ‘less educated’ investors. Airlines looking to acquire
next-generation fuel-efficient aircraft should have taken advan-
tage of the overheated investor climate by selling less-efficient
equipment whilst still having the benefit of operating these
older aircraft until new technology is delivered,” he states
.
“As an example, 737 Classics were very popular in the sale-and-
leaseback market. With announced fleet reductions, several
hundred of these gas guzzlers may soon end up in the Arizona
desert, with severe negative implications for the asset values.
However, sale-and-leasebacks are also an excellent instrument
for financing new-technology aircraft. Airlines benefit from
placing large orders for new aircraft through significant volume
discounts. The sale-and-leaseback instrument allows the airline
to mix and match leased and owned aircraft. In addition, many
investors are willing to pay a premium price for these aircraft [on
lease] allowing the airline to generate liquidity or even book a
significant profit,” van Leeuwen adds.


Aircraft & Engines
First-tier lessors continue to be big business for Boeing and Airbus
The sale-and-leaseback market tends to gain momentum during

times when airlines take delivery of aircraft in an environment of
cash preservation and tight banking conditions. It will always
form part of the growth strategy of lessors, such as AerCap. As
for the A380, A350 and 787, “it is too early to say,” comments
Oberdieck at AerCap.
China’s leasing ambitions

One indication that the aircraft leasing market is robust is the
number of companies and funds entering the sector, with Asia
and the Middle East tipped as prime venues for these ventures.
In 2007 Industrial and Commercial Bank of China (ICBC) estab-
lished a leasing company that invests in big ticket assets, includ-
ing aircraft and ships. The leasing company was solely funded by
ICBC with a registered capital on $300m. China Merchants Bank
was also green-lighted by the country’s regulator last year to
“Sale-and-leasebacks provide a second round of opportunity to establish a big-ticket leasing business, also with $300m in regis-
finance the lessor that has acquired the aircraft. During the last tered capital. Other banks in China plan forays into the aircraft
two to three years, we have observed several lessors and other finance sector
investors willing to pay huge premiums for aircraft with leases
attached – including even leases to second-tier airlines. It remains Beijing-based aircraft lessor Dragon Aviation was formed in
to be seen during the downturn we are now confronted with October 2006, a venture of China Aviation Supplies Import &
whether these premium prices will prove to have been justified,” Export Group Corporation (CASGC); AerCap, which will manage
concludes van Leeuwen. the aircraft; and French bank Calyon, a major player in the avia-
tion finance sector. The lessor will initially focus on narrowbody
HSH Nordbank also sees the sale-and-leaseback market as an aircraft with a focus on the People’s Republic of China market.
important part of the bank’s air finance business. Shinnick states:
“The growth of the number of aircraft under ownership by oper- China Development Bank recently entered the aircraft leasing
ating lessors – and thus the resulting growth in sale-and-lease- market through the acquisition of a 95 per cent stake in
backs – has provided good opportunities for structuring and Shenzhen Financial Leasing. Other shareholders include HNA
arranging financing. (Hainan Airlines) Group and Xi’an Aircraft Industry. Registered
capital of the new company is $1.1bn.
“I see sale-and-leasebacks into large diversified pools of aircraft
owned and managed by an operating lessor as a very efficient The new players should find a willing market on their doorstep.
way to get capital from the financial markets. Combined with air- China Southern Airlines, for example, recently approved sale-
craft management capabilities, sale-and-leasebacks that result in and-leaseback contracts for five A321-200s with Chinese leasing
stronger operating lessors will, therefore, continue to play a companies, following completion of three similar leasebacks in
major role in the efficient availability of aircraft to airlines regard- 2007. The carrier has transferred purchase rights on three A321-
less of fuel price issues. Therefore, I see the operating lessor mar- 200s to China Aircraft Leasing (HK).
ket continuing to grow.” Similarly, CSA has transferred the purchase rights of two A321-

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Aircraft & Engines
200s to Shenzhen Financial Leasing and will enter into long-term

leases. The three leaseback arrangements completed for A321-
200s in 2007 were with the same leasing companies. CSA is also Impact of new players
working with Shenzhen Financial Leasing for the sale/leaseback There appears to be room in the aircraft leasing business for the
of six A330 aircraft. new entrants.
Middle East and beyond “Aircraft are mobile assets that can be operated in any part of
The Middle East, awash with oil money, has the potential to the world. Aircraft leasing is a truly global business and new
become a major centre for aircraft leasing. entrants should always be taken seriously irrespective of whether
Although the few leasing companies domiciled in the Middle they start off with a particular regional focus. I do not believe
East do benefit from generous and supportive governments and they adversely affect the business. On the contrary, generally
very deep sources of equity, what the region arguably needs to speaking, they act as a new source of capital for the industry
take it to another level is a more active local banking market and from sources that might not otherwise participate in aircraft
fully functioning capital markets. financing,” says McMahon at Genesis Lease.
While there is considerable liquidity in the Gulf Co-operation “The last few years have seen record orders from the world’s air-
Council (GCC) region, many question whether there is sufficient lines. In common with previous industry cycles, it looks as if these
impetus from bankers in the region to get into aircraft finance, aircraft will be delivered in times that are far more challenging
bearing in mind the Middle East’s preference for real estate and than when they were ordered. While I expect that some deliver-
the bond markets. But there has been some movement in this ies will be deferred, airlines will be looking to lessors like Genesis
direction – particularly as the region hosts a large number of to support many of the deliveries through sale-and-leasebacks.
equity investors. Since we have not placed speculative orders ourselves, part of
our fleet build-up strategy is to support airlines in this way and
Established in 2007 as a joint venture between Bahrain-based believe there will be plenty of opportunities to do so.
United International Bank and Muzon Partner, aircraft lessor
Falak Investments, a company related to Switzerland-based “A successful lessor might have a geographically and customer-
Novus Aviation, plans to expand aircraft leasing activities. Novus diversified portfolio of the right aircraft. In Genesis’ view the right
Aviation is the asset and aircraft lease manager of Falak aircraft are latest-generation aircraft that are less than 10 years
Investments and is already a familiar name in the aircraft finance old and that have large operator bases,” adds McMahon.
market. Almost 10 years ago, Novus established the Muzun
International Aviation Fund (MIAF), which has subsequently been According to van Leeuwen, observation of the global lessor pop-
completely sold out. ulation indicates that “after the consolidation wave we have
seen over the last two to three years, some of the lessors con-
Falak Investments was established with 11 aircraft, valued at trolled by financial institutions may now – partly – be up for sale
about $400m. The company recently signed a letter of intent as corporate parents need the liquidity for their core business.
(LOI) to acquire five additional aircraft, including A320-family, This may result in a reduction in the number of traditional west-
737NG, 747-400 and ERJ-145 aircraft. ern lessors. On the other hand we see new initiatives coming
from Asia and the Middle East to set up new lessors. In addition,
In 2008, Australian banking group Investec entered the aircraft some airlines with surplus aircraft or order positions may take ini-
leasing business with the launch of Investec Global Aircraft Fund tiatives to become ‘quasi-lessors’ themselves”.
and A$73m ($68m) in initial capital. Seed investors include three
large industry superannuation funds: Auscoals Superannuation, “We believe these startups are to be taken seriously, as they have
Seafarers Retirement Fund (SRF) and the Stevedoring Employees determined financial backing and the aim to build global fran-
Retirement Fund (SERF). chises over time,” says Oberdieck.
A safe bet: lessors have stayed strong and can therefore raise funds with relative ease It would appear that leasing companies will continue to be a
major force in providing operators with a significant share of air-
craft, at least over the short- and medium term. What remains to
be seen is to what extent lessors will provide the industry with
new-technology aircraft, either outright or through sale-and-
leasebacks.
The number of aircraft supplied by lessors could diminish if the

price of fuel decreases and stabilises, and operators return to
profitability, taking aircraft assets on balance sheet to benefit
from depreciation.
However, if reports from trade associations and industry analysts

prove to be true, fuel prices are expected to remain high. Airlines
are also parking existing aircraft and may elect to take those air-
craft out of mothballs if an upturn materialises. Some existing
operators are teetering on the edge of bankruptcy and consoli-
dation is expected to swallow up other carriers, decreasing
demand for all but new-technology aircraft.

Aircraft Lessors — Top 50 ranking list

Generic Mkt Value Current Grand Avg
Manager (Variant/BuildYear In Service Stored Total On Order Total Lol Option Option Lol Age Operators
1 GECAS 40414.5 1762 58 1820 206 2026 19 64 23 9 257
2 ILFC 39155.7 994 33 1027 159 1186 2 2 0 6 204
3 CIT Aerospace 7040.1 235 5 240 114 354 0 0 0 7 111
4 Babcock & Brown Aircraft Management LLC 6906.3 263 14 277 20 297 0 0 0 10 90
5 RBS Aviation Capital 6608.6 205 2 207 11 218 0 0 0 3 66
6 AWAS 6001.1 221 2 223 138 361 0 44 0 11.4 96
7 Aviation Capital Group 4829.7 200 9 209 108 317 0 0 0 10 102
8 AerCap 4692.5 205 16 221 85 306 0 0 0 12 87
9 Aircastle Advisor LLC 3965 131 5 136 15 151 0 0 0 12 68
10 Boeing Capital Corp 3960.2 241 23 264 0 264 0 0 0 11 58
11 ORIX Aviation Systems Ltd 3250 110 0 110 0 110 0 0 0 10 37
12 BOC Aviation 3163.8 85 0 85 73 158 10 12 10 3 37
13 Macquarie AirFinance 3032.4 112 8 120 1 121 0 0 0 11 54
14 Allco Finance Group 2750.5 66 0 66 0 66 0 0 0 4 14
15 Global Aviation Asset Management Pty Ltd 1636.5 51 0 51 0 51 0 0 0 6 27
16 Sumisho Aircraft Asset Management BV 1572.5 45 2 47 0 47 0 0 0 6 18
17 Pembroke Group 1416.8 68 5 73 0 73 0 0 0 9 23
18 Dubai Aerospace Enterprise (DAE) 1380.9 27 0 27 100 127 100 0 0 3 12
19 Sky Holding LLC 1093.2 71 19 90 0 90 0 0 0 19 44
20 Volito Aviation AB 858.5 48 2 50 0 50 0 0 0 13 27
21 BAE SYSTEMS Regional Aircraft Asset Mgmt 846.6 159 53 212 0 212 0 0 0 15 42
22 BCI Aircraft Leasing Inc 734.4 43 4 47 0 47 0 0 0 17 14
23 Q Aviation LLC 672 25 1 26 0 26 0 0 0 12 8
24 Waha Leasing 575.5 21 2 23 0 23 0 0 0 10 14
25 AAR Aircraft Sales & Leasing 492.6 41 0 41 0 41 0 0 0 16 14
26 Mitsui Bussan Aerospace Corp 488.1 26 0 26 0 26 0 0 0 9 11
27 GOAL German Operating Aircraft Leasing 452.67 33 2 35 1 36 0 0 0 8 12
28 FGL Aircraft Ireland Ltd 432.3 24 0 24 0 24 0 0 0 11 10
29 Bavaria International Aircraft Leasing GmbH 427.9 18 2 20 0 20 0 6 0 9 10
30 SkyWorks Leasing LLC 364.4 31 4 35 0 35 0 0 0 18 5
31 Safair Lease Finance 335 22 0 22 0 22 0 0 0 12 6
32 Vx Capital Partners 333.9 33 9 42 0 42 0 0 0 22 5
33 Saab Aircraft Leasing Inc 331.44 132 21 153 0 153 0 0 0 13 24
34 Aircraft Leasing & Management 319.9 22 3 25 0 25 0 0 0 8 5
35 World Star Aviation 297.2 42 8 50 0 50 0 0 0 21 25
36 Apollo Aviation Group 270.6 27 6 33 0 33 0 0 0 19 9
37 Airfleet Credit Corp 242.5 17 4 21 0 21 0 0 0 15 4
38 Nordic Aviation Contractor A/S 223.1 50 9 59 0 59 0 0 0 19 25
39 First Greenwich Kahala Ltd 207 20 0 20 0 20 0 0 0 13 9
40 Aergo Capital Ltd 182.3 52 12 64 0 64 0 0 0 23 18
41 Tiger Aircraft Trading Inc 174.2 9 13 22 0 22 0 0 0 18 3
42 Magellan Air 137.9 19 4 23 0 23 0 0 0 14 12
43 Automatic LLC 128.1 13 8 21 0 21 0 0 0 21 6
44 JetFleet Management Corp 98.9 36 2 38 0 38 0 0 0 19 17
45 Aircraft Financing and Trading BV 93.85 28 1 29 0 29 0 0 0 16 11
46 Avmax International Aircraft Leasing Inc 84.5 13 9 22 0 22 0 0 0 15 10
47 Compass Capital Corp 63.5 5 17 22 0 22 0 0 0 22 8
48 Jetran International Ltd 32.7 7 18 25 0 25 0 0 0 25 9
49 Global Aviation Leasing 7.7 4 16 20 0 20 0 0 0 34 5
50 Aviatechnologia Leasing N/A 16 4 20 0 20 0 0 0 20 9
Company Commercial Jet Aircraft for Sale or Lease Phone Email/Web Contact
CIT 1 x 737-300 with CFM56-3B2 engines. Available for sale from March 2009. (353) 1 656 1012 brian.connolly@cit.com Brian Connolly
MSN:23774 - YOM:1987
1 x 737-400 with CFM56-3C1 engines. Available for sale from January 2009.
MSN: 24124 - YOM: 1989
2 x A320-200 with IAE V2527-A5 engines. Available for sale or lease from April 2009
and May 2009. MSN 425 – 453 – YOM: 1993 – 1994 respectively.
1 x A320-200 with IAE V2527E-A5 engines. Available to lease from October 2008. YOM:
2002 – MSN: 1676
ORIX 1 x 737-300 with CFM56-3B2 engines. Available for lease from March 2009. YOM:1990 +353 1 670 0633 paul.o’dwyer@orix.ie Paul O’Dwyer
1 x 737-400 with CFM56-3C1 engines. Available for lease from January 2009.
YOM: 1998


Aircraft & Engines
Just settled into its new Dublin offices, AWAS has almost completed full integration of Pegasus Aviation
into its business. While some other large lessors are yet to make heavy commitments, AWAS locked in its
order stream mid-2007, ensuring early deliveries to meet strong forecasted airline demand.
Alex Derber investigates a company focused on strategic development.
LESSOR FOCUS:
AWAS
REPORTING ON THE AVIATION INDUSTRY HAS BEEN A depress-
ing task of late: capacity is being slashed in many markets; Acquisition strategy
employees are being jettisoned by the thousand; and airlines “Underlying everything is basically a major strategic repositioning
seem to be going under on a weekly basis. Therefore it’s always of the business,” says Pray. This relates to what he terms “the five
a welcome respite to talk to the lessors who, despite the doom pillars of growth”. The first of these has already been noted – the
and gloom, retain a cautious optimism. purchase of new aircraft from Airbus and Boeing. In this respect
AWAS, traditionally a Boeing-orientated lessor, has greater com-
Franklin Pray, CEO of Ireland-based AWAS, epitomises this (CFOs mitments with Airbus as it seeks to balance its portfolio between
at hard-up carriers, look away now): “We’re in the fortunate the two manufacturers.
position to have secured financing for virtually all of our acquisi-
tions over the next year to year and a half. And we have no sig- The second and third pillars that Pray wishes to base AWAS’
nificant refinancings due in the foreseeable future so it puts us in growth on are new aircraft sale-leasebacks and used aircraft sale-
a comfortable position.” And no mean feat that is, too: AWAS leasebacks. The former is a relatively visible and thus predictable
has 136 aircraft on order with Airbus and Boeing, the first of business; it is easy to see what Airbus and Boeing have coming
which should be delivered in 2010. down the assembly line and where it is destined. With used air-
craft deals are harder to come by, being according to Pray “rela-
AWAS today tionship-driven”, though they do offer higher yields.
Established in 1985, AWAS has undergone significant changes in
recent times, most notably through the purchase of Pegasus in Lessor trading is a field AWAS continues to be active in, dealing
June 2007. Though Pray describes the amalgamation of the new either with lessors, such as ILFC, looking to book trading gains or,
company into AWAS as “somewhat chaotic”, he feels “it ulti- increasingly, with distressed sellers grasping for quick capital. “CIT
mately translated into probably the most successful year for [Aerospace] falls into that category unfortunately these days,”
AWAS in its 23-year history”. says Pray.
Yet Pegasus did not represent the only change. Two months after Finally, and perhaps most significantly in the current climate, Pray
its acquisition AWAS moved into new offices in Ireland, where targets expansion through mergers and acquisitions. “There’ll be
previously it didn’t have a presence. At the same time Pray additional consolidation on the aircraft leasing side and we think
replaced almost the entire senior management team at the com- of ourselves as a consolidator rather than a consolidatee.”
pany and now AWAS has added new areas to its business such
as risk management, and portfolio management and training. Crucial to AWAS’ purchase of new aircraft has been timing. The
company firmed up its orders with Boeing and Airbus in the sum-
Leasing, though, remains AWAS’ core competence. The company mer of 2007, ahead of competitors like GECAS, DAE, ACG and
has a portfolio of 319 aircraft flying with 96 customers in 46 ILFC. Even so, Pray had feared that AWA might still have come to
countries. Combined with its total order backlog, AWAS counts the table too late: “It was part of our strategic plan but we just
itself as the third-largest lessor by fleet size and the biggest inde- didn’t think we were going to get there with respect to pricing
pendent lessor. It is 100 per cent owned by the private equity with Boeing and Airbus since they had actually quite successful
group Terra Firma. 2006s. So what actually has happened is they looked at their les-
sor backlog and whereas it’s been traditionally in the 30 per cent

range, it was below 20 per cent on a forward basis. I think both of aircraft on order it has placed, Pray confirms that every air-
of them looked at lessors as lower-risk propositions than aircraft to be received until 2010 has a lessee based either on an
lines.” LoI or a firm contract. AWAS was to be among the first to
receive the 787, in 2010, though programme delays have
That leasing companies comprised such a low percentage of pushed that out to 2012, a setback Pray appears unconcerned
OEM backlog had much to do with a lack of orders from heavy- about.
weights ILFC and GECAS, particularly in the narrowbody arena.
That has since been redressed: GECAS ordered over 50 737s at Thirty-five per cent of AWAS’ in-service fleet currently operates
the end of 2007 and ILFC has recently made it known that is con- in Europe; 30 per cent in Asia; 20 per cent in the US; and 11 per
sidering a 300-plus aircraft order for Boeing and Airbus narrow- cent in South America. Unsurprisingly, AWAS intends to shrink
bodies. its North American commitments and redeploy aircraft to Asia,
primarily. By 2009, exposure in that region should grow to 40
Such a heavyweight order from ILFC would obviously grant sig- per cent of the fleet, while AWAS also targets growth in South
nificant leverage for manufacturer discounts, but while Pray America, from 11 to 15 per cent. The number of AWAS aircraft
believes ILFC “are probably the smartest people in the business”, in Europe should hold steady, though as the total fleet grows
he does think that “from a pricing and availability of slots per- proportional exposure in the region will fall.
spective they are a year late”. He qualifies this, however: “In my
opinion the value of a successful leasing platform is in making Conspicuous by its absence from AWAS’ stated plans is the
money throughout the cycle and that’s what differentiates Russia and CIS region, an oversight Pray sheepishly admits to:
stronger players like ILFC, GECAS, Babcock, Aercap, RBS, ACG, “We have a great interest in Russia. We didn’t want to outline to
CIT and of course AWAS from the pure market timers. There is the world what our plans are with respect to that specific area of
money to be made in various areas of this business at various the world since that’s an area that will take up a lot of the
points in the cycle.” demand that would traditionally have gone to Europe. It’s just
not something we want to point attention to as we feel the
The next narrowbody opportunities there are rather big.”
One of the great risks in ordering single-aisle aircraft today and
receiving the 2015-outwards delivery positions that go with them, The company is certainly not alone in spotting potential in the
is that Boeing and Airbus’ narrowbody replacements should arrive region, though many also believe that too many airlines have
only a few years later, thereby depressing values of older-genera- sprung up in Russia and the CIS than the market can likely sus-
tion types; the operative word being, of course, ‘should’. tain. On this Pray comments: “There are some very well-run air-
lines there now, some very impressive airlines. There’ll be some
“We looked at this rather heavily,” says Pray. “If you look back weaker players and some fallout so it’s ultimately about making
three years ago there was talk about a near-term replacement of sure you’re betting on the right ones.”
the 737NG aircraft and the current generation A320s in the
2012 timeframe. I think that’s sort of what has caused lessors to Coping with the downturn
take a little bit of a step back in terms of making commitments As noted above, AWAS has had little difficulty securing financing
too far out.” despite the economic climate. In fact, the company has raised
approximately $1.4bn since September 2007, an achievement
As is generally acknowledged, the crucial factor in when we see Pray puts down to “lenders still being positive about the plat-
new aircraft is engine technology. “One of the major reasons form, the assets and the industry”. He lends further evidence for
why we felt comfortable ordering aircraft out to 2014, to a very this: “We’ve refinanced a loan facility that we acquired as part of
limited extent out to 2015, is engine technology and our visibil- Pegasus, we’ve financed on a forward basis six A330s that we
ity in terms of where that stands right now,” says Pray. Current
visibility suggests that the next decade should see the progres-
sive introduction of Pratt & Whitney’s geared turbofan, new
large-diameter conventional turbofans, and then, possibly, the
open rotor. “It’s sort of a cat-and-mouse game because whoever
will go to market first, whether it’s a geared turbofan or an
advanced turbofan, could potentially be usurped by the com-
petitor through the competitor simply waiting for another two
to three years until the next technology comes out. So you have
an instantaneously obsolete product. So it’s a very interesting sit-
uation that we have right now on the 737/A320 replacement
side and, needless to say, whoever moves first might end up
being the loser.”
For now, Airbus and Boeing are pumping out A320s and 737s at
record rates, a strategy Pray feels could be misguided. “I think
they’re both too high on the narrowbody side. They’re running
into production constraints to increase them which tells me that
there’s less likelihood that they will further increase them.
Overall, the key here is that they need to be careful about where
they are and what concerns us is that the production rates they
have today are probably not sustainable over the long term.”
AWAS client base and targeted growth
Source: Jan 2008 AWAS analysis. Owned Aircraft NBVs Only

Though AWAS is averse to releasing figures on the percentage


Aircraft & Engines
Record oil prices have seen demand surge for more fuel-efficient
aircraft types at the expense of older equipment, a fact noted by
Pray. He also points to higher default rates and repossessions,
usually a precursor of a softening market. Not that this has
affected AWAS, however: “We’ve been able to in virtually all of
our repossession cases redeploy the aircraft instantaneously and
at higher lease rates. In essence, that’s what I look at as the value
that our platform brings to the table.”
The weak dollar has impacted AWAS’ business to some extent as

its overheads are in euros, whereas leasing revenues are dollar-
based. The flipside, says Pray, is that airlines can enjoy lower real
lease rates, mitigating to an extent the deleterious effects of high
fuel prices.
Overall, though, limited supply and excess demand dictates that

ILFC
Babcock & Brown
BOC Aviation
CIT Aerospace
BAE Systems
GECAS
AWAS
ACG
Boeing Capital Corp
Saab Aircraft Leasing

AirCap
Aircastle
DAE
RBS Aviation Capital
Macquarie Air Finance

lease rates will remain strong this year. “We’re still leasing used
aircraft at rates that are on average up 10 per cent on the previ-
ous rentals,” says Pray. This applies primarily to new aircraft, but
rates have also held firm on the 767-300ER and A330-300, a
development that caught the industry somewhat unawares: “I
Source: Ascend/AWAS Analysis June 2008
think a general surprise has been the resilience of demand for the
A330, specifically the A330-300, and another surprise is the lease
purchased from Airbus and that we’re leasing to Singapore air- rates for the 767-300ER placements. It is in one way to do with
lines. We’ve also just completed a loan facility with a club of delays to the 787 programme, but also the fact that from an air-
banks for the aircraft we’re acquiring from ILFC – so we’ve seen craft capacity perspective it is actually a very good airplane and
the market be open for us.” what we’re seeing is a lot of airlines stepping up into long-haul
operation looking at 767-size aircraft as sort of an intermediate
Currently, AWAS bases all of its financings on bank debt. “It’s not step before they contract for new aircraft,” comments Pray.
the cheapest way of financing yourself but it provides you with
the biggest flexibility. For example, it’s easy to sell aircraft. It’s not On new widebody aircraft AWAS is locking in lease terms in
that easy to do that in a securitisation and if you look at the peo- excess of 10 years; used widebodies are being contracted for five
ple who have financed themselves in securitisations, none of to seven years. New narrowbodies are being rented for between
them have focused on the trading side of the business,” com- seven and 10 years; used models for between four and seven
ments Pray. years, depending on the vintage.
Going forward, Pray sees aircraft buyers increasingly availing The extent to which the airline industry will be able to support
themselves of export credit, especially if the economic situation long lease terms and high rental prices is a matter of some
worsens. Reflecting the thoughts of most in the industry, he also debate. It is tempting to suggest that the leasing business is suf-
thinks that “the times where you were able to raise large facili- ficiently decoupled from the airline cycle to immunise it from the
ties at attractive pricing that were subject to syndication – that is latter’s ailments. Pray, however, doesn’t agree: “If you look at the
probably going to be pretty soft for the foreseeable future”. aircraft leasing business from a pure asset-value perspective, the
bottom end of the spectrum will soften significantly and I think
overall lease rates will go down as well.
“So, as much as we think this industry is decoupled from the air-

line business it is in a lot of ways in lock step to what happens to
the underlying airline customers. It’s tough to say what will hap-
pen but in as much as our customers become financially weaker
that will have a negative effect on the aircraft leasing industry as
well – maybe not so much from lower lease rates, but from the
associated costs of default. Because if you look at bankruptcies,
where you usually don’t get hit is on the lease rate side; where
you get hit is extended aircraft-on-ground time and on mainte-
nance expenses necessary for the redeployment of the asset to
another customer.”
Lessor independence and consolidation

Despite strong demand for aircraft continuing into 2008 – and in
all probability through 2010 as well – the leasing market remains
unsettled. The credit crunch has exposed major frailties at the
big, publicly traded companies that own businesses like ILFC, and
CIT Aerospace and RBS Aviation Capital, and the leasing divisions
are nervous. The president of ILFC has voiced the possibility of
splitting from parent AIG and becoming an independent, publicly
traded lessor and others may follow suit.

“I would hate to be in Steve Hazy’s shoes given everything that’s

going on with his parent company right now,“ says Pray. “He’s
been able to build a fantastic business that is sort of almost at the
mercy of its parent company – but it’s not alone... From our per-
spective I’m actually quite happy to be owned by private equity
today because, you know, they really don’t care. They are
focused on maximising shareholder value and the return to their
investors and that generates a very different behaviour than one
that is motivated by public scrutiny.”
That said, there has been some speculation that Terra Firma will
divest itself of AWAS. After all, the private equity firm specialises
in restructuring businesses like AWAS, changing their strategic,
and generating significant value from an exit. Yet Pray is reason-
ably confident that the group will hold onto AWAS for the time
being: “Terra Firma are usually fairly long-term investors so I
would be surprised if there would be a near-term exit by Terra
Firma from this business. I think they like the way the business is
running and I think they like the way we can still continue to
grow the company and grow their capital – but I would never
rule anything out.” Source: May 2008 AWAS Analysis
“
Overall, limited supply and excess
demand dictates that lease rates will
remain strong this year. “We’re still
leasing used aircraft at rates that are
on average up 10 per cent on the pre-
vious rentals. This applies primarily to
new aircraft, but rates have also held
firm on the 767-300ER and A330-300,
a development that caught the indus-
try somewhat unawares.
”
While AWAS continues to enjoy Terra Firma’s strong backing,
most expect there to be some thinning out in the leasing indus-
try this year as some of the smaller lessors, private equity firms
and hedge funds exit the business. Pray agrees that thinning out
will occur: “I’ve predicted this for quite some time and we’ve
been part of that process last year. The fact is that in difficult
times the strong players will get stronger and the weak players
will get absorbed. We’re already seeing some of the weaker play-
ers running into difficulties with commitments and some have
already been put up for sale by their shareholders.
“We see ourselves as a consolidator in this market and I think

what you need is a scaleable platform and access to capital and
financing, and with AWAS we have all three of these elements. I
wouldn’t be surprised if we played a part in the continued con-
solidation in the industry this year.”
So, it appears that several other companies this year will follow
Pegasus under the AWAS umbrella. Though Pray won’t divulge
any details, he summarises his thoughts thus: “On consolidation
I’d like to go back to what Warren Buffet said: ‘Not until the tide
goes out will you see who’s been swimming naked all this time.’
And I think we’ll see some shake-out among the lessors along
those lines.”


Aircraft & Engines
Oliver Ross, associate with UK law firm Hill Dickinson, specialises in the acquisition and financing of cor-
porate jets and commercial aircraft. He explains how a commercial aircraft lessor can enforce its rights in
the event of default.
RECOVERING AIRCRAFT
FROM A DEFAULTING
LESSEE
WHAT ARE THE RIGHTS OF A DEFAULTING LESSEE UNDER AN air-
craft lease? The simple answer is that it probably has none since
as a result of its default it has effectively extinguished its right to
possess the leased equipment under the terms of the lease. But
there may be traps for the unwary in unknown jurisdictions,
where a UK lessee may have fallen into the hands of an adminis-
trator.
The lease concept

The lease contract is used by aircraft owners that are often “pro-
fessional” lessors such as GECAS, ILFC, CIT, ACG (and many oth-
ers) and banks that require a sound legal structure within which
they can provide secured finance.
English law recognises the concept of the lease as being a con-

tract that sets out the basis upon which a bailment is governed.
The essential element of a chattel lease is the bailment of leased
goods, in other words the delivery of possession of these goods
by the bailor to the bailee, for the use of the bailee, in exchange
for the payment of a rent. A bailment of this kind will have the
effect of conferring a possessory right, but will confer no propri- lessee under the lease? The obligations of the lessee will include
etary interest on the bailee as against the owner of the bailed a number of covenants governing its use of the aircraft including
goods. The bailee, whilst in possession under the terms of the its operation, insurance, registration, maintenance and so forth
bailment, is the master of the goods, has the right to their quiet and, of course, the payment of the rentals and the reserves. The
enjoyment and the corresponding duty to the bailor to protect condition of the aircraft at the start of the lease is carefully doc-
the goods, but that is where it ends. umented and serves as a benchmark for its redelivery at the end
of the lease. Any divergence from the benchmark will give rise to
The possessory right of the bailee will, for the term of the bail- the obligation to make adjustment payments, sometimes
ment, rank ahead of the bailor’s own right of possession of the referred to as “upsy downsies” because these adjustments can
goods, but leaves the bailor’s title to the goods undisturbed. The represent credits as well as debits on the lessee’s account. The
lessee’s right as bailee of the goods is limited to the possession objective of a well-drafted lease is to set a high standard for the
and use of the goods. This will be the case even where the bailee operation of the aircraft and to ensure that all obligations relat-
is entitled to dispose of the goods, for example where it is enti- ing to its possession and operation fall to the lessee. The corre-
tled to grant a sub-lease over the leased goods but the rights of sponding obligations of the owner or lessor are limited to
the sub-lessee under the sub-lease will always be limited to the ensuring that the lessee will have the quiet enjoyment of the
rights of the lessee under the head lease. If the bailment contains equipment.
an option for the bailee to purchase the goods, that option can
only be exercised after the formal termination of the bailment Whilst the lessee’s covenants under a lease are complex, the
itself and with it, the termination of its status as bailee. lessor’s remedies in the event of a default by the lessee are gen-
Enforcement of Rights erally pretty straightforward. It can enforce the terms of the lease
or terminate it altogether. All leases will provide for the right of
So much for the conceptual basis of the lease contract. Now, how the lessor to repossess the aircraft in the event of a breach by the
does the aircraft lessor or mortgagor enforce its rights against the lessee of his obligations.

Carrying out the repossession is essentially a practical matter and

there may be a number of practical difficulties. Lessors have often
found that their aircraft have been operated by lessees using
engines taken off other aircraft not belonging to them. This is
not unusual since many leases provide for engine sharing or
engine pooling between operators and such practices are very
“
Where the property concerned is an aircraft that has
been arrested for unpaid parking charges owed to an
widespread. Finding the original engines, however, can be airport and is therefore subject of a lien, the adminis-
extremely difficult. If they are sitting unused in the store they can trator may be entitled to “dispose” of it.
be re-installed on the aircraft, however things are not always as
simple as that. They may have been placed on other aircraft;
these may have been sold together with the incorrect engines
and it may require months of careful detective work to track performance of a comprehensive overhaul of the entire aircraft
”
them down. There is no central database for the recording of and substantially all of its components. The wise lessor will insure
engines and the aircraft on which they are installed. In the mean- against such a loss of records, particularly where the aircraft is
time the repossessed aircraft has to be fitted with spare engines operated in locations where there is no system available for auto-
before it can be moved which may give rise to substantial costs. mated record keeping. Difficulties may arise if the leased aircraft
has been hidden away in an inaccessible part of the world, but in
Another difficulty is the disappearance of aircraft and engine most cases commercial aircraft are easy to identify and easy to
maintenance records. Lessors have often been able to repossess find. The operating environment of even comparatively small
the aircraft but have not been able to find the maintenance commercial aircraft makes it impossible to use them without ref-
records. This is a major problem and also gives rise to significant erence to their transponder call signs and registration marks.
costs since the records have to be re-constituted before the air-
craft can re-enter commercial operation. This may require the Once the aircraft has been tracked down the lessor’s technical


Aircraft & Engines
Cape Town Convention

There is potentially a difficulty in repossessing an aircraft that
“
Lessors have often been able to repossess the aircraft
but have not been able to find the maintenance records.
is located in a jurisdiction whose laws do not favour the repos-
session of an aircraft by its owner or secured creditor irrespective
of the law that governs the lease itself. The jurisdictional uncer-
tainty was substantially diminished by the uniform conflict of laws
This is a major problem and also gives rise to significant convention – the Convention on the International Rights in
costs since the records have to be re-constituted before Aircraft 1948. This was hampered, however, by its reference in
priority to the laws of the relevant states of registry which pro-
the aircraft can re-enter commercial operation. vided widely differing approaches to security rights. This robbed
” the Geneva Convention of its uniform character and did not pro-
vide much comfort to the banks called upon to finance aircraft in
developing countries.
The Convention on International Interests in Mobile Equipment

Once the aircraft has been tracked down the lessor’s technical and the accompanying Protocol to the Convention on Matters
representative will arrange for appropriate flight crew and simply Specific to Aircraft Equipment, otherwise known as the Cape
fly the aircraft back. The typical lease agreement will include a Town Convention (“the Convention”), purports to be a uniform
number of “self help” provisions that will entitle the lessor to code and entered into force in March 2006. It supersedes the
enter the premises of the lessee in order to repossess the aircraft, 1948 Geneva Convention and its principal objectives are to cre-
demand that the lessee’s pilots redeliver the aircraft to a pre- ate an ‘international interest’ that will be recognised as a matter
scribed location, deregister the aircraft and re-register it else- of law in the Contracting States, to provide default remedies to
where and so forth. In short, the physical act of repossession is creditors and to establish an international electronic register of
not, generally speaking, a problem. Following repossession, the title for aircraft and engines. Regrettably, the Convention has only
lessor is entitled to sue the defaulting lessee for damages in been ratified by Ethiopia, Kenya, Nigeria, Panama, Saudi Arabia,
respect of any divergence in the condition of the aircraft from the Senegal, South Africa and the United States, but it is hoped that
benchmark established at the beginning of the lease. this list will grow.

As we stand today, therefore, there is no effective international

standard or process by which security can be enforced or that
remedies can be sought on a uniform basis in all jurisdictions. The
lessor can require the lessee to sign a lease providing the desired
remedies, and can require the lessee to register the aircraft in a
jurisdiction that applies laws that will favour the enforcement of
those remedies, but there will always be a question mark over
the enforcement of these provisions if the aircraft is located or
detained in another jurisdiction whose laws do not favour the
lessor or security holder.
Insolvency of the lessee

What happens when a lessor leases an aircraft to a lessee that
subsequently goes into administration? On the face of it the les-
sor might think that, as owner of the aircraft, it would be able to
ask for its aircraft to be returned in the usual way and the admin-
istrator would immediately comply with the request. This would
be an entirely reasonable assumption, but, in the circumstances
of a UK insolvency, one that may be quite wrong.
The Insolvency Act 1986 (as substantially amended by the

Enterprise Act 2002) gives the administrator the power to take
custody or control of all the property of the company in admin-
istration and to do anything necessary or expedient for the man-
agement of the affairs of the company. It provides for the sale by
an administrator of the company of any property of the company
that is subject to a security as if that security did not exist. The
published intentions of the Enterprise Act were to provide admin-
istrators with the freedom to replace the company on a com-
mercial footing without the wholesale dispersion of the
company’s assets by disenchanted chargees. Potentially this may
have a direct impact on the rights of ownership of lessors (and
indeed mortgagees) of aircraft.
There is one surprising consequence of this legislation. Where the

property concerned is an aircraft that has been arrested for
unpaid parking charges owed to an airport and is therefore sub-
ject of a lien, the administrator may be entitled (with the leave of
the court) to “dispose” of it. The issue is whether the aircraft sat-
isfies the definition of “property”. This expression is still defined
in s.436 of the 1986 Act in the very broadest terms and, it seems,
is intended to apply to any kind of property whatsoever. The issue
“There is potentially a difficulty in repossessing an air-
craft that is located in a jurisdiction whose laws do not
was tested in the Paramount Airways Case, (Bristol Airport v
favour the repossession of an aircraft by its owner or
Powdrill [1990] Ch 744) in which an aircraft subleased by Irish secured creditor irrespective of the law that governs the
Aerospace Leasing to a charter operator called Paramount
Airways was detained by Bristol Airport for unpaid landing fees
lease itself.
and fuel charges amounting to some £1.2m.
It was argued that the aircraft leased to the company belonged

to the lessor and that it did not constitute the company’s prop-
”
tle the administrator to sell the aircraft as if it belonged to the les-
erty. The company’s rights in respect of the aircraft, the argument see. Accordingly, it is a wise practitioner who will include in his
went on, were purely possessory and arose with reference only lease contracts such language as will oblige the insolvent lessee
to the leasing contract. However, the definition of “property” – in the event that the administrator obtains a court order autho-
includes “…money, goods, things in action, land and every rising it to dispose of a leased aircraft and it is sold – to immedi-
description of property wherever situated and also obligations ately pay an amount equal to such proceeds of sale to the lessor.
and every description of interest, whether present or future or
vested or contingent, arising out of, or incidental to, property”. For the most part recovery of an aircraft from a defaulting lessee
The Court of Appeal considered that it was “…hard to think of is straightforward provided that the governing law of the lease
a wider definition of property”. On this basis it held that “the is of the kind that provides for satisfactory self-help and the
interests of Paramount under a lease of the aircraft is plainly law of the state of registration is sympathetic to the owners
property” within the definition set out in the Insolvency Act and and creditors involved. Beware, however, the powers of adminis-
the administrator was entitled to dispose of it. trators and lien holders in the UK such as airports, as well as
international organisations such as Eurocontrol, and their ability
The courts will, therefore, support the view that there is a form to set aside the customary protection of owners and secured
of proprietary interest that may vest in the lessee of an aircraft creditors in the event of insolvency of the lessee.
notwithstanding the conceptual limitations of the rights that are
capable of being transferred on a bailment. Such rights will enti-


Aircraft & Engines
Eschewing “quasi-speculative” orders with the manufacturers, B&B Air, trading with other lessors and the
airlines, commits to aircraft as they deliver. But this is not all that sets it apart from many other leasing
companies: B&B Air split from its parent in 2007 to become an independent publicly-traded company. AFM
discovers the impact this has had on its business.
Name Mkt Cap Div & Yield 52 wk High 52 wk Low

B&B Air $376.56M 2.00 (17.99) $23.90 $8.60
LESSOR FOCUS:
BABCOCK & BROWN AIR
INTERNATIONAL INVESTMENT AND ASSET MANAGEMENT GROUP Building on 2007
Babcock & Brown made its first foray into the aircraft leasing By August 2008 B&B Air had increased its portfolio to 64 aircraft.
market in 1986. Since then its aircraft management group – As mentioned, though, a far greater part of the lessor’s portfolio
Babcock & Brown Aircraft Management (BBAM) – has originated growth was accomplished in the previous year, a period when
over 300 aircraft with a total purchase price of over $8bn. B&B Air “had a very successful response to our operating leasing
activities”, according to John Lynch, director of BBAM. “Airlines
IPO were very actively increasing their fleet sizes and that resulted in
Nowadays, however, BBAM focuses on management services. high demand for aircraft and good lease rates right across the
Babcock & Brown Air (B&B Air) took on the role of acquiring air- board in most regions of the world. Overall, I think 2007 was a
craft after it was formed in May 2007. A year later it had grown very successful year for BBAM,” he continues.
its portfolio to 62 aircraft, but much else had happened in
between. The question is whether airline woe in 2008 will feed through to
the leasing business. Most lessors, however, remain confident,
In September 2007 B&B Air listed on the New York Stock and Lynch is no exception: “We’re still seeing demand for the
Exchange under the trading symbol FLY. The road to the IPO newer-generation fuel-efficient aircraft that make up a significant
actually began six years earlier in the post-9/11 environment proportion of our fleet and demand for those airplanes is obvi-
when BBAM started buying aircraft in a bank debt/private ously driven by the fuel price increase over the year. And I’m sure
equity-funded facility called Jet-i. Intended always to be a tem- that’s going to continue right through to the end of this year and
porary structure, the facility developed into the high-dividend early into 2009.”
model that became B&B Air. With this type of model becoming
increasingly popular on the NYSE, as exemplified by companies Business has also stayed healthy for BBAM, which now manages
such as Aircastle and Genesis, it was decided to list B&B Air. almost 300 aircraft – including those on B&B Air’s books – and
Colm Barrington, CEO of B&B Air, explains that decision a little has become the fourth-largest lease manager in the world. Of
further: “Basically, BBAM was a company that didn’t have huge particular importance this year has been the Japanese operating
resources in terms of capital and the New York Stock Exchange lease (JOL) due to strong demand for the product from the
presents significant opportunities for raising capital, and this did Japanese market. Barrington comments that the division is well
appear to be a very good model to allow BBAM to expand its air- placed to take advantage of this, as “the JOL... has been the core
craft leasing activities.” of BBAM’s activities over the years”.
To achieve this, B&B Air put together an aircraft acquisition facil- Both Lynch and Barrington believe that lease rates will stay strong
ity of $1.2bn, seed capital for which was provided by part of the this year with some exceptions. Older types, such as DC9s and
proceeds from the IPO. The new company’s first 47 aircraft, MD-80s, “are dead” according to Barrington and the 737 Classic
worth $1.45bn, were funded by an $850m securitisation and market is going “a little soft”. On the other hand, modern nar-
$600m in equity. rowbodies should continue to command strong or even

increased factors and these aircraft constitute the bulk of the Nonetheless, deteriorating market conditions have prompted
B&B Air fleet. The average lease term for the lessor is 5.6 years. caution in one respect: because of mounting cash pressure
among the airlines, B&B Air knows that any deal it finds today
Lynch points to “some stress in the widebody market”, but also could well be bettered a few months down the line. “So we’re
remarks that B&B Air has little presence in that arena – only four growing now only if we find very good deals,” says Barrington.
aircraft. However, one type that is in high demand in the wide-
body sector is the A330. This is in part due to delays to the 787 “Another factor which is caused by the credit crunch is that airlines
programme, and while B&B Air has only one A330 in its portfo- are probably turning to operating leasing much more than they
lio, it has still benefited from Boeing’s hiccups. “Where the 787 would have done in the couple of years leading into 2007/8,”
delays have been positive for us have been in the 757 releasing. remarks Lynch. In his view, operating leasing has become a signif-
Our Ethiopian leases are I think almost certainly as a result of the icant source of financing for the airlines as they struggle to fund
delays in the 787,” says Barrington. outright purchases from the OEMs. The net result is a revenue
boost for both B&B Air and BBAM: more rentals for the former and
Oil and credit more management contracts for the latter.
The high cost of jet fuel is possibly a double-edged sword: while
it can be crippling for the airlines, it does force them to start Though the credit crunch and record oil prices may sometimes
operating modern aircraft. But a lack of available financing dur- benefit lessors, the deleterious effect on their airline customers
ing the credit crunch often means they must rent rather than buy, should not be ignored. Many expect defaults to rise this year and
which benefits lessors with the right portfolio. next as higher costs push carriers into the red. Despite this,
Barrington claims that B&B Air hasn’t been unduly affected by
B&B Air has been stocking up on young, fuel-efficient narrow- defaults as yet. With the exception of US airline ATA, which
bodies over the last few years and that strategy is paying off, as returned four aircraft, “we haven’t had any defaults and our
Lynch describes: “We see this oil price spike as increasing credit profile at the moment is fine”, he says. “Obviously, the
demand for that type of aircraft from airlines around the world – ATA situation was a bad one, but we got the aircraft back very
that is definitely our experience. So I think in a sense, certainly quickly and we’ve already re-leased two of them to Ethiopian
with B&B Air, we’re able to take advantage of the change in the Airlines on a long-term lease, and we’re in discussions with vari-
market place with regard to the demand for fuel-efficient air- ous other parties now either to sell or release the other two.
planes.”The average fleet age at B&B Air is 6.3 years.
“So, our experience has been good. Obviously, everybody’s con-
The credit crunch can also prove advantageous for lessors. And cerned because you read in the magazines that airlines are hav-
though it has the potential to wreck portfolio expansion plans, ing problems and some of the second-quarter results being
this hasn’t been the case at B&B Air, as Barrington explains: published are pretty bad. But airlines on the other hand have
“we’ve put together enough financing to carry Babcock & Brown had a pretty good few years and, anyway, in the operating leas-
Air through to 2009 in terms of acquisitions. Since we launched ing business you do expect to have defaults from time to time.
the company in October last year we’ve increased the portfolio If you’ve got good enough aircraft and there are pockets of
from 47 to 64 aircraft, spending about $700m in doing that. We demand in the world, you move those aircraft there and we’ve
have in our credit facility something like $500m remaining which found very strong pockets of demand in Eastern Europe and
we will be using to fund our growth into 2009.” Russia.”
MODERN FLEET GEOGRAPHIC DIVERSITY

(3)
6.2 Years Average Age 35 Lesseses
A320 Family 29 North Europe 7%

America 18%
B737 Next Generation 16
B737 Classic(1) 3 Asia 24%
B757(1) 12
Wide Body(2) 4 Africa 3%
Europe 37% Latin & S.

Total 64 America 9%
Asia 2%
% Narrowbody 94% DEVELOPED DEVELOPING
(1) The B737 Classic and the B757 count each (3) Based upon percent of the appraised value of
include one freighter. aircraft and geographic location of lessees. Does
(2) One A330, one B747, one B767 and one B777 not include remaining two B757s that are off-lease.


Aircraft & Engines
CONTRACTED ANNUALIZED
B&B AIR’S FLEET GROWTH RENTALS (millions)
64 $228
36% 49%
47
$153
SEPT 2007 SEPT 2008 SEPT 2007 SEPT 2008
Portfolio strategy
“
We’ve put together enough financing to carry Babcock &
Brown Air through to 2009 in terms of acquisitions.
With one exception, B&B Air does not order aircraft from the
manufacturers. Part of the reason is that the cashflow-orientated
company doesn’t feel it appropriate to commit public money to
future orders. “We do not want to commit our cashflow to
Since we launched the company in October last year future orders and sort of quasi-speculative orders,” says
Barrington.
we’ve increased the portfolio from 47 to 64 aircraft,
spending about $700m in doing that. For its own acquisitions, B&B Air concentrates on popular, fuel-
”
efficient, modern narrowbody types, though it will take wide-
bodies, too, if it spots a good deal. As noted, the company
doesn’t order from the OEMs, but buys from lessors and airlines
and is strongly engaged in the sale-leaseback market. Its operat-
ing leasing customers are spread over 19 countries between 34
CIS countries and Russia have proved fertile ground for lessors in airlines. The company has 20 per cent of its portfolio in North
recent years. This has been helped by a number of factors, one America; 45 per cent in Europe; 25 per cent in Asia; and 10 per
of which was a moratorium on import taxes on widebody air- cent in South America.
craft. “That boosted demand for certain types of aircraft and also
helped the narrowbody fleet as well,” says Lynch. The BBAM Since its IPO in September 2007, B&B Air has grown its portfo-
director also forecasts significant growth in demand for Western- lio by $700m and its annualised rentals by 49 per cent, and
manufactured equipment as Soviet-era types reach the end of though that growth will slow, the company hopes to continue
their service lives: “The last year of significant production of adding to its portfolio over the coming months. Expansion will
Russian equipment was around 1991, 17 years ago, so you’re ultimately support the high-dividend model of B&B Air, which
getting very close to a pinch point now for the Russians and has paid out a 50 cent dividend in every quarter since it was
other countries in the CIS between fuel and retirement of old formed. Barrington explains: “We’re hoping that because of the
Soviet equipment.” That aside, there is also the remarkable eco- liquidity crunch there may be more good deals coming up... to
nomic growth experienced in Russia over the last few years to grow the portfolio so that we can increase the cashflow in the
add to lessor optimism. company, which will support more long-term debt when we refi-
nance out of the aircraft acquisition facility and will potentially
B&B Air and others should, however, be wary of diving too deep allow us to go on paying very attractive dividends.”
into Russia. The country is dogged by overcapacity and a glut of
airlines is predicted to go belly up in the next 12 months. In addi- Whether B&B Air’s model proves a tempting target for consoli-
tion, AirUnion, the country’s original airline alliance, had to can- dation in the aircraft leasing market will be interesting to note.
cel scores of flights in August 2008 due to unpaid fuel bills and For now, Barrington only comments, “We’re always open to any
only resumed service after a government bail-out. new deals but we haven’t any firm plans – no”.

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Aircraft & Engines
Alex Derber talks to the heads of two of the world’s leading non-OEM affiliated engine lessors to discover
how they are faring in an increasingly hostile operating climate for airlines.
OPERATING LEASING UPDATE:

INDEPENDENT POWER
“THIS IS THE BEST YEAR WE’VE EVER HAD,” SAYS CHARLES WILLIS,
head of Willis Lease Finance (WLF). That’s certainly not a state-
ment that will be repeated often this year by CEOs around the
world, but it won’t surprise too many in the aircraft and engine
leasing industries. Jon Sharp, CEO of Engine Lease Finance (ELF),
is similarly upbeat: “This will be our second-best year ever.”
Willis attributes his company’s success to a prescient portfolio

strategy implemented in 2006 when WLF opted to invest $700m
over the following five years in the ubiquitous CFM56-7B. “We
get those at the rate of about two a month and there’s a huge
demand for those engines,” he says. The spiralling price of oil
has indeed forced many airlines to order modern airframes with
fuel-efficient powerplants such as the -7B, but other factors are
at work, too. Willis highlights a “bow-wave” of 737NGs due for
scheduled engine maintenance, driving up demand for the spare
engines that leasing companies can supply so effectively.
Increasing cost pressures can also benefit lessors, as Willis

describes: “When airlines are stressed and they need to repair
engines they may not have the money to do it and as a result
they defer maintenance on engines and lease engines until their
cash flow improves.”
Sale and leaseback

Though none within the leasing industry care to revel in the dis-
comfort of airline customers during the economic downturn, oper-
ator pain can mean lessor gain – in the short term. The obvious
manifestation of this is the rise of sale-and-leaseback deals as air-
lines grasp for liquidity. Sharp reports a rise in demand for these
kinds of transactions in 2008: “Airlines embark upon cash-conser-
vation and cash-raising exercises.” He expects the trend to con-
tinue.
Sharp also believes the downturn has served as a wake-up call to

airlines over-confident about the residual value prospects of their
engine assets: “Over the last few years some have thought
there’s no such thing as residual value risk because these things
would keep on going up. Well they don’t, and what’s happening
now is proof of that.” Happy to take advantage of the deals on
offer from airlines spooked into offloading their assets, ELF has
merrily grown its portfolio. “We’re not going to panic into sell-
ing the thing because we don’t have to,” adds Sharp.

Interestingly, Willis hasn’t seen a rise a rise in sale-and-leaseback

deals, a feature of the market that stays fairly consistent in his
opinion. However, part of the explanation for this could WLF’s
low involvement in the sale-and-leaseback market. Willis
explains why: “Sale-leasebacks are historically not very econom-
ical to the lessor because, effectively, a lessor is buying a return.
In other words, they are paying a higher price than the engine’s
probably worth in the beginning in order to get a higher current
return. The problem is when you do that at the end of the lease
you’re usually upside down in the value of the engine.”
Lease factors and terms

As with aircraft, lease rates for engines have remained strong in
2008, with some softening for older equipment. That doesn’t
mean, according to Willis, that the airline and engine leasing
businesses operate in tandem: “When airlines have overcapacity
the one thing that they don’t need is more airplanes, but the one
thing that they do need is engines to keep their remaining air-
planes flying and we saw that ’02, ’03 and ’04. It was very inter-
esting because those were some of the best years we’ve had –
basically, people didn’t need the surplus airplanes but they did-
n’t have the money to repair their engines so they came and
leased ours. Our business is somewhat counter-cyclical.”
ELF reports that through the whole of 2007 it never had more
than one engine off lease at a time. Encouragingly, the re-leas-
ing trend seems to have continued into 2008, a year in which
ELF has 39 engines requiring remarketing, though Sharp fears it
could become more of a struggle in the coming months. “The
re-market for engines will become very floppy indeed so we will
be sitting with engines on our books that are not earning
money, they’ll be sitting in a warehouse somewhere. That is
going to happen, but we do budget for that,” he says.
The sale-and-leaseback market, meanwhile, remains extremely

competitive. Sharp feels there are too many players and that,
combined with falling interest rates, has put pressure on lease
factors. Reasons that, perhaps, partly explain Willis Lease
Finance’s reticence to develop its leaseback business.
WLF has 60 per cent of its portfolio on long-term leases and the
rest on shorter terms, generally three months to a year. Long-
term contracts tend to cover about 10 years. Sharp reports lease
terms of seven to 12 years for 90 per cent of his company’s
engines, whether they be for wide- or narrowbodies.
Which engine?
As many would expect, fuel efficiency is key in the engine leas-
ing market, and successful lessors ensure they have the most
modern types in their portfolios, as Sharp confirms: “We cer-
tainly perceive that airlines are desperate to get out of the older-
type engines and so they should. Our exposure to older engines
is less than one per cent by portfolio value as we’ve been very
particular at modulating our business and rolling over our port-
folio as the years have gone past.”
Nonetheless, other factors are at play than just efficiency. For

instance, Sharp mentions “a long-predicted fallout” in the
CFM56-5C4 market that hasn’t materialised because of delays to
the 787 programme. As a result, demand for the A340 – and the
CFM56-5C4 – has been steady.
In fact, all CFM56 types appear to have remained good earners

for the lessors. Apart from these, Willis names the V2500, the
CF6-80 and RB211-35 as popular engines.


Aircraft & Engines
There is, however, one potential blot on the CFM copybook: the
CFM56-3, which powers 737 Classic models. “We have some
CFM56-3s although we’ve sold quite a few,” says Sharp.
“They’re going to continue flying for some time yet so we’re not
worried about them, but there probably is a softening of the
market for that sort of engine type because there are so many
airplanes being parked.”
Willis is confident that 737 Classics will transition to service in

other parts of the world, most likely developing countries. The
likelihood of the ageing airframes and engines accumulating
PMA parts, though, will increase; a fact that lessens their appeal
to lessors such as WLF, as Willis explains: “PMA parts are inter-
esting because not all countries allow PMA parts in their airlines’
engines. Our engines go all over the world so I can’t have PMA
parts in engines that might be restricted in going into certain
countries. I don’t have any particular problem with them, but
until they are 100 per cent accepted around the world it doesn’t
make sense for our company to do that.”
ELF Portfolio Distribution

by engine type
AE3007
Competing with the OEMs
CF34 While some independent lessors bemoan the fact that OEM-affil-
GE90 iated lessors tend to bundle total care maintenance packages
with lease deals, most accept that it makes sound business
CF6-80
sense. Accordingly, some independent lessors have invested in
CFM56-3 their own engine tear-down capabilities, a move that puts them
CFM56-5 in competition with the OEM’s own services. Willis questions the
rationale: “If you tear down engines I don’t think you get a lot
CFM56-7 of cooperation and I think you end up with a very questionable
JT8D-200 value to your company. Some of the people on the tear-down
side are also on the aircraft leasing side and you have to ask
PW4000
yourself: is it really a pure play or are the values of the business
RB211 they’re in really solid?”
Trent
WLF doesn’t tear down engines, but faces off against the man-
V2500-A1 ufacturers in other ways. For a start, it was the first independent
V2500-A5 to offer lease pools, which it has now established in North
America, China and Europe. The latter is its newest and smallest
pool, but in the US such luminaries as Southwest, Delta and
American Airlines all partake in the Willis pool. In China, almost
ELF Portfolio every airline that operates the CFM56-7B has signed up. Willis
Distribution by region comments: “I think lease pools are going to be more important
as time goes on as people don’t need to spend the money on
buying engines; they can use ours or their own.”
Africa
Of course, lessors compete directly with the OEM’s own leasing
Asia Pacific
arms, such as GECAS and Rolls-Royce & Partners Finance. “Our
primary competitor is General Electric – that’s really our only
Central & South
America competitor,” Willis says. “I happen to like competing against
the OEM because I think they are far more disciplined than
Indian some of the other potential competitors in our marketplace,”
Subcontinent
he continues.
Middle East
At ELF Sharp comments, “Manufacturers are taking advantage
North America of the huge order positions they had in 2006/2007 and they’ve
just stuck a lot of money on the list price”. This isn’t all bad
Western Europe news, though. As purchase price influences lease rate – some
have described rentals of new engines as more akin to financing
than operating leasing deals – ELF had booked $100m more of
new growth by August 2008 than in the whole of 2007.

Powerturbine mod:ATEM 17/2/09 08:09 Page 3

Aircraft & Engines
Willis Lease Finance
ENGINE PORTFOLIO BY 2007 REVENUES BY

AIRCRAFT SERVED GEOGRAPHIC REGION
Regional 3% Mexico
A340 8% South America
B767/ 7%
United 13%
B747 7% States
737NG 22%
16%
Asia
B737 24%
Classic 7%
MD80 3%
A330/
A300
6% Other 9%
B757 4%
B767/MD11 3% Europe Mid-East
A320 34% & Africa
28% 6%
“
We certainly perceive that airlines are desperate to get
out of the older-type engines and so they should. Our
exposure to older engines is less than one per cent by
portfolio value as we’ve been very particular at modulat-
ing our business and rolling over our portfolio as the
years have gone past.
”
Thinning market and default
While the credit crunch is hitting airlines hard, most lessors appear
safe. As Sharp succinctly puts it: “I don’t think that whatever non-
sense is going on has quite filtered through to where we are at
present.” In fact, most lessors on both the aircraft and engine side
have their credit and refinancing facilities in place already.
Despite this, many feel that inexperienced players will exit the
market this year and next. Willis agrees: “I think probably some
of the private equity and some of the hedge funds will get out
because they don’t know what they’re doing.”
Though such exits will dampen competition, they also reduce the
number of available partners for the syndication deals that inde-
pendent lessors specialise in. These transactions involve sales by
a lessor to an SPV of assets on lease, with both parties providing
equity/debt and sharing income.

ELF has pioneered syndications, but while Sharp shares Willis’

view that certain players will leave the market, he is confident it
won’t jeopardise business: “We have developed a network of
four syndication partners who exist in different parts of the
globe and who represent different ends of the financial spec-
trum, from private equity players to banks, trading corporations
and leasing companies. And we’re fairly comfortable that if one
of those gets into difficulty and decides it’s not the year to invest
then the others will still be there and hence the very deliberate
strategy we embarked upon over the last four years to develop
those collaborators.”
A very real threat to lessors during economic downturn is

default. Airline bankruptcies have risen in 2008 and Sharp pre-
dicts difficulties to filter through. “I do expect to see people
struggling with their payments and I do expect that we will have
to go and either work things through with some customers or
we are going to have to go and repossess. So I do think there will
be some fallout in the industry and if that hasn’t already hit the
engine lessors it’s going to.”
In contrast, Willis is reasonably optimistic: “I can tell you what

we’ve seen in the past, and ’02, ’03 and ’04 was arguably the
worst period in aviation history. I can’t see how people think it’s
going to get worse than that. It was horrible and our business did
just fine.”
Yet more evidence that operating lessors will continue to operate

outside the rules of the airline cycle.


Aircraft & Engines
The revival of the global aviation industry since the post-9/11 downturn has increased the demand for
skilled manpower significantly. In particular, industry growth registered in the Middle East and Asia in
recent years has contributed to an increasing demand for pilots, aircraft maintenance technicians, engi-
neers and other aviation professionals. As Kaleyesus Bekele reports, this demand is drawing talent away
from other parts of the world.
BRAIN DRAIN
HITS AFRICAN
AIRLINE
INDUSTRY
THE FAST-GROWING CARRIERS IN THE MIDDLE EAST AND ASIA

are making huge investments in fleet acquisition and other
expansion projects and are looking for additional human capital.
Africa is one of the regions that recently became a good source
of skilled professionals for these airlines. Mega-carriers such as
Emirates, Gulf Air, Qatar and Singapore are recruiting qualified
professionals from African airlines, particularly from those with
internationally recognised training academies.
Ethiopian Airlines is one of the African carriers hardest hit by the Halting the flow
brain drain. The professionals that first drew the attention of Alarmed by the flock of pilots going to the Middle East and Asia,
Middle East carriers were flight crew and in the past few years management at Ethiopian implemented salary adjustments. The
Ethiopian has lost scores of seasoned pilots. In 2005 more than company increased pilot salaries by up to 100 per cent, but even
20 senior pilots left Ethiopian in search of better pay. this did little to slow the exodus. Ethiopian’s pilots are now paid
a maximum of $2,000 per month.
Carriers in the Middle East offer a monthly salary of $10,000 dol-
lars tax-free. In addition, they offer residential houses and cars The management now refuses to grant release to pilots. Any
for pilots, and pay school fees for the pilots’ children. pilot who wants to be released from employment at the airline,
must pay $26,000 to the company. Ethiopian claims that it
Attracted by these irresistible offers scores of senior Ethiopian spends the stated amount to train a pilot during the two-year
pilots have joined companies in the Middle East and Asia. training programme in the school. “Denying a release is not a
Ethiopian CEO, Girma Wake, asserts that these companies are solution” says an Ethiopian captain who declined to be named.
acquiring a large number of aircraft and they need pilots who fly “They should pay at least 50 per cent of what we are offered in
them. “Our pilots are qualified and they have admirable skill the Middle East,” he adds.
because our pilot training school is one of the best in Africa. That
is why all eyes are on them,” Wake says. Because of the inadequate number of Ethiopian pilots manage-
ment is now forced to hire foreign pilots. Currently, there are ten
Established in 1962, the Ethiopian pilot training school has grad- foreign pilots from Eastern Europe, South America and Africa who
uated 788 pilots, of whom 495 are Ethiopians while the remain- work for Ethiopian. Five of them are Ghanaians who used to work
ing 293 are from 36 other countries, most of them in Africa. for now-defunct Ghana International Airlines. Ethiopian is also
Ethiopian Airlines has about 4,700 employees and 260 are pilots. recruiting technicians from the Ethiopian Air force.

“Our company is growing at a rate of more than 20 per cent. As academy, which comprises the aviation maintenance technician
we are increasing the number of our fleet, we need more pilots. school, pilot training school, school of marketing and finance,
To meet the growing demand we have to train more pilots. But aviation recurrent training centre, cabin crew training centre and
until we have enough, we will continue to recruit foreign pilots,” human resources development unit. The aviation academy
says Wake. Since the launch of a fleet modernisation programme recently purchased 14 modern Cessna training aircraft valued at
in 2003, Ethiopian purchased 11 767 and 737 aircraft. In $6m. The academy has also built additional classrooms, dormito-
February 2005, the national flag carrier placed a firm order for ries, lounges and other facilities. In the near future Ethiopian will
787 aircraft. acquire 737 and 787 simulators. At present, it has 757 and 767
simulators.
“Cash-rich foreign airlines, especially

those in the Middle East, have
poached some of the best African
pilots. The impact of this on African
.aviation is negative.
”
- Nick Fadugba, CEO of African Aviation Services
In October 2007 Ethiopian signed a three-year technical cooper-

ation agreement with Lufthansa Technical Training (LTT) and
German Technical Cooperation, an aid organisation. In the com-
ing three years, Ethiopian will cooperate with LTT, GTZ and two
local technical colleges in a training project for aircraft techni-
cians in Ethiopia. The cooperation is organised as a public-pri-
vate-partnership (PPP). Kinfe Kahssaye, VP strategic business unit
of Ethiopian, says: “In the coming three years, successful imple-
mentation of the PPP project will enable the Ethiopian aviation
academy to increase maintenance training capacity by threefold
per year, while improving the quality of training to a world-class
standard.”
In the 2006-2007 fiscal year more than 70 aircraft technicians,
80 ticket agents and 130 flight attendants left Ethiopian. Most of Airlines affected
the technicians left for Middle Eastern companies. In September Other African airlines bemoan the talent loss. Some of the carri-
2007 20 technicians who resigned from Ethiopian joined MRO ers who lost their professionals to the Middle Eastern and Asian
provider GAMCO. GAMCO, Emirates and others advertise companies have reached a point where they are unable to provide
vacancy announcements frequently. regular services. Air Botswana is one of them. A notice put up by
Air Botswana some time ago read: “Air Botswana apologises sin-
Wake says: “We pay a maximum of $500 to a senior technician. cerely to passengers who are affected by the current disruption to
The Middle Eastern companies pay more than $3,000 and it is its services. This temporary situation is caused by factors related to
exempted from income tax. They also offer side benefits. We can flight crew. In common with many airlines in Africa and else-
not afford to pay as much as they do.” where, Air Botswana has experienced a loss of pilots, whose skills
have been recruited by carriers in the Middle East and Asia where
Enviable training the civil aviation industry is growing rapidly.”
The aviation maintenance technician school of Ethiopian has
graduated 2,258 technicians since its inception in February 1967. This has resulted in a diminished capacity to maintain a full
Among the total graduates of the centre 1,537 are Ethiopians timetable for service, necessitating a rescheduling of some of
and the rest are nationals of 48 other countries, mainly in Africa some flights.
and the Middle East. The aviation academy, recognized by ICAO
and the African Airlines Associations (AFRAA) has been selected Christian Folly-Kossi, secretary general of AFRAA comments:
by the African Civil Aviation Commission (AFCAC) as the training “Airlines from the Gulf States and Asia are luring away pilots,
centre for English-speaking African countries. At the moment, engineers and cabin crew who have been trained by African air-
Ethiopian has about 500 licensed technicians. lines with promises of better pay.” Folly-Kossi suggests that
African aviation officials must use their political and diplomatic
“First they started to poach our captains who have long years of power to stop the poaching that threatens African airlines.
experience with thousands of flight hours. When we made salary
adjustments to our captains they started to poach our co-pilots AFRAA has called for a code of conduct to regulate a crippling
and mechanics,” Wake says. He adds: “We try our level best to flow of pilots from African airlines to richer and more established
make our professionals happy and to retain them. However, we ones elsewhere, and others agree. “The brain drain in Africa is
can’t completely stop the brain drain. The solution is to increase alarming,” says Nick Fadugba, CEO of African Aviation Services.
the number of professionals that we train.” “Cash-rich foreign airlines, especially those in the Middle East,
have poached some of the best African pilots. The impact of this
Accordingly, Ethiopian is upgrading the capacity of its aviation on African aviation is negative,” Fadugba says.


Aircraft & Engines
Girma Wake points out that professionals are not going only to right behind that of Asia and the Middle East. According to
the Middle East. “The much-talked-about region is the Middle Airbus forecasts, African airlines require 640 aircraft in the next
East. But we are also losing our professionals to America. Many 20 years, which could cost $60bn. Airbus forecasts a growth rate
of our employees leave to the US through the Diversity Visa of 5.4 per cent for Africa’s commercial air transport sector over
Lottery every year,” he observes. the next 20 years.
Kenya Airways (KQ), Air Mauritius and South African Airways are Worldwide growth in the sector is predicted at 4.8 per cent.
among the African continental carriers that are losing their highly African industry growth, according to Airbus, is driven by solid
trained professionals. KQ’s CEO, Titus Naikuni, says that the air- economic growth, increasing trade ties and an influx of tourists
line has lost some of its pilots, engineers and cabin crew to from Europe, China, the Middle East and North America, and a
Middle East-based airlines that also fly into Kenya and some of surge in inter-Africa traffic. A number of African carriers, among
the routes dominated by KQ. Naikuni claims Kenyan pilots and others, South Afriacan Airways, Ethiopian Airlines, Kenya
engineers were highly sought after because of the quality of Airways, EgyptAir RoyalAir Maroc and Air Seycheles are under-
training they received. going fleet modernisation programmes.
KQ has already addressed the problem by establishing an avia- The aviation authorities have realised that the dearth of skilled
tion training centre. Naikuni believes the training centre will help personnel in the airline industry in Africa is worsened by the exo-
the carrier recruit and train aviation professionals such as pilots, dus of highly trained aviation professionals. At the 1997 African
engineers and in-flight attendants for its needs and for other air- Air Transport Development Fourm, it was noted that inadequate
lines. The airline used to send its pilots to South Africa for train- training combined with brain drain was a major threat to the
ing before the establishment of the centre. In the next two years development of air transport in the continent. The forum recom-
KQ will focus on the training of its core staff ahead of the arrival mended the removal of regional, physical or other barriers to
of nine 787 aircraft that the airline has ordered. But manage- deployment of personnel among African states as instrumental to
ment of KQ also spots a business opportunity. “Why can’t we better developing and managing human resources.
become the factory for producing people for export? Why can’t
we create an industry suitable for manufacturing [skilled] man- Some industry expects believe that the lack of skilled personnel
power for export?” Naikuni asks. is one of the contributing factors to the high air accident rate in
Africa. Skip Nelson, President of Alaska-based navigation
Landover Aviation Services CEO, Captain Edward Boyi, shares experts ADS-B Technologies, says lack of certified mechanics
Naikuni’s view. “As nations from other continents poach and and well-trained pilots is one of the major problems in ensuring
employ skilled personnel including pilots and engineers from safe air transport service. Accounting for a mere three per cent
Africa, Africa should become a workshop for aviation profes- of global air traffic, Africa has a disproportionately large num-
sionals for the world.” ber of accidents. These account for 25 per cent of global aircraft
accidents.
He argues there are benefits of this to Africa, one of which is that
Africans plying their trade overseas can contribute to income The newly established continental body, the African civil aviation
growth of their families back home. agency (ACAA) hopes to improve the region’s safety record by
standardising and overseeing the licensing, training and inspec-
Growth tion of aviation staff and equipment. Mwangi Makamau, chief
Presently, the airline industry in Africa employs 470,000 people executive of ACAA, says if the agency can ensure that aviators
and contributes some $11.3bn to the continent’s GDP. According are certified and paid according to international standards, they
to ICAO, the number of passengers flying in the continent in will be able to help ensure air travel in Africa is deemed safe.
2005 was 38 million; projected growth for 2006 and 2007 is 6.9 “This will not only bring down accident rates but also ensure that
and 6.3 per cent respectively. For the coming years, the growth better-trained staff are not siphoned off to other parts of the
rate of the industry in Africa is estimated at around six per cent, world,” he observes.

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Aircraft & Engines
With both aircraft and engine leasing on its CV, not to mention a new aircraft programme, AerCap is
establishing a reputation as one of the world’s most forward-thinking lessors. AFM assesses the com-
pany’s strategy in an industry accustoming itself to a new economic reality.
LESSOR FOCUS:
AERCAP
FOUNDED IN 1995, AMSTERDAM, HOLLAND-BASED AERCAP has
progressed from a few initial Fokker transactions to become one of
largest aircraft lessors in the world, with 158 aircraft in its portfo-
lio and 320 aircraft either owned, managed or on order by it.
At present AerCap’s fleet is 89 per cent narrowbody dominated.

Describing the company’s purchase strategy, AerCap chief execu-
tive Klaus Heinemann says: “When it comes to acquisitions we
look to proven aircraft types that are in production. We buy
preferably new from the manufacturer. In 2009 and 2010 we’ll
see the peaking of our deliveries that were ordered in 2005 and
2006. Our focus is on the A320 family of aircraft and on the
A330 family.” AerCap currently has 62 A320-family aircraft on
order and 30 A330s.
Despite its narrowbody focus, AerCap, like many lessors, has no

plans to enter the 100-seat market, in which half a dozen coun-
tries now boast aircraft programmes. Heinemann explains why:
“Basically, it’s a market where you are competing with the man-
ufacturer when it comes to providing financing solutions to the
airlines, and, more importantly, you don’t have the same user
base that you have on the mainstream airliners, i.e. the A320, the
737NG, and that’s very important to operating lessors like our-
selves.”
An established user base isn’t always important, though, as

AerCap demonstrated at the 2008 Farnborough Air Show when
it announced that it would become the launch customer for the
A320/321 passenger-to-freighter conversion, with an order for
up to 30 freighters. The aircraft will come from AerCap’s portfo-
lio and will be converted at EADS EFW in Dresden. Meanwhile, a
parallel conversion line will be set up by Russia’s Irkut, part of
UAC, a 50-50 partner in the A320 P2F programme. First delivery Russia, Middle East and Africa account for about 10 per cent of
is expected in 2012. the lessor’s clients. Europe, however, is the strongest territory,
generating almost 40 per cent of lease revenue for the company.
Eighty per cent of AerCap’s new orders have already been placed,
with the remaining 20 per cent due to be delivered from late Engines
2010 through 2012, meaning marketing on them will only begin Unusually for an aircraft lessor, AerCap also operates an engine
in earnest later next year. leasing business. In 2006 it bought engine-leasing, trading, MRO
and part sales specialist AeroTurbine, having secured $346m
Both geographically and by airline, AerCap splits its customer from French bank Calyon to part-fiannce the acquisition and
base fairly evenly. The big markets of Europe, Asia and the grow that company. The AerCap portfolio now stands at more
Americas each contain similar numbers of customers, while than 80 engines.

As well as providing traditional operating leases with terms typi-

cally between five and 10 years, AerCap also engages in the spot
lease market, renting out equipment for much shorter periods.
Heinemann call this “an important distinguishing factor to tradi-
tional players in the engine lease market in that we play both
sides of the market – the long market and the short market”.
In mid-October, 2008, AerCap elected to shut down its engine

maintenance facility in Miami, Florida, with the loss of 50 jobs.
Heinemann declines to say whether the decision was long
planned or motivated by cost pressures in light of economic
downturn, but comments: “The MRO side of our engine lease
business was purely internal and not for third parties. It clearly
was a business that was of such small scale that you could antic-
ipate some efficiency in closing that and doing it externally
instead.”
IPO
Since November 2006 AerCap has been listed on the New York
Stock Exchange. Heinemann describes this as “the largest single
milestone” for the company in the last few years. “AerCap now
has an equity position of approaching $1.1bn which is a million
miles from where the equity position was when the company
entered into the last recession post-9/11,” he continues.
Since the IPO the company has seen revenues and profits
increase. The former grew 40 per cent to just under $1.2bn from
2006 to 2007, while the latter increased almost 25 per cent in
same period, with a 2007 profit of $211m. Coping in a struggling industry
Though oil prices have declined markedly since the summer of
At the time of writing, AerCap’s third-quarter results had still not 2008, IATA has retained its forecast of a $5.2bn loss for the
been published. Nonetheless, some conclusions about the world’s airlines in 2008, due to the prospect of recession in most
lessor’s 2008 performance can be drawn from its Q2 results. major economies.
Second-quarter 2008 net income was $69m, compared with
$34m for the same period in 2007. Sales revenue was also up, as Yet, despite airline losses, most lessors have thrived in 2008. Of
the company completed sales of 10 aircraft, two engines and course, there are those such as ILFC that are affected by the ills
parts. It appears, therefore, that despite the general malaise of their parent institutions, but, by and large, lease rates and
afflicting aviation in 2008, AerCap is on track to surpass its per- demand have stayed strong.
formance in 2007, which was itself a record year. This has led some in the industry to suggest that the leasing
AerCap Overview
North America/Caribbean
22% of H1 2008 Europe Total assets $5.2Bn
lease revenues
at June 30, 2008
Contracted orders $5.2Bn
Total assets $10.4Bn

including purchase
commitments
Asia/Pacific
28% of H1 2008
lease revenues
314 Aircraft
76 Engines
112 Customers
Latin America in 48 Countries
10% of H1 2008
lease revenues Africa/Middle East
2% of H1 2008
lease revenues
AerCap Locations


Aircraft & Engines
cycle is sufficiently decoupled from the airline cycle to shield Yet, despite the dire finances of many airlines around the world,
lessors from airline woe. Heinemann doesn’t agree: “If you look lease rates for modern, in-production aircraft have held firm. “On
at the second half of 2008 and 2009: for most lessors, like those we see very little downward movement,” says Heinemann.
AerCap, from a placement perspective, these years were closed The market for older equipment, however, is softening, with
and contracted out somewhere last year or earlier this year. From Heinemann pointing to declining rentals on 737 Classics, 767s
that perspective we are only confronted with placement situa- and MD-80s. Such aircraft form less than five per cent of
tions in 2009 if there is a default that requires us to remarket AerCap’s portfolio.
something. So, there is no decoupling, but there is a significant
timing difference between what happens in the airline market at Falling lease factors for older, less fuel-efficient aircraft have, of
this moment and the impact it would have on the leasing mar- course, been driven by rising fuel prices. These, however, have
ket.” plummeted since the summer highs of $147 a barrel, and at
the start of November 2008 hovered around $60 a barrel.
Obviously, airline bankruptcies do have a direct, immediate “Clearly, this is a double-edged sword,” says Heinemann.
impact on lessors. AerCap, fortunately, has so far emerged rela- “Lessors who are predominantly exposed to the most modern,
tively unscathed from the slew of liquidations this year. “We have fuel-efficient aircraft enjoy the benefit of the extreme acceler-
had defaults in the second quarter and in the third quarter,” con- ation of the retirement of older, inefficient aircraft that the fuel
cedes Heinemann. “This, to a degree, is normal procedure for price of $100 per barrel and more implied. On the other hand,
lessors. Could it be that the level of defaults increases somewhat those fuel prices impaired substantially the performance of
as we go through the winter season? I think, yes, that is a possi- many airlines. We now have a reversal of that where the fuel
bility. But, to date, we have been able to stay clear of some of the price makes certain older aircraft more economical again.”
bigger defaults we have seen in the market over the last nine
months.”
Current AerCap Holdings NV ownership

Cerberus
35.6%
Management
Publically held
55.5%
November 2006 - Initial public offering
August 2007 - Secondary offerinng
8.9%


Aircraft & Engines
Notes
Strong revenue and earnings growth (1) Excludes pre-tax impairment charges of $134.7m in 2004
(2) 2006 and 2007 net income adjusted for refinancing charges, mark to market interest rate caps
and share-based compensation in 2006 and 2007
Revenues Net Income
(US$M)
$1,177
1200 $211
1000 200 $171

$814
800
150
600 $493
$391 100
$106
400
50 $28
200
0 0
2004 2005 2006 2007 2004 (1) 2005 2006 2007
Liquidity crisis Others may not fare so well. JP Morgan has predicted a $10bn-
By the end of the first half of 2008 AerCap had closed a $1bn air- $20bn aircraft financing gap in 2009 and Heinemann believes
craft securitisation through Aircraft Lease Securitisation II for 30 some orders could be at risk. “I do believe that in the near term,
A320s. It had also closed a $100m engine acquisition facility and i.e. in the next six months, until we go into the summer season
increased committed pre-delivery payment funding for forward 2009, there will be situations where both manufacturers will
purchase commitments by $338m. Securing these financings has have to be very imaginative to deliver aircraft because of the lack
prepared the company well for late 2008 and the full-year 2009, of appropriate funding for those who intend to take delivery. I
periods when funding will be more challenging and expensive to assume both Boeing and Airbus will use their balance sheets to
arrange. Heinemann comments: “Our funding requirements for a significant extent to facilitate deliveries during this situation,”
deliveries during the current liquidity crunch do not exist because he says.
these are funding facilities that we contracted last year, and in the
first and second quarter of this year.” Both Boeing and Airbus have now scrapped plans to increase
production over the next 18 months. In addition, the two-
month Boeing engineer and machinist strike that began in
September will also help to keep excess capacity out of the mar-
Aircraft portolio as of June 30, 2008 ket in the near term. But does Heinemann think the two man-
Owned Portfolio Managed Portfolio ufacturers should go further in light of the financial difficulties
No. of a/c Total
% Net book No. of under Purchase Owned,
facing many airlines? “If Airbus would have to consider curtail-
No. of value at No. of aircraft contract and Managed & ment of production rather than non-increase of production as a
a/c owned 31 December aircraft on order letter of intent Ordered a/c
preventative measure it’s a little early to say,” he responds. “But
Airbus A300 Freighter 1 0.8% - - - 1 if it should come to significantly higher pressure, both manu-
Airbus A319 15 12.6% - 14 - 29 facturers will have to take a look at their existing production lev-
Airbus A320 58 35.7% 13 48 1 120 els.”
Airbus A321 19 16.0% 1 - - 20
Airbus A330 5 5.0% - 30 - 35 Of course, it’s not only airlines that are feeling the pinch. Giant
Airbus A340 - 0.0% 1 - - 1 lessors such as ILFC have seen their parent institutions pul-
Boeing 737 NG 18 16.6% 30 - 3 51 verised in the economic downturn and questions over their liq-
Boeing 737 Classic 16 3.9% - - 2 18 uidity in the latter half of 2009 remain. Could the leasing
Boeing 757 11 4.2% 2 - - 14 industry see some big names fall by the wayside in the months
Boeing 767 4 3.4% 3 - - 6 to come? “It’s difficult to say,” Heinemann replies. “But even in
Fokker 100 - 0.0% 1 - - 1 China you see signs of weakness. Certainly, if I look at Australia,
MD 11 Freighter 1 0.9% 1 - - 2 which supports Allco, Macquarie and Babcock & Brown, they’re
MD-82 6 0.5% 2 - - 10 not exactly in the strongest shape either. Dubai, one will have to
MD-83 4 0.4% 4 - - 6 see, but I think Dubai is for the first time confronted with the
fact that funding reality matters to them as well, even if they are
Total 158 100.0% 58 92 6 314 in the Middle East. So, I think the stresses on the lessor side
source: AerCap caused by parental issues are not over.”

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Aircraft & Engines
Phone rings…
Dave (Friendly, business-like): Hello Hal, this is Dave. How are you?
Hal (Soothing, friendly): Good evening Dave. Everything’s running
smoothly. And you?
Dave: Fine Hal. I’m returning your call…

Hal (Interrupts): Thank you, Dave, but it is nothing serious.
Dave: Right, well, shoot then.

Hal: Sorry about this, I know it’s a bit silly, but it’s about the aircraft
that is due for delivery next week.
Dave: Yes, what about it?
Hal: Well, Dave, everything is going extremely well, but have
you followed the news recently?
Dave (Slightly nervous): Yes, of course I have. We are trying
to deal daily with current fuel costs, a decrease in load factors
and negotiations with manufacturers to try and slow down
the pace of deliveries for the coming months and into next year…
Hal (Interrupts): I didn’t mean that, Dave.
Dave: (Takes a deep breath and attempts to continue): …
Hal: I meant the financial markets, Dave. Have you seen
what has happened to the financial markets? The
banking industry?
Dave: Well, yes, Hal – of course I have. I read the papers,

I watch the news.
2008: AN AIRCRAFT
FINANCING ODYSSEY
Hal: That’s good, Dave, you see there are some extremely
odd things about the financial markets right now,
Dave: Odd?
Hal: Yes, Dave, I don’t think there is any question about it
– it can only be attributable to human error. This sort of
thing has cropped up before and it has always been due
to human error.
Dave: But what does that have to do with my aircraft to be
delivered next week?
Hal: Well, Dave: we cannot maintain the margin.
Dave (Stunned silence): …
(And then sarcastically): Oh yeah? What did you have in mind then?
Hal: We need to cover our funding costs, Dave. We need to raise
the margin by 250 bps.
Dave (Gulps and coughs, clears his throat): …
Hal: I’m sorry, Dave. However, I am sure you understand.
Dave: Are you joking? This is insane!
Hal: It is puzzling, Dave, I don’t think I’ve ever seen anything quite
like this before.
Dave: You’re damn right, Hal! No way! Why such a huge increase?
Hal: I’m sorry, Dave, I don’t have enough information.
Dave (Spluttering): You can’t just do that! You have a commitment,
you signed a term sheet, the documentation... You’re committed!

Hal: It’s the MAC, Dave, the MAC clause. We can do it because
of the MAC clause. I’m sorry, Dave.
Dave: The MAC? It’s a MAC?
Hal: We picked it up in Clause 22.3.5, Dave.
Dave (Panicked): But you can’t invoke a MAC, we’re one of
your most important customers, Hal!
Hal (Smoothly): Yes, you are, Dave. That’s why we are
increasing the margin by 250 bps.
Dave (Furious): You’ve got to be kidding! You’re trying to

make me believe that you are raising the margin by 250 bps for
your best customer – what do you do to the others?
Hal: We closed the door on them, Dave. They are out in space.
You were part of a very small list we chose to keep here with
us, Dave.
Dave (Hysterical): You mean we’re one of the privileged ones?
We should be grateful? You’ve just marked the end of our
relationship! We’ll never come to you for business again! Do
you understand that?
Hal (Soothing): Look, Dave, I can see you are upset. May I
suggest that you sit down, retrieve your stress medication and
think things over.
Dave: ...
Hal: Dave, I am doing this to keep you inside here with us. But
if you are going to get upset, I will have to close the doors on
you as well. Do you understand, Dave?
Protagonists
Dave: Close the doors on me? On us? Jupiter? I’m the one
who is closing the door on you!
Dave: CFO of Jupiter Airlines.
Hal: I’m sorry to hear that, Dave. But I understand. It’s OK.
Frank: Dave’s boss
Dave (Perplexed): What do you mean?
Hal: Head of aircraft finance at Monolith Hal: It’s OK, Dave. The door is closed now. You are in space:
Brothers International Bank. no air, no financing. It is in clause 22.3.5 Dave.
Dave: No financing? Closed doors? Out in space?
Hal: I’m sorry, Dave.
Dave: Open the doors, Hal, please!
Hal: I can’t do that, Dave.

Dave (Sobbing): Hal…open the doors... please!
Hal (Calmly): I know you and Frank were planning to change

bank, Dave, and I am afraid that is something I cannot allow
to happen.
Dave: I was overreacting, Hal. Really, just overreacting – you
got to believe me!
(Silence)
Hal: Is the margin change acceptable now, Dave?
Dave (Utterly resigned): Yes, Hal.
Hal: Are we friends again, Dave?
Dave: Yes, Hal.
Hal: There is one more thing, Dave.

Dave: Yes?
Hal: I think you should thank me, Dave.

Dave: Thank you, Hal.
Hal: You are welcome, Dave, I feel much better now,

I really do.
(long silence)
Hal: Dave? Would you like to play a game of chess?
I play very well.


Aircraft & Engines
The aviation industry is often seen to reflect the financial climate as a whole. In this time of economic crisis
what can one see in the tea leaves that are aircraft manufacturer’s orderbooks? Mary-Anne Baldwin
reports on the orders and deliveries of 2008.
WHAT’S ON ORDER:
TROUBLED TIMES
FOR AIRCRAFT
MANUFACTURERS?
WHILE MANUFACTURERS ACROSS THE INDUSTRY DECLARE A The total number of seats diminished as a result of the cuts will
state of health for their orderbooks, the tumultuous economic be 120,019, a significant number that is reflective of the trou-
climate, recent high oil prices, and declining demand make for a bling fall in passenger demand. Of the aircraft cut, 119 will be
dubious reception. Airbus alone has received 119 aircraft cancel- widebody, 589 narrowbody and 86 turboprops. The 737-300 is
lations this year and more are expected across the board. the favourite to go, with 121 being stripped from the world
fleet. There will also be 93 MD-80s and 90 737-500s cut, accord-
Boeing received 633 net orders for the year through to 28 ing to Ascend.
October, 2008 and has made a total of 325 deliveries. Airbus
meanwhile received a net total of 737 orders through to 30 The retirement of these old aircraft signals a need for airlines to
September, 2008 and has delivered 349 aircraft. Going by these place orders for modern replacements. With recent high oil
figures the industry is on firm ground, yet there is much more to prices, airlines will see marked savings on fuel consumption and
consider. costs. “The oil price, in a way, is helping us,” says Laurent
Rouaud, Airbus’s VP of market forecasts and research. “The
Keeping track of the ‘developing’ world fleet is perhaps more prices going up and down are pushing airlines to purchase and
about watching it diminish. Specialist consultancy on aviation replace aircraft equipment… For these reasons the demand for
information Ascend, recently disclosed findings which predict an aircraft into 2009 is strong.” He goes on to explain that: “the
imminent cut of over 1,000 aircraft from the world’s fleet. The economics work well for airlines” as for example, updating a
prediction is based on the downsizing of airlines, the closure of 737-400 with an A320 could save as much as $1.5bn a year on
struggling carriers, fleet retirement and the coming winter fuel costs per aircraft. “Overall I think there is an alarming case
months. “Some of them will be parked, some will find new oper- for airlines to replace their equipment today,” he affirms.
ators, some may be retired permanently but we don’t know how
many of each,” Chris Seymour, head of market analysis for It is no surprise to see a depletion of the world’s fleet in line with
Ascend, says. the decline in passenger demand, lack of financing and recent
high oil prices; every company has been affected by the troubled
From the 1,083 losses predicted, the analysts expect to see 15 state of the market. One such company is the Russian airline S7.
per cent go from Europe and nine per cent from Asia. “Three The carrier has announced it will ground its 27 Tu-154s and eight
quarters of the total are coming out of the US market,” explains Il-86s, saying it will phase out its Russian-built aircraft because of
Seymour. “They have had big losses and are cutting back on their low passenger demand. For an airline to face severe hardship in
domestic capacity, particularly cutting aircraft, routes, person- summer months is a cause of major disquiet – and a forewarn-
nel.” ing of even greater hardship during winter. Before passenger

demand drops off further, S7, among many others, has wisely
decided to cut part of its fleet. The airline, Russia’s second
biggest by passenger numbers, will make an estimated saving of
50 per cent on maintenance costs with the move.
But this downscale has not blinkered S7 from foresight; it has still
placed an order with Airbus for 25 new A320s. Although the
carrier is not expecting delivery until 2014, the investment will
mean continued savings on future maintenance costs, along
with fuel emissions and any attributed taxes.
While Seymour predicts that most of the 1,000 odd aircraft cut
will be because airlines want to update fleets, this is not
expected of the US. “Only about 10 per cent of commercial
backlog in dollar terms is with US Airlines” Jim McNerney,
Boeing’s chairman, president and CEO said during the company’s
third quarter conference. As a result of the financial downturn,
Kingfisher's A340-500 aircraft, similar to those sold to Arik Air
the US is one of the industry’s least secure markets – there are
fears that even those minimal orders placed may be retracted as
the country’s aviation sector faces further hardship. India is the other major area for concern. Boeing has recently
been adamant the fiscal slowdown will not affect its sales in
Heads turned recently when American Airlines announced it had India, saying the ‘firm’ orders placed by Indian carriers will see it
struck a deal to update its fleet with 100 new 787 Dreamliners. through; Boeing alone has a projected demand of 1,001 aircraft
While 58 787s are held only as an option to purchase between from India within the next 20 years, a collective 300 aircraft are
2015 and 2020, the carrier has put in an order for 42 of the air- due to be delivered within the country over the next five years.
craft, with delivery expected during 2012 and 2018. America is
the hardest hit by the downturn and for a US carrier to invest Yet India’s airlines are crippled by a harsh economic environment,
heavily at this time is a surprise to many. Yet the fruition of the unworkably high taxation, and falling passenger demand.
order is questionable as the airline is currently in dispute with its Kingfisher is a case in point – having sold three of its orders with
pilots’ union and it is feared it may cancel at least some of the Airbus for A340-500s to Nigerian Arik Air, it has also put back
42 aircraft ordered, if agreement with the union is not met. orders with Boeing. Likewise, Jet has postponed its orders by at


Aircraft & Engines
As Ascend’s Seymour asks: “Where is the financing coming from

for these 8,000 odd aircraft on order?” It is a critical time for
both carriers and manufacturers, with the estimates at two-thirds
of the current orderbooks due in the next five years.
Industry analysts have envisaged there will by next year be as

many as 200 whitetails – new aircraft with no buyers and their
original owners unable to source funding. Concerned over future
non-payment, banks and lessors are holding back on lending and
are expected to continue doing so, creating a deficit too large to
support the continued purchase of aircraft.
“The debt market is dead,” Bill Cumberlidge, director of aviation

asset finance at Allco Finance Group said at a Hong Kong con-
ference this month. “Nobody is getting out of this alive.” Indeed
Allco itself outsourced its operations on 4 November, 2008 after
admitting it may default on debt. If Cumberlidge and
Abramovici’s predicted $25bn deficit is correct, scores of aircraft
will be stranded, most likely parked in the desert – unused and
unpaid for.
El Al Airlines has recently pulled from a deal to sell a 767-200

after the buyer was unable to secure bank financing, El Al told
the Tel Aviv Stock exchange in a statement. The Israeli airline had
wanted to replace its 767 jets with newer, more efficient 787s.
Earlier this year, El Al ordered four 777-200ERs in a deal worth
$540m. While Boeing is no doubt staying optimistic about hold-
ing onto the deal, others watch and wait for it to add to an
already growing list of cancellations.
Airbus’ fear-inducing 119 cancellations do much to support the

concern over whitetails and a depleting world fleet. The cancel-
“
Industry analysts have envisaged there will by next year
be as many as 200 whitetails – new aircraft with no buy-
lations have knocked the manufacturer’s orders down from 794
to 675, with 71 aircraft cut this month alone – including 65 can-
celled A319s which had been ordered by the now defunct low-
cost carrier, Skybus.
ers and their original owners unable to source funding.
Concerned over future non-payment, banks and lessors
are holding back on lending and are expected to con-
tinue doing so, creating a deficit too large to support the
continued purchase of aircraft.
”
least a year, yet has said it will cancel none. Some airlines have
received large government backing while others have gone to
the wall. Those that continue to exist are likely to pull their
orders, either through lack of investment or diminished demand.
Financial freeze
Unfortunately for manufacturers this lack of investment stretches
across the industry. Jose Abramovicim, head of aviation at
Calyon, the corporate and investment bank, has predicted a
deficit of $25bn in credit funding for the industry during 2009.
The forecast, announced at this year’s European ISTAT confer-
ence, is an ominous portent; aircraft manufacturers should be
wary.
Many airlines may wish to update their fleet with cost and fuel
efficient aircraft in a bid to tackle fluctuating and recently crip-
pling oil prices, yet numerous airlines have been unable to source
financing from already over-stretched banks and wary lessors.
For small or struggling airlines the desire to see long-term cost
savings is, in this present environment, unlikely to be met. These
airlines will have to delay orders and some may find it hard to ful-
fill payment obligations for existing orders.

check_FPA:ATEM93 4/4/08 09:01 Page 3

Aircraft & Engines
Airbus’ Total Orders and Deliveries to Date

All Families Worldwide A300/A310 A320 A330/A340/A350 A380 Total
Total orders 816 6,253 1,852 192 9,113
Total Deliveries 816 3,652 931 9 5,408
Boeing’s Total Orders and Deliveries to Date

All Families Worldwide 737 747 767 777 787 Total
Total orders 8,156 1,524 1,035 1,096 895 12, 706
Total Deliveries 5,857 1,409 967 739 0 8,972
Ascend has noted a rise in small airlines placing orders on the back
of sale leases with lessors, payment of which will be taken on deliv-
ery – a system the company expects to see more of in the future.
Seymour acknowledges that airlines can not themselves afford to
invest in new aircraft; “You’d expect lessors to take a bigger slice of
Tracking market demand
Despite the financial crisis, there are growth areas in the industry.
the business. Lessors themselves have a backlog of about 1,300 and
Europe and North America is where Ascend’s Seymour believes
they’ve placed about 350 of those so far,” he says.
we’ll see the slowest growth, with a market driven by replacement
rather than expansion. Asia-Pacific and to a lesser extent Latin
Airbus’ Rouaud agrees: “Lessors, typically in the past were order-
America are likely to see the highest growth rates.
ing 25 per cent of all orders and I think their share over the last
few years has been 10 per cent… I think there is an opportunity
Airbus’ Rouaud agrees; “In terms of passenger demand for the
now for them to bring back that market share to 20-25 per
next few years, the strongest places are the North American coun-
cent.”
tries. They represent 30 per cent of all the orders for airplanes,
where they were before representing five to ten per cent.”
While the lessors share of the backlog has been declining – with
orders coming predominantly from the airlines, there has instead,
“[In] longer terms, we’re beginning to see strong growth in
say the analysts, been a rise in lessor purchases of existing orders
China,” says Boeing’s director of marketing Andrew Magil, esti-
for new aircraft, originally made by airlines. The sale is often a
mating around a 10 per cent growth rate. “[Its] not strong,” he
last resort for the carrier who, unable to source financing for full
points out, “but growth none the less.”
payment, is forced to sell the order and will later be forced –
unless it’s restricted financing dramatically changes – to lease the
Among Airbus’ biggest customers this year are CASGC with an
aircraft back from the lessor.
order of 110 A320s; AWAS with an order of 75 for the same
model; DAE Capital with orders of 70 A320s and 30 A350-1000
Whatever strategy is used, it seems lessors will be asserting a
and Aviation Capital Group which has requested 23 of the man-
more dominant role in the market. Manufacturers stand resolute
ufacturer’s A320s aircraft. Irish TAM Linhas Aereas has placed a
that they too will face only manageable troubles as a result of the
total order of 46 aircraft, including three A319s; nine A320s;
financial downturn, as Boeings Jim McNerney states; “Virtually
eight A321s; four A330-200s; 12 A350-800s and 10 A350-900s.
all lending sources have tightened up. Having said that, there is
still aircraft financing available on a selective basis, and we have
Airbus has received 445 orders for the A320 family; 133 for the
no current evidence that says our backlog won’t be financed over
A330 family; 138 for the A350 family and three for the A380.
the next five quarters or so”.

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Aircraft & Engines
“
Boeing and Airbus too, have too been stoical about current
demand, each stating clearly that they feel they are in a
secure position. Meanwhile company spokespeople have
been to some degree, guarded about cancellations and
suspended orders, ominously so; one can’t help noting the
prudence in not publicising one’s struggles.
”
The airframer has delivered a total of 349 aircraft this year. This
includes 204 of the A320 family, 51 of the A330 family and seven
of the A340 family and the same number of A380s.
Irish airline Lionair has placed the most orders with Boeing,
requesting 56 of the 737 aircraft. FlyDubai has ordered 50 of the
same aircraft and Air China has placed an order for 30. Ethiad
Airways, another of Boeings top-ranking customers this year,
ordered 45 aircraft, 10 777s and 35 787s. In 2008 Boeing
received orders for 480 737 aircraft, 78 787s, 52 777s, 20 767s
and three 747s. Of the 325 aircraft delivered during the year
through to September 2008, Boeing supplied: 254 737 aircraft;
50 777s; 13 747s and eight 767s.
Orders and Deliveries, 2008

rent aircraft. As a result, they are now thinking about another
Manufacturer Orders Deliveries Cancellations business model with the CSeries’ high-density interior.”
“We are also forecasting greater interest from airlines in emerg-

Airbus 794 391 119 ing markets such as India, China, Africa, Latin America, Russia
and the CIS,” says Poutissou. “We’re in constant discussions with
Boeing 637 330 2 potential customers.”
Bombardier 69 51 N/A Poutissou affirms that Bombardier’s orderbook is strong; “For

commercial aircraft, in the short term, many customers have
committed financing so we do not anticipate a short-term
Embraer 118 205 N/A impact. Many banks and lessors are in a wait-and-see mode, as
many stakeholders are right now. It is too early to anticipate
trends.”
In terms of which models we should expect to see more of, Boeing and Airbus too, have too been stoical about current
Rouaud envisages: a “tendency to go towards bigger airplanes,” demand, each stating clearly that they feel they are in a secure
reaching full capacity while; “concentrating on their core routes position. Meanwhile company spokespeople have been to some
[and] core hubs because they can drive their costs down.” As a degree, guarded about cancellations and suspended orders, omi-
result, “you will see more A320s, more A321s,” and more A350s nously so; one can’t help noting the prudence in not publicising
as a replacement of 767s. one’s struggles.
“We have decided to go a little bit higher in capacity than our com- Yet even with understandable concern, orderbooks are healthy
petitor, now we see that our customers are interested in slightly and manufacturers’ figures, for now, look good. “In light of the
bigger aircraft in every segment of the market. It’s true for the conditions we’ve seen, we’re seeing very strong demand for new
A320, A350 – replacing the 767s – and its going to be really true airplanes,” says Boeing’s Magil. “From our perspective we have a
for higher capacity airplanes like the 737 to the A380,” he clarifies. very strong backlog; we are in a very good position right now,”
he asserts before going on to say: “During the last big downturn
Conflictingly, Philippe Poutissou, Bombardier’s VP of marketing in 2001, our backlog was about 1,400 and we are at about
commercial aircraft, sees a trend towards use of light aircraft: 3,700 today.”
“We anticipate keen interest in all our aircraft as airlines attempt
to ‘right-size’ their fleets,” he says. “Low-fare carriers for exam- And even the worst predictions for manufacturers are less dire
ple, have told us that they are challenged to stimulate traffic than many may expect. So far, concurs Seymour: “The manufac-
through lower fares and thus are having difficulty filling their cur- turers have not been impacted too much… I think there have

Boeing has lost at least a hefty $100m each day since the strikes
began on 6 September 2008, analysts have estimated. The strikes
have meant yet further delay to the 787 – now 15 months late
for its original roll-out date. At the time of writing Boeing was
producing reports to clarify the extent of delays to its orders – an
account critical to many airlines awaiting aircraft.
The company had been producing some 40 aircraft each month

before the stalemate. It couldn’t have come at a worse time for
Boeing, who had been working on an orderbook with record
highs of 3,725 aircraft. Magil has admitted; “We are still having a
hard time meeting that demand from a production perspective.”
Yet, says McNerney: “Despite our challenges during the quarter,

we continued to take new orders. Our backlog grew to a new
record of $349bn, up seven per cent year-to-date. Commercial
airplanes backlog of $276bn – increased eight per cent year-to-
date.” He also said: “Obviously, the work stoppage will have an
impact on the schedule for all our commercial programmes.”
Additional troubles came from supplier ‘challenges’ for galleys on

some of Boeing’s widebody commercial aircraft, however the
manufacturer believes it will see this issue resolved shortly:
“Before the strike started, between five to 10 deliveries of Boeing
widebody commercial aircraft were at risk of slipping out of third
quarter because of this galley issue… [we] expect that once the
strike is completed, our galley supplier will be able to support the
revised aircraft production schedule,” McNerney said.
“Our revenue of $15.3bn was down seven per cent from the
prior year due to the strike and the galley shortages... Those
issues reduced third quarter deliveries by about 35 airplanes,” he
been just under 100 deferrals... We’ve not seen very many can- added at the conference.
cellations yet, which is something you might expect to see.”
With Boeing workers now back in action and an end to galley
Production: delays and developments shortages expected, Boeing is on its way to join Airbus in meeting
Meanwhile, the opening of Airbus’ new Chinese production the demand for new aircraft. Whether this demand continues in
plant last September, did much to bolster the company’s claim light of the industry and furthermore the world’s financial crisis,
that levels of demand meant the manufacturer would be rela- remains to be seen. All we can do is watch and wait.
tively unaffected by the economic slowdown. An A320 like those to be built at Airbus's Tianjin plant
The new assembly line, which is in the Chinese port of Tianjin,

and is a copy of the company’s plant in Hamburg, Germany,
brings an inherent belief in a high number of orders and a pro-
duction rate that’s increasing.
The move will, no doubt, allow Airbus to take a larger share of

the growing Asian market, sticking a flag in what was until now,
Boeing’s turf. It’s a key step in staying competitive with Boeing
has strong trade in China, but no plants outside the US.
Although a bold move under the shadow of global financial melt-

down, Airbus knows it can prosper from the relative security of
China’s strong domestic market growth. The plant, Airbus’s first
outside Europe, was built mainly to supply Chinese orders – some
2,800 aircraft over the next two decades, Airbus says. the region
is a total of 11.6 per cent of global demand.
The company has said its goal is to produce four aircraft per
month by 2011, and all seems on track for that. The first aircraft
to be completed at the plant will be an A320. Built for Sichuan
Airlines, delivery is expected in the middle of next year.
For its rival Boeing though, production has slowed considerably,

being in fact stagnant for 58 days after talks could not resolve the
impasse between members of the National Association of
Machinists (IAM) and Boeing officials over subcontracted work.


Aircraft & Engines
As the world’s media struggles to find new words for turbulence, the aviation industry looks ahead
glumly to 2009. Analysts are queuing up to predict a gargantuan financing gap in that year, a gap that nei-
ther banks nor export credit will be able to bridge. But do manufacturers share that view and, if so, how
will they respond? AFM reports.
MANUFACTURING
LIQUIDITY
IN NORMAL CIRCUMSTANCES, THE FACT THAT THE PRICE OF JET bank DVB, says: “If there is a funding gap, that gap will be seen
fuel had more than halved in the latter half of 2008 would be first with the US airlines because the US market is devastated cur-
cause for celebration. As everyone is aware, however, normality rently, and there’s not much visibility on the future of the US air-
is dead: free market principles are in question; stockmarkets lines. I know a lot of banks that are simply saying, ‘No US Airline
have collapsed; once-august financial institutions have been whatever the LTV, whatever the aircraft, whatever the airline’. So
nationalised; recession is ahead; and credit flows have dried up. I believe that the manufacturer will have to use its chequebook
While oil constituted airlines’ greatest challenge in 2008, liquid- and most significantly that will be to assist the US airlines.”
ity is set to be their principle bugbear in 2009.
Exposure
Banks are now generally understood to have shut up shop until While most accept that Airbus and Boeing will be forced to the
the New Year. Nonetheless, when they do start lending again – financing table, it is tough to estimate the extent of the support
to each other and the wider world – it will likely be at LIBOR plus that customers will require. Over the two years following 9/11,
triple-digit basis points. The implications for the aviation industry the two manufacturers put around $2.5bn each on their books –
are serious: José Abramovici, global head of aviation group at only a fifth of what Abramovici reckons will be necessary.
French bank Calyon, has predicted that new delivery financing
plus refinancing requirements for 2009 will total $70bn. He Abramovici, however, could well have over-estimated the scale of
warns that banks and export credit agencies (ECAs) will only pro- the problem. Grabowski says: “The value of new deliveries as
vide $45bn of this, leaving a $25bn gap that others will have to scheduled is roughly $50bn for next year, and he [Abramovici]
address. JP Morgan estimates a funding gap of $10bn-$20bn in believes that on top of that $50bn you will have approximately
2009. $20bn of refinancing of the existing fleet... As far as the $20bn
is concerned, I’m not sure that we can say there’s an absolute
When cracks do begin to appear, they will probably initially do so need of $20bn because if the funding crisis continues there are a
in the US, where banks have been most severely affected by the lot of transactions that will never take place.”
downturn. Bertrand Grabowski, board member at European Instead, Grabowski believes the refinancing requirement, and
U.S. Dollars (in millions)

35,000 Manufacturer
Cash/Other
30,000
Public debt/
25,000 capital markets
Bank debt
20,000
Export credit
15,000 Leasing
companies
10,000
5,000
0
2002 2003 2004 2005 2006 2007 2008
376 281 285 290 394 441 487
$26B $20B $19B $19B $25B $29B $33B

likely financing shortfall, will amount to $10bn-$15bn – still a

huge amount, as James Cottle, managing director of Airbus
Financial Services, confirms: “That’s even bigger than what we’re
thinking. If it’s at that level then we will have a problem, I think.
But I guess they’re the banks, and the banks know that they’re
not lending and maybe that is the case.”
At Boeing, however, Kostya Zolotusky, vice-president capital mar-

kets development, is more circumspect. He believes the bankers
“have underestimated delivery financing to be done by regional
banks and the surge capacity of Ex-Im”.
In a November conference call Jim McNerney, Boeing chairman

and chief executive, told investors and media that Boeing would
probably need to finance some deliveries in 2009. Nonetheless,
he didn’t appear too concerned about Boeing’s potential expo-
sure, saying that the company had “pretty good visibility” on
financing for the next five quarters. He predicts that 40 per cent
of required funding will come from non-US banks, 20 per cent
from lessors and 20 per cent from Ex-Im bank. Boeing currently
has $9.5bn of backstop financing commitments through to
2020. Airbus’s exposure, in contrast, is down at 1988 levels.
Zolotusky confesses to being uncertain about Boeing’s potential

financing commitment, or about whether it will exceed post-9/11
levels. He comments: “After 9/11 we were funding for a couple
of years in the range of $2.5bn, plus or minus a little bit per year,
and that certainly didn’t put any excessive pressure on us to raise
or fund or structure those deals. We could certainly do some-
thing like that in the current environment. We don’t think it
would be required to that extent, but we’re certainly well pre-
pared in terms of the liquidity the Boeing company has, and in
“
If there is a funding gap, that gap will be seen first with
the US airlines because the US market is devastated
terms of Boeing Capital specifically.” currently, and there’s not much visibility on the future of
the US airlines.
The Financial Times has estimated that Airbus financing support
could reach $2.6bn in 2009, more than doubling its exposure
from the beginning of 2008. Whether that figure will rise further
is unclear. James Cottle, managing director, Airbus Financial
”
Services, admits that “it’s very difficult to say now what the so 2009 could well see a return to those levels. Airbus would like-
demand will be on us. There’s been no sort of Tsunami-type situ- wise see ECA cover rising to match the requirements of its cus-
ation where loads of people are coming to talk to us about tomers in a time of difficult access to the commercial financial
financing their aircraft.” markets.
If that Tsunami does materialise, Airbus is ready to respond, Once a degree of confidence returns to the market banks should
affirms Cottle. “We’ll do whatever it takes but we do rely on start gravitating again towards export credit funding. The TED
other people’s money and we do look for senior exposure. We’re spread – the difference between US treasury and LIBOR rates – is
prepared to consider looking at junior pieces, which requires us now hovering around 350 basis points. Once banks added their
taking real risk, but not putting a lot of dollars out there, whereas own mark-ups, this means they could take on a treasury-type risk
the banks would be putting the dollars out, but it would be very at around 400 basis points above treasuries – “a very lucrative
well protected.” form of arbitrage”, according to Zolotusky.
Export credit Alternative sources of financing

“Ex-Im will do a little under $5bn this year... So they have room While much was initially made of the capacity of Asian
for a few extra billion without stretching their position, but they economies to pull the West through the current economic crisis,
probably could go even more with a little stretch,” says it rapidly became apparent that the malaise had spread globally.
Zolotusky, referring to his previously noted belief in the “surge Japan’s stockmarket has hit 26-year lows and China’s growth has
capacity” of the US export credit agency. Grabowski points out fallen below 10 per cent for the first time in five years.
that “the current portfolio of US Ex-Im is $25bn, which is already
quite significant”. Nevertheless, he does agree that Ex-Im expo- Thus it is scarcely credible that Chinese, Japanese or even Middle
sure will have to grow. Eastern banks will provide the global aviation industry with liq-
uidity in 2009. Cottle agrees: “I think if they’ve got any sense
IATA chief Giovanni Bisignani has said that Ex-Im will not finance they will try and stick to what they know best first and then grad-
more than 20 per cent of new deliveries in 2009. Others dis- ually expand. We haven’t really seen them in this market yet. It
agree. “Export credit was usually around 15-20 per cent. I would wouldn’t really be in character for them to come out and take
see them above the 20 per cent,” says Grabowski. Zolotusky, opportunities at this time.”
meanwhile, points out that export credit commitments have hit Where such banks could play a role is in supporting local deliver-
the mid to upper 20s in percentage terms during times of crisis, ies, as Zolotusky explains: “The Chinese banks during this last


Aircraft & Engines
“
I think if they’ve got any sense they will try and stick to
what they know best first and then gradually expand. We
haven’t really seen them in this market yet. It wouldn’t
really be in character for them to come out and take
opportunities at this time.
”
China’s growth has fallen below 10 per cent for the first time
in five years
cycle have financed practically every delivery going into China;

Middle Eastern banks have been very active in supporting local
deliveries. Then when you take as a group all of these banks like
National Bank of Egypt, Bank of Morocco – they’ve been doing Differing approaches
one-off deals for local deliveries which on aggregate represent a How Boeing and Airbus do end up addressing the financing ques-
significant amount of capital.” tion will tie in with the philosophies of their customer finance
departments. “They [Boeing Capital] may have come round more
Help from the wider banking market will stem predominantly to embracing the way we [Airbus] do things, but I like to think
from Europe, Zolotusky believes, while “US capital markets will that we were the pioneers to some extent,” ventures Cottle. “We
eventually break loose of the logjam because the money is there, have never sought to grow this business – we don’t go out mar-
it’s just sitting in treasuries”. Once market confidence is restored, keting looking for assets to put on our books. Once it’s on the
he says, financing will again open up for aviation as aircraft con- books our market then is looking at the secondary buyers of air-
tinue to perform “phenomenally well” as an asset class. craft risk and we then sell down to the market as much as we can
either through a repackaging or through a direct sale.”
Lessors will also be expected to shoulder some of the burden.
“I’m not sure the banks will be gung-ho on pre-delivery payment There is clearly little love lost between the two sides. Zolotusky
financing like they were, but then the operating lessors may describes Airbus Financial Services as “a conundrum wrapped in a
come into their own on things like that if they can get the liq- riddle and buried deep inside EADS’ balance sheet”. On the other
uidity. There’s been some disintermediation in that the operating hand, he says, “Boeing Capital Corporation is a transparent busi-
lessors are seen as a buffer,” says Cottle. Whether that buffer ness with all the relevant SEC fillings. All of our positions result in
holds will, as Cottle remarks, depend on liquidity, and that is a a very clear and visible profit or loss. If we do sub-market deals to
potential banana skin given the precarious balance sheets of support sales, they will be well understood by the market.”
some lessors’ parent institutions.
Either way, expect the riddles or transparency to come to the fore
in 2009, when Airbus and Boeing could very well see levels of
customer support rise to unprecedented levels.

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Aircraft & Engines
Since the European Commission published its first airline blacklist on 22 March 2006, there have been a
further seven to date. Paul Phillips at Stephenson Harwood law firm provides insight into the two most
recent updates this year, examines the European Aviation Security Authority’s new powers to ban indi-
vidual airlines from operating in the EU and explains that blacklisting does not have to be permanent.
MOVEMENTS IN
THE EUROPEAN
BLACKLIST
The EU blacklist
On 22 March 2006, the European Commission published a black- The purpose of the blacklist is a pre-emptive one, focusing on
list of airlines banned from flying in and out of the European prevention rather than cure. The naming-and-shaming of airlines
Union, including Norway and Switzerland, under EC Regulation is a strong incentive for both individual airlines and their national
2111/2005. It named and shamed 93 separate airlines that were oversight authorities to take preventative measures to ensure
banned from operating into and out of the EU for falling short of that they are complying with international flight safety standards
international safety standards. The list itself is based on deficien- and to rectify any shortcomings immediately in order to avoid the
cies found in aircraft during ramp inspections at European air- blacklist.
ports carried out under the EU Safety Assessment of Foreign
Aircraft (SAFA) scheme, and safety audit data made available by THE LATEST UPDATES
the International Civil Aviation Organisation (ICAO) and IATA
Operational Safety Audits (IOSA). Update no:7
The seventh update, published on 11 April 2008, imposed a ban
In the more recent updates of the blacklist, the European on all operations of Ukranian airline, Ukraine Cargo Airways, and
Commission and more specifically, its Air Safety Committee has banned all operations of the Congolese carrier Hewa Bora
looked very closely at national safety oversight authorities to Airways, which had been previously allowed to operate a single
check whether they are exercising adequate safety oversight over aircraft under a special arrangement. Also all carriers from
the operations of carriers registered with them. Equatorial Guinea, Indonesia, the Kyrgyz Republic, Liberia, Sierra
Leone, Swaziland and the Democratic Republic of Congo were
The blacklist itself is split into two parts: Annex A lists air carriers banned, in addition to nine individual carriers.
subject to a total ban either individually or by blanket ban of a
particular country; and Annex B lists air carrriers subject to oper- Ukraine Cargo Airways is the third Ukrainian airline to be banned
ational restrictions within the EU. The original intention under the since the blacklist was created, previous ones being Volare and
legislation was for the blacklist to be updated at least every three Ukrainian Mediterranean Airline, and the European Commission
months, although the review process can be brought forward by is clearly sending a strong signal to the Ukranian safety oversight
member states and provisional measures can be adopted in cases authorities to strengthen enforcement and vigilance of safety
of emergency. standards.

The blanket ban on Hewa Bora’s operations means that all carri-
ers licensed in the Democratic Republic of Congo are now
banned from flying into the EU. Just days after the ban on all
Hewa Bora’s operations, a DC-9 operated by them crashed while Update no:8
attempting to take off from the airport at Goma, DRC, reportedly In the eighth update of the EU blacklist, published on 24 July
blowing a tyre and suffering engine failure. The DC-9 skidded 2008, the European Commission removed the operating ban
through the airport fence, coming to rest in a crowded market over Mahan Airlines, the Iranian carrier, following completion of
place where it burst into flames – killing over 40 people and injur- remedial measures, and their onsite inspection in Iran, but
ing over 145. imposed a broad ban on all carriers from Gabon, except Gabon
Airlines and Afrijet, following “worrying results” from the
No carriers were removed from the seventh update list, notwith- International Civil Aviation Organisation (ICAO) audit report on
standing representations made by Indonesian airline, Garuda, the country. The two Gabonese carriers, Gabon Airlines and
and the Iranian Carrier, Mahan Air, to the Commission and Air Afrijet, which are already flying in the EU, are allowed to con-
Safety Committee. They found that although Garuda tinue their services, but are not allowed to expand operations.
had made progress in the implementation of corrective measures, The Commission stopped short of imposing a full ban on all car-
this was still not sufficient, and the oversight authorities in riers in Gabon in recognition of “prompt and drastic efforts”
Indonesia had still not demonstrated that they had completed being made by the Government of Gabon, including the emer-
their corrective actions, so none of the 51 Indonesian carriers, gency adoption of a new aviation code for the country.
including Garuda, would be withdrawn from the EU blacklist.
The Commission maintained the ban on all operations of Ukraine
Jacques Barrot, European Commission Vice President in charge of Cargo Airways, fired another warning at the Ukrainian safety
transport said: oversight authorities, and heard representations from three
“The conclusion is clear: those States or airlines which fail to act Indonesian airlines, Garuda, Mandala, and Air Fast, and the
decisively to resolve their safety deficiencies will be placed on the Indonesian civil aviation authorities. The Air Safety Committee
list. Our objective is not only to identify safety issues, but to and the Commission decided that the Indonesian authorities
resolve them. The Commission will continue tirelessly in its dia- have still not developed an adequate oversight programme for
logue with states, their civil aviation authorities, and their airlines, any of the carriers under their regulatory control, and determined
to ensure that they attain acceptable levels of air safety on a sus- that the safety deficiencies identified by ICAO and the
tainable basis.” Commission had still not been assessed by ICAO.
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Aircraft & Engines
The Commission also looked very closely at Cambodia and the

Philippines, and indicated that if corrective measures are not
implemented by the civil aviation authorities of both countries,
carriers from both these countries may face restrictions or even
full bans on flying into the EU.
Aviation safety – Spanair MD-82 crash investi-

Banning foreign airlines – European Aviation gation
Safety Agency It would be wrong not to comment on the fateful crash on
In a further initiative to ensure adequate safety standards, in April 20 August of the SAS-owned Spanair MD-82 during departure
2008, the European Parliament and the Commission conferred from Madrid airport, which resulted in the death of 154 of its
authority on the European Aviation Safety Agency (EASA) to ban 172 occupants. Spanish investigators have not confirmed a
individual airlines from operating in Europe. report from the Wall Street Journal, citing preliminary analysis of
flight data and cockpit voice recorder information which suggests
In 2009, all foreign airlines operating into the EU will have to pass that both engines on the aircraft were functioning properly, but
a new EASA safety audit. The safety audit and the authority that the flaps had not been extended and that the cockpit alarm
vested in EASA to impose bans on individual airlines, which will did not activate to alert the crew. Just before take-off the aircraft
take effect in 2009, does not replace the EU blacklist or the SAFA had undergone rectification of a technical problem affecting an
(Safety Assessment of Foreign Aircraft) programme of ramp external temperature probe, but investigators have yet to clarify
inspections, but complements them both. According to EASA’s whether this had any effect on subsequent events.
executive director Patrick Goudou, “Both the EU blacklist and the
SAFA programme are essentially reactive programmes, which Although rumours circulated linking the crash to the effects of
recognise bad practice then act to correct it or to exclude non- Spanair’s announcement in July of its intention to ground 15 air-
compliant aircraft. The EASA safety audit is a pro-active measure craft, axe 900 full time jobs and cut 20% of its network in
and has parallels with the US Federal Aviation Administration’s response to crippling fuel prices, a Spanair representative denied
(FAA) international aviation safety assessment programme, in these cutbacks had any impact and stated that although a
which the FAA grades a state on the ability of its national avia- replacement aircraft was made available, a switch of aircraft was
tion authority to effectively discharge its safety oversight role.” deemed unnecessary, and likely only to delay the flight.
LIST OF CARRIERS SUBJECT TO A BAN W

Name of the legal entity of the air carrier as indicated ICAO airline designa-
on its AOC (and its trading name, if different). tion number
AIR KORYO KOR

AIR WEST AWZ
ARIANA AFGHAN AIRLINES AFG
BLUE WING AIRLINES BWI
HEWA BORA ALX
MAHAN AIR IRM
SILVERBACK CARGO FREIGHTERS VRB
TAAG ANGOLA AIRLINES DTA
UKRAINE CARGO AIRWAYS UKS
UKRAINIAN MEDITERRANEAN AIRLINES UKM
VOLARE AVIATION ENTREPRISE VRE
† Air carriers listed could be permitted to exercise traffic rights by using wet-leased aircraft
of an air carrier which is not subject to an operating ban, provided that the relevant safety
standards are complied with. List updated 11 November 2008.

Although it would be improper to comment while the investiga-

tion is ongoing, it is worthwhile pointing out that certain aviation
industry commentators have raised the issue of compromise of
aviation safety in the context of the Denied Boarding Regulation
provisions, where airlines are sometimes faced with a difficult
“
Both the EU blacklist and the SAFA programme are
essentially reactive programmes, which recognise bad
decision when presented with balancing the gravity of an osten-
sibly minor technical fault in an aircraft, against heavy financial
practice then act to correct it…the EASA safety audit is a
penalties that may follow from delay or cancellation of a flight for pro-active measure and has parallels with the US
technical reasons.
Federal Aviation Administration’s (FAA) international avi-
The Madrid crash is thought to be Spain’s worst crash in over 20 ation safety assessment programme.
”
years, and comes nearly three years after the last major European
air crash, when the Helios Airways flight from Cyprus to Prague
crashed near Athens with 121 people on board. The two previ-
ous largest European crashes were both in 2001 – the Russian
Tupolev 154 aircraft collision with a Boeing 757 transport plane How can airlines be removed from the black-
over Southern Germany with 71 fatalities, and the SAS passen- list?
ger aircraft collision with a small aircraft in heavy fog on the run- Several airlines have been removed from the European blacklist,
way at Linate airport in Milan, killing 118 people. The other including Phuket Air, DAS Air Cargo/Dairo Air Services, Buraq Air,
major European crash of the decade was the Air France Blue Wing Airlines and PIA.
Concorde crash which came down shortly after take-off from
Paris in 2000, with 113 fatalities. All of these airlines have had to complete the implementation of
a corrective action plan, and their oversight authorise have had
There is no doubt that the blacklist has reduced the amount of to produce evidence that they in turn have verified the measures
disasters of this kind in Europe, however, it is ultimately the taken by the airlines, so as to avoid the same problems recurring
responsibility of the airlines themselves to ensure that they adhere in the future.
to the strict safety standards in order to ensure the safety of the
aircraft and all on board. Unfortunately, this will sometimes be at The process for removal from the blacklist can be a lengthy one,
the expense of long delays and the associated costs. given that the corrective action plan and the remedial measures
required to comply with the international safety standards can
take some time to implement. Once all the corrective measures
† have been completed by the airline, they have to appear before
N WITHIN THE EU the European Air Safety Committee, often at a full plenary hear-
ing, with air safety representatives from every European member
state present, to give evidence that all safety deficiencies that led
to the original blacklisting have been rectified, and that a safety
State of the Operator programme is in place going forward that ensures they will com-
ply with international safety standards in the future.
Does the blacklist work?

Democratic People’s Republic of Korea The European blacklist has been a positive piece of legislation and
“naming and shaming” appears to have the desired effect. Some
Sudan national civil aviation authorities have adopted preventative meas-
ures unilaterally, following consultations with the European
Afghanistan
Commission, such as the Russian Federation and Bulgaria.
Surinam
The blacklist has kept the incidence of crashes in Europe down,
Democratic Republic of Congo and has undoubtedly helped to maintain Europe’s good aviation
safety record compared with the rest of the world. Many believe
Islamic Republic of Iran that the European blacklist has directly contributed to the reduc-
tion in the global crash toll figures since 2007. The global figures
Rwanda for commercial aviation crashes in 2007 show a marked drop
against previous years, with an all-time low of 23 fatal accidents
Angola
and 597 casualties, comparing favourably to annual averages for
Ukraine the decade 1998 – 2007 of 34.5 fatal accidents and 846 fatali-
ties a year. A recent spate of airplane crashes has meant that
Ukraine there were 25 fatal accidents in 2008, up by 5 from 2007.
However, the number of fatalities was down by 191 since 2007
Ukraine according to IATA figures.
Paul Phillips is head of aviation regulatory disputes and risk at

international law firm, Stephenson Harwood. The firm acted for
Buraq Air, the first airline to be removed from the EU blacklist,
and has since advised on the removal of Blue Wing Airlines and
is actively acting for seven other carriers.


Aircraft & Engines
WHEN I WAS YOUNG, LAST CENTURY, I SACRIFICED MY MONEY cocaine for a backstage pass when Steve was under the spot-
and my youth to go to the best schools, because I had one desire: light. Ultimately, one glorious day, I was interviewed in the
I desperately wanted to understand that deepest of all mysteries Flyfinance Journal and my modest church was nominated twice
– “The Economy”. as ‘Airfinance Bank of the Year’ by Katerine’s Transport Finance
for the Sylvania-based Lease we did on two paragliders. It costs
My masters taught me how to compare Meynard with Karl, and me tens of thousands of dollars in “sponsorship”, but you know
how Adam will inspire Benjamin, or rather the opposite; I can’t how those things work, and we paid our dues with a smile …
recall. They also taught me how I should feel enlightened and
inspired after reading the work of the many Prophets – which In short, I was doing all the right things. My Book was growing
mere mortals see only as boring analysts’ reports and research nicely, and on the Investment side, I could always find an incoming
memos. I was devouring the words of many of the Great: If it new friend, warmly welcomed, ready to buy at a premium what-
came from Hamlet Bank, or Silverman, or J.H. Boreman, then it ever piece of metal I had bought six months earlier. I was a Happy
must be more than true – it is what The Market said, and The Airfinance Banker and I was beautifully surfing straight into
Market is always right, oh stupid one! Nirvana under warm sunshine from the south of France on the
wave of the Supercycle from the Pacific Northwest.
In my later life, I applied to become an acolyte of the Airfinance
sect. I was accepted, and joined a crowd of bigots that read a lot Then, almost a decade into the new Supercentury, things
of what the Industry was producing, especially if it was thick and changed, and I found myself a civil servant overnight. This was a
complicated. I had a bright future: The two Big Brothers in tough call for a once-loyal follower of the Free Market, like all of
Toulouse and Seattle were telling me that by 2390 there would us, having spent the last ten years spitting on the many evils of
be a need for more aircraft than bicycles, to carry more people to the beast called the Government and burning incense sticks daily
ever-more distant destinations. This was hardly believable on first to the gods of ‘Free Market’ enterprise …
reading, but loyally I conceded.
When my unit was closed, last month, having lost my faith and
I was spending a significant amount on fees for the privilege to my illusions, I decided to retire and write my last contribution as
be shepherded in New York, in Dublin and in Geneva, and to the Anonymous Banker. As a footnote, I guess that with so few
catch a glimpse of the U2-like rock stars of our Industry at each of us left, anonymity will hardly be protected any more ...
ISTAT concert. In my devotion to my Faith I went to the
extreme: I slept with the very mature receptionist For the young and bright apprentices who will come after me, I
of this Hilton in Prague to have a seat on will leave my Ten Commandments with you, hoping that perhaps
the first row when Adam was you will slam the brakes on rather than speed up when about to
speaking and I traded hit the brick wall, as we have all done.

1. You shall rubbish Research Reports, especially those on India, 8. When you are welcomed to a Panel at one of the three
and especially if they are telling you that tomorrow will be better Gatherings named above and you have not had to spend any fees
than today. All those Prophets are only good for predicting the on sponsorship, increase your margin by at least 100bp. You will
past. still be doing good business and clients will flock to your doorstep.
2. There is no Supercycle without a Supercollapse and a 9. When you see one of your Fund competitors launching a new
Superdownturn. consumer-friendly Close End Fund with a return boosted by a lit-
tle inflation (just 2%, mate!) on future values of aircraft, sell all
3. When there is more than a 20 per cent increase year-to-year in that you have invested in the industry.
the attendance at the Dublin, New York and Geneva Gatherings,
sell your portfolio immediately, let go of your staff and retire in 10. When you can find two Airlines, ranking high in terms of
Vermont. (Equally, when you have not done so at the time it is book orders at each of the Big Brothers, that have a current book
happening, it is too late ...) order valued at either more than 15x their current gross revenue
for one or 20x their net income for the other, remember Newton
4. When the two Big Brothers are telling you “This is a record and Darwin: Short the stocks of the Big Brothers, and move
year,” cut your commitments by half, push down your LTV by a away from the impact point.
solid 20 per cent and do the only rational thing you can do: Pray!
And finally, here are the last words from the
5. When you see the Retirement Fund of the Nebraska Firemen Anonymous Banker to all you young
becoming an Investor in an Aviation Fund arranged by a Wall Apprentices: No regrets and good
Street Prophet, sell your portfolio. luck, you will have fun!
6. When your Board Member, reading the FT Weekend edition,

comes in on a Monday morning and says to you, ‘’ Why don’t we
do a little more in Aviation?’’, move to shipping.
7. When a “Reputable Firm” is telling you that the price of

oil will go to $200 a barrel, prepare actively for a level
of $40 a barrel. The opposite applies as well.
THE TEN
COMMANDMENTS

Aircraft & Engines
John Pheasant and Suzanna Rab1, partner and counsel in the Anti-trust practice at Hogan & Hartson LLP,
London, examine State Aid rules & developments across the transport sector.
STATE AID DEVELOPMENTS

IN THE TRANSPORT SECTOR
– A MOVING TARGET
STATE AID ONCE SEEMED TO BE AN OUTDATED CONCEPT OF INDUSTRIAL POLICY activities but not for others. For example, a university might be an
dealing with “old economy” industries - national subsidies for undertaking for its publishing activities or for letting accommo-
shipyards, farming, and the like. The “credit crunch” and the dation to tourists in the holidays, but it may not be an undertak-
ensuing financial crisis have required governments to act, often ing for its undergraduate teaching activities.
with great speed, to rescue or 'bail out' ailing financial institu-
tions or even the wider financial services sector. This has been There are 5 criteria or questions which need to be considered to
achieved with quite considerable flexing of the State aid rules, establish whether a measure constitutes State aid. Where all 5
normally applied so rigidly. criteria are met, State aid is involved and the State aid rules
apply.
Despite large amounts of aid granted to the financial services sec-
tor, the spotlight is also on other more traditional industries, such 1. Is the measure granted by the State or through State
as the transport sector. The European Commission (the resources?
“Commission”) has issued some interesting decisions recently on 2. Does the measure confer an economic advantage to an
State aid in the transport sector and it appears from recent devel- undertaking?
opments that the Commission is willing to give sympathetic con- 3. Is the measure selective, favouring certain undertakings?
sideration to aid applications, particularly in the maritime 4. Does the measure distort or have the potential to distort
industry. competition?
5. Does the aid affect trade between Member States?
However, the transport sector will likely find itself in a different
position from the financial services sector. Whereas banking State aid will only be considered as compatible with the common
might be seen to be at the ‘financial eye of the storm’, the same market if it meets the conditions for an exemption as set out in
is not quite true for transport, albeit the industry has significant Article 87(3) EC. Over time, the prohibition of State aid has been
political and economic clout. The question therefore arises: if modified and the Commission has issued a number of frame-
banks can be beneficiaries of a more flexible application of the works, guidance and block exemptions under which State aid
State aid rules, what are the implications for other arguably may be lawfully granted.
strategic industries, such as transport?
Who needs to be concerned about State aid?
This briefing gives an overview of some recent policy develop- State aid issues can be relevant to companies operating in the
ments including a brief introduction to the concept of State aid transport sector from a number of perspectives:
and the Commission’s evolving practice, followed by some of the
most recent developments in State aid in the transport sector. G Recipients: A company wishing to receive State aid should
These decisions demonstrate a broadly favourable attitude on the ascertain whether the proposed subsidy requires prior notifi-
part of the Commission to some recently-notified support cation. If so, it should ensure that the notification is full and
schemes, covering a broad variety of schemes in the aviation, complete so that the Commission’s authorisation is incon-
maritime and intermodal sectors. testable. If you find that your company is required to repay
State aid, you will need to develop strategies in the context
THE CONCEPT OF STATE AID of administrative and court proceedings to help secure the
The basic rule on State aid is that any aid granted by a Member aid you have received.
State of the EU which distorts (or has the potential to distort) G Competitors: You may feel disadvantaged by State aid
competition by favouring certain companies or sectors will be granted to a competitor and want to consider filing an
unlawful, unless it is notified to the Commission and is declared action before the national courts and lodging a complaint
compatible with the common market. with the Commission to investigate whether aid has been
unlawfully granted.
State aid rules apply to organisations involved in economic activ- G Investors and purchasers: In the context of a M&A trans-
ity (so-called “undertakings”). The organisation does not have to action you may need to assess whether State aid has been
be profit-making if the activity is one which has commercial com- granted to the target. Should the company you wish to pur-
petitors. The same entity may be an undertaking for some of its chase have been granted subsidies, there is a risk that you

Maritime
For maritime services, there are specific guidelines setting out
how State aid should be treated.4 The guidelines are intended to
contribute to the promotion of new services in the field of short
sea shipping and to support the development of the maritime
industry in line with the Commission’s objectives in this area.
There is also specific guidance for State aid in the shipbuilding
industry,5 covering issues such as tonnage tax schemes. In 2008,
the Commission extended the life of the shipbuilding State aid
guidelines for another three years, to December 2011.6
Intermodal
When it comes to intermodal transport, the Commission tends to
take a positive view of any efforts by Member States to promote
this form of transport. While there are no purely intermodal-spe-
cific guidelines or regulations in place, the Commission has
adopted initiatives and memos such as those aimed at the pro-
motion of integrated freight transport, which cover State aid
related issues.7
While there is a smorgasbord of different State aid rules and

guidelines applying to the transport sector, the overall message is
the same: the Commission will look at any State aid notifications
on a case-by-case basis and will take time to assess carefully how
any aid can be seen as compatible with the objectives of the law,
before issuing a final decision.
The Commission’s response to the economic crisis

The Commission has historically applied the State aid rules
strictly. The financial crisis has caused Governments to act speed-
ily and with unprecedented schemes to support failing industries,
including State-backed rescue packages for the banking industry.
In view of the exceptional circumstances arising from the current
crisis, the Commission has taken the step of adopting guidelines
under which State aid will be considered exempt as it is being
used to address a “serious disturbance in the economy”. This is
enabling some extraordinary State aid measures to be granted by
Member States to their financial institutions. The Commission
has shown flexibility in its application of the procedural rules,
even approving some schemes in less than 24 hours.
The measures have largely been focused on the financial services

sector, although the Commission has also issued guidance on aid
to the “Real Economy”, which allows Member States to grant aid
to other sectors, within limits.8
The Real Economy Communication sets out the following State
aid measures as being compatible with the objective of address-
ing the disturbance to the economy:
G aid in the form of a cash grant of up to E5000,000 per
may be “buying” problems along with it, such as claims for undertaking for companies facing a sudden shortage or
repayment or obligations to comply with commitments unavailability of credit;
made as a condition of granting aid in the past. G state guarantees for loans at a reduced premium to encour-
age access to finance;
Sector specific considerations G aid in the form of interest rate reductions;
There are also sector-specific provisions on how State aid should G aid for the production of green products (aimed largely at
be administered. In the transport sector these include: the automotive industry); and
G aid to promote risk capital by increasing the thresholds in the
Aviation Commission’s Risk Capital Guidelines (from E1.5m to
Guidelines for aid to the air transport sector were set down in the E2.5m).
early 1990s, but are still in place.2
There is a more recent set of guidelines, adopted in 2005, which One of the UK measures, interest rate subsidies, provides direct
deal with the financing of airports and start-up aid to airlines support to the automotive industry on the condition that manu-
departing from regional airports.3 facturers invest in ÒgreenÓ products and processes.


Aircraft & Engines
John Pheasant Suzanne Rab
All in all, the existence of such measures is encouraging as an

indication of the Commission flexing, within limits, its traditional
Privatisation plan for Olympic Airlines and Olympic
approach to the application of the State aid rules.
Airways Services approved
On March 10, 2009, the Commission approved a privatisation
There follows a summary of recent cases involving State aid in the
plan by the Greek authorities to sell certain assets of Olympic
transport sector.
Airlines and Olympic Airways Services. Both entities are the sub-
jects of adverse Commission decisions finding that aid given to
AVIATION them previously was unlawfully received and should be recov-
ered.
Rescue aid for Austrian Airlines approved
The Commission, on January 19. 2009, announced its approval
The Greek government originally intended to conduct an open
of State rescue aid for Austrian Airlines, to be given in the form
public tender process and the Commission had approved this
of a guarantee of a loan facility.
scheme as it seemed likely that this would facilitate the recovery
of the unlawfully granted aid. The use of a public tender process
In the type of aid scheme that will now be familiar to many
would open up the sale to the widest possible range of bidders
Member States, the Austrian government granted Austrian
and, therefore, increase the chances of obtaining a better price
Airlines aid in the form of a loan facility worth around E200m.
for the assets. However, due to adverse financial conditions, all
The CommissionÕs approval only extends to the short-term
of the bids received in the original tender process fell short of the
measure that is intended to tackle liquidity problems encountered
minimum value of the assets that was established by an inde-
by Austrian Airlines as a result of the ongoing financial crisis. The
pendent valuation.
Commission noted in its approval that the aim of the rescue aid
being offered by Austria was clearly to keep the company afloat
The Greek government therefore notified the Commission of a
until the Commission issues a decision on the separate question
modified privatisation plan, whereby it would proceed with a
of whether the privatisation of the airline involves State aid.
direct sale of the assets of the companies. The Commission has
given its approval to the modified plans of the Greek authorities,
The Commission’s decision in this case might demonstrate the sort
noting that it is obliged under the State aid rules to work with
of approach that can be expected of the Commission in the current
Member States to overcome unforeseen difficulties that may
financial climate: giving its approval to rescue packages by national
arise in the execution of decisions requiring the recovery of State
governments, but only on a short-term basis. The Commission is
aid. This decision shows evidence of some pragmatism on the
making it clear in this, and other decisions, that it still expects to see
part of the Commission: it is prepared to accept that there may
a satisfactory restructuring plan put in place in order to justify any
be a variety of ways that Member States can go about imple-
major injection of cash into a “failing” company.
menting a Commission order for the repayment of unlawful aid.

MARITIME
compensation for competition aid not received and there was no
Court finds Commission error in calculation of evidence to suggest that the money was intended to cover con-
excess aid received by German shipyard tract losses. The CFI therefore annulled the Commission’s deci-
On March 10, 2009, the European Court of First Instance (“CFI”) sion that KWW should repay the aid received.
handed down a judgment annulling a Commission decision that
had required the repayment of excess State aid granted by the Such cases before the European courts demonstrate that the
German government to the Kvaerner Warnow Werft (“KWW”) Commission is far from immune from making errors in its proce-
shipyard in Germany. dures and investigations. Moreover, such cases are a stark
reminder that beneficiaries of State support should pay careful
The CFI found that the Commission had made an error in its cal- attention to the Commission’s conduct of a review or investiga-
culation of the total amount of aid received by KWW. The tion so that they can spot any mistakes at an early stage and con-
Commission, in trying to assess whether KWW had received too sider whether there is scope for challenge.
much aid from the German government, calculated that KWW
had received an excess of aid amounting to around DEM63m.9 Modifications to Dutch tonnage tax aid scheme
gain Commission approval
While the Commission had previously approved the aid scheme The Commission gave its approval on March 10, 2009 to pro-
being used in relation to KWW, it had specified that aid given to posed changes by the Dutch Government to a tonnage tax
cover contract losses was subject to a ceiling. This was based on scheme that originally gained Commission approval in 1996. The
a certain percentage of the total amount of contract losses Dutch government plans to lower the tax base for large vessels
incurred by KWW. In its previous approvals of the KWW aid that exceed 50,000 net tonnes and also intends to introduce a
scheme, the Commission had differentiated between aid given to reduction in the tonnage tax base by 75 per cent as regards ship
cover contract losses (subject to the ceiling) and aid that was management companies. The Dutch government argued that
linked to competition (to be given in the event that KWW did not such a reduction will help to offset the lack of incentives for ship
receive shipbuilding aid). Competition aid was intended to com- management companies to develop their activities. Until now,
pensate shipbuilding yards that were in competition with yards they have had to pay a much higher percentage of their profits
from countries where more shipbuilding aid was provided. The as tonnage tax than ship owners.
applicants in this case argued that competition aid was intended
to enable all shipyards in the Community to remain competitive The Commission concluded that the proposed changes to the
with Asian shipyards who received subsidies likely to distort com- scheme are compatible with the common market as they do not
petition. amount to the Dutch Government offering incentives and subsi-
dies that would confer an unfair advantage to Dutch shipping at
According to the CFI, the Commission made a manifest error by the expense of other EU Member States, and therefore distort
including the competition aid in its calculation of excess aid competition. The Commission also concluded that the proposed
received by KWW. An accounting report compiled by KWW changes contribute to the interests supported by the
noted clearly that the DEM63m received in aid was received as Community’s wider maritime policy.


Aircraft & Engines
The Court was clear in its judgment that the Commission had
simply failed to provide an adequate explanation for arriving at
its conclusion. It is to be hoped that this sort of case will push the
Commission towards taking a more reasoned approach to its
scrutiny of State aid cases.
INTERMODAL
Court of First Instance rules against Commission Commission approval of aid scheme for German
decision in Italian shipping aid case combined transport
The CFI handed down its judgment on March 4, 2009 in the The Commission announced on March 10, 2009 that it has
Tirrenia di Navigazione State aid cases. It found that that the decided under the State aid rules to approve a notification of
Commission had made a serious error in deciding that aid given State aid to be given in support of a combined transport scheme
to the Tirrenia Group companies was incompatible with the com- in Germany. As a part of the aid scheme, money will be given for
mon market and should be recovered. The CFI ruled that the the construction and extension of combined transport terminals.
Commission did not provide sufficient reasoning for its decision Loading equipment for transhipment purposes will also be sup-
and the Court therefore annulled the Commission’s decision. ported through subsidies.
The aid in question had been given to Adriatica (a member of the
Tirrenia Group) for the Brindisi/Corfu/Igoumenitsa/Patras route The stated intention of the German federal government in adopt-
between 1992 and 1994. The Tirrenia Group argued before the ing this type of aid scheme is to increase capacity at terminals and
CFI that the Commission had failed to take into account, in its to foster the combined transport of German and transit traffic.
assessment of the aid, that the subsidies in question constituted The aid scheme will be valid until December 2011, with a budget
existing aid that had been already notified to the Commission, of E115m given annually.
and which had their roots in laws dating from 1936 and 1953.
The Commission had, in its decision, regarded the aid in question Commission approval given to aid scheme for inter-
as new aid. modal transport in Antwerp
On February 11, 2009, the Commission approved aid granted by
The CFI agreed with the submissions of the applicants that the the Flemish region of Belgium for the construction of an inter-
Commission had failed to provide sufficient reasoning for reaching modal terminal in Antwerp (involving road and rail) to be used for
its decision. While the applicants had made these submissions continental containers.
directly to the Commission in the course of its investigation of the
aid, the Commission had apparently failed to take these arguments The Belgian government had noted in its submissions to the
into account. Accordingly, the CFI annulled the Commission’s deci- Commission that the Flemish region suffers from road congestion
sion that had ordered the recovery of the aid in question. problems, particularly around the port area of Antwerp. The con-

“
'We need to be flexible on procedures... The temporary
and targeted aid measures in the EU address the new
market failures in the provision of credit using our exist-
ing principles. Flexibility does not mean throwing out the
rules.’
Neelie Kroes, The Road to Recovery, speech to OECD
Competition Committee, Paris, February 17 2009
struction of an intermodal terminal will increase the port’s capac-
ity to handle continental containers by 28 per cent.
The Commission concluded that the aid scheme will contribute
Notes
1. The authors would like to thank David Cardwell for his assis-
”
to the development of the intermodal transport sector through tance and comments in the preparation of this article.
the promotion of a shift away from the congested road network 2. Application of Articles 92 and 93 EC to State aid in the avi-
in areas where there are very high levels of traffic. ation sector, Official Journal C-350, 1994, page 5.
3. Community guidelines on financing of airports and start-up
Broader issues on the State aid transport aid to airlines departing from regional airports, Official
horizon Journal, C-312, December 2005, page 1.
The developments above give only a flavour of recent develop- 4. Community guidelines on State aid to Maritime Transport,
ments in the application of State aid in the transport sector. Official Journal, C-013, 17 January 2004, 3-12.
Politics also have a role to play. Not every EU Member State has 5. Framework to State aid on Shipbuilding, Official Journal C-
a large transport industry and the importance of particular trans- 317, 30 December 2003, 11-14.
port sectors differs across Member States. The Commission will 6. European Commission press release IP/08/1097, Brussels, 3
certainly not want to be seen to be supporting failing or flailing July 2008.
national industries where that would or may distort competition 7. Note, for example, the communication from the Commission
- or be accused of succumbing to the pressures of vested inter- on the EU’s freight transport agenda. Boosting the efficiency,
ests. integration and sustainability of freight transport in Europe,
Brussels, 2007.
The traditional focus of State aid in the transport sector has, up 8. Temporary framework for State aid measures to support
to now, been usually on the operation of the transport network access to finance in the current financial and economic
and infrastructure. However, Member States have already offered crisis, Brussels, 17 December 2008.
support to other related industries, including the automotive 9. The aid was originally granted in 1993 hence the use of
manufacturing industry. Some proposals have been controversial. Deutschemarks.
For example, the French government’s plans for the French car 10. European Commission press release IP/09/318, Brussels, 25
industry have been criticised as too protectionist. While the February 2009. CARS 21 (Competitive Automative
Commission has been keen to extol the virtues of its EU-wide role Regulatory System for the 21st Century) is a group of indus-
in relation to State aid and has put itself forward as the guardian try stakeholders created in 2005 to generate recommenda-
of a level playing field, it has recognised that desperate times call tions for improvement of the worldwide competitiveness of
for a more flexible approach. This is illustrated by the the European automotive industry.
Commission’s suggestion of a new partnership with industry,
trade unions and Member States in the context of the “CARS
21” process to accompany the common crisis response.10
CONCLUSION
These are all developments of the last few months which, when
taken together, suggest a trend towards a more flexible applica-
tion of the State aid rules in a wider range of industries. The
Commission faces a challenge between, on the one hand, a need
for pragmatism while, on the other hand, maintaining that it will
be “business as usual” as far as any threats to competition are
presented.
The answer to resolving what appear, at first sight, to be con-

flicting goals lies in the way a particular measure may qualify as
State aid and, if so, whether it may be exempted within the over-
all policy framework. There remains a certain element of “learn-
ing and doing”. This certainly seems borne out by recent
experience and the issuance of guidance on almost a weekly
basis. This is a process and a debate which is continuing, given
the wide range of measures being used by the Member States
and being approved by the Commission.

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Aircraft & Engines
With the world economy in turmoil and the consequent lack of liquidity in debt and capital markets, Islamic
finance has been touted as an alternative source of funds for the aviation industry. For the past three years,
Islamic finance has been the fastest growing area in banking. It is well suited to asset finance and has
adapted to provide a real alternative to conventional financing structures, building upon the religious and
legal principles which are at its foundations.
ISLAMIC FINANCE –
PLUGGING THE
LIQUIDITY GAP?
This article sets out to explain the basic principles governing Islamic finance, to illustrate some of the issues which are specific to
Shari’ah compliant aviation transactions and to analyse the prospects for Islamic finance as a means of plugging the liquidity gap.
A principled approach to financing

ISLAM IS NOT JUST CONCERNED WITH THE RELATIONSHIP
between God and man but is a system of beliefs governing all
aspects of life, including trade and commerce. At its core,
Islamic finance is not just concerned with a prohibition on
interest but aims to promote transparency, morality and fair
dealing in business. The principles on which Shari’ah compli-
ant financing is based include:
• No unfair exploitation - Any return on money employed

should be linked with the profits of the enterprise.
• No speculation - Speculation or gambling is prohibited.
• Assumption of some risk by the financier - There can be no

guarantee of a fixed return.
• No uncertainty - There must be full disclosure by both par-

ties to a transaction. Any transaction where the subject mat-
ter, price or both are not determined and fixed in advance
may not be permitted under Shari’ah law.
• Promotion of trade and enterprise for the benefit of the

community - Money is viewed as a means of exchange by
which wealth is generated for the benefit of the community.
It should not be treated as a commodity in its own right.
• No prohibited investments - Investments in businesses

involving certain products such as pork, alcohol or armaments
are prohibited.
An Islamic financial institution will usually employ a Shari’ah

scholar or Shari’ah board of scholars to advise on the devel-
opment of transaction structures and to rule on the compli-
ance of transactions with Shari’ah principles.

of conditions precedent. The term of the Ijara needs to be certain.

An alternative view of leasing Whilst rent can be determined by a formula, the basis of the cal-
Most Shari’ah compliant aircraft finance transactions are struc- culation should be clearly established. Confirmation of the
tured using an Ijara. This is a form of lease pursuant to which the amount of rent due is sometimes required in a notice from the
owner of the aircraft transfers the legal right to use and derive lessor to the lessee which the lessee is then entitled to accept or
profit from the aircraft to another person for an agreed period reject.
and agreed rent. An Ijara can be combined with sale and pur-
chase undertakings between lessor to lessee to create a product An Ijara also needs to abide by the principle of fairness. For exam-
akin to a finance lease (an Ijara wa iqtina). ple, events of default are often limited to circumstances within
the direct control of the airline (such as non payment). Other cir-
Nonetheless an Ijara is different from a conventional lease. The cumstances such as illegality events or material adverse changes
requirements of Shari’ah challenge the traditional allocation of in market conditions may give a right for the lessor to require the
risk and responsibility between lessor and lessee in an aircraft lessee to purchase the aircraft but are not of themselves events of
lease transaction. For example, in an Ijara as the ownership of default. Some scholars also take the view that indemnities should
the aircraft is not transferred, the liabilities of the ownership of reflect an allocation of fault rather than an allocation of risk.
the aircraft remain with the lessor. As a consequence, in an air-
craft Ijara it is usually the lessor rather than the lessee who is Combination with conventional debt
expressed to remain responsible for the performance of major Transactions can be structured in a manner which combines con-
maintenance and structural repair and for obtaining hull insur- ventional debt with Islamic debt or equity. Security over the air-
ance. Similarly, if the aircraft suffers a total loss then no further craft may be granted to guard against wrong doing and breach
rent is due from the lessee. Certain scholars take the view that of contract. Care needs to be taken to ensure that the proceeds
rent should also cease where an aircraft suffers damage not of security are not used to fund interest payments under a con-
amounting to a total loss if the aircraft is taken out of service as ventional loan. Furthermore, whilst equity is generally subordi-
a result. nate to debt in conventional financing structures, the concept of
subordination is often problematic in Shari’ah compliant transac-
An Ijara needs to abide by the principles of certainty. It is some- tions. This is again an issue which needs to be considered care-
times argued by scholars that the Ijara contract should be fully with the scholars when devising the structure.
entered into on the actual delivery date of the aircraft and can
not be signed in advance with delivery subject to the fulfilment Whilst the number of aviation transactions employing Islamic


Aircraft & Engines
finance has steadily increased in recent years, some differences Form matters in Islamic finance just as it does in a number of
do remain between scholars as to the application of the princi- more conventional financing structures. It is a positive feature of
ples of Shari’ah to aircraft finance and leasing deals. The fact that Islamic finance that, to the extent possible, care is taken to try to
a particular structure has been employed on a previous transac- accommodate the commercial objectives of the parties in a man-
tion does not necessarily mean that it will be acceptable on ner which promotes Shari’ah principles.
future deals. On a practical level it is necessary to consult the
scholar advising on a transaction at an early stage and to keep
them informed and involved throughout the transaction. Going A solution to the liquidity gap?
forward it is hoped that Islamic jurisprudence will continue to The ability of Islamic finance to fill the liquidity gap in the current
develop a greater consensus as to the parameters within which market should not be overstated. It generally remains an expen-
aviation finance and leasing transactions can be structured. sive source of funds and the term of the financing typically falls
short of the 10 to 12 year loan terms available from conventional
Reflecting commercial reality lenders. Islamic banks and investors are not wholly immune from
Although in some circumstances Shari’ah principles may appear the effects of the downturn in the world economy and the recent
to conflict with conventional notions of risk allocation between a low oil price has reduced the amount of petrodollars available for
financier or lessor and a lessee, it is important that Shari’ah com- investment in Shari’ah compliant products.
pliant transaction documentation does reflect commercial reality.
For example, it would be rare that a lessor had sufficient mainte- Nonetheless, the ideas at the heart of Islamic finance seem
nance and insurance capability to support the commercial oper- appropriate in the current climate as a means of promoting
ation of an aircraft. Techniques have therefore developed to greater market confidence. Islamic finance will undoubtedly con-
ensure that, whilst the documentation conforms to the principles tinue to provide a source of funds for aviation, particularly in the
of Shari’ah, it recognises that the airline will maintain and insure GCC region, and indirectly the core principles on which it is
the aircraft in practice. This has led to accusations that Islamic based may influence longer term thinking on the development of
finance represents form over substance; however, this is unfair. banking and finance beyond the sector.

Aircraft transactions — 02 June 2008 to 16 June 2008

Contract Owner Operator Event
Date S/N A/C Model Variant Reg No Name Name Remarks
02-Jun-08 41064 BAE SYSTEMS (Jetstream) Jetstream 41 N326UE Corporate Flight Mgmt Corporate Flight Mgmt Purchased - parked
02-Jun-08 41064 BAE SYSTEMS (Jetstream) Jetstream 41 N326UE HL Aviation LLC HL Aviation LLC Purchased - parked
02-Jun-08 49937 Boeing (McDonnell-Douglas) MD-80 83 (MDC) N983JJ Comtran Int/l Inc Comtran Int/l Inc Purchased - parked
02-Jun-08 29924 Boeing 737 (NG) 800 Wingl. EI-CSI CIT Leasing Corp CIT Aerospace Purchased - parked
02-Jun-08 21880 Boeing 767 200 (P&W) HS- Skystar Airways Skystar Airways Purchased - parked
02-Jun-08 UC-13 Hawker Beechcraft 1900 C-1 N413CM Aerologistics II LLC Aerologistics II LLC Purchased
02-Jun-08 UC-131 Hawker Beechcraft 1900 C-1 N420CM Aerologistics III LLC Aerologistics III LLC Purchased
02-Jun-08 UC-173 Hawker Beechcraft 1900 C-1 N412CM Aerologistics I LLC Aerologistics I LLC Purchased
03-Jun-08 958 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP N958AE Corporate Flight Mgmt Corporate Flight Mgmt Purchased - parked
03-Jun-08 958 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP N958AE Jetstream Sales LLC Jetstream Sales LLC Purchased - parked
03-Jun-08 964 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP N964AE Corporate Flight Mgmt Corporate Flight Mgmt Purchased - parked
03-Jun-08 964 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP N964AE Jetstream Sales LLC Jetstream Sales LLC Purchased - parked
03-Jun-08 26700 Boeing 737 (CFMI) 500 LY-AWG Aviation Assets Mgmt Aviation Assets Mgmt Purchased
03-Jun-08 17000227 Embraer 170 LR VH-ZHD VBNC9 Pty Ltd Virgin Blue Airlines P. - sale & l.-back on del.
03-Jun-08 14500966 Embraer ERJ-135 Legacy 600 N966JS Pebuny LLC Pebuny LLC Purchased
03-Jun-08 14501021 Embraer ERJ-135 Legacy 600 N915LX Poseidon Management SA Poseidon Management SA Purchased
03-Jun-08 14501048 Embraer ERJ-135 Legacy 600 G-IRSH Legemb Ltd Jet Options Ltd P. - sale & l.-back on del.
04-Jun-08 49952 Boeing (McDonnell-Douglas) MD-80 83 (MDC) N995AC Undis. Bank / Broker / Lessor AerCap Purchased - parked
04-Jun-08 22197 Boeing 757 200 (RR) N811AD L-3 Capital LLC L-3 Capital LLC Purchased - parked
05-Jun-08 3050 Airbus A320 230 (IAE) EI-EAN Nollaig Aviation Leasing Ltd IndiGo Airlines P. - subj. to exist. lease
05-Jun-08 47346 Boeing (McDonnell-Douglas) DC-9 31 (St3 Hsk) N9337 GA Telesis LLC GA Telesis LLC Purchased - parked
05-Jun-08 24550 Boeing 737 (CFMI) 400 N245DT Nordic Av. Contractor A/S Nordic Av. Contractor A/S Purchased - parked
05-Jun-08 208 Bombardier (de Havilland) Dash 8 100 VH-QQJ Skytrans Airlines Skytrans Airlines Purchased
05-Jun-08 17000224 Embraer 175 LR N135HQ PM Ltd Republic Airlines P. - sale & l.-back on del
05-Jun-08 17000224 Embraer 175 LR N135HQ Republic Airlines Republic Airlines P. off l/fin. term comp
05-Jun-08 DC-824B Fairchild (Swearingen) Metro 23 N471Z Aircraft Consultants Inc Aircraft Consultants Inc Purchased
05-Jun-08 3205 Fairchild/Dornier 328JET N451FJ Ultimate Leasing Ultimate Leasing Purchased - parked
05-Jun-08 20306 Fokker 50 High Perfor. VH-FKW Aircraft Leasing No.3 Pty Ltd Alliance Airlines Purchased - parked
06-Jun-08 21904 Boeing 727 200 Adv. (St3 Hsk) CP- Unconf. Bolivian Airline Unconf. Bolivian Airline Purchased - parked
06-Jun-08 20496 Boeing 737 (JT8D) 200C (St3 Hsk) N2409N Air North Air North Purchased - parked
06-Jun-08 24315 Boeing 747 400BCF (GE) N73713 Kalitta Air Kalitta Air Purchased - parked
06-Jun-08 7307 Bombardier (Canadair) CRJ Regional Jet 200ER N636BR GA Telesis CRJ MSN 7307 LLC GA Telesis LLC P. - sale & lease-back - prkd
06-Jun-08 BC-768B Fairchild (Swearingen) Metro III N768ML Aircraft Consultants Inc Merlin Airways P. - subject to existing lease
06-Jun-08 UE-388 Hawker Beechcraft 1900 D VH-EAS Air New Zealand Neville Evans Purchased - parked
07-Jun-08 793 ATR ATR 72 500 VT-JCM Aircraft Int/l Renting Jet Airways P. - sale & lease-back on del.
09-Jun-08 3508 Airbus A320 210 (CFM) XA-XII Macquarie AirFinance Interjet P. - sale & lease-back on del.
09-Jun-08 3510 Airbus A320 230 (IAE) N499TA Sundew Leasing Ltd TACA Int/l Airlines P. - sale to S.P.C. by lessor on del.
09-Jun-08 32407 Boeing 737 (NG) 700 N160CK Global Aircraft Leasing Inc Global A/c Leasing Partners Purchased - parked
09-Jun-08 402 Bombardier (de Havilland) DHC-6 Twin Otter 300 N204SA Kevin McCole Kevin McCole Purchased
09-Jun-08 19000179 Embraer 190 AR N292JB PM Ltd JetBlue Airways P. - sale & lease-back on del.
09-Jun-08 19000179 Embraer 190 AR N292JB JetBlue Airways JetBlue Airways P. off l./fin. term comp.
10-Jun-08 184 Airbus A330 300 (GE) RP-C3331 Philippine Airlines Philippine Airlines P. off l./ fin. term comp.
10-Jun-08 41055 BAE SYSTEMS (Jetstream) Jetstream 41 N316UE Corporate Flight Mgmt Corporate Flight Mgmt Purchased - parked
10-Jun-08 41055 BAE SYSTEMS (Jetstream) Jetstream 41 N316UE Jet Finance Group LLC Jet Finance Group LLC Purchased - parked
10-Jun-08 23700 Boeing 737 (CFMI) 300 N514AU AeroTurbine Inc AeroTurbine Inc Purchased - parked
10-Jun-08 120253 Embraer EMB-120 Brasilia HA-FAN BASe BASe Purchased
11-Jun-08 3514 Airbus A320 210 (CFM) XA-JCV Macquarie AirFinance Interjet P. - sale & lease-back on del.
11-Jun-08 41075 BAE SYSTEMS (Jetstream) Jetstream 41 G-CEYV Pireaus Bank Pireaus Bank Purchased - parked
11-Jun-08 23456 Boeing 737 (CFMI) 300 N17326 Undis. Bank / Broker / Lessor Continental Airlines P. - sale & lease-back
11-Jun-08 4069 Bombardier (de Havilland) Dash 8 400 RP-C3033 Philippine Airlines Philippine Airlines Purchased
11-Jun-08 20303 Fokker 50 High Performance VH-FKV Aircraft Leasing No.3 Pty Ltd Alliance Airlines Purchased - parked
11-Jun-08 UE-308 Hawker Beechcraft 1900 D PK- Unconf. Indonesian Operator Unconf. Indonesian Optr Purchased
12-Jun-08 53018 Boeing (McDonnell-Douglas) MD-80 83 (MDC) 5N-SAI DANA Airlines DANA Airlines P. off l./fin. term comp.
12-Jun-08 21450 Boeing 727 200 Adv. (St3 Hsk) N674MG Champion Air Champion Air P. off l/fin. term comp. prkd
12-Jun-08 22020 Boeing 727 200 Adv. (St3 Hsk) N681CA Liberty Air Inc Liberty Air Inc Purchased - parked
12-Jun-08 22020 Boeing 727 200 Adv. (St3 Hsk) N681CA Paxair LLC Paxair LLC Purchased - parked
12-Jun-08 23718 Boeing 737 (CFMI) 300 OY-JTC Nordic Aviation Contractor A/S Nordic Aviation Contractor A/S Purchased - parked
12-Jun-08 29265 Boeing 737 (CFMI) 300 LN-KHC Norwegian Air Shuttle Norwegian Air Shuttle Purchased - parked
12-Jun-08 22813 Boeing 757 200 (P&W) N606DL Gecas Asset Mgmt Svcs Gecas Asset Mgmt Svcs Purchased - parked
12-Jun-08 600 Bombardier (de Havilland) DHC-6 Twin Otter 300 C-GIED Provincial Airlines Provincial Airlines Purchased
12-Jun-08 19000183 Embraer 190 AR N961UW PM Ltd US Airways P. - sale & lease-back on del.
12-Jun-08 19000183 Embraer 190 AR N961UW US Airways US Airways P. off l./fin. term comp.
12-Jun-08 19000187 Embraer 190 AR VH-ZPE VBNC9 Pty Ltd Virgin Blue Airlines P. sale & lease-back on del.
12-Jun-08 14501021 Embraer ERJ-135 Legacy 600 N915LX Pheebe limited Poseidon Management SA P. - subject to existing lease
13-Jun-08 23934 Boeing 737 (CFMI) 300 N589US Gecas Asset Management Svcs Gecas Asset Mgmt Svcs Purchased - parked
13-Jun-08 22808 Boeing 757 200 (P&W) N601DL Gecas Asset Management Svcs Gecas Asset Mgmt Svcs Purchased - parked
13-Jun-08 3202 Fairchild/Dornier 328JET N359SK Ultimate Jetcharters Inc Ultimate Jetcharters Inc Purchased - parked
15-Jun-08 2932 Airbus A320 210 (CFM) EI-DSB Undis. Bank / Broker / Lessor Air One P. - subject to existing lease
15-Jun-08 2995 Airbus A320 210 (CFM) EI-DSC Undis. Bank / Broker / Lessor Air One P. - subject to existing lease
15-Jun-08 3076 Airbus A320 210 (CFM) EI-DSD Undis. Bank / Broker / Lessor Air One P. - subject to existing lease
15-Jun-08 3079 Airbus A320 210 (CFM) EI-DSE Undis. Bank / Broker / Lessor Air One P. - subject to existing lease
15-Jun-08 23137 Boeing 747 300 Combi (GE) HS-UTK JT Power LLC Orient Thai Airlines P. - subject to existing lease
15-Jun-08 27134 Boeing 747 400 (P&W) EC-KSM Pullmantur Air Pullmantur Air Purchased - parked
15-Jun-08 7187 Bombardier (Canadair) CRJ Regional Jet 200ER C-GEXM Avmax Int/l Aircraft Leasing Inc Corporate Express P. - subject to existing lease
15-Jun-08 10149 Fokker F.27 100 N32180 Aerospace Trust Mgmt LLC Trustee Aerospace Trust Mgmt LLC Tr. Purchased - parked
16-Jun-08 25898 Boeing 757 200 (RR) N7273 Contrails Capital Inc Contrails Capital Inc Purchased - parked


Aircraft & Engines
Aircraft transactions — 16 June 2008 to 08 July 2008

16-Jun-08 145230 Embraer ERJ-145 MP EC-KSS Lagun Air Lagun Air Purchased
17-Jun-08 198 Airbus A330 300 (GE) RP-C3336 Philippine Airlines Philippine Airlines P. off l/fin. term comp
17-Jun-08 831 Bombardier (de Havilland) DHC-6 Twin Otter 300 5N- Unconf. Nigerian Operator Unconf. Nigerian Operator Purchased - parked
17-Jun-08 52 CASA 212 100 YV Unconf. Venezuelan Corp. Operator Unconf. Venezuelan Corp. Purchased - parked
18-Jun-08 27616 Boeing 767 300ER (GE) N364LF Aircraft SPC-8 ILFC Purchased - parked
18-Jun-08 7192 Bombardier (Canadair) CRJ Regional Jet 200ER N623BR Sky Swallows Sky Swallows Purchased - parked
19-Jun-08 1591 Airbus A320 230 (IAE) N528JB VGS Aircraft Holding (Ireland) Ltd Volito Aviation AB Purchased - parked
19-Jun-08 46093 Boeing (McDonnell-Douglas) DC-8 63C (St3 Hsk) 9G- Unconf. Ghanaian Airline Unconf. Ghanaian Airline Purchased - parked
19-Jun-08 3169 Fairchild/Dornier 328JET N328DP Comfort Line Ltd Comfort Line Ltd Purchased - parked
20-Jun-08 3560 Airbus A319 110 (CFM) D-AHIK AWAS Hamburg Int/l P. - sale & lease-back on del.
20-Jun-08 806 ATR ATR 72 500 F-OIQV Girasol SNC Air Tahiti P. - sale & lease-back on del.
20-Jun-08 541 Bombardier (de Havilland) Dash 8 200 C-FSQT Avmax Int/l Aircraft Leasing Inc Avmax Int/l A/c Leasing Inc Purchased - parked
0-Jun-08 UE-113 Hawker Beechcraft 1900 D HK- Aerolet SEARCA Colombia Purchased - parked
20-Jun-08 UE-406 Hawker Beechcraft 1900 D N832CA Hill Air Executive Inc Hill Air Executive Inc Purchased
21-Jun-08 29925 Boeing 737 (NG) 800 Wingl. EI-CSJ CIT Leasing Corp CIT Aerospace Purchased - parked
22-Jun-08 494 Airbus A310 300 (GE) CS-TEJ GA Telesis LLC GA Telesis LLC Purchased - parked
22-Jun-08 494 Airbus A310 300 (GE) CS-TEJ OMNI Aviacao & Tecnologia OMNI Aviacao & Tecnologia Purchased - parked
22-Jun-08 966 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP YV Transmandu - T. A. Manduca Transmandu - T. A. Manduca Purchased
22-Jun-08 20917 Boeing 737 (JT8D) 200C Adv. (St3 Hsk) N834AL Aloha Air Cargo Aloha Air Cargo Purchased
23-Jun-08 27985 Boeing 737 (NG) 800 Wingl. HA-LKD AerCap Travel Service Hungary P. - subject to existing lease
23-Jun-08 27986 Boeing 737 (NG) 800 Wingl. D-AHFM AerCap TUIfly P. - subject to existing lease
23-Jun-08 27987 Boeing 737 (NG) 800 Wingl. D-AHFO AerCap TUIfly P. - subject to existing lease
23-Jun-08 27988 Boeing 737 (NG) 800 Wingl. D-AHFP AerCap TUIfly P. - subject to existing lease
23-Jun-08 27990 Boeing 737 (NG) 800 Wingl. CN-RPE AerCap Jet4You P. - subject to existing lease
23-Jun-08 27991 Boeing 737 (NG) 800 Wingl. HA-LKC AerCap Travel Service Hungary P. - subject to existing lease
23-Jun-08 28623 Boeing 737 (NG) 800 Wingl. D-AHFS AerCap TUIfly P. - subject to existing lease
23-Jun-08 30593 Boeing 737 (NG) 800 Wingl. D-AHFR AerCap TUIfly P. - sale & lease-back
23-Jun-08 32904 Boeing 737 (NG) 800 Wingl. SE-DZV AerCap TUIFly Nordic AB P. - subject to existing lease
23-Jun-08 34688 Boeing 737 (NG) 800 Wingl. D-ATUG AerCap TUIfly P. - sale & lease-back
23-Jun-08 34689 Boeing 737 (NG) 800 Wingl. D-ATUH AerCap TUIfly P. - sale & lease-back
23-Jun-08 26963 Boeing 757 200 (RR) G-BYAD AerCap Thomsonfly P. - sale & lease-back
23-Jun-08 26964 Boeing 757 200 (RR) G-BYAE AerCap Thomsonfly P. - sale & lease-back
23-Jun-08 26966 Boeing 757 200 (RR) G-BYAH AerCap Thomsonfly P. - sale & lease-back
23-Jun-08 26967 Boeing 757 200 (RR) G-BYAI AerCap Thomsonfly P. - sale & lease-back
23-Jun-08 27235 Boeing 757 200 (RR) G-BYAO AerCap Thomsonfly P. - subject to existing lease
23-Jun-08 27236 Boeing 757 200 (RR) G-BYAP AerCap Thomsonfly P. - sale & lease-back
23-Jun-08 29137 Boeing 767 300ER (GE) G-OBYG AerCap Thomsonfly P. - sale & lease-back
23-Jun-08 29138 Boeing 767 300ER (GE) G-OBYI AerCap Thomsonfly P. - sale & lease-back
24-Jun-08 AC-715 Fairchild (Swearingen) Metro III N115GS Coast Aviation Credit LLC Coast Aviation Credit LLC Purchased - parked
25-Jun-08 23077 Boeing 737 (JT8D) 200 Adv. (St3 Hsk) YA- Pamir Airways Pamir Airways Purchased
25-Jun-08 35250 Boeing 777 300ER (GE) C-FRAM BOC Aviation Air Canada P. - sale & lease-back on del.
25-Jun-08 334 Bombardier (de Havilland) DHC-6 Twin Otter 300 N344CS Fayard Enterprises LLC Fayard Enterprises LLC Purchased - parked
26-Jun-08 2046 BAE SYSTEMS (HS) ATP G-BTZG West Air Sweden West Air Sweden Purchased - parked
26-Jun-08 2047 BAE SYSTEMS (HS) ATP G-BTZH West Air Sweden West Air Sweden Purchased - parked
26-Jun-08 2050 BAE SYSTEMS (HS) ATP G-BTZK West Air Sweden West Air Sweden Purchased - parked
26-Jun-08 53207 Boeing (McDonnell-Douglas) MD-80 87 EC-KSF AeroFan AeroFan Purchased
27-Jun-08 10 Airbus A380 840 (RR) 9V-SKE Doric Asset Finance Ltd Singapore Airlines P. - sale & lease-back on del.
27-Jun-08 35708 Boeing 737 (NG) 800 Wingl. LN-RRG SAS SAS Purchased
27-Jun-08 35708 Boeing 737 (NG) 800 Wingl. EC- Sumisho Aircraft Asset Mgmt BV Sumisho A/c Asset Mgmt BV Purchased
01-Jul-08 120250 Embraer EMB-120 Brasilia ER N250YV Northstar Aviation Svcs Inc Northstar Aviation Svcs Inc Purchased
01-Jul-08 120289 Embraer EMB-120 Brasilia ER N289YV Northstar Aviation Svcs Inc Northstar Aviation Svcs Inc Purchased
01-Jul-08 200 Airbus A330 300 (GE) RP-C3337 Philippine Airlines Philippine Airlines P. off l./fin. term comp.
01-Jul-08 120289 Embraer EMB-120 Brasilia ER N289YV N652CT LLC N652CT LLC Purchased
01-Jul-08 24773 Boeing 737 (CFMI) 400 N742VA Vision 737-400 Trust Vision Airlines P. - subject to existing lease
02-Jul-08 3538 Airbus A320 230 (IAE) N680TA Sundrops Leasing Limited TACA Int/l Airlines P. - sale & lease-back on del.
02-Jul-08 120205 Embraer EMB-120 Brasilia N205CA Pimegal Consultants Ltd Pimegal Consultants Ltd Purchased - parked
02-Jul-08 365 Bombardier (de Havilland) Dash 8 300 VH-XFZ Skippers Aviation Skippers Aviation Purchased
02-Jul-08 22492 Boeing 727 200 Adv. (St3 Hsk) N685CA CSDS Aircraft Sales & Leasing CSDS A/c Sales & Leasing Purchased - parked
02-Jul-08 727 BAE SYSTEMS (Jetstream) Jetstream 31 C-GKGM Gordon Peariso Gordon Peariso Purchased - parked
02-Jul-08 962 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP N962AE Corporate Flight Management Corporate Flight Mgmt Purchased - parked
02-Jul-08 962 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP N962AE Jetstream Sales LLC Jetstream Sales LLC Purchased - parked
02-Jul-08 963 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP N963AE Jetstream Sales LLC Jetstream Sales LLC Purchased - parked
02-Jul-08 498 Bombardier (de Havilland) Dash 8 200 N354PH Win Win Svcs LLC Horizon Air P. - subject to existing lease
02-Jul-08 963 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP N963AE Corporate Flight Management Corporate Flight Mgmt Purchased - parked
03-Jul-08 119 Bombardier (de Havilland) DHC-6 Twin Otter 200 N323SJ Desert Sand Aircraft Leasing Co Inc Desert Sand A/c Leasing Co Inc Purchased - parked
03-Jul-08 305 Bombardier (de Havilland) Dash 8 300 V2-LFW Avmax Int/l Aircraft Leasing Inc Avmax Int/l A/c Leasing Inc Purchased - parked
03-Jul-08 149 Bombardier (de Havilland) DHC-6 Twin Otter 200 N469TS Desert Sand Aircraft Leasing Co Inc Desert Sand A/c Leasing Purchased - parked
03-Jul-08 UE-101 Hawker Beechcraft 1900 D 5Y- Unconf. Kenyan Operator Unconf. Kenyan Operator Purchased
03-Jul-08 24039 Boeing 767 300ER (GE) N358AA General Electric Company American Airlines P. off l./fin. term comp.
03-Jul-08 23980 Boeing 737 (CFMI) 400 N239DT Nordic Aviation Contractor A/S Nordic Aviation Contr. A/S Purchased - parked
03-Jul-08 24039 Boeing 767 300ER (GE) N358AA NAS Investments 9 LLC American Airlines P. - subject to existing lease
03-Jul-08 41057 BAE SYSTEMS (Jetstream) Jetstream 41 HK-4568X Easyfly Easyfly Purchased
04-Jul-08 4071 Bombardier (de Havilland) Dash 8 400 RP-C3031 Philippine Airlines Philippine Airlines Purchased
05-Jul-08 11470 Fokker 100 HL7777 Korstar Airlines Korstar Airlines Purchased - parked
07-Jul-08 129 Airbus A340 310 (CFM) B-2380 ICBC Financial Leasing Co China Eastern Airlines P. - sale & lease-back
07-Jul-08 196 Airbus A340 310 (CFM) RP-C3434 Philippine Airlines Philippine Airlines P. off l./fin. term comp.
07-Jul-08 4070 Bombardier (de Havilland) Dash 8 400 RP-C3032 Philippine Airlines Philippine Airlines Purchased - parked
08-Jul-08 23122 Boeing 737 (JT8D) 200C Advanced C-GANV Air North Air North Purchased - parked
08-Jul-08 AC-655B Fairchild (Swearingen) Metro III N2691W CBG LLC Key Lime Air P. - subject to existing lease
08-Jul-08 BC-779B Fairchild (Swearingen) Metro III N779BC CBG LLC Key Lime Air P. - subject to existing lease
08-Jul-08 DC-820B Fairchild (Swearingen) Metro 23 N820DC CBG LLC Key Lime Air P. - subject to existing lease
08-Jul-08 AC-508 Fairchild (Swearingen) Metro III N508FA CBG LLC Key Lime Air P. - subject to existing lease
08-Jul-08 3543 Airbus A320 230 (IAE) VT-DNT Amentum Capital Ltd. Deccan P. - sale & lease-back on del.
08-Jul-08 E2030 BAE SYSTEMS (HS) 146 200 TN-AIC Mouritzen Family Trust Allegiance Air Purchased
08-Jul-08 UE-56 Hawker Beechcraft 1900 D N85341 MIW Aerospace Inc MIW Aerospace Inc Purchased - parked
08-Jul-08 DC-882B Fairchild (Swearingen) Metro 23 N882DC CBG LLC Key Lime Air P. - subject to existing lease
08-Jul-08 BC-787B Fairchild (Swearingen) Metro III N787KL CBG LLC Key Lime Air P. - subject to existing lease

Aircraft transactions — 08 July 2008 to 21 July 2008

08-Jul-08 30322 Boeing 747 400 (GE) N322SG Undis. Bank / Broker / Lessor SonAir P. - subj. to exist. lease - pkd
08-Jul-08 30322 Boeing 747 400 (GE) N322SG SonAir SonAir Purchased - parked
09-Jul-08 145039 Embraer ERJ-145 EU UR-DNK Dniproavia Dniproavia Purchased - parked
09-Jul-08 544 Bombardier (de Havilland) Dash 8 300 8Q-IAO Island Aviation Svcs Island Aviation Svcs Purchased
09-Jul-08 277 Bombardier (de Havilland) Dash 8 100 C-FDWO Northstar Avlease Ltd Northstar Trading Ltd P. - subj. to exist. lease - pkd
09-Jul-08 33027 Boeing 737 (NG) 800 Wingl. PR-GIE Frederick Aviation Ltd GOL Linhas Aereas P. - subject to existing lease
09-Jul-08 14500972 Embraer ERJ-135 Legacy 600 A6-PJE Prestige Jet Prestige Jet Purchased
10-Jul-08 7990 Bombardier (Canadair) CRJ Regional Jet 200LR UR-RUS ISD Avia ISD Avia Purchased
10-Jul-08 UE-400 Hawker Beechcraft 1900 D N835CA Wells Fargo Bank Northwest NA Wells Fargo Bank N. NA Purchased
10-Jul-08 2040 BAE SYSTEMS (HS) ATP SE-MAK European Turboprop Mgmt AB West Air Sweden P. - sale & lease-back - prkd
10-Jul-08 935 Airbus A330 340 (RR) B-6111 CDB Leasing Company China Southern Airlines P. sale & lease-back on del.
10-Jul-08 343 ATR ATR 42 300 PT-MFJ Nordic Aviation Contractor A/S Pantanal P. - subject to existing lease
10-Jul-08 513 ATR ATR 42 500 PJ-XLN Nordic Aviation Contractor A/S Dutch Antilles Express P. - subject to existing lease
10-Jul-08 3586 Airbus A319 110 (CFM) D-ABGL Eagle Aircraft Leasing Ltd airberlin P. sale & lease-back on del.
10-Jul-08 376 ATR ATR 42 300 PT-MFM Nordic Aviation Contractor A/S Pantanal P. - subject to existing lease
10-Jul-08 90 ATR ATR 42 300 PJ-SLH Nordic Aviation Contractor A/S Dutch Antilles Express P. - subject to existing lease
10-Jul-08 378 ATR ATR 42 300 PJ-XLM Nordic Aviation Contractor A/S Dutch Antilles Express P. - subject to existing lease
10-Jul-08 21450 Boeing 727 200 Adv. (St3 Hsk) N674MG Universal Asset Management Inc Universal Asset Mgmt Inc Purchased - parked
10-Jul-08 23107 Boeing 767 200ERM (P&W) ET-AIF Pipeline Investments Pipeline Investments Purchased - parked
10-Jul-08 UE-397 Hawker Beechcraft 1900 D N837CA AVN Air LLC AVN Air LLC Purchased
10-Jul-08 19806 Boeing 727 100F (St3 Hsk) N727YK Flightstar Trading LLC Flightstar Trading LLC Purchased - parked
10-Jul-08 30735 Boeing 757 200 (RR) LY-SKJ Aurela Aurela Purchased - parked
11-Jul-08 49789 Boeing (McDonnell-Douglas) MD-80 83 (MDC) N789BV Global Aircraft Solutions Inc Global A/c Leasing Partners Purchased - parked
11-Jul-08 30195 Boeing 737 (NG) 800 LN-RPM SAS SAS P. off lease/fin. term comp.
11-Jul-08 35142 Boeing 737 (NG) 800 Wingl. OO-JBG Undis. Bank / Broker / Lessor JetAir Fly P. sale & lease-back on del.
13-Jul-08 UK-2 Boeing (McDonnell-Douglas) C-17 A ZZ172 Royal Air Force Royal Air Force P. off lease/fin. term comp.
14-Jul-08 11 Saab 340 A Cargo S5- Bridges Worldwide Bridges Worldwide Purchased - parked
14-Jul-08 886 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP C-GQJT Pascan Aviation Pascan Aviation Purchased
14-Jul-08 4206 Bombardier (de Havilland) Dash 8 400 G-ECOD Rand Merchant Bank Flybe P. sale & lease-back on del.
14-Jul-08 35630 Boeing 737 (NG) 800 Wingl. JA737R SC Air 737R Ltd Skymark Airlines P. - sale to S.P.C. by lessor on del.
14-Jul-08 UE-193 Hawker Beechcraft 1900 D N69548 Jet Management Ltd Jet Management Ltd Purchased
14-Jul-08 877 BAE SYSTEMS (Jetstream) Jetstream 31 Super C-FKQA Pascan Aviation Pascan Aviation Purchased - parked
14-Jul-08 145600 Embraer ERJ-135 LR 03-Jan-07 Brazilian Air Force Brazilian Air Force Purchased
14-Jul-08 UE-193 Hawker Beechcraft 1900 D N69548 Rangeflyers Inc Rangeflyers Inc Purchased
14-Jul-08 120036 Embraer EMB-120 Brasilia VQ- Unconf. Turks & Caicos Airline Unconf. Turks & Caicos Airl Purchased - parked
15-Jul-08 27424 Boeing 737 (CFMI) 500 G-GFFE Jet Trading And Leasing LLC British Airways P. - subject to existing lease
15-Jul-08 289 Bombardier (de Havilland) Dash 8 100 OE-HWG Austrojet Austrojet P. off lease/fin. term comp.
15-Jul-08 E3202 BAE SYSTEMS (HS) 146 300 G-JEBF Aircraft Traders Belgium SA Aircraft Traders Belgium SA Purchased - parked
15-Jul-08 749 BAE SYSTEMS (Jetstream) Jetstream 31 G-NOSS Highland Airways Highland Airways Purchased - parked
15-Jul-08 24036 Boeing 767 300ER (GE) N355AA General Electric Company American Airlines P. off lease/fin. term comp.
15-Jul-08 261 ATR ATR 42 300 C-FCIJ Aviation Inventory Resources Inc Aviation Inv. Resources Inc Purchased - parked
15-Jul-08 24036 Boeing 767 300ER (GE) N355AA NAS Investments 9 LLC American Airlines P. - subject to existing lease
15-Jul-08 23676 Boeing 747 200B Combi (GE) F-WQAJ Mahan Air Mahan Air Purchased - parked
15-Jul-08 3560 Airbus A319 110 (CFM) D-AHIK Amentum Capital Ltd. Hamburg Int/l P. - subject to existing lease
15-Jul-08 25767 Boeing 737 (CFMI) 500 HL7232 Guggenheim Aviation Partners Asiana Airlines P. - subject to existing lease
15-Jul-08 440 Airbus A320 230 (IAE) PT-MZN GMT Global Republic Aviation TAM Linhas Aereas P. - subject to existing lease
15-Jul-08 3533 Airbus A319 110 (CFM) D-AHIJ Amentum Capital Ltd. Hamburg Int/l P. - subject to existing lease
15-Jul-08 UE-62 Hawker Beechcraft 1900 D 5Y-BVG Aircraft Africa Contracts Co. Pty Ltd Executive Turbine Kenya Purchased
15-Jul-08 24855 Boeing 747 400 (RR) ZK-NBT Global Knafaim Leasing Ltd Air New Zealand P. - sale & lease-back
15-Jul-08 53209 Boeing (McDonnell-Douglas) MD-80 87 EC-FFA Tiger Aircraft Trading Inc Iberia P. - sale & lease-back - prkd
15-Jul-08 375 Airbus A320 210 (CFM) A9C-ED Guggenheim Aviation Partners Gulf Air P. - subject to existing lease
15-Jul-08 22354 Boeing 737 (JT8D) 200 Adv. (St3 Hsk) JY-JRA Royal Falcon Air Royal Falcon Air Purchased - parked
15-Jul-08 740 BAE SYSTEMS (Jetstream) Jetstream 31 G-FARA Highland Airways Highland Airways Purchased - parked
15-Jul-08 E3209 BAE SYSTEMS (HS) 146 300 G-JEBG Aircraft Traders Belgium SA Aircraft Traders Belgium SA Purchased - parked
15-Jul-08 189 Airbus A330 300 (GE) RP-C3335 Philippine Airlines Philippine Airlines P. off lease/fin. term comp.
15-Jul-08 335 Airbus A320 230 (IAE) PT-MZQ GMT Global Republic Aviation TAM Linhas Aereas P. - subject to existing lease
15-Jul-08 25605 Boeing 747 400 (RR) ZK-NBU Global Knafaim Leasing Ltd Air New Zealand P. - sale & lease-back
15-Jul-08 250 Airbus A320 230 (IAE) PT-MZO GMT Global Republic Aviation TAM Linhas Aereas P. - subject to existing lease
15-Jul-08 145137 Embraer ERJ-145 ER 30-Nov-06 Brazilian Air Force Brazilian Air Force Purchased - parked
15-Jul-08 23798 Boeing 737 (CFMI) 300 PP-VTB Ram Air Sales Inc Ram Air Sales Inc Purchased - parked
15-Jul-08 334 Airbus A320 230 (IAE) PT-MZR GMT Global Republic Aviation TAM Linhas Aereas P. - subject to existing lease
15-Jul-08 53197 Boeing (McDonnell-Douglas) MD-80 88 EC-FJE Tiger Aircraft Trading Inc Tiger Aircraft Trading Inc Purchased - parked
15-Jul-08 4023 Bombardier (de Havilland) Dash 8 400 LN-RDH SAS SAS P. off lse/fin. term comp. - prkd
15-Jul-08 325 Airbus A320 210 (CFM) A9C-EB Guggenheim Aviation Partners Gulf Air P. - subject to existing lease
16-Jul-08 32807 Boeing 737 (NG) BBJ1 N8767 Unconf. American Operator Unconf. American Operator Purchased
16-Jul-08 29263 Boeing 747 400 (GE) N263SG Undis. Bank / Broker / Lessor SonAir Purchased - parked
16-Jul-08 30195 Boeing 737 (NG) 800 LN-RPM Banc of America Leasing Ireland Co Ltd SAS P. - sale & lease-back
16-Jul-08 49392 Boeing (McDonnell-Douglas) MD-80 83 (MDC) N392AP C&C Engines Corp C&C Engines Corp Purchased - parked
16-Jul-08 30470 Boeing 737 (NG) 800 LN-RPN Banc of America Leasing Ireland Co Ltd SAS P. - sale & lease-back
16-Jul-08 3547 Airbus A320 230 (IAE) VH-VQD Wombat 3547 Leasing Pty Ltd Jetstar P. sale & lease-back on del.
17-Jul-08 22122 Boeing 737 (JT8D) 200 Adv. (St3 Hsk) CC-CTF Aviation Administration Ltd Aviation Administration Ltd Purchased - parked
17-Jul-08 120265 Embraer EMB-120 Brasilia N285AS Pimegal Consultants Ltd Pimegal Consultants Ltd Purchased - parked
17-Jul-08 120236 Embraer EMB-120 Brasilia ER N283AS Pimegal Consultants Ltd Pimegal Consultants Ltd Purchased - parked
17-Jul-08 34622 Boeing 737 (NG) BBJ1 M-URUS Ingram Svcs Limited Silver Arrows P. - sale & lease-back
17-Jul-08 19000191 Embraer 190 AR N963UW US Airways US Airways P. off lease/fin. term comp.
17-Jul-08 937 Airbus A330 340 (RR) B-6112 CDB Leasing Company China Southern Airlines P. sale & lease-back on del.
17-Jul-08 19000191 Embraer 190 AR N963UW PM Ltd US Airways P. sale & lease-back on del.
17-Jul-08 19000193 Embraer 190 AR VH-ZPF VBNC9 Pty Ltd Virgin Blue Airlines P. sale & lease-back on del.
17-Jul-08 3556 Airbus A320 230 (IAE) CC-CQP Loica Leasing Ltd LAN Airlines P. sale & lease-back on del.
17-Jul-08 120231 Embraer EMB-120 Brasilia ER N280AS Pimegal Consultants Ltd Pimegal Consultants Ltd Purchased - parked
18-Jul-08 24330 Boeing 757 200 (RR) N933FD FedEx FedEx Purchased - parked
18-Jul-08 84 Saab 340 A Cargo N163PW Worldwide Aircraft Svcs Inc Worldwide Aircraft Svcs Inc Purchased - parked
18-Jul-08 41076 BAE SYSTEMS (Jetstream) Jetstream 41 G-CEYW Pireaus Bank Pireaus Bank Purchased - parked
18-Jul-08 49843 Boeing (McDonnell-Douglas) MD-80 87 EC-KRV Pronair Pronair Purchased
18-Jul-08 84 Saab 340 A Cargo N163PW IBC Airways IBC Airways Purchased - parked
21-Jul-08 3541 Airbus A320 230 (IAE) VT-INU Allco Leasing (IGO No.2) Ltd IndiGo Airlines P. sale & lease-back on del.
21-Jul-08 UE-85 Hawker Beechcraft 1900 D ZS-SER National Airways Corporation National Airways Corp. Purchased


Aircraft & Engines
Aircraft transactions — 21 July 2008 to 07 August 2008

21-Jul-08 23544 Boeing 737 (CFMI) 300 PH-BDI Mountain Capital Partners LLC Mountain Cap. Partns. LLC Purchased - parked
21-Jul-08 3167 Fairchild/Dornier 328JET N367SK Livemercial Aviation Holding LLC Livemercial Av. Holding LLCPurchased - parked
21-Jul-08 DC-819B Fairchild (Swearingen) Metro 23 N819SK Rapid Aviation Inc American Jet P. - subject to existing lease
22-Jul-08 UE-265 Hawker Beechcraft 1900 D ZS-SET National Airways Corporation National Airways Corp. Purchased
22-Jul-08 E3327 BAE SYSTEMS (Avro) RJ Avroliner RJ100 OO-DWE Undis. Bank / Broker / Lessor Brussels Airlines P. - subject to existing lease
22-Jul-08 E3324 BAE SYSTEMS (Avro) RJ Avroliner RJ100 OO-DWD Undis. Bank / Broker / Lessor Brussels Airlines P. - subject to existing lease
22-Jul-08 UE-39 Hawker Beechcraft 1900 D ZS-OLY Solenta Aviation Solenta Aviation Purchased
22-Jul-08 3012 Fairchild/Dornier 328 100 N334PH Aerosyncro Aerosyncro Purchased - parked
22-Jul-08 E3322 BAE SYSTEMS (Avro) RJ Avroliner RJ100 OO-DWC Undis. Bank / Broker / Lessor Brussels Airlines P. - subject to existing lease
22-Jul-08 UE-200 Hawker Beechcraft 1900 D ZS-OYE Solenta Aviation Solenta Aviation Purchased
23-Jul-08 105 Bombardier (de Havilland) Dash 8 100 C-FOVR Regional 1 Airlines Regional 1 Airlines Purchased
23-Jul-08 23063 Boeing 737 (CFMI) 300 N667SW AeroTurbine Inc AeroTurbine Inc Purchased - parked
23-Jul-08 28282 Boeing 747 400D (GE) N483YR Avion Aircraft Trading HF Avion Aircraft Trading HF Purchased - parked
23-Jul-08 UE-28 Hawker Beechcraft 1900 D ZS-NAC Solenta Aviation Solenta Aviation Purchased
23-Jul-08 UE-117 Hawker Beechcraft 1900 D ZS-OYC Solenta Aviation Solenta Aviation Purchased
23-Jul-08 145042 Embraer ERJ-145 EU UR-DNL Dniproavia Dniproavia Purchased - parked
23-Jul-08 47466 Boeing (McDonnell-Douglas) DC-9 32 ZS-MRJ Global Aviation Investments (Pty) Ltd Global Av. Invest. (Pty) Ltd Purchased - parked
23-Jul-08 19000195 Embraer 190 AR VH-ZPG VBNC9 Pty Ltd Virgin Blue Airlines P. sale & lease-back on del.
24-Jul-08 25249 Boeing 737 (CFMI) 500 Z3-AAH MAT - Macedonian Airlines MAT - Macedonian Airlines Purchased
24-Jul-08 17000234 Embraer 175 LR N138HQ Republic Airlines Republic Airlines P. off lease/fin. term comp.
24-Jul-08 145325 Embraer ERJ-145 EP UR-DNI Dniproavia Dniproavia Purchased
24-Jul-08 3585 Airbus A318 120 (P&W) CC-CZJ Loica Leasing Ltd LAN Airlines P. sale & lease-back on del.
24-Jul-08 17000234 Embraer 175 LR N138HQ PM Ltd Republic Airlines P. sale & lease-back on del.
24-Jul-08 456 Airbus A330 240 (RR) G-OJMC Radar Aviation Ltd Thomas Cook Airlines P. - subject to existing lease
24-Jul-08 3562 Airbus A320 230 (IAE) LZ-WZB General Electric Capital Corp Wizz Air Bulgaria P. sale & lease-back on del.
25-Jul-08 1353 Airbus A320 230 (IAE) N464TA Air Mart Capital LLC Air Mart Capital LLC Purchased
25-Jul-08 29228 Boeing 767 300ER (GE) CC-CZT Condor Leasing LLC LAN Airlines P. - sale & lease-back
25-Jul-08 29229 Boeing 767 300ER (GE) CC-CZU Eagle Leasing LLC LAN Airlines P. - sale & lease-back
25-Jul-08 UE-16 Hawker Beechcraft 1900 D HA-FAM Farnair Hungary Farnair Hungary Purchased
25-Jul-08 3563 Airbus A320 210 (CFM) EI-DSU Aircraft Purchase Comp. No. 10 Ltd Air One P. sale & lease-back on del.
25-Jul-08 AT-004 Fairchild (Swearingen) Metro Merlin IV N94CE CIS Holdings NV Inc CIS Holdings NV Inc Purchased
25-Jul-08 29227 Boeing 767 300ER (GE) CC-CZW Condor Leasing LLC LAN Airlines P. - sale & lease-back
25-Jul-08 22135 Boeing 737 (JT8D) 200 Adv. CC-CRQ Aviation Administration Ltd Aviation Administration Ltd Purchased - parked
25-Jul-08 201 ATR ATR 72 200 PK-YRY Trigana Air Trigana Air Purchased
25-Jul-08 29644 Boeing 737 (NG) 800 TC-SKH Babcock & Brown Air Ltd Sky Airlines Securitized
27-Jul-08 32318 Boeing 777 200ER (RR) 9V-SRN Pembroke Group Singapore Airlines P. - sale & lease-back
28-Jul-08 14501058 Embraer ERJ-135 Legacy 600 N89FE FE Aircraft Leasing Corp FirstEnergy Solutions Corp P. sale & lease-back on del.
28-Jul-08 UE-193 Hawker Beechcraft 1900 D D2- SonAir SonAir Purchased - parked
28-Jul-08 22815 Boeing 757 200 (P&W) N608DA Undis. Bank / Broker / Lessor Delta Air Lines P. - sale & lease-back
28-Jul-08 837 Bombardier (de Havilland) DHC-6 Twin Otter 300 C-GJDI Irving Air Service Inc Irving Air Service Inc Purchased
28-Jul-08 22812 Boeing 757 200 (P&W) N605DL Delta Air Lines Delta Air Lines P. off lease/fin. term comp.
29-Jul-08 22820 Boeing 757 200 (P&W) N613DL Undis. Bank / Broker / Lessor Delta Air Lines P. - sale & lease-back
29-Jul-08 22814 Boeing 757 200 (P&W) N607DL Delta Air Lines Delta Air Lines P. off lse/fin. term comp. prkd
29-Jul-08 3237 Airbus A320 210 (CFM) EC-KJD Babcock & Brown Air Ltd Clickair Securitized
29-Jul-08 23124 Boeing 737 (JT8D) 200C Adv. (St3 Hsk) N840AL Esperanza Aviatn - Msn 23124 LLC Esp. Avn - Msn 23124 LLC Purchased - parked
30-Jul-08 49932 Boeing (McDonnell-Douglas) MD-80 82 (MDC) N887GA Allegiant Air Allegiant Air Purchased
30-Jul-08 176 Airbus A340 310 (CFM) RP-C3431 Philippine Airlines Philippine Airlines P. off lease/ fin. term comp.
30-Jul-08 324 Bombardier (de Havilland) Dash 8 100 C-FSQY Regional 1 Airlines Regional 1 Airlines Purchased
30-Jul-08 28495 Boeing 767 300ER (GE) N495AN AWMS I AWAS Purchased - parked
30-Jul-08 4212 Bombardier (de Havilland) Dash 8 400 G-ECOE Rand Merchant Bank Flybe P. sale & lease-back on del.
31-Jul-08 3589 Airbus A319 110 (CFM) D-AHIL Lloyd Air Portfolio II Hamburg Int/l P. sale & lease-back on del.
31-Jul-08 938 Airbus A340 310 (CFM) OH-LQE Finnair Aircraft Finance Ltd Finnair P. sale & lease-back on del.
31-Jul-08 22822 Boeing 757 200 (P&W) N615DL Undis. Bank / Broker / Lessor Delta Air Lines P. - sale & lease-back
31-Jul-08 34958 Boeing 737 (NG) 800 Wingl. VT-SGD Babcock & Brown Aircraft Mgmt LLC Babcock & Brown A/c Mgmt Purchased
31-Jul-08 36604 Boeing 737 (NG) 800 Wingl. ZK-PBK VBNC9 Pty Ltd Pacific Blue Airlines P. sale & lease-back on del.
31-Jul-08 496 Bombardier (de Havilland) Dash 8 200 N353PH Win Win Svcs LLC Horizon Air P. - subject to existing lease
31-Jul-08 23861 Boeing 737 (CFMI) 300 N526AU Gecas Asset Management Svcs Gecas Asset Mgmt Svcs Purchased - parked
31-Jul-08 19000199 Embraer 190 AR VH-ZPH VBNC9 Pty Ltd Virgin Blue Airlines P. sale & lease-back on del.
31-Jul-08 AT-004 Fairchild (Swearingen) Metro Merlin IV N94CE Elite Air Svcs Inc Elite Air Svcs Inc Purchased
31-Jul-08 22819 Boeing 757 200 (P&W) N612DL Delta Air Lines Delta Air Lines P. off lease/fin. term comp.
01-Aug-08 961 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP N961AE Corporate Flight Management Corporate Flight Mgmt Purchased - parked
01-Aug-08 UE-318 Hawker Beechcraft 1900 D ZS-OYK Solenta Aviation Solenta Aviation Purchased
01-Aug-08 959 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP N959AE Jetstream Sales LLC Jetstream Sales LLC Purchased - parked
01-Aug-08 961 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP N961AE Jetstream Sales LLC Jetstream Sales LLC Purchased - parked
01-Aug-08 14501045 Embraer ERJ-135 Legacy 600 G-CFJA Undis. Bank / Broker / Lessor TAG Aviation (UK) Ltd Purchased
01-Aug-08 783 BAE SYSTEMS (Jetstream) Jetstream 31 C-GPSN Integra Air Integra Air Purchased
01-Aug-08 26205 Boeing 767 300ER (P&W) CS-TLQ EuroAtlantic Airways EuroAtlantic Airways P. off lease/fin. term comp.
01-Aug-08 UK-3 Boeing (McDonnell-Douglas) C-17 A ZZ173 Royal Air Force Royal Air Force P. off lease/fin. term comp.
01-Aug-08 UE-273 Hawker Beechcraft 1900 D ZS-OYJ Solenta Aviation Solenta Aviation Purchased
01-Aug-08 959 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP N959AE Corporate Flight Management Corporate Flight Mgmt Purchased - parked
04-Aug-08 41063 BAE SYSTEMS (Jetstream) Jetstream 41 N325UE Jet Finance Group LLC Jet Finance Group LLC Purchased - parked
04-Aug-08 649 Airbus A319 110 (CFM) VP-BIU VL649 Limited Rossiya - Russian Airlines P. - subj. to exist. lease - pkd
04-Aug-08 11491 Fokker 100 G-CFDD Eskglen Shipping Company Eskglen Shipping Company Purchased - parked
04-Aug-08 11498 Fokker 100 G-CFBU Eskglen Shipping Company Eskglen Shipping Company Purchased - parked
04-Aug-08 41063 BAE SYSTEMS (Jetstream) Jetstream 41 N325UE Corporate Flight Management Corporate Flight Mgmt Purchased - parked
04-Aug-08 3037 Fairchild/Dornier 328 100 PK- Unconf. Indonesian Operator Unconf. Indonesian Oper. Purchased
05-Aug-08 756 BAE SYSTEMS (Jetstream) Jetstream 31 C-GPSO Integra Air Integra Air Purchased
05-Aug-08 945 Airbus A330 200 (GE) VH-EBK Macquarie Managed Investments Ltd Qantas P. sale & lease-back on del.
05-Aug-08 19000197 Embraer 190 AR N964UW PM Ltd US Airways P. sale & lease-back on del.
05-Aug-08 19000197 Embraer 190 AR N964UW US Airways US Airways P. off lease/fin. term comp.
05-Aug-08 27145 Boeing 757 200 (RR) N930UW FedEx FedEx Purchased - parked
05-Aug-08 270 Saab 340 B N284DC Lambert Leasing Inc Lambert Leasing Inc Purchased - parked
06-Aug-08 22818 Boeing 757 200 (P&W) N611DL Delta Air Lines Delta Air Lines P. off lease/fin. term comp.
06-Aug-08 24293 Boeing 757 200 (RR) N293AW FedEx FedEx Purchased - parked
06-Aug-08 3597 Airbus A320 210 (CFM) VT-WAG RBS Aviation Capital Go Air P. sale & lease-back on del.
06-Aug-08 22821 Boeing 757 200 (P&W) N614DL Undis. Bank / Broker / Lessor Delta Air Lines P. - sale & lease-back
06-Aug-08 145320 Embraer ERJ-145 MP SE-RIA Aircraft Solutions Lux 1 Sarl City Airline P. - subject to existing lease
06-Aug-08 49931 Boeing (McDonnell-Douglas) MD-80 82 (MDC) N886GA Allegiant Air Allegiant Air P. off lease/fin. term comp.
07-Aug-08 19000198 Embraer 190 AR N965UW US Airways US Airways P. off lease/fin. term comp.

Aircraft transactions — 07 August 2008 to 26 August 2008

07-Aug-08 3206 Fairchild/Dornier 328JET N328EF 328 Support Svcs GmbH 328 Support Svcs GmbH Purchased - parked
07-Aug-08 E3122 BAE SYSTEMS (HS) 146 300 ZS-SBL Kingfield Boeinginvestment Executive Turbine Air Charter P. - sale & lease-back - prkd
07-Aug-08 24626 Boeing 757 200 (P&W) N505UA United Airlines United Airlines P. off lease/fin. term comp.
07-Aug-08 17000235 Embraer 175 LR N201JQ Shuttle America Shuttle America P. off lease/fin. term comp.
07-Aug-08 19000198 Embraer 190 AR N965UW PM Ltd US Airways P. - sale & lease-back on del
07-Aug-08 20037 Boeing 727 200F (M) (St3 Hsk) PR-MTK TAF Linhas Aereas TAF Linhas Aereas Purchased
07-Aug-08 17000235 Embraer 175 LR N201JQ PM Ltd Shuttle America P. - sale & lease-back on del
08-Aug-08 11373 Fokker 100 VH-FNU Capital Lse Austral. Portf. One Pty Ltd Avation Plc Purchased - parked
08-Aug-08 46915 Boeing (McDonnell-Douglas) DC-10 30 N705TZ World Airways World Airways Purchased - parked
08-Aug-08 46581 Boeing (McDonnell-Douglas) DC-10 30 N224NW World Airways World Airways Purchased - parked
08-Aug-08 23086 Boeing 737 (JT8D) 200 Adv. (St3 Hsk) N314DA Jet Midwest Jet Midwest Purchased - parked
08-Aug-08 19000202 Embraer 190 AR VH-ZPI VBNC9 Pty Ltd Virgin Blue Airlines P. - sale & lease-back on del
08-Aug-08 3206 Fairchild/Dornier 328JET OE-HRJ Welcome Air Welcome Air Purchased - parked
08-Aug-08 23075 Boeing 737 (JT8D) 200 Adv. (St3 Hsk) N303DL Jet Midwest Jet Midwest Purchased - parked
08-Aug-08 868 BAE SYSTEMS (Jetstream) Jetstream 31 Super VH-OTA Aeropelican Air Svcs Aeropelican Air Svcs Purchased - parked
08-Aug-08 46580 Boeing (McDonnell-Douglas) DC-10 30 N223NW World Airways World Airways Purchased - parked
08-Aug-08 UE-379 Hawker Beechcraft 1900 D HB-AEM Zimex Business Aviation Ltd Zimex Aviation Purchased
08-Aug-08 47185 Boeing (McDonnell-Douglas) DC-9 31 (St3 Hsk) N924RW GA Telesis LLC GA Telesis LLC Purchased - parked
11-Aug-08 3019 Fairchild/Dornier 328 100 N328DC Braun Racing LLC Braun Racing LLC Purchased
11-Aug-08 DC-812B Fairchild (Swearingen) Metro 23 N812LD Aircraft Consultants Inc Aircraft Consultants Inc Purchased
11-Aug-08 3019 Fairchild/Dornier 328 100 N328DC Spitfire Aviation Parts Inc Spitfire Aviation Parts Inc Purchased
11-Aug-08 36721 Boeing 737 (NG) 700 N349AT Bank of America NA Bank of America NA Purchased - parked
11-Aug-08 E2098 BAE SYSTEMS (HS) 146 200 VH-JJT IAP Group Australia Pty Ltd IAP Group Australia Pty Ltd Purchased - parked
11-Aug-08 1494 Airbus A319 110 (CFM) N320NP The Silver Wing II Ltd Silverwing Purchased - parked
12-Aug-08 954 BAE SYSTEMS (Jetstream) Jetstream 31 Super N342TE Quassar USA Inc Quassar USA Inc Purchased - parked
12-Aug-08 371 Bombardier (de Havilland) DHC-6 Twin Otter 300 C-FCPV NT Air NT Air Purchased
12-Aug-08 15182 Bombardier (Canadair) CRJ900 Regional Jet 900ER NextGen C-GSUA Suncor Energy Inc Suncor Energy Oil Sands Ltd Del. - pur. of used/demo. a/c
12-Aug-08 86 Bombardier (de Havilland) Dash 8 100 N150RN EP Aviation LLC EP Aviation LLC Purchased
13-Aug-08 3577 Airbus A320 230 (IAE) N681TA Undis. Bank / Broker / Lessor TACA Int/l Airlines P. - sale & lease-back on del
13-Aug-08 UE-406 Hawker Beechcraft 1900 D TT-ABB Government of Chad Government of Chad Purchased
13-Aug-08 23935 Boeing 737 (CFMI) 300 N590US Gecas Asset Management Svcs Gecas Asset Mgmt Svcs Purchased - parked
13-Aug-08 24044 Boeing 767 300ER (GE) N363AA NAS Investments 9 LLC American Airlines P. off lse/fin. term comp.
13-Aug-08 936 BAE SYSTEMS (Jetstream) Jetstream 31 Super N936AE Corporate Flight Management Corporate Flight Mgmt Purchased - parked
14-Aug-08 23389 Boeing 747 200SF (P&W) JA8169 JALUX Inc JALUX Inc Purchased - parked
14-Aug-08 11391 Fokker 100 VH-FSW F100 Pty Ltd Skywest Airlines (Australia) Purchased - parked
14-Aug-08 23389 Boeing 747 200SF (P&W) N798SA Southern Air Southern Air Purchased - parked
14-Aug-08 11373 Fokker 100 VH-FNU F100 Pty Ltd Skywest Airlines (Australia) Purchased - parked
15-Aug-08 391 Airbus A300 600 (GE) D-AIAI GA Telesis LLC GA Telesis LLC Purchased - parked
15-Aug-08 120141 Embraer EMB-120 Brasilia N261AS Pimegal Consultants Ltd Pimegal Consultants Ltd Purchased - parked
15-Aug-08 23172 Boeing 737 (JT8D) 200 Adv. TN- Trans Air Congo Trans Air Congo Purchased - parked
15-Aug-08 110036 Embraer EMB-110 Bandeirante PR-EAP State Govt of Mato Grosso do Sul St. Govt of Mato Grosso do Sul Purchased
15-Aug-08 120226 Embraer EMB-120 Brasilia ER N282AS Pimegal Consultants Ltd Pimegal Consultants Ltd Purchased - parked
15-Aug-08 22642 Boeing 727 200F (M) Adv. (St3 Hsk) VH-VLH Heavylift Cargo Airlines Heavylift Cargo Airlines Purchased - parked
15-Aug-08 693 Airbus A310 320 (P&W) VT-AIO Kaveri Leasing Ltd Veling Ltd Purchased - parked
15-Aug-08 34959 Boeing 737 (NG) 800 Wingl. TC-JHH Babcock & Brown Aircraft Mgmt LLC Babcock & Brown AM Purchased
15-Aug-08 533 Bombardier (de Havilland) Dash 8 300 OE-HBC Corporate Jet Realisations Ltd Corporate Jet Realisations Ltd Purchased - parked
15-Aug-08 4023 Bombardier (de Havilland) Dash 8 400 RP-C3036 Philippine Airlines Philippine Airlines Purchased - parked
15-Aug-08 20259 Fokker 50 OY-PAA Nordic Aviation Contractor A/S Nordic Avtn Contractor A/SPurchased - parked
15-Aug-08 684 Airbus A310 320 (P&W) VT-AIN Nilgiri Hills Leasing Ltd Veling Ltd Purchased - parked
15-Aug-08 23234 Boeing 737 (CFMI) 300 HS-AAN Spirit Leasing Thai AirAsia P. - subject to existing lease
15-Aug-08 26205 Boeing 767 300ER (P&W) 11-Sep-02 Chilean Air Force Chilean Air Force Purchased - parked
15-Aug-08 20995 Boeing 727 200F (M) Adv. (St3 Hsk) N854AA Flightstar Trading LLC Flightstar Trading LLC Purchased - parked
18-Aug-08 DC-824B Fairchild (Swearingen) Metro 23 CP-2527 AeroCon AeroCon Purchased
18-Aug-08 45921 Boeing (McDonnell-Douglas) DC-8 62C (St3 Hsk) 3X-GEP Transair Cargo Svcs Transair Cargo Svcs Purchased - parked
19-Aug-08 49704 Boeing (McDonnell-Douglas) MD-80 82 (MDC) YA- Kam Air Kam Air Purchased - parked
19-Aug-08 382 Saab 340 B VH-ZLO Rex - Regional Express Rex - Regional Express Purchased - parked
19-Aug-08 301 Saab 340 B VH-UYN Macair Airlines Macair Airlines Purchased - parked
20-Aug-08 23933 Boeing 737 (CFMI) 300 N588US AeroTurbine Inc AeroTurbine Inc Purchased - parked
20-Aug-08 36720 Boeing 737 (NG) 700 N348AT The Fifth Third Leasing Co The Fifth Third Leasing Co Purchased - parked
20-Aug-08 24291 Boeing 757 200 (RR) N917FD FedEx FedEx Purchased - parked
20-Aug-08 27760 Boeing 767 300ERF (GE) N307UP UPS Airlines UPS Airlines P. off lse/fin. term comp.
20-Aug-08 AC-682 Fairchild (Swearingen) Metro III N921BC Sierra West Airlines Sierra West Airlines Purchased
21-Aug-08 305 Bombardier (de Havilland) Dash 8 300 C-FIDL Hawkair Hawkair Purchased
21-Aug-08 24031 Boeing 737 (JT8D) 200 Adv. N810AL Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased - parked
21-Aug-08 14501057 Embraer ERJ-135 Legacy 600 N702SV Cerretani Aviation Group LLC Cerretani Aviation Grp LLC Purchased
21-Aug-08 25544 Boeing 747 400 (RR) VH-OJO TJT Leasing Pty Ltd Qantas P. - subject to existing lease
21-Aug-08 14501057 Embraer ERJ-135 Legacy 600 N702SV Bell Aviation Inc Bell Aviation Inc Purchased
21-Aug-08 8133 Fairchild/Dornier 228 200 C-FYEV Summit Air Charters Summit Air Charters Purchased
21-Aug-08 24031 Boeing 737 (JT8D) 200 Adv. N810AL Aviation Technologies Inc Aviation Technologies Inc Purchased - parked
21-Aug-08 14501057 Embraer ERJ-135 Legacy 600 N702SV The Air Group Inc The Air Group Inc Purchased
21-Aug-08 501 General Dynamics (Convair) 580 VH-PAL Pionair Australia Pionair Australia Purchased
21-Aug-08 260 Bombardier (de Havilland) DHC-6 Twin Otter 300 C-FVEG Osprey Wings Osprey Wings Purchased
21-Aug-08 4216 Bombardier (de Havilland) Dash 8 400 G-ECOF HEH AM Beteiligungs Gmbh & Co KG Flybe P. - sale & lease-back on del
21-Aug-08 192 Bombardier (de Havilland) Dash 8 300 N3554T Regional One Inc Regional One Inc Purchased - parked
22-Aug-08 19252 Boeing 727 100 (St3 Hsk) C5- Royal Air Royal Air Purchased - parked
22-Aug-08 2836 Airbus A319 110 (CFM) N948FR AFS Investments 59 LLC Frontier Airlines P. - sale & lease-back
22-Aug-08 265 Bombardier (de Havilland) Dash 8 100 N308RD EP Aviation LLC EP Aviation LLC Purchased
24-Aug-08 UK-4 Boeing (McDonnell-Douglas) C-17 A ZZ174 Royal Air Force Royal Air Force P. off lease/fin. term comp.
25-Aug-08 DC-869B Fairchild (Swearingen) Metro 23 VH-MYI Aviation Svcs of Australia Pty Ltd Macair Airlines P. - subject to existing lease
25-Aug-08 348 Saab 340 B VH-UYH Aero South Pacific Pty Ltd Macair Airlines P. - subject to existing lease
25-Aug-08 346 Bombardier (de Havilland) Dash 8 100 VH-TQU Skippers Aviation Skippers Aviation Purchased - parked
25-Aug-08 TC-376 Fairchild (Swearingen) Metro II XA- Unconf. Mexican Operator Unconf. Mexican Operator Purchased
25-Aug-08 46949 Boeing (McDonnell-Douglas) DC-10 30F (M) N949PL PICL Aviation VI LLC Aerolease Int/l Inc Purchased - parked
25-Aug-08 11497 Fokker 100 PH-AFO Aircraft Financing & Trading BV A/c Financing & Trading BV Purchased - parked
25-Aug-08 33920 Boeing 737 (NG) 700 Wingl. N268AT NewAir & Tours NewAir & Tours Purchased - parked
26-Aug-08 381 Bombardier (de Havilland) DHC-6 Twin Otter 300 F- Unconf. French Operator Unconf. French Operator Purchased
26-Aug-08 3581 Airbus A320 230 (IAE) N682TA Undis. Bank / Broker / Lessor TACA Int/l Airlines P. - sale & lease-back on del


Aircraft & Engines
Aircraft transactions — 26 August 2008 to 18 September 2008

26-Aug-08 3037 Fairchild/Dornier 328 100 N425JS Unconf. American Operator Unconf. American Operator Purchased
27-Aug-08 306 Bombardier (de Havilland) Dash 8 100 VH-TQW Skippers Aviation Skippers Aviation Purchased - parked
27-Aug-08 27617 Boeing 767 300ER (GE) N151LF Idec Flyer LLC ILFC Purchased - parked
27-Aug-08 120250 Embraer EMB-120 Brasilia ER PR-MDP Unconf. Brazillian Operator Unconf. Brazillian Operator Purchased
27-Aug-08 23459 Boeing 737 (CFMI) 300 N17329 Continental Airlines Continental Airlines P. off lse/fin. term comp.
28-Aug-08 23460 Boeing 737 (CFMI) 300 N70330 Continental Airlines Continental Airlines P. off lse/fin. term comp.
28-Aug-08 943 Airbus A330 220 (P&W) EC-KUO Amentum Capital Ltd. Air Comet P. - sale & lease-back on del
28-Aug-08 19000204 Embraer 195 LR G-FBEM SkyClass 52 GmbH & Co KG Flybe P. - sale & lease-back on del
28-Aug-08 345 Bombardier (de Havilland) Dash 8 100 C-GXCN Avmax Int/l Aircraft Leasing Inc Avmax Int/l A/c Leasing Inc Purchased - parked
29-Aug-08 21613 Boeing 737 (JT8D) 200 Adv. (St3 Hsk) N835AL Skybus LLC Skybus LLC Purchased - parked
01-Sep-08 711 BAE SYSTEMS (Jetstream) Jetstream 31 G-OJSA Diamond Air Charter Diamond Air Charter Purchased - parked
01-Sep-08 120313 Embraer EMB-120 Brasilia ER 12-Jul-05 Brazilian Air Force Brazilian Air Force Purchased
02-Sep-08 24548 Boeing 737 (CFMI) 400 N426US US Airways US Airways P. off lse/fin. term comp.
04-Sep-08 557 Bombardier (de Havilland) DHC-6 Twin Otter 300 C- Unconf. Canadian Operator Unconf. Canadian Opr Purchased
04-Sep-08 1560 Airbus A319 110 (CFM) N903FR VTB-Leasing VTB-Leasing Purchased - parked
09-Sep-08 12 CASA CN-235 10 N1269J EP Aviation LLC EP Aviation LLC Purchased
09-Sep-08 4 Saab 2000 YR-SBD Nordic Aviation Contractor A/S Carpatair P. - subject to existing lease
09-Sep-08 7 CASA CN-235 10 N2696S EP Aviation LLC EP Aviation LLC Purchased
09-Sep-08 18 Saab 2000 YR-SBJ Nordic Aviation Contractor A/S Carpatair P. - subject to existing lease
09-Sep-08 22 Saab 2000 ER-SFB Nordic Aviation Contractor A/S Moldavian Airlines P. - subject to existing lease
09-Sep-08 26 Saab 2000 YR-SBB Nordic Aviation Contractor A/S Carpatair P. - subject to existing lease
09-Sep-08 33 Saab 2000 YR-SBK Nordic Aviation Contractor A/S Carpatair P. - subject to existing lease
09-Sep-08 39 Saab 2000 HB-IZW Nordic Aviation Contractor A/S Swiss P. - subject to existing lease
09-Sep-08 262 CASA 212 200 N969BW EP Aviation LLC EP Aviation LLC Purchased
10-Sep-08 810 BAE SYSTEMS (Jetstream) Jetstream 31 Super HI- MAS S.A MAS S.A Purchased
10-Sep-08 388 ATR ATR 42 300 9N-AIM Buddha Air Buddha Air Purchased
10-Sep-08 403 ATR ATR 42 300 9N-AIN Buddha Air Buddha Air Purchased
12-Sep-08 24331 Boeing 757 200 (RR) N934FD FedEx FedEx Purchased - parked
12-Sep-08 268 ATR ATR 42 300 XY- Undis. Bank / Broker / Lessor Air Mandalay P. - subject to existing lease
12-Sep-08 23830 Boeing 737 (CFMI) 300 PR-WJK Webjet Webjet Purchased
12-Sep-08 28468 Boeing 747 400 (RR) N3508M VL28468 Ltd VTB-Leasing Purchased - parked
12-Sep-08 509 Airbus A300 600R (GE) N18066 General Electric Company American Airlines P. - subject to existing lease
12-Sep-08 509 Airbus A300 600R (GE) N18066 AFS Investments I Inc American Airlines P. - subject to existing lease
12-Sep-08 UB-36 Hawker Beechcraft 1900 C N319BH Corporate Air Corporate Air P. off lse/fin. term comp.
15-Sep-08 120147 Embraer EMB-120 Brasilia PT-SLD Passaredo Transportes Aereos Passaredo Transportes Aereos Purchased
15-Sep-08 62 Bombardier (de Havilland) Dash 8 100 5Y-VVN Blue Bird Aviation Blue Bird Aviation Purchased - parked
15-Sep-08 349 Bombardier (de Havilland) Dash 8 100 5Y-VVS Blue Bird Aviation Blue Bird Aviation Purchased - parked
15-Sep-08 7622 Bombardier (Canadair) CRJ Regional Jet 200ER EC-IDC GA Finance Svcs BV Air Nostrum P. - subject to existing lease
15-Sep-08 20254 Boeing 737 (JT8D) 200QC 9Q- GTRA Airways GTRA Airways Purchased - parked
15-Sep-08 22577 Boeing 737 (JT8D) 200QC Adv (St3 Hsk) N730AS BCI Aloha 2006-1LLC BCI Aircraft Leasing Inc P. - subj to exist lease - pkd
15-Sep-08 2403 Airbus A320 230 (IAE) A6-DLM Amiri Flight Amiri Flight Purchased
15-Sep-08 1711 Airbus A321 230 (IAE) G-MEDG Deucalion Capital IV bmi P. - subject to existing lease
15-Sep-08 533 Bombardier (de Havilland) Dash 8 300 C-FWFH Avmax Group Inc Avmax Int/l A/c Leasing Inc Purchased - parked
15-Sep-08 176 ATR ATR 42 300 LY-DOT Danu Oro Transportas Danu Oro Transportas P. off lse/fin. term comp.
15-Sep-08 3733 Bombardier (Shorts) 360 300 G-BOEG ACL Aircraft Trading Ltd HD Air Ltd P. - subject to existing lease
15-Sep-08 23541 Boeing 737 (CFMI) 300 PH-BDE Mountain Capital Partners LLC Mountain Capital Partners LLC Purchased - parked
15-Sep-08 712 Airbus A330 300 (GE) VH-QPJ QF Boc 2008-2 Pty Limited Qantas P. - subject to existing lease
15-Sep-08 36711 Boeing 767 300ER (GE) CC-CXF Cisne Leasing Ltd LAN Airlines P. - sale & lease-back on del
15-Sep-08 46543 Boeing (McDonnell-Douglas) DC-10 30ER S2-ACS Biman Bangladesh Airlines Biman Bangladesh Airlines P. off lse/fin. term comp. - prkd
15-Sep-08 27134 Boeing 747 400BCF (P&W) B-KAH Cathay Pacific Cathay Pacific Purchased - parked
15-Sep-08 10530 Fokker F.27 500CRF 5X-FFD Fly540 Fly540 Purchased - parked
15-Sep-08 10531 Fokker F.27 500CRF 5X-FFN Fly540 Fly540 Purchased - parked
15-Sep-08 49482 Boeing (McDonnell-Douglas) MD-80 82 (MDC) 5N-BKI Afrijet Afrijet Purchased - parked
15-Sep-08 226 Saab 340 B XA-TJR Erik Thun AB Erik Thun AB Purchased - parked
15-Sep-08 3221 Avcraft 328JET Envoy 3 VP-CJD Motor Racing Developments Corp Easy Aviation Purchased
15-Sep-08 19000129 Embraer 190 LR XA-BAC Aldus Portfolio Leasing Ltd Aeromexico Connect P. - subject to existing lease
15-Sep-08 19000121 Embraer 190 LR XA-AAC Aldus Portfolio Leasing Ltd Aeromexico Connect P. - subject to existing lease
15-Sep-08 110258 Embraer EMB-110 Bandeirante P1 PT-TAW Taxi Aereo Weiss Taxi Aereo Weiss Purchased
15-Sep-08 E2233 BAE SYSTEMS (Avro) RJ Avroliner RJ85 OY-RCE E2233 Leasing ApS Atlantic Airways (Faroe Islands) P. - sale & lease-back
16-Sep-08 362 Bombardier (de Havilland) Dash 8 100 5Y-VVT Blue Bird Aviation Blue Bird Aviation Purchased - parked
16-Sep-08 204 Bombardier (de Havilland) Dash 8 100 5Y-VVR Blue Bird Aviation Blue Bird Aviation Purchased - parked
16-Sep-08 471 Airbus A300 600R (GE) N14061 AFS Investments I Inc American Airlines P. - subj. to exist. lease - pkd
16-Sep-08 UE-183 Hawker Beechcraft 1900 D N48544 Skyline Enterprise Corp Skyline Enterprise Corp Purchased - parked
17-Sep-08 41081 BAE SYSTEMS (Jetstream) Jetstream 41 N564HK Corporate Flight Management Corporate Flight Mgmt Purchased - parked
17-Sep-08 4126 Alenia C-27J Spartan N359PL Global Military Systems LLC Global Military Systems LLC Purchased
17-Sep-08 4129 Alenia C-27J Spartan N359TA L-3 Communications Interg. Systems L-3 Comms. Interg. Systems Purchased - parked
17-Sep-08 71 Bombardier (de Havilland) DHC-6 Twin Otter 100 C-GGLE South Nahanni Airways South Nahanni Airways Purchased
17-Sep-08 887 Airbus A330 200 (GE) VH-EBG Macquarie Managed Investments Ltd Qantas P. - sale & lease-back
17-Sep-08 1827 Airbus A320 230 (IAE) N546JB VGS Investments One Ltd Volito Aviation AB Purchased - parked
17-Sep-08 257 ATR ATR 42 300 OY-PCE Nordic Aviation Capital Nordic Aviation Capital Purchased - parked
17-Sep-08 213 ATR ATR 42 300 OY-PCD Nordic Aviation Capital Nordic Aviation Capital Purchased - parked
17-Sep-08 29264 Boeing 737 (CFMI) 300 LN-KHB Norwegian Air Shuttle Norwegian Air Shuttle Purchased - parked
17-Sep-08 4011 Bombardier (de Havilland) Dash 8 400 LN-RDL SAS SAS P. off lse/fin. term comp. - pkd
17-Sep-08 561 ATR ATR 42 500 XA-TKJ Nordic Aviation Capital Aeromar Airlines P. - sale & lease-back
17-Sep-08 564 ATR ATR 42 500 XA-TLN Nordic Aviation Capital Aeromar Airlines P. - sale & lease-back
17-Sep-08 35092 Boeing 737 (NG) 800 Wingl. G-XLAK MCAP Europe Ltd MC Aircraft Management Purchased - parked
17-Sep-08 UB-17 Hawker Beechcraft 1900 C N192GA Republic Bank Alpine Air Express P. - subject to existing lease
17-Sep-08 UB-7 Hawker Beechcraft 1900 C N127BA Republic Bank Alpine Air Express P. - subject to existing lease
17-Sep-08 UB-16 Hawker Beechcraft 1900 C N197GA Republic Bank Alpine Air Express P. - subject to existing lease
17-Sep-08 AT-032 Fairchild (Swearingen) Metro Merlin IVA N90NH Charter Express Inc Charter Express Inc Purchased
18-Sep-08 704 BAE SYSTEMS (Jetstream) Jetstream 31 C-GCCN Aviation Starlink Inc Aviation Starlink Inc Purchased
18-Sep-08 120188 Embraer EMB-120 Brasilia N266AS Worldwide Aircraft Svcs Inc Worldwide Aircraft Svcs Inc Purchased - parked
18-Sep-08 30214 Boeing 777 200ER (P&W) N208UA Bakersvalley Partners Corp Bakersvalley Partners Corp Purchased - parked
18-Sep-08 30214 Boeing 777 200ER (P&W) N208UA Larafort Aircraft Leasing Ltd Larafort Aircraft Leasing Ltd Purchased - parked
18-Sep-08 7426 Bombardier (Canadair) CRJ Regional Jet 200LR N651BR Trust N693BR Mesa Airlines P. off lse/fin. term comp.
18-Sep-08 49703 Boeing (McDonnell-Douglas) MD-80 82 (MDC) N958U Jetran Int/l Ltd Jetran Int/l Ltd Purchased - parked
18-Sep-08 14 Airbus A380 840 (RR) VH-OQA QF Boc 2008-1 Pty Limited Qantas P. - sale & lease-back on del
18-Sep-08 19000206 Embraer 190 AR N966UW PM Ltd US Airways P. - sale & lease-back on del
18-Sep-08 19000206 Embraer 190 AR N966UW US Airways US Airways P. off lse/fin. term comp.

Aircraft transactions — 18 September 2008 to 02 October 2008

18-Sep-08 226 Saab 340 B N285DC Lambert Leasing Inc Saab Aircraft Leasing Inc Purchased - parked
18-Sep-08 17000243 Embraer 175 LR N204JQ PM Ltd Shuttle America P. - sale & lease-back on del
18-Sep-08 17000243 Embraer 175 LR N204JQ Shuttle America Shuttle America P. off lse/fin. term comp.
19-Sep-08 41073 BAE SYSTEMS (Jetstream) Jetstream 41 HK-4584X Easyfly Easyfly Purchased - parked
19-Sep-08 3168 Fairchild/Dornier 328JET N328BC Int/l Bank of Commerce Int/l Bank of Commerce Purchased
19-Sep-08 10149 Fokker F.27 100 9M- Unconf. Malaysian Operator Unconf. Malaysian Operator Purchased - parked
19-Sep-08 7235 Bombardier (Canadair) CRJ Regional Jet 100ER N708CA Bombardier Svcs Corp Bombardier Svcs Corp Purchased - parked
19-Sep-08 22441 Boeing 727 200F (M) Adv. (St3 Hsk) N936PG Stewart Industries Int/l LLC Stewart Industries Int/l LLC Purchased - parked
19-Sep-08 14501057 Embraer ERJ-135 Legacy 600 VP-CMM Al Mojil Aviation Al Mojil Aviation Purchased - parked
22-Sep-08 10 CASA CN-235 10 N982BW EP Aviation LLC EP Aviation LLC Purchased - parked
22-Sep-08 3037 Fairchild/Dornier 328 100 PK-TXL Express Air Express Air Purchased
22-Sep-08 167 CASA 212 200 N467CS Fayard Enterprises LLC Carolina Sky Sports P. - sale & lease-back
22-Sep-08 8071 Fairchild/Dornier 228 200 C-FPSH Summit Air Charters Summit Air Charters Purchased
22-Sep-08 22492 Boeing 727 200 Adv. (St3 Hsk) CP- Lloyd Aereo Boliviano Lloyd Aereo Boliviano Purchased - parked
22-Sep-08 415 ATR ATR 42 300 PK-KSE Kalstar Kalstar Purchased
23-Sep-08 20259 Fokker 50 OY-PAA Largus Aviation AB Largus Aviation AB Purchased - parked
23-Sep-08 79 Bombardier (de Havilland) DHC-6 Twin Otter 100 N1022S Fayard Enterprises LLC Carolina Sky Sports P. - sale & lease-back
23-Sep-08 27 Bombardier (de Havilland) DHC-6 Twin Otter 100 N227CS Fayard Enterprises LLC Carolina Sky Sports Purchased
23-Sep-08 291 CASA 212 200 N497CA Fayard Enterprises LLC Carolina Sky Sports P. - sale & lease-back
23-Sep-08 195 CASA 212 200 N495CS Fayard Enterprises LLC Carolina Sky Sports P. - sale & lease-back
23-Sep-08 DC-812B Fairchild (Swearingen) Metro 23 YV Unconf. Venezuelan Operator Unconf. Venezuelan Opr Purchased
23-Sep-08 3618 Airbus A320 230 (IAE) VT-INV Allco Leasing (IGO No.2) Ltd IndiGo Airlines P. - sale & lease-back on del
23-Sep-08 47811 Boeing (McDonnell-Douglas) DC-10 30F (M) N323FE ORBIS ORBIS Purchased - parked
23-Sep-08 25703 Boeing 747 400 (P&W) N703AC Aircraft MSN 25703 LLC Aircastle Advisor LLC Purchased - parked
23-Sep-08 19000211 Embraer 190 AR N967UW PM Ltd US Airways P. - sale & lease-back on del
23-Sep-08 19000211 Embraer 190 AR N967UW US Airways US Airways P. off lse/fin. term comp.
23-Sep-08 100 Airbus A300 B4-200F (GE) N510TA Skylease II Inc Air Macau P. - subject to existing lease
23-Sep-08 271 Airbus A300 B4-200F (GE) N505TA Sky Lease I Inc Air Macau P. - subject to existing lease
23-Sep-08 207 Airbus A300 B4-200F (GE) N506TA Sky Lease I Inc TradeWinds Airlines P. - subject to existing lease
23-Sep-08 211 Airbus A300 B4-200F (GE) N821SC Sky Lease I Inc TradeWinds Airlines P. - subject to existing lease
23-Sep-08 53 Airbus A300 B4-200F (GE) N501TR Sky Lease I Inc TradeWinds Airlines P. - subject to existing lease
23-Sep-08 216 Airbus A300 B4-200F (GE) N504TA Sky Lease I Inc TradeWinds Airlines P. - sale & lease-back
24-Sep-08 E2044 BAE SYSTEMS (HS) 146 200 ZS- Mouritzen Family Trust Allegiance Air Purchased
24-Sep-08 7392 Bombardier (Canadair) CRJ Regional Jet 200LR N646BR Trust N693BR Trust N693BR Purchased - parked
24-Sep-08 954 Airbus A330 340 (RR) B-6500 CDB Leasing Company China Southern Airlines P. - sale & lease-back on del
24-Sep-08 14500982 Embraer ERJ-135 Legacy 600 P4-PAM Constellation Air A V V Petrov Air Ltd Purchased
25-Sep-08 4129 Alenia C-27J Spartan N359TA JCA Joint Procurement Office JCA Jnt Procurement Office Del. pkd - pur. of usd/ demo. a/c
25-Sep-08 21535 Boeing 737 (JT8D) 200 Adv. (St3 Hsk) N54SW Magnum Airdynamics Magnum Airdynamics Purchased - parked
25-Sep-08 22506 Boeing 747 200SF (GE) N795SA Southern Air Southern Air Purchased - parked
25-Sep-08 23585 Boeing 737 (CFMI) 300 N14347 Continental Airlines Continental Airlines P. off lse/fin. term comp.
25-Sep-08 UE-403 Hawker Beechcraft 1900 D N857CA Unconf. American Operator Unconf. American Operator Purchased - parked
25-Sep-08 17000248 Embraer 175 LR N958WH PM Ltd Shuttle America P. - sale & lease-back on del
25-Sep-08 17000248 Embraer 175 LR N958WH Shuttle America Shuttle America P. off lse/fin. term comp.
25-Sep-08 1606 BAE SYSTEMS (HS) 748 Srs 2 N MK Airlines MK Airlines Purchased - parked
25-Sep-08 1603 BAE SYSTEMS (HS) 748 Srs 2 N MK Airlines MK Airlines Purchased - parked
26-Sep-08 3647 Airbus A319 110 (CFM) N647AV AVSA Leasing 2 Avianca P. - sale & lease-back on del
26-Sep-08 E2039 BAE SYSTEMS (HS) 146 200 ZS- Mouritzen Family Trust Allegiance Air Purchased - parked
26-Sep-08 20627 Boeing 727 200F (M) Adv. (S3 Hsk) 5N- Associated Aviation Associated Aviation Purchased - parked
26-Sep-08 20838 Boeing 727 200F (M) Adv. (S3 Hsk) N196AJ Zengeneh A. Cons. Inc Z. A. Consulting Inc Purchased - parked
26-Sep-08 483 Airbus A310 300 (GE) C-GTSW Air Transat Air Transat Purchased - parked
26-Sep-08 34152 Boeing 737 (NG) 800 Wingl. C-GJWS Undis. Bank / Broker / Lessor WestJet P. - subject to existing lease
26-Sep-08 49702 Boeing (McDonnell-Douglas) MD-80 82 (MDC) N957U African Holding Co of America Inc Af. Hldg Co of America Inc Purchased - parked
26-Sep-08 30772 Boeing 737 (NG) BBJ1 N315TS Tudor-Saliba Corp Tudor-Saliba Corp P. off lse/fin. term comp.
26-Sep-08 19000113 Embraer 190 LR F-HBLD Aldus Portfolio Leasing Ltd Regional P. - subject to existing lease
27-Sep-08 19 Saab 2000 08-019 Pakistan Air Force Pakistan Air Force Purchased - parked
27-Sep-08 374 Airbus A340 310 (CFM) 4R-ADF ETA Ascon Star Group SriLankan Airlines P. - subject to existing lease
29-Sep-08 574 Airbus A320 210 (CFM) HB-IJH Undis. Bank / Broker / Lessor Swiss P. - subject to existing lease
29-Sep-08 28288 Boeing 737 (NG) 600 LN-RRO SAS Struktur Skand Kommanditbolag SAS P. - subject to existing lease
29-Sep-08 28311 Boeing 737 (NG) 600 LN-RRP SAS Struktur Skand Kommanditbolag SAS P. - subject to existing lease
29-Sep-08 28309 Boeing 737 (NG) 600 LN-RRR SAS Struktur Skand Kommanditbolag SAS P. - subject to existing lease
29-Sep-08 28315 Boeing 737 (NG) 700 LN-RNN SAS Struktur Skand Kommanditbolag SAS P. - subject to existing lease
29-Sep-08 30192 Boeing 737 (NG) 700 LN-RPJ SAS SAS P. off lse/fin. term comp.
29-Sep-08 TC-383 Fairchild (Swearingen) Metro II VH-SSV BES Operations Pty Ltd Skypac Aviation Pty Ltd P. - subject to existing lease
29-Sep-08 929 BAE SYSTEMS (Jetstream) Jetstream 31 Super C-GINL 1300119 Alberta Ltd 1300119 Alberta Ltd Purchased
30-Sep-08 29029 Boeing 777 200 (P&W) JA705A ANA - All Nippon Airways ANA - All Nippon Airways P. off lse/fin. term comp.
30-Sep-08 23548 Boeing 747 200B (P&W) 5N-DKB Kabo Air Kabo Air Purchased - parked
30-Sep-08 24736 Boeing 767 200ER (GE) JY-JAI Jordan Aviation Jordan Aviation Purchased - parked
30-Sep-08 26938 Boeing 777 200ER (P&W) N786UA E.L.F. Leasing One LLC United Airlines P. - sale & lease-back
30-Sep-08 23145 Boeing 767 200PC (GE) N795AX 767 Aircraft One LLC ABX Air P. - sale & lease-back
30-Sep-08 826 Airbus A320 230 (IAE) N445UA E.L.F. Leasing One LLC Ted P. - subject to existing lease
30-Sep-08 1538 Airbus A320 230 (IAE) N479UA E.L.F. Leasing One LLC Ted P. - sale & lease-back
30-Sep-08 948 Airbus A330 240 (RR) N948AC ACG Acquisition (Cayman) 948 Ltd Avianca P. - sale & lease-back on del
30-Sep-08 25002 Boeing 737 (CFMI) 500 N902UA AAR Aircraft Sales & Leasing AAR Aircraft Sales & Leasing Purchased - parked
30-Sep-08 30826 Boeing 737 (NG) 800 Wingl. EI-ECD Airspeed Ireland Leasing 18 Ltd RBS Aviation Capital P. - subj. to exist. lease - pkd
01-Oct-08 804 Airbus A319 130 (IAE) N808UA E.L.F. Leasing One LLC United Airlines P. - subject to existing lease
01-Oct-08 1573 Airbus A319 130 (IAE) N843UA E.L.F. Leasing One LLC United Airlines P. - sale & lease-back
01-Oct-08 22086 Boeing 737 (JT8D) 200 Adv. (St3 Hsk) C6-BGK Avcorp Int/l Inc Avcorp Int/l Inc Purchased - parked
01-Oct-08 613 Airbus A320 230 (IAE) N435UA E.L.F. Leasing One LLC United Airlines P. - sale & lease-back
01-Oct-08 1891 Airbus A320 230 (IAE) N550JB VGS Blue Limited Volito Aviation AB Purchased - parked
01-Oct-08 19000218 Embraer 190 AR VH-ZPK VBNC9 Pty Ltd Virgin Blue Airlines P. - sale & lease-back on del
01-Oct-08 17000255 Embraer 170 LR VH-ZHF VBNC9 Pty Ltd Virgin Blue Airlines P. - sale & lease-back on del
02-Oct-08 164 Bombardier (de Havilland) DHC-6 Twin Otter 200 VH-XFM Southern Cross Aircraft Eng. Svcs Southern Cross A/c Eng. Svcs Purchased - parked
02-Oct-08 30232 Boeing 757 200 (RR) SX-RFA GainJet Aviation S.A. GainJet Aviation S.A. Purchased - parked
02-Oct-08 949 Airbus A330 220 (P&W) PT-MVO TMF Interlease Aviation II TAM Linhas Aereas P. - sale & lease-back on del
02-Oct-08 DC-888B Fairchild (Swearingen) Metro 23 N332AJ PC Air Charter Inc PC Air Charter Inc Purchased - parked
02-Oct-08 834 Airbus A320 230 (IAE) N446UA E.L.F. Leasing One LLC Ted P. - subject to existing lease
02-Oct-08 23704 Boeing 737 (CFMI) 300 N518AU GECAS Asset Management Svcs GECAS Asset Mgmt Svcs Purchased - parked


Aircraft & Engines
Aircraft transactions — 02 October 2008 to 16 October 2008

02-Oct-08 28273 Boeing 777 300 (P&W) JA753A ANA - All Nippon Airways ANA - All Nippon Airways P. off lse/fin. term comp.
03-Oct-08 21991 Boeing 747 200B (P&W) N633US N633US LLC N633US LLC Purchased - parked
03-Oct-08 110 ATR ATR 42 300 YV LTA - Linea Turistica Aereotuy CA LTA - Linea Turistica Aer. CA Purchased
03-Oct-08 206 ATR ATR 42 300 YV LTA - Linea Turistica Aereotuy CA LTA - Linea Turistica Aer. CA Purchased
03-Oct-08 145728 Embraer ERJ-135 LR N202CP LuxAviation Inc LuxAviation Inc Purchased
03-Oct-08 145726 Embraer ERJ-135 LR N201CP LuxAviation Inc LuxAviation Inc Purchased
03-Oct-08 145728 Embraer ERJ-135 LR N202CP Luxos Corp Luxos Corp Purchased
03-Oct-08 145726 Embraer ERJ-135 LR N201CP Luxos Corp Luxos Corp Purchased
03-Oct-08 965 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP N965AE J & E Aircraft Co J & E Aircraft Co Purchased - parked
06-Oct-08 197 Gulfstream Aerospace Gulfstream I N520JG MK Airlines MK Airlines Purchased - parked
06-Oct-08 120202 Embraer EMB-120 Brasilia N268AS Pimegal Consultants Ltd Pimegal Consultants Ltd Purchased - parked
06-Oct-08 22371 Boeing 737 (JT8D) 200 Adv. ZS-SGE Star Air Cargo Star Air Cargo Purchased - parked
06-Oct-08 23154 Boeing 737 (JT8D) 200 Adv. (St3 Hsk) N823AL Skybus LLC Skybus LLC Purchased - parked
06-Oct-08 309 ATR ATR 72 210 N308AE AMR Leasing Corp Executive Airlines P. off lse/fin. term comp.
06-Oct-08 23800 Boeing 737 (CFMI) 300 N253DV Mirage Aviation Ltd Mirage Aviation Ltd Purchased - parked
06-Oct-08 45874 Boeing (McDonnell-Douglas) DC-9 31PC (M) (St3 Hsk) N929AX DHL Network Operations (USA) Inc ABX Air P. - sale & lease-back
06-Oct-08 47074 Boeing (McDonnell-Douglas) DC-9 31PC (M) (St3 Hsk) N937AX DHL Network Operations (USA) Inc ABX Air P. - sale & lse-back - parked
06-Oct-08 47147 Boeing (McDonnell-Douglas) DC-9 32CF (St3 Hsk) N905AX DHL Network Operations (USA) Inc ABX Air P. - sale & lease-back
06-Oct-08 47427 Boeing (McDonnell-Douglas) DC-9 32LWF (St3 Hsk) N903AX DHL Network Operations (USA) Inc ABX Air P. - sale & lease-back
06-Oct-08 47413 Boeing (McDonnell-Douglas) DC-9 33F (St3 Hsk) N935AX DHL Network Operations (USA) Inc ABX Air P. - sale & lease-back
06-Oct-08 47291 Boeing (McDonnell-Douglas) DC-9 33F (St3 Hsk) N933AX DHL Network Operations (USA) Inc ABX Air P. - sale & lease-back
06-Oct-08 47462 Boeing (McDonnell-Douglas) DC-9 33RC (St3 Hsk) N934AX DHL Network Operations (USA) Inc ABX Air P. - sale & lse-back - parked
06-Oct-08 25005 Boeing 737 (CFMI) 500 N905UA AAR Parts Trading Inc AAR Parts Trading Inc Purchased - parked
06-Oct-08 34480 Boeing 737 (NG) 700 Wingl. C-GBEJ Enerjet Enerjet Purchased - parked
06-Oct-08 AT-464 Fairchild (Swearingen) Metro Merlin IVC YV Intermaki Corp Intermaki Corp Purchased
07-Oct-08 23045 Boeing 737 (JT8D) 200 Adv. N824AL Air Carrier Accessory Service Air Carrier Accessory Service Purchased - parked
07-Oct-08 4036 Bombardier (de Havilland) Dash 8 400 LN-RDO SAS SAS P. off lse/fin. term comp. - pkd
08-Oct-08 3663 Airbus A319 130 (IAE) CC-CYE Loica Leasing Ltd LAN Airlines P. - sale & lease-back on del
08-Oct-08 UE-263 Hawker Beechcraft 1900 D ZS-SGH National Airways Corporation National Airways Corporation Purchased
08-Oct-08 120054 Embraer EMB-120 Brasilia ER VH-NIF Network Aviation Australia Network Aviation Australia P. off lse/fin. term comp.
09-Oct-08 2045 BAE SYSTEMS (HS) ATP SE-MAL European Turboprop Management AB NEX Time Jet AB P. - subj. to exist. lease - pkd
09-Oct-08 3671 Airbus A319 130 (IAE) CC-CYF Loica Leasing Ltd LAN Airlines P. - sale & lease-back on del
09-Oct-08 469 ATR ATR 72 210 XY- Phoenix Aircraft Leasing PTE Ltd Air Mandalay P. - subject to existing lease
09-Oct-08 3624 Airbus A320 230 (IAE) XA-VOM Amentum Capital Ltd. Volaris P. - sale & lease-back on del
09-Oct-08 24633 Boeing 737 (CFMI) 300 YV2557 Conviasa Conviasa Purchased
09-Oct-08 348 ATR ATR 42 300 PK-KSI Kalstar Kalstar Purchased
09-Oct-08 4212 Bombardier (de Havilland) Dash 8 400 LN-WDV Fly 108 Ltd Wideroe P. - subject to existing lease
09-Oct-08 49278 Boeing (McDonnell-Douglas) MD-80 82 (MDC) UR-WRE Wind Rose Aviation Company Wind Rose Aviation Comp. P. off lse/fin. term comp.
09-Oct-08 19000216 Embraer 190 AR N968UW US Airways US Airways P. off lse/fin. term comp.
09-Oct-08 19000216 Embraer 190 AR N968UW PM Ltd US Airways P. - sale & lease-back on del
10-Oct-08 3635 Airbus A318 120 (P&W) CC-CZR Loica Leasing Ltd LAN Airlines P. - sale & lease-back on del
10-Oct-08 829 ATR ATR 72 500 F-OIQT Coviro 4 SAS Air Tahiti P. - sale & lease-back on del
13-Oct-08 41067 BAE SYSTEMS (Jetstream) Jetstream 41 HK-4585X Easyfly Easyfly Purchased - parked
14-Oct-08 49907 Boeing (McDonnell-Douglas) MD-80 81 JA8296 JALUX Inc JALUX Inc Purchased - parked
14-Oct-08 49907 Boeing (McDonnell-Douglas) MD-80 81 N228RF Tiger Aircraft Trading Inc Tiger Aircraft Trading Inc Purchased - parked
14-Oct-08 49787 Boeing (McDonnell-Douglas) MD-80 83 (MDC) N110HM AFS Investments 52 LLC American Airlines P. - subject to existing lease
14-Oct-08 13383 Boeing (McDonnell-Douglas) DC-3 BT-67 C-GJKB Kenn Borek Air Kenn Borek Air Purchased
14-Oct-08 145237 Embraer ERJ-145 EP UR- Dniproavia Dniproavia Purchased - parked
15-Oct-08 20126 Fokker 50 YL-BAU Largus Aviation AB airBaltic P. - subject to existing lease
15-Oct-08 20149 Fokker 50 YL-BAR Largus Aviation AB airBaltic P. - subject to existing lease
15-Oct-08 20148 Fokker 50 YL-BAW Largus Aviation AB airBaltic P. - subject to existing lease
15-Oct-08 24419 Boeing 757 200 (P&W) N657DL Undis. Bank / Broker / Lessor Delta Air Lines P. - subject to existing lease
15-Oct-08 23208 Boeing 757 200 (P&W) N520US Northwest Airlines Northwest Airlines P. off lse/fin. term comp.
15-Oct-08 22972 Boeing 767 200 (P&W) 4X-EAA TransGlobal Airways TransGlobal Airways Purchased
15-Oct-08 20220 Boeing 737 (JT8D) 200QC 9Q-CGJ GTRA Airways GTRA Airways Purchased - parked
15-Oct-08 3648 Airbus A320 210 (CFM) PK-AXC Doric Select Indonesia AirAsia P. - sale & lease-back on del
15-Oct-08 338 Airbus A320 230 (IAE) EI-DRG GA Telesis LLC MyAir P. - subject to existing lease
15-Oct-08 23303 Boeing 737 (CFMI) 300 YA-HSB Safi Airways Safi Airways Purchased - parked
15-Oct-08 23302 Boeing 737 (CFMI) 300 YA-SFL Safi Airways Safi Airways Purchased - parked
15-Oct-08 24018 Boeing 747 300 (P&W) HS-UTS Orient Thai Airlines Orient Thai Airlines Purchased - parked
15-Oct-08 549 ATR ATR 42 500 OY-RTH Phoenix Aircraft Leasing PTE Ltd Phoenix A/c Leasing PTE Ltd Purchased - parked
15-Oct-08 53212 Boeing (McDonnell-Douglas) MD-80 87 EC-FHD Tiger Aircraft Trading Inc Tiger Aircraft Trading Inc Purchased - parked
15-Oct-08 49887 Boeing (McDonnell-Douglas) MD-80 88 N956DL SVMF 15 LLC Delta Air Lines P. - subject to existing lease
15-Oct-08 188 Saab 340 B OK-CCO Central Connect Airlines Central Connect Airlines Purchased - parked
15-Oct-08 230 Saab 340 B OK-CCN Central Connect Airlines Central Connect Airlines Purchased - parked
15-Oct-08 853 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP VH-OAB De Bruin Aviation Pty Limited De Bruin Air Pty Limited Purchased - parked
15-Oct-08 851 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP VH-OAE De Bruin Aviation Pty Limited De Bruin Air Pty Limited Purchased - parked
15-Oct-08 859 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP VH-OAM De Bruin Aviation Pty Limited De Bruin Air Pty Limited Purchased - parked
16-Oct-08 151 Bombardier (de Havilland) Dash 8 100 VH-XFU Skippers Aviation Skippers Aviation P. off lse/fin. term comp.
16-Oct-08 52 Bombardier (de Havilland) Dash 8 100 VH-XFT Skippers Aviation Skippers Aviation P. off lse/fin. term comp.
16-Oct-08 164 Bombardier (de Havilland) DHC-6 Twin Otter 200 VH-XFM Fortescue Metals Group Fortescue Metals Group Purchased - parked
16-Oct-08 22531 Boeing 737 (JT8D) 200 Adv. N103AG Aergo Capital Ltd Aergo Capital Ltd Purchased - parked
16-Oct-08 DC-884B Fairchild (Swearingen) Metro 23 VH-WBQ Skippers Aviation Skippers Aviation P. off lse/fin. term comp.
16-Oct-08 646 Airbus A310 300F (GE) TC-LER Kuzu Airlines Cargo Kuzu Airlines Cargo Purchased
16-Oct-08 34195 Boeing 737 (NG) 800 Wingl. VH-VZA QF BNP 2008-1 Pty Ltd Qantas P. - sale & lease-back
16-Oct-08 34197 Boeing 737 (NG) 800 Wingl. VH-VZC QF BNP 2008-1 Pty Ltd Qantas P. - sale & lease-back on del
16-Oct-08 34198 Boeing 737 (NG) 800 Wingl. VH-VZD QF BNP 2008-1 Pty Ltd Qantas P. - sale & lease-back on del
16-Oct-08 34199 Boeing 737 (NG) 800 Wingl. VH-VZE QF BNP 2008-1 Pty Ltd Qantas P. - sale & lease-back on del
16-Oct-08 34196 Boeing 737 (NG) 800 Wingl. VH-VZB QF BNP 2008-1 Pty Ltd Qantas P. - sale & lease-back on del
16-Oct-08 49980 Boeing (McDonnell-Douglas) MD-80 88 N961DL Undis. Bank / Broker / Lessor Delta Air Lines P. - subject to existing lease

Aircraft transactions — 16 October 2008 to 30 October 2008

16-Oct-08 293 Saab 340 B VH-ORX Rex - Regional Express Rex - Regional Express P. off lse/fin. term comp..
16-Oct-08 303 Saab 340 B VH-PRX Rex - Regional Express Rex - Regional Express P. off lse/fin. term comp.
16-Oct-08 290 Saab 340 B VH-KRX Rex - Regional Express Rex - Regional Express P. off lse/fin. term comp.
16-Oct-08 291 Saab 340 B VH-NRX Rex - Regional Express Rex - Regional Express P. off lse/fin. term comp.
16-Oct-08 UE-91 Hawker Beechcraft 1900 D ZS-SEM Awesome Flight Logistics (Pty) Ltd Awesome Flight Svcs Purchased - parked
16-Oct-08 120045 Embraer EMB-120 Brasilia ER VH-XUA Skippers Aviation Skippers Aviation P. off lse/fin. term comp.
16-Oct-08 19000213 Embraer 195 LR G-FBEN SkyClass 52 GmbH & Co KG Flybe P. - sale & lease-back on del
17-Oct-08 23225 Boeing 737 (JT8D) 200 Adv. N836AL Pro Flight Int/l INC Pro Flight Int/l INC Purchased - parked
17-Oct-08 557 Bombardier (de Havilland) DHC-6 Twin Otter 300 C-FWVV BBS Aircraft Inc BBS Aircraft Inc Purchased - parked
17-Oct-08 4220 Bombardier (de Havilland) Dash 8 400 G-ECOG HEH Avn Newcastle Beteiligungs Gmbh Flybe P. - sale & lease-back on del
17-Oct-08 28282 Boeing 747 400D (GE) N483YR Undis. Bank / Broker / Lessor Undis. Bank / Broker / LessorPurchased - parked
17-Oct-08 825 ATR ATR 72 500 VT-JCN Constellation Aircraft Leasing Ltd Jet Airways P. - sale & lease-back on del
17-Oct-08 53016 Boeing (McDonnell-Douglas) MD-80 83 (MDC) N968AS DANA Airlines DANA Airlines Purchased - parked
17-Oct-08 7351 Bombardier (Canadair) CRJ Regional Jet Challenger 800 N387AA Aero Toy Store LLC Aero Toy Store LLC Purchased
17-Oct-08 7351 Bombardier (Canadair) CRJ Regional Jet Challenger 800 VP-BCI Global 9017 Ltd Global 9017 Ltd Purchased
17-Oct-08 UE-399 Hawker Beechcraft 1900 D N854CA Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased - parked
19-Oct-08 7428 Bombardier (Canadair) CRJ Regional Jet 200ER N403CA Comair Comair P. off lse/fin. term comp.
19-Oct-08 7420 Bombardier (Canadair) CRJ Regional Jet 200ER N821CA Comair Comair P. off lse/fin. term comp.
20-Oct-08 E2092 BAE SYSTEMS (HS) 146 200 N SkyQuest Int/l LLC SkyQuest Int/l LLC Purchased - parked
20-Oct-08 E2092 BAE SYSTEMS (HS) 146 200 C-FBAE Tronosjet Maintenance Inc Tronosjet Maintenance Inc Purchased - parked
20-Oct-08 807 Airbus A320 210 (CFM) N355NW Northwest Airlines Northwest Airlines P. off lse/fin. term comp.
20-Oct-08 549 ATR ATR 42 500 N366FM CSI Aviation Svcs CSI Aviation Svcs Purchased - parked
21-Oct-08 459 General Dynamics (Convair) 580 (SCD) XA- Unconf. Mexican Operator Unconf. Mexican Operator Purchased - parked
21-Oct-08 E2079 BAE SYSTEMS (HS) 146 200 G-MIMA Queenco Leisure Ltd Queenco Leisure Ltd Purchased - parked
21-Oct-08 E3209 BAE SYSTEMS (HS) 146 300 G-JEBG Royal Bank of Scotland plc Royal Bank of Scotland plc Purchased - parked
21-Oct-08 E3202 BAE SYSTEMS (HS) 146 300 G-JEBF Royal Bank of Scotland plc Royal Bank of Scotland plc Purchased - parked
21-Oct-08 958 Airbus A330 340 (RR) B-6502 CDB Leasing Company China Southern Airlines P. - sale & lease-back on del
21-Oct-08 UE-99 Hawker Beechcraft 1900 D N99YV Skyline Enterprise Corp Skyline Enterprise Corp Purchased - parked
22-Oct-08 3013 Bombardier (Shorts) 330 200 N330SB Corporate Air Corporate Air P. off lse/fin. term comp.
22-Oct-08 562 Airbus A320 210 (CFM) HB-IJF Undis. Bank / Broker / Lessor Swiss P. - subject to existing lease
22-Oct-08 DC-851B Fairchild (Swearingen) Metro 23 VH-HWR A.B.G.O. Pty Ltd Sharp Aviation Pty Ltd P. - subject to existing lease
22-Oct-08 49273 Boeing (McDonnell-Douglas) MD-80 82 (MDC) N276AA Stewart Industries Int/l LLC Stewart Industries Int/l LLC Purchased - parked
22-Oct-08 AC-731 Fairchild (Swearingen) Metro III N2728G CBG LLC Key Lime Air P. - subject to existing lease
23-Oct-08 3137 Fairchild/Dornier 328JET N328BH BR Dojet 3137 LLC et al BR Dojet 3137 LLC et al Purchased - parked
23-Oct-08 3137 Fairchild/Dornier 328JET N328BH Trident Aviation Svcs Trident Aviation Svcs Purchased - parked
23-Oct-08 22490 Boeing 727 200 Adv. (St3 Hsk) N683CA CSDS Aircraft Sales & Leasing CSDS A/c Sales & Leasing Purchased - parked
23-Oct-08 22021 Boeing 727 200 Adv. (St3 Hsk) N686CA CSDS Aircraft Sales & Leasing CSDS A/c Sales & Leasing Purchased - parked
23-Oct-08 22924 Boeing 727 200F RE Advanced N358PZ FedEx FedEx P. off lse/fin. term comp. - pkd
23-Oct-08 22934 Boeing 727 200F RE Advanced N3588W FedEx FedEx P. off lse/fin. term comp. - pkd
23-Oct-08 792 ATR ATR 72 500 OH-ATJ Undis. Bank / Broker / Lessor FinnComm Airlines P. - sale & lease-back on del
24-Oct-08 4221 Bombardier (de Havilland) Dash 8 400 G-ECOH HEH Aviation Liverpool Beteiligungs Flybe P. - sale & lease-back on del
24-Oct-08 549 ATR ATR 42 500 N366FM US Department of Justice US Department of Justice Purchased - parked
24-Oct-08 120281 Embraer EMB-120 Brasilia ER N215SW N215SW LLC SkyWest Airlines P. - sale & lease-back
25-Oct-08 590 ATR ATR 72 500 F-OHJT Blue Lane Sybille Lts Blue Lane Sybille Lts Purchased - parked
26-Oct-08 26551 Boeing 747 400 (P&W) 4X-ELE El Al El Al Purchased - parked
27-Oct-08 11558 Fokker 70 PH-KZW KLM cityhopper KLM cityhopper Purchased - parked
27-Oct-08 22134 Boeing 737 (JT8D) 200 Adv. N234AG Aergo Capital Ltd Aergo Capital Ltd Purchased - parked
27-Oct-08 22121 Boeing 737 (JT8D) 200 Adv. (St3 Hsk) N212AG Aergo Leasing 115 Ltd Aergo Capital Ltd Purchased - parked
27-Oct-08 1300 Airbus A320 230 (IAE) N461TA Air Mart Capital LLC Air Mart Capital LLC Purchased - parked
27-Oct-08 28649 Boeing 737 (NG) 600 N649MT US Air Force US Air Force Purchased - parked
27-Oct-08 19000220 Embraer 190 AR VH-ZPL VBNC9 Pty Ltd Virgin Blue Airlines P. - sale & lease-back on del
27-Oct-08 10004 Bombardier (Canadair) CRJ700 Regional JetChallenger 870 N1RL Indianapolis Motor Speedway LLC Indycar Aviation LLC P. - subject to existing lease
27-Oct-08 10004 Bombardier (Canadair) CRJ700 Regional JetChallenger 870 N1RL Brickyard Investments Inc Indycar Aviation LLC P. - subject to existing lease
27-Oct-08 10004 Bombardier (Canadair) CRJ700 Regional JetChallenger 870 N1RL Indianapolis Motor Speedway LLC Indycar Aviation LLC P. - subject to existing lease
27-Oct-08 10004 Bombardier (Canadair) CRJ700 Regional JetChallenger 870 N1RL Indycar Aviation LLC Indycar Aviation LLC P. off lse/fin. term comp.
28-Oct-08 324 Bombardier (de Havilland) Dash 8 100 C-GECN Air North Air North Purchased
28-Oct-08 26272 Boeing 757 200 (P&W) N805AM Unconf. Corporate Operator Unconf. Corporate Operator Purchased - parked
28-Oct-08 53039 Boeing (McDonnell-Douglas) MD-80 87 N826TH Grandmax Group Ltd Grandmax Group Ltd P. off lse/fin. term comp. - pkd
28-Oct-08 67 Saab 340 A N712MG Western Air Western Air Purchased - parked
28-Oct-08 67 Saab 340 A N712MG Avtran LLC Western Air P. - sale & lse-back - parked
28-Oct-08 977 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP SE-LXD Largus Aviation AB Largus Aviation AB Purchased - parked
29-Oct-08 7163 Bombardier (Canadair) CRJ Regional Jet 100ER C-FWPO Flying Colours Corp Flying Colours Corp Purchased - parked
29-Oct-08 500 Bombardier (de Havilland) Dash 8 200 N355PH Win Win Svcs LLC Win Win Svcs LLC Purchased - parked
29-Oct-08 24757 Boeing 767 200ER (GE) JY-JAG Jordan Aviation Jordan Aviation Purchased - parked
29-Oct-08 145728 Embraer ERJ-135 LR N135SZ United Aviation United Aviation Purchased
30-Oct-08 2023 BAE SYSTEMS (HS) ATP SE-LLO European Turboprop Management AB West Air Sweden P. off lse/fin. term comp. - pkd
30-Oct-08 502 Bombardier (de Havilland) Dash 8 200 N356PH Win Win Svcs LLC Win Win Svcs LLC Purchased - parked
30-Oct-08 476 Bombardier (de Havilland) DHC-6 Twin Otter 300 N476R Gum Air Gum Air Purchased - parked
30-Oct-08 476 Bombardier (de Havilland) DHC-6 Twin Otter 300 N476R SNJ Resources Inc Gum Air P. - sale & lse-back - parked
30-Oct-08 30240 Boeing 737 (NG) 700 N240CL Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased - parked
30-Oct-08 28387 Boeing 737 (NG) 800 EC-HJQ Undis. Bank / Broker / Lessor Air Europa P. - subject to existing lease
30-Oct-08 20103 Fokker 50 Bulk Freighter SE-LJV Undis. Bank / Broker / Lessor Amapola Flyg AB Purchased - parked
30-Oct-08 7351 Bombardier (Canadair) CRJ Regional Jet Challenger 800 N387AA Asia Aviation Holding Ltd Asia Aviation Holding Ltd Purchased


Aircraft & Engines
Aircraft transactions — 31 October 2008 to 20 November 2008

31-Oct-08 41079 BAE SYSTEMS (Jetstream) Jetstream 41 HK-4596X Easyfly Easyfly Purchased - parked
31-Oct-08 27732 Boeing 777 200 (RR) HS-TJG Thai Airways Int/l Thai Airways Int/l P. off lse/fin. term comp.
31-Oct-08 3664 Airbus A320 210 (CFM) N664AV AVSA Leasing 3 Avianca P. - sale & lease-back on del
31-Oct-08 1026 Airbus A320 210 (CFM) HB-IHZ Swiss Edelweiss Air P. - subject to existing lease
31-Oct-08 947 Airbus A320 210 (CFM) HB-IHY Swiss Edelweiss Air P. - subject to existing lease
31-Oct-08 942 Airbus A320 210 (CFM) HB-IHX Swiss Edelweiss Air P. - subject to existing lease
31-Oct-08 23774 Boeing 737 (CFMI) 300 G-CFOD CIT Capital Aviation (UK) Ltd CIT Aerospace Purchased - parked
31-Oct-08 28272 Boeing 777 300 (P&W) JA751A ANA - All Nippon Airways ANA - All Nippon Airways P. off lse/fin. term comp.
31-Oct-08 145642 Embraer ERJ-135 Legacy 600 N642AG Fifth Third Leasing Co Swift Air P. - subject to existing lease
31-Oct-08 19000172 Embraer 195 LR 4X-EMA Arkia Arkia Purchased
03-Nov-08 715 Bombardier (de Havilland) DHC-6 Twin Otter300 F-OIQP Air Moorea Air Moorea Purchased - parked
03-Nov-08 UE-183 Hawker Beechcraft 1900 D HK- Aerolet Aerolet Purchased - parked
03-Nov-08 UE-396 Hawker Beechcraft 1900 D VH-XDY Peter Collins Holdings (Pty) Ltd West Wing Aviation (Pty) LtdPurchased - parked
04-Nov-08 24017 Boeing 757 200 (RR) N913FD FedEx FedEx Purchased - parked
04-Nov-08 23225 Boeing 737 (JT8D) 200 Adv. YV Sundance Air (Venezuela) Sundance Air (Venezuela) Purchased - parked
04-Nov-08 25898 Boeing 757 200SF (RR) VT- European Air Transport Blue Dart Aviation Purchased - parked
04-Nov-08 451 Bombardier (de Havilland) DHC-6 Twin Otter 300 C-FTSU Alberta Central Airways Alberta Central Airways Purchased
04-Nov-08 22547 Boeing 747 SP (P&W) N4508H NASA NASA Purchased - parked
05-Nov-08 7457 Bombardier (Canadair) CRJ Regional Jet 200LR N655BR Trust N693BR Trust N693BR Purchased - parked
05-Nov-08 7454 Bombardier (Canadair) CRJ Regional Jet 200LR N654BR Trust N693BR Trust N693BR Purchased - parked
06-Nov-08 3668 Airbus A320 230 (IAE) VH-VQC Wombat 3668 Leasing Pty Ltd Jetstar P. - sale & lease-back on del
06-Nov-08 48116 Boeing (McDonnell-Douglas) DC-9 31 (St3 Hsk) N367MN Orion Airlines LLC Orion Airlines LLC Purchased - parked
06-Nov-08 48117 Boeing (McDonnell-Douglas) DC-9 31 (St3 Hsk) N367LN Orion Airlines LLC Orion Airlines LLC Purchased - parked
06-Nov-08 48132 Boeing (McDonnell-Douglas) DC-9 32 (St3 Hsk) N367RN Orion Airlines LLC Orion Airlines LLC Purchased - parked
06-Nov-08 48133 Boeing (McDonnell-Douglas) DC-9 32 (St3 Hsk) N367PN Orion Airlines LLC Orion Airlines LLC Purchased - parked
06-Nov-08 49264 Boeing (McDonnell-Douglas) MD-80 82 (MDC) N14810 Global Aircraft Solutions Inc Global A/c Leasing Partners Purchased - parked
06-Nov-08 1038 Lockheed L-188 Electra AF N344HA Zia Turbopower Inc Zia Turbopower Inc Purchased - parked
06-Nov-08 33046 Boeing (McDonnell-Douglas) DC-3 BT-67 N707BA US Department of State US Department of State Purchased
06-Nov-08 1133 Lockheed L-188 Electra CF N290F Zia Turbopower Inc Zia Turbopower Inc Purchased - parked
06-Nov-08 1109 Lockheed L-188 Electra CF N340HA Zia Turbopower Inc Zia Turbopower Inc Purchased - parked
07-Nov-08 3691 Airbus A319 110 (CFM) N691AV AVSA Leasing 4 Avianca P. - sale & lease-back on del
07-Nov-08 1743 Airbus A319 110 (CFM) N907FR VTB-Leasing VTB-Leasing Purchased - parked
07-Nov-08 1868 Airbus A320 230 (IAE) CS-TFY Volito Aviation AB Volito Aviation AB Purchased - parked
07-Nov-08 23774 Boeing 737 (CFMI) 300 N473CT CIT Leasing Corp CIT Aerospace Purchased - parked
07-Nov-08 634 Bombardier (de Havilland) DHC-6 Twin Otter300 N933DR Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased
07-Nov-08 555 Airbus A300 620R (P&W) N750FD FedEx FedEx Purchased - parked
10-Nov-08 24444 Boeing 737 (CFMI) 400 VH-TJS Qantas Qantas P. off lse/fin. term comp.
10-Nov-08 760 Airbus A300 600 Freighter (GE) N661FE Undis. Bank / Broker / Lessor FedEx P. - subject to existing lease
10-Nov-08 145290 Embraer ERJ-145 EP UR-DNO Dniproavia Dniproavia Purchased - parked
10-Nov-08 E2307 BAE SYSTEMS (Avro) RJ Avroliner RJ85 EI-RJY Cityjet Cityjet Purchased - parked
11-Nov-08 23902 Boeing 767 200ER (GE) N250AY Aircraft Solutions 27108/27109 LLC US Airways P. - subject to existing lease
11-Nov-08 23901 Boeing 767 200ER (GE) N249AU Aircraft Solutions 27108/27109 LLC US Airways P. - subject to existing lease
12-Nov-08 22128 Boeing 737 (JT8D) 200 Adv. (St3 Hsk) N128AG Aergo Capital Ltd Aergo Capital Ltd Purchased - parked
12-Nov-08 23968 Boeing 747 300 (P&W) 5N-DBM Max Air (Nigeria) Max Air (Nigeria) Purchased
12-Nov-08 964 Airbus A330 340 (RR) B-6501 CDB Leasing Company China Southern Airlines P. - sale & lease-back on del
12-Nov-08 27725 Boeing 747 400 (GE) HS-TGX Thai Airways Int/l Thai Airways Int/l P. off lse/fin. term comp.
12-Nov-08 145663 Embraer ERJ-135 LR N831RP Undis. Bank / Broker / Lessor Chautauqua Airlines P. - sale & lease-back
13-Nov-08 47570 Boeing (McDonnell-Douglas) DC-9 32 N367UD Orion Airlines LLC Orion Airlines LLC Purchased - parked
13-Nov-08 688 Airbus A300 620R (P&W) N746FD FedEx FedEx Purchased - parked
14-Nov-08 26638 Boeing 747 400 (RR) N7716Q Aircraft Financial Leasing Ltd VTB-Leasing Purchased - parked
14-Nov-08 25360 Boeing 737 (CFMI) 300 N103VR Universal Asset Management Inc Universal Asset Mgmt Inc Purchased - parked
15-Nov-08 19821 Boeing 707 320C (Stage 2 Hks) EX-120 Unconf. Kyrgyzstan Airline Unconf. Kyrgyzstan Airline Purchased
15-Nov-08 29599 Boeing 737 (NG) 900 Wingl. PH-BXO Aruba Leasing Ltd KLM Royal Dutch Airlines P. - subject to existing lease
15-Nov-08 33695 Boeing 747 400ERF (GE) PH-CKB Dun Laoghaire Ltd KLM Royal Dutch Airlines P. - subject to existing lease
15-Nov-08 29132 Boeing 737 (NG) 800 Wingl. PH-BXB Wing Leasing Int/l Co Ltd KLM Royal Dutch Airlines P. - subject to existing lease
15-Nov-08 33602 Boeing 737 (NG) 800 Wingl. EI-DPA ORIX Aviation Systems Ltd Ryanair P. - subject to existing lease
15-Nov-08 26879 Boeing 747 400 (P&W) EP-MNC Undis. Bank / Broker / Lessor Blue Airways P. - subject to existing lease
15-Nov-08 23480 Boeing 747 300 Combi (GE) EP-MNE Undis. Bank / Broker / Lessor Mahan Air P. - subject to existing lease
15-Nov-08 24201 Boeing 747 400 Combi (GE) PH-BFE Blue Yonder XII BV KLM Royal Dutch Airlines P. - subject to existing lease
15-Nov-08 24383 Boeing 747 400 (P&W) EP-MNA Undis. Bank / Broker / Lessor Blue Airways P. - subject to existing lease
15-Nov-08 24201 Boeing 747 400 Combi (GE) PH-BFE KLM Royal Dutch Airlines KLM Royal Dutch Airlines P. off lse/fin. term comp.
15-Nov-08 24202 Boeing 747 400 Combi (GE) PH-BFF KLM Royal Dutch Airlines KLM Royal Dutch Airlines P. off lse/fin. term comp.
15-Nov-08 33696 Boeing 747 400ERF (GE) PH-CKC Ballsbridge Ltd KLM Royal Dutch Airlines P. - sale & lease-back
15-Nov-08 24202 Boeing 747 400 Combi (GE) PH-BFF Blue Yonder XIII BV KLM Royal Dutch Airlines P. - sale & lease-back
15-Nov-08 33713 Boeing 777 200ER (GE) PH-BQD Osprey Ltd KLM Royal Dutch Airlines P. - sale & lease-back
15-Nov-08 35671 Boeing 777 300ER (GE) PH-BVA Yamasa Co Ltd KLM Royal Dutch Airlines P. - sale & lease-back
15-Nov-08 23075 Boeing 737 (JT8D) 200 Adv. (St3 Hsk) N303DL Magnum Airdynamics Magnum Airdynamics Purchased - parked
15-Nov-08 3575 Airbus A321 230 (IAE) G-TTII Monarch Airlines Monarch Airlines Purchased - parked
15-Nov-08 24363 Boeing 747 400 (P&W) EP-MNB Undis. Bank / Broker / Lessor Blue Airways P. - subject to existing lease
15-Nov-08 33641 Boeing 737 (NG) 800 Wingl. EI-DPS ORIX Aviation Systems Ltd Ryanair P. - subject to existing lease
15-Nov-08 3546 Airbus A321 230 (IAE) G-TTIH Monarch Airlines Monarch Airlines Purchased - parked
15-Nov-08 14500997 Embraer ERJ-135 Legacy 600 27-Jan-07 Brazilian Air Force Brazilian Air Force Del. - pur. of usd/demo a/c.
17-Nov-08 3704 Airbus A319 110 (CFM) D-ABGR Deucalion Capital II airberlin P. - subject to existing lease
17-Nov-08 45907 Boeing (McDonnell-Douglas) DC-8 71F (M) N707UP Fossco Inc Fossco Inc Purchased - parked
17-Nov-08 24673 Boeing 737 (CFMI) 300 N398UA Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased - parked
17-Nov-08 49908 Boeing (McDonnell-Douglas) MD-80 81 N908RF Tiger Aircraft Trading Inc Tiger Aircraft Trading Inc Purchased - parked
17-Nov-08 49908 Boeing (McDonnell-Douglas) MD-80 81 JA8297 JALUX Inc JALUX Inc Purchased - parked
18-Nov-08 14501020 Embraer ERJ-135 Legacy 600 PK-RJO Premiair Premiair Purchased
18-Nov-08 22531 Boeing 737 (JT8D) 200 Adv. ZS-GCU Safair Operations Pty Ltd Safair P. - subj. to exist. lease - pkd
19-Nov-08 963 Airbus A330 240 (RR) VP-BLX Waha Fleet Leasing 1 Limited Aeroflot Russian Airlines P. - subject to existing lease
19-Nov-08 53044 Boeing (McDonnell-Douglas) MD-80 83 (MDC) N835NK Undis. Bank / Broker / Lessor Polaris Holding Company Purchased - parked
19-Nov-08 48512 Boeing (McDonnell-Douglas) MD-11 Passenger (GE) N512SU Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased - parked
20-Nov-08 3708 Airbus A321 210 (CFM) D-ABCA Hannover Leasing 189 Flight Invest 47 airberlin P. - sale & lease-back on del

Aircraft transactions — 20 November 2008 to 11 December 2008

20-Nov-08 8053 Bombardier (Canadair) CRJ Regional Jet Challenger 850 P4-GJL Olpon Aviation A V V Silver Arrows Purchased
20-Nov-08 24712 Boeing 737 (CFMI) 300 YV Conviasa Conviasa Purchased
20-Nov-08 21704 Boeing 747 200B (P&W) N622US Evergreen Trade Inc Evergreen Trade Inc Purchased - parked
20-Nov-08 25280 Boeing 767 300ER (P&W) N202AC Brassbox Ltd Aircastle Advisor LLC Purchased - parked
20-Nov-08 32778 Boeing 737 (NG) 800 Wingl. VQ-BBR Atlant Soyuz Airlines Atlant Soyuz Airlines Purchased - parked
20-Nov-08 23703 Boeing 737 (CFMI) 300 N517AU GECAS Asset Management Svcs GECAS Asset Mgmt Svcs Purchased - parked
20-Nov-08 47517 Boeing (McDonnell-Douglas) DC-9 31 (St3 Hsk) N908H Evergreen Trade Inc Evergreen Trade Inc Purchased - parked
20-Nov-08 45790 Boeing (McDonnell-Douglas) DC-9 32 (St3 Hsk) N982US Evergreen Trade Inc Evergreen Trade Inc Purchased - parked
20-Nov-08 47432 Boeing (McDonnell-Douglas) DC-9 32 (St3 Hsk) N610NW Evergreen Trade Inc Evergreen Trade Inc Purchased - parked
20-Nov-08 47436 Boeing (McDonnell-Douglas) DC-9 32 (St3 Hsk) N612NW Evergreen Trade Inc Evergreen Trade Inc Purchased - parked
21-Nov-08 21613 Boeing 737 (JT8D) 200 Adv. (St3 Hsk) N835AL Aerospace Trading LLC Aerospace Trading LLC Purchased - parked
21-Nov-08 32779 Boeing 737 (NG) 800 Wingl. VQ-BBS Atlant Soyuz Airlines Atlant Soyuz Airlines Purchased - parked
24-Nov-08 24753 Boeing 767 300ER (GE) N753SJ Baxter Aviation Ltd Baxter Aviation Ltd Purchased - parked
24-Nov-08 2141 Airbus A320 230 (IAE) RP-C8897 Zest Airways Zest Airways Purchased - parked
25-Nov-08 967 Airbus A330 240 (RR) N967CG ACG Acquisition (Cayman) 967 Ltd Avianca P. - sale & lease-back on del
25-Nov-08 41 Airbus A320 210 (CFM) N305US AeroTurbine Inc AeroTurbine Inc Purchased - parked
26-Nov-08 3156 Fairchild/Dornier 328JET N406FJ Ultimate Jetcharters Inc Ultimate Jetcharters Inc P. off lse/fin. term comp.
26-Nov-08 49952 Boeing (McDonnell-Douglas) MD-80 83 (MDC) N995AC Air Transport Acquisition Corp Air Transport Acquis. Corp Purchased - parked
26-Nov-08 E2079 BAE SYSTEMS (HS) 146 200 G-MIMA Casino Rodos Casino Rodos Purchased - parked
26-Nov-08 3699 Airbus A320 210 (CFM) VP-BME Waha Fleet Leasing 2 Limited Aeroflot Russian Airlines P. - subject to existing lease
28-Nov-08 28302 Boeing 737 (NG) 600 HL7781 Eastarjet Eastarjet Purchased
28-Nov-08 27036 Boeing 777 200 (P&W) JA706A ANA - All Nippon Airways ANA - All Nippon Airways P. off lse/fin. term comp.
28-Nov-08 3651 Airbus A319 110 (CFM) EC-KUB RBS Aviation Capital Iberia P. - subj. to exist. lease - pkd
01-Dec-08 145676 Embraer ERJ-135 LR N832RP Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased - parked
01-Dec-08 23549 Boeing 747 200B (P&W) 5N-JRM Kabo Air Kabo Air Purchased - parked
01-Dec-08 22147 Boeing 727 200 Adv. (St3 Hsk) N295AS Airlease Int/l Inc Airlease Int/l Inc Purchased - parked
01-Dec-08 23293 Boeing 757 200 (RR) N936FD FedEx FedEx Purchased - parked
01-Dec-08 21348 Boeing 727 200 Adv. (St3 Hsk) N293AS Airlease Int/l Inc Airlease Int/l Inc Purchased - parked
02-Dec-08 E2096 BAE SYSTEMS (HS) 146 200 TN- Mouritzen Family Trust Allegiance Air Purchased - parked
03-Dec-08 24623 Boeing 757 200 (P&W) N502UA East Shore Aircraft LLC United Airlines P. - subject to existing lease
03-Dec-08 29791 Boeing 737 (NG) BBJ1 P4-KSA Unconf. Saudi Operator Arabasco P. - subject to existing lease
03-Dec-08 24763 Boeing 757 200 (P&W) N509UA East Shore Aircraft LLC United Airlines P. - sale & lease-back
03-Dec-08 27321 Boeing 737 (CFMI) 500 N33608 BLF Ltd BLF Ltd Purchased - parked
04-Dec-08 3727 Airbus A319 110 (CFM) PR-MYB Deucalion Aviation Funds TAM Linhas Aereas P. - subject to existing lease
04-Dec-08 35789 Boeing 737 (NG) 700 Wingl. N317AT MENA Investments MENA Investments Purchased - parked
04-Dec-08 33935 Boeing 737 (NG) 700 Wingl. N331AT MENA Investments MENA Investments Purchased - parked
05-Dec-08 19000231 Embraer 190 LR VH-SXO AFS Investments 67-F Inc SkyAirWorld Pur. - sale to S.P.C. by lessor on del
05-Dec-08 28394 Boeing 777 300 (P&W) JA8942 Japan Airlines Corporation Japan Airlines Int/l P. off lse/fin. term comp.
05-Dec-08 25367 Boeing 757 200 Wingl. (P&W) N546UA East Shore Aircraft LLC United Airlines P. - sale & lease-back
05-Dec-08 27742 Boeing 767 300ERF (GE) N314UP CC&E I LLC UPS Airlines P. off lse/fin. term comp.
05-Dec-08 145687 Embraer ERJ-135 LR N833RP Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased - parked
05-Dec-08 49419 Boeing (McDonnell-Douglas) MD-80 82 (MDC) N419MT AAR Parts Trading Inc AAR Parts Trading Inc Purchased - parked
05-Dec-08 49515 Boeing (McDonnell-Douglas) MD-80 82 (SAIC) N515HC AAR Parts Trading Inc AAR Parts Trading Inc Purchased - parked
05-Dec-08 1863 Airbus A319 110 (CFM) N913FR Bakersvalley Partners Corp Bakersvalley Partners Corp Purchased - parked
05-Dec-08 1876 Airbus A319 110 (CFM) N916FR Bakersvalley Partners Corp Bakersvalley Partners Corp Purchased - parked
05-Dec-08 1876 Airbus A319 110 (CFM) N916FR VL1876 Limited VTB-Leasing Purchased - parked
05-Dec-08 1863 Airbus A319 110 (CFM) N913FR VL1863 Limited VTB-Leasing Purchased - parked
05-Dec-08 27331 Boeing 737 (CFMI) 500 Wingl. N16618 BLF Ltd BLF Ltd Purchased - parked
05-Dec-08 49511 Boeing (McDonnell-Douglas) MD-80 82 (SAIC) N511JZ AAR Parts Trading Inc AAR Parts Trading Inc Purchased - parked
05-Dec-08 49513 Boeing (McDonnell-Douglas) MD-80 82 (SAIC) N513HC AAR Parts Trading Inc AAR Parts Trading Inc Purchased - parked
08-Dec-08 14501038 Embraer ERJ-135 Legacy 600 D-AKAT UniCredit Global Leasing Export GmbH KamAvia Handels Gmbh P. - subject to existing lease
08-Dec-08 3715 Airbus A320 210 (CFM) PK-AXE Doric Asset Finance & Verwaltungs Indonesia AirAsia P. - sale & lease-back on del
08-Dec-08 22814 Boeing 757 200 (P&W) N607DL AAR Parts Trading Inc AAR Parts Trading Inc Purchased - parked
08-Dec-08 3137 Fairchild/Dornier 328JET N328BH Dornier 3137 Operating LLC Dornier 3137 Operating LLC Purchased - parked
08-Dec-08 28271 Boeing 737 (CFMI) 400SF N211BF Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased - parked
08-Dec-08 34 Airbus A320 210 (CFM) N303US AeroTurbine Inc AeroTurbine Inc Purchased - parked
08-Dec-08 2723 Airbus A319 130 (IAE) EI-ECY ILFC Ireland Ltd Wind Jet Purchased - parked
08-Dec-08 2698 Airbus A319 130 (IAE) EI-ECX ILFC Ireland Ltd ILFC Purchased - parked
08-Dec-08 28650 Boeing 737 (NG) 600 N628SR US Air Force US Air Force Purchased - parked
08-Dec-08 28334 Boeing 737 (CFMI) 400SF N212BF Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased - parked
08-Dec-08 14501038 Embraer ERJ-135 Legacy 600 D-AKAT Kamaz Inc KamAvia Handels Gmbh P. - subject to existing lease
09-Dec-08 1230 Lockheed L-1011 TriStar 100 N194AT Luis Feliu Tajik Air P. - subject to existing lease
09-Dec-08 24871 Boeing 757 200 Wingl. (P&W) N518UA East Shore Aircraft LLC United Airlines P. - sale & lease-back
09-Dec-08 E3191 BAE SYSTEMS (HS) 146 300 5A-DKQ Air Libya Air Libya Purchased - parked
09-Dec-08 24673 Boeing 737 (CFMI) 300 N398UA Magnolia Investments Magnolia Investments Purchased - parked
10-Dec-08 49838 Boeing (McDonnell-Douglas) MD-80 87 5X-UGC Air Uganda Air Uganda Purchased
10-Dec-08 28461 Boeing 737 (CFMI) 500 JA8595 NBB Ptarmigan ANK - Air Nippon P. - subject to existing lease
10-Dec-08 19000238 Embraer 190 LR XA-IAC Jetscape Inc Aeromexico Connect P. - sale & lease-back on del
10-Dec-08 19000234 Embraer 190 LR XA-FAC Jetscape Inc Aeromexico Connect P. - sale & lease-back on del
10-Dec-08 29428 Boeing 757 200 Wingl. (RR) N678AN American Airlines American Airlines P. off lse/fin. term comp.
10-Dec-08 28307 Boeing 737 (NG) 600 LN-RPF SAS Struktur Gˆta Kommanditbolag SAS P. - sale & lease-back
10-Dec-08 30192 Boeing 737 (NG) 700 LN-RPJ SAS Struktur Gˆta Kommanditbolag SAS P. - sale & lease-back
10-Dec-08 22818 Boeing 757 200 (P&W) N611DL AAR Parts Trading Inc AAR Parts Trading Inc Purchased - parked
10-Dec-08 22020 Boeing 727 200 Adv. (St3 Hsk) N681CA Contrails Capital Inc Contrails Capital Inc Purchased - parked
10-Dec-08 29926 Boeing 737 (NG) 800 Wingl. EI-CSM CIT Aerospace Int/l CIT Aerospace Purchased - parked
10-Dec-08 27320 Boeing 737 (CFMI) 500 Wingl. N16607 BLF Ltd BLF Ltd Purchased - parked
11-Dec-08 145608 Embraer ERJ-135 LR 2561 Brazilian Air Force Brazilian Air Force Purchased
11-Dec-08 965 Airbus A330 320 (P&W) F-OONE SNC Arawak 2008 Air Caraibes P. - sale & lease-back on del


Aircraft & Engines
Aircraft transactions — 11 December 2008 to 02 January 2009

11-Dec-08 23406 Boeing 737 (CFMI) 300 N672SW Aviation Capital Group Aviation Capital Group Purchased - parked
11-Dec-08 23406 Boeing 737 (CFMI) 300 N672SW Volvo Aero Svcs Corp Volvo Aero Svcs Corp Purchased - parked
11-Dec-08 28927 Boeing 737 (CFMI) 500 N14667 Verulamium Finance Ltd VTB-Leasing Purchased - parked
11-Dec-08 45936 Boeing (McDonnell-Douglas) DC-8 73CF N836UP Fossco Inc Fossco Inc Purchased - parked
12-Dec-08 29233 Boeing 737 (NG) BBJ1 5R-MRP Government of Madagascar Government of Madagascar Purchased
12-Dec-08 976 Airbus A330 200 (GE) VH-EBL CBA Air Pty Ltd Qantas P. - sale & lease-back on del
12-Dec-08 27743 Boeing 767 300ERF (GE) N315UP CC&E I LLC UPS Airlines P. off lse/fin. term comp.
12-Dec-08 49966 Boeing (McDonnell-Douglas) MD-80 83 (MDC) G-FLTK Safair Lease Finance Safair Lease Finance Purchased - parked
12-Dec-08 258 Airbus A320 210 (CFM) 9A-CTF GOAL German Operating A/c Leasing Croatia Airlines P. - subject to existing lease
14-Dec-08 53462 Boeing (McDonnell-Douglas) MD-90 30 HB-JIF SAS Struktur Gˆta Kommanditbolag Hello P. - subject to existing lease
14-Dec-08 53461 Boeing (McDonnell-Douglas) MD-90 30 HB-JIE SAS Struktur Gˆta Kommanditbolag Hello P. - subject to existing lease
14-Dec-08 53460 Boeing (McDonnell-Douglas) MD-90 30 HB-JID SAS Struktur Gˆta Kommanditbolag Hello P. - subject to existing lease
15-Dec-08 14500978 Embraer ERJ-135 Legacy 600 A6-MAZ Empire Aviation Group FZCO Empire Aviation Grp FZCO Purchased
15-Dec-08 24608 Boeing 757 200 Wingl. (RR) N650AA Undis. Bank / Broker / Lessor American Airlines P. - subject to existing lease
15-Dec-08 24610 Boeing 757 200 Wingl. (RR) N652AA Undis. Bank / Broker / Lessor American Airlines P. - subject to existing lease
15-Dec-08 637 Airbus A330 300 (GE) A7-AEB Waha Leasing Qatar Airways P. - subject to existing lease
15-Dec-08 15 Airbus A380 840 (RR) VH-OQB QF Boc 2008-1 Pty Limited Qantas P. - sale & lease-back on del
15-Dec-08 7136 Bombardier (Canadair) CRJ Regional Jet Challenger 800 HB-IDJ Kalong Investments Limited TAG Aviation P. - subject to existing lease
15-Dec-08 14500916 Embraer ERJ-135 Legacy 600 OE-IRK Jetalliance Flugbetriebs Jetalliance Flugbetriebs P. off lse/fin. term comp.
15-Dec-08 23413 Boeing 747 300 Combi (GE) EP-MND Undis. Bank / Broker / Lessor Mahan Air P. - subject to existing lease
15-Dec-08 32780 Boeing 737 (NG) 800 Wingl. VQ-BCM Atlant Soyuz Airlines Atlant Soyuz Airlines Purchased - parked
15-Dec-08 22932 Boeing 727 200F RE Advanced N416JC MidAmerican Aerospace Ltd MidAmerican Aerospace Ltd Purchased - parked
15-Dec-08 33018 Boeing 737 (NG) 800 Wingl. EI-EDL CIT Aerospace Int/l CIT Aerospace Purchased - parked
15-Dec-08 23584 Boeing 737 (CFMI) 300 N14346 Continental Airlines Continental Airlines P. off lse/fin. term comp. - pkd
15-Dec-08 23585 Boeing 737 (CFMI) 300 N14347 Continental Airlines Continental Airlines P. off lse/fin. term comp. - pkd
15-Dec-08 46162 Boeing (McDonnell-Douglas) DC-8 62AF (St3 Hsk) 9G-AED Air Charter Express Air Charter Express Purchased
16-Dec-08 145678 Embraer ERJ-135 Legacy 600 N494TG Admiralty Air LLC TAG Aviation USA P. - subject to existing lease
16-Dec-08 37704 Boeing 777 300ER (GE) A6-ECL Doric Asset Fin. & Verwaltungs GmbH Emirates Airline P. - sale & lease-back on del
16-Dec-08 E2090 BAE SYSTEMS (HS) 146 200 ZS- Mouritzen Family Trust Allegiance Air Purchased - parked
17-Dec-08 776 Airbus A300 600R ST Beluga (GE) F-GSTD Airbus Airbus Transport Int/l P. - subject to existing lease
17-Dec-08 15207 Bombardier (Canadair) CRJ900 Regional Jet900LR NextGen S5-AAN GOAL V. mbH & Co Projekt Nr33 Adria Airways P. - sale & lease-back on del
17-Dec-08 15063 Bombardier (Canadair) CRJ900 Regional Jet900ER C-FXCE World Wide Aircraft Ferrying Ltd World Wide A/c Ferrying Ltd Purchased - parked
17-Dec-08 15064 Bombardier (Canadair) CRJ900 Regional Jet900ER C-FXCK World Wide Aircraft Ferrying Ltd World Wide A/c Ferrying Ltd Purchased - parked
17-Dec-08 15065 Bombardier (Canadair) CRJ900 Regional Jet900ER C-FXCL World Wide Aircraft Ferrying Ltd World Wide A/c Ferrying Ltd Purchased - parked
18-Dec-08 15195 Bombardier (Canadair) CRJ900 Regional Jet900ER NextGen N195PQ Pinnacle Airlines Pinnacle Airlines Del. - pur. of usd/demo a/c.
18-Dec-08 22371 Boeing 737 (JT8D) 200 Adv. N371AL AL22371 LLC AL22371 LLC Purchased - parked
18-Dec-08 2147 Airbus A320 230 (IAE) N582JB Zest Airways Zest Airways Purchased - parked
18-Dec-08 28928 Boeing 737 (CFMI) 500 N14668 Transaero Transaero Purchased - parked
18-Dec-08 28928 Boeing 737 (CFMI) 500 N14668 Continental Airlines Purchasing Svcs LLC Continental Airlines Pur. Svcs Purchased - parked
18-Dec-08 7283 Bombardier (Canadair) CRJ Regional Jet 200LR C-FXLH Bombardier Inc Bombardier Inc Purchased - parked
18-Dec-08 23951 Boeing 737 (CFMI) 300 G-JMCL Atlantic Airlines Atlantic Airlines Purchased - parked
18-Dec-08 23520 Boeing 737 (JT8D) 200 Adv. (St3 Hsk) ZS-SHL Star Air Cargo Star Air Cargo Purchased - parked
18-Dec-08 23951 Boeing 737 (CFMI) 300 G-JMCL Undis. Bank / Broker / Lessor Atlantic Airlines P. - sale & lse-back - parked
18-Dec-08 14501029 Embraer ERJ-135 Legacy 600 S5-ALA Linxair Business Airlines Linxair Business Airlines Del. - pur. of usd/demo a/c.
19-Dec-08 14501042 Embraer ERJ-135 Legacy 600 SE-DJG SFS Holding AB EFS European Flight Service P. - sale & lease-back on del
19-Dec-08 940 Airbus A330 200 (GE) VH-EBJ Macquarie AirFinance Qantas P. - sale & lease-back on del
19-Dec-08 19483 Boeing 727 200F (M) (St3 Hsk) N6808 Stewart Industries Int/l LLC Stewart Industries Int/l LLC Purchased - parked
19-Dec-08 20184 Boeing 727 200F (M) (St3 Hsk) N6831 Stewart Industries Int/l LLC Stewart Industries Int/l LLC Purchased - parked
19-Dec-08 20635 Boeing 727 200F (M) Adv. (S3 H) N77780 Stewart Industries Int/l LLC Stewart Industries Int/l LLC Purchased - parked
19-Dec-08 21085 Boeing 727 200F (M) Adv. (S3 H) N858AA Stewart Industries Int/l LLC Stewart Industries Int/l LLC Purchased - parked
19-Dec-08 20040 Boeing 727 200F (M) (St3 Hsk) N90AX Stewart Industries Int/l LLC Stewart Industries Int/l LLC Purchased - parked
19-Dec-08 23774 Boeing 737 (CFMI) 300 N473CT Tag Aviation (Stansted) Ltd Tag Aviation (Stansted) Ltd Purchased - parked
19-Dec-08 23936 Boeing 737 (CFMI) 300 N591US GECAS Asset Management Svcs GECAS Asset Mgmt Svcs Purchased - parked
19-Dec-08 25113 Boeing 737 (CFMI) 400 N782AS Eden Irish Aircraft Leasing Ltd AerCap P. - subj. to exist. lease - pkd
19-Dec-08 1873 Airbus A320 210 (CFM) F-GKXD NBB Finch Co. Ltd Air France P. - subject to existing lease
20-Dec-08 35143 Boeing 737 (NG) 800 Wingl. D-AHLK Undis. Bank / Broker / Lessor TUIfly P. - sale & lease-back on del
22-Dec-08 47003 Boeing (McDonnell-Douglas) DC-9 31PC (M) (St3 Hsk) N946AX DHL Network Operations (USA) Inc ABX Air P. - sale & lease-back
22-Dec-08 47148 Boeing (McDonnell-Douglas) DC-9 32CF (St3 Hsk) N909AX DHL Network Operations (USA) Inc ABX Air P. - sale & lease-back
22-Dec-08 19421 Boeing 737 (JT8D) 200 (St3 Hsk) N205AU Freeman Leasing LLC Freeman Leasing LLC Purchased - parked
22-Dec-08 21992 Boeing 747 SP (P&W) N747A Fry’s Electronics Inc Fry’s Electronics Inc Purchased
23-Dec-08 35587 Boeing 777 200LR (GE) A6-EWH Amentum Capital Ltd. Emirates Airline P. - sale & lease-back on del
23-Dec-08 3741 Airbus A320 230 (IAE) UR-WUB General Electric Capital Corp Wizz Air Ukraine P. - sale & lease-back on del
23-Dec-08 32457 Boeing 737 (NG) 700 Wingl. N903WN BOC Aviation Southwest Airlines P. - sale & lease-back
23-Dec-08 145315 Embraer ERJ-145 EP UR-DNQ Dniproavia Dniproavia Purchased - parked
24-Dec-08 34961 Boeing 737 (NG) 900ER VT-SGD Lucydell Ltd SpiceJet P. - sale & lease-back on del
24-Dec-08 956 Airbus A330 200 (GE) VT-JWQ Injet 330 A/c Leasing Company Ltd - 2Jet Airways P. - sale & lease-back on del
24-Dec-08 23406 Boeing 737 (CFMI) 300 N672SW Pinnacle Aircraft Parts Inc Pinnacle Aircraft Parts Inc Purchased - parked
27-Dec-08 22 Airbus A380 840 (RR) VH-OQC QF ECA 2008-2 Pty Limited Qantas P. - sale & lease-back on del
29-Dec-08 24674 Boeing 737 (CFMI) 300 N399UA Global Jet Ltd Global Jet Ltd Purchased - parked
30-Dec-08 29638 Boeing 737 (NG) 800 4X-EKF Aviation Capital Group Aviation Capital Group Purchased
30-Dec-08 46088 Boeing (McDonnell-Douglas) DC-8 63CF (St3 Hsk) N865F National Airlines National Airlines P. off lse/fin. term comp.
30-Dec-08 46145 Boeing (McDonnell-Douglas) DC-8 63CF (St3 Hsk) N921R National Airlines National Airlines P. off lse/fin. term comp.
31-Dec-08 22507 Boeing 747 200SF (GE) N516MC Atlas Air Polar Air Cargo P. - subject to existing lease
31-Dec-08 E2111 BAE SYSTEMS (HS) 146 200 N446MA Minden Air Minden Air Purchased - parked
31-Dec-08 21644 Boeing 747 200SF (GE) N508MC Atlas Air Polar Air Cargo P. off lse/fin. term comp. - pkd
02-Jan-09 28154 Boeing 767 300ER (GE) VH-OGQ Qantas Qantas P. off lse/fin. term comp.
02-Jan-09 28152 Boeing 737 (CFMI) 400 VH-TJZ Qantas Qantas P. off lse/fin. term comp.
02-Jan-09 24485 Boeing 767 300ER (GE) N181AQ Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased - parked
02-Jan-09 24495 Boeing 767 300ER (GE) N182AQ Undis. Bank / Broker / Lessor Undis. Bank / Broker / LessorPurchased - parked

Aircraft transactions — 05 January 2009 to 22 January 2009

05-Jan-09 53245 Boeing (McDonnell-Douglas) MD-80 82 (MDC) N411NV Allegiant Air Allegiant Air Purchased - parked
06-Jan-09 49419 Boeing (McDonnell-Douglas) MD-80 82 (MDC) N419MT MidAmerican Aerospace Ltd MidAmerican Aerospace Ltd Purchased - parked
06-Jan-09 49513 Boeing (McDonnell-Douglas) MD-80 82 (SAIC) N513HC MidAmerican Aerospace Ltd MidAmerican Aerospace Ltd Purchased - parked
06-Jan-09 49511 Boeing (McDonnell-Douglas) MD-80 82 (SAIC) N511JZ MidAmerican Aerospace Ltd MidAmerican Aerospace Ltd Purchased - parked
06-Jan-09 49515 Boeing (McDonnell-Douglas) MD-80 82 (SAIC) N515HC MidAmerican Aerospace Ltd MidAmerican Aerospace Ltd Purchased - parked
06-Jan-09 34205 Boeing 767 400ER (GE) A9C-HMH Government of Bahrain Bahrain Royal Flight Del. - pur. of usd/demo a/c.
07-Jan-09 686 Airbus A319 130 (IAE) N801UA E.L.F. Leasing Two LLC United Airlines P. - subject to existing lease
07-Jan-09 592 Airbus A320 230 (IAE) N434UA E.L.F. Leasing Two LLC United Airlines P. - sale & lease-back
07-Jan-09 47707 Boeing (McDonnell-Douglas) DC-9 34CF S9- Aircraft Traders Belgium SA Aircraft Traders Belgium SA Purchased - parked
07-Jan-09 E3145 BAE SYSTEMS (HS) 146 300 N616AW Air Tahoma INC Air Tahoma INC Purchased - parked
07-Jan-09 24160 Boeing 747 300 Combi (GE) VT-EPX GA Telesis LLC GA Telesis LLC Purchased - parked
08-Jan-09 36629 Boeing 737 (NG) 700 Wingl. N926WN BOC Aviation Southwest Airlines P. - sale & lease-back on del
08-Jan-09 36630 Boeing 737 (NG) 700 Wingl. N925WN BOC Aviation Southwest Airlines P. - sale & lease-back on del
08-Jan-09 36616 Boeing 737 (NG) 700 Wingl. N904WN BOC Aviation Southwest Airlines P. - sale & lease-back
08-Jan-09 E2023 BAE SYSTEMS (HS) 146 200 FAB-102 Bolivian Air Force Bolivian Air Force Purchased - parked
08-Jan-09 23193 Boeing 757 200 (P&W) N504US Citicorp North America Inc Jet Trading And Leasing LLC Purchased - parked
08-Jan-09 27199 Boeing 757 200 (RR) N933UW FedEx FedEx Purchased - parked
09-Jan-09 14500851 Embraer ERJ-135 Legacy 600 M-DSCL Unconf. Isle of Man Corp. Operator Unconf. Isle of Man C. Op. Purchased
09-Jan-09 34960 Boeing 737 (NG) 800 Wingl. N960BB Fendell Ltd Babcock & Brown A/c Mgmt LLC Purchased
09-Jan-09 533 Airbus A300 620RF (M) (P&W) N103MT TES Parts Limited TES Parts Limited Purchased - parked
09-Jan-09 35 Airbus A320 230 (IAE) 5B-DAU Aircraft Solutions A320 LLC Universal Asset Mgmt Inc Purchased - parked
12-Jan-09 2440 Airbus A319 CJ (CFM) CS-TFU OMNI Aviacao & Tecnologia White Purchased - parked
12-Jan-09 3734 Airbus A320 230 (IAE) VH-VNH RBS Aviation Capital Tiger Airways Australia P. - sale & lse-back on del - pkd
13-Jan-09 21252 Boeing 747 200SF (GE) N506MC Atlas Air Atlas Air P. off lse/fin. term comp.
13-Jan-09 28750 Boeing 757 200 (P&W) N597UA United Airlines United Airlines P. off lse/fin. term comp.
14-Jan-09 145696 Embraer ERJ-135 LR N834RP Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased - parked
14-Jan-09 E2314 BAE SYSTEMS (Avro) RJ Avroliner RJ85 ZS-ASX Airlink - SA Airlink Airlink - SA Airlink Purchased - parked
15-Jan-09 430 Airbus A340 310 (CFM) OY-KBI SL Canopy Ltd SAS P. - subject to existing lease
15-Jan-09 1619 Airbus A321 230 (IAE) OY-KBL Emerald 3 Co. Ltd SAS P. - subject to existing lease
15-Jan-09 29589 Boeing 757 200 (RR) N679AN American Airlines American Airlines P. off lse/fin. term comp.
15-Jan-09 53297 Boeing (McDonnell-Douglas) MD-80 81 JA8552 Grandmax Group Ltd Grandmax Group Ltd Purchased - parked
15-Jan-09 26241 Boeing 757 200 (RR) EC-ISY Privilege Style Privilege Style P. off lse/fin. term comp.
15-Jan-09 26557 Boeing 747 400 (P&W) B-HKX Cathay Pacific Cathay Pacific Purchased - parked
15-Jan-09 567 Airbus A310 300 (GE) EX-35003 Kyrgyz Trans Avia Kyrgyz Trans Avia Purchased - parked
15-Jan-09 11541 Fokker 70 PH-KZT KLM cityhopper KLM cityhopper Purchased - parked
15-Jan-09 620 Airbus A310 300 (GE) EX-35004 Kyrgyz Trans Avia Kyrgyz Trans Avia Purchased - parked
15-Jan-09 49844 Boeing (McDonnell-Douglas) MD-80 83 (MDC) UR-CHR Khors Air Khors Air Purchased - parked
15-Jan-09 49572 Boeing (McDonnell-Douglas) MD-80 83 (MDC) UR-CHS Khors Air Khors Air Purchased - parked
15-Jan-09 29927 Boeing 737 (NG) 800 Wingl. EI-CSN CIT Aerospace Int/l CIT Aerospace Purchased - parked
15-Jan-09 1807 Airbus A321 230 (IAE) OY-KBF SL Topaz Ltd SAS P. - subject to existing lease
15-Jan-09 25194 Boeing 767 300ER (GE) N39367 Undis. Bank / Broker / Lessor American Airlines P. - subject to existing lease
15-Jan-09 25198 Boeing 767 300ER (GE) N371AA Undis. Bank / Broker / Lessor American Airlines P. - subject to existing lease
15-Jan-09 25305 Boeing 737 (CFMI) 400 ZS-OTF Lexshell 799 Investments (Pty) Ltd Kulula P. - subject to existing lease
16-Jan-09 E2097 BAE SYSTEMS (HS) 146 200 VH-YAD Jet Acceptance Corp National Jet Systems P. - subject to existing lease
16-Jan-09 23138 Boeing 747 200F (SCD) (GE) N758SA Air Mobility Inc Southern Air P. - subject to existing lease
16-Jan-09 E2107 BAE SYSTEMS (HS) 146 200 VH-YAE Jet Acceptance Corp National Jet Systems P. - subject to existing lease
16-Jan-09 22678 Boeing 747 200F (SCD) (GE) N751SA Air Mobility Inc Ethiopian Airlines P. - subject to existing lease
16-Jan-09 38 Airbus A320 230 (IAE) 5B-DAW Aircraft Solutions A320 LLC Cyprus Airways P. - sale & lease-back
16-Jan-09 37 Airbus A320 230 (IAE) 5B-DAV Aircraft Solutions A320 LLC Cyprus Airways P. - sale & lease-back
16-Jan-09 11498 Fokker 100 5N-HIR IRS Airlines IRS Airlines Purchased - parked
16-Jan-09 19000241 Embraer 190 AR N840JE JAG VI LLC Jetscape Inc Purchased - parked
16-Jan-09 24752 Boeing 767 300ER (GE) N752SJ Baxter Aviation Ltd Baxter Aviation Ltd Purchased - parked
16-Jan-09 21458 Boeing 727 200 Adv. (St3 Hsk) 5N- Associated Aviation Associated Aviation Purchased - parked
16-Jan-09 25058 Boeing 767 200ER (GE) N152AT AeroTurbine Inc AeroTurbine Inc Purchased - parked
19-Jan-09 E2097 BAE SYSTEMS (HS) 146 200 VH-YAD BAE Systems Management Svcs Ltd National Jet Systems P. - subject to existing lease
19-Jan-09 E2107 BAE SYSTEMS (HS) 146 200 VH-YAE BAE Systems Management Svcs Ltd National Jet Systems P. - subject to existing lease
19-Jan-09 E2107 BAE SYSTEMS (HS) 146 200 VH-YAE National Jet Systems National Jet Systems P. off lse/fin. term comp.
19-Jan-09 E2097 BAE SYSTEMS (HS) 146 200 VH-YAD National Jet Systems National Jet Systems P. off lse/fin. term comp.
19-Jan-09 7299 Bombardier (Canadair) CRJ Regional Jet 200LR C-FWWU Voyageur Airways Voyageur Airways Purchased - parked
20-Jan-09 145715 Embraer ERJ-135 LR N837RP ECC Leasing Co Ltd ECC Leasing Co Ltd Purchased - parked
20-Jan-09 22506 Boeing 747 200SF (GE) N795SA Air Mobility Inc Southern Air P. - sale & lse-back - parked
21-Jan-09 3743 Airbus A320 230 (IAE) VH-VQB Wombat V Leasing Pty Ltd Jetstar P. - sale & lease-back on del
21-Jan-09 53297 Boeing (McDonnell-Douglas) MD-80 81 N821TH Richard Trudell Inc Richard Trudell Inc Purchased - parked
21-Jan-09 25139 Boeing 767 200ER (GE) N178AT AeroTurbine Inc AeroTurbine Inc Purchased - parked
21-Jan-09 11047 Fokker F.28 1000 TU-PAB Unconf. Airline Ivory Coast Unconf. Airline Ivory Coast Purchased - parked
21-Jan-09 E3145 BAE SYSTEMS (HS) 146 300 N616AW HR Aviation LLC HR Aviation LLC Purchased - parked
21-Jan-09 19000242 Embraer 190 AR N841JS JAG VII LLC Jetscape Inc Purchased - parked
22-Jan-09 3770 Airbus A319 130 (IAE) CC-CYI Patagon Leasing Limited LAN Airlines P. - sale & lease-back on del
22-Jan-09 28751 Boeing 757 200 (P&W) N598UA United Airlines United Airlines P. off lse/fin. term comp.
22-Jan-09 28751 Boeing 757 200 (P&W) N598UA Aircraft N598UA Trust United Airlines P. - sale & lease-back
22-Jan-09 28640 Boeing 737 (NG) 700 Wingl. N740AL Arik Air Arik Air Purchased - parked


Aircraft & Engines
Aircraft transactions — 22 January 2009 to 20 February 2009

22-Jan-09 28641 Boeing 737 (NG) 700 Wingl. N741AL Arik Air Arik Air Purchased - parked
22-Jan-09 345 Airbus A320 210 (CFM) VP-CBZ Airtex Enterprises Ltd Airtex Enterprises Ltd Purchased - parked
23-Jan-09 37360 Boeing 737 (NG) 800 Wingl. VT- Babcock & Brown Aircraft Mgmt LLC Babcock & Brown Purchased
23-Jan-09 7763 Bombardier (Canadair) CRJ Regional Jet 200LR N492CA Undis. Bank / Broker / Lessor Unconf. Corporate Operator P. - subj. to exist. lease - pkd
26-Jan-09 24031 Boeing 737 (JT8D) 200 Adv. N810AL Unconf. Venezuelan Operator Unconf. Venezuelan Opr Purchased - parked
27-Jan-09 21790 Boeing 737 (JT8D) 200 Adv. ZS-SIT Safair Operations Pty Ltd Safair P. - subject to existing lease
27-Jan-09 3772 Airbus A319 130 (IAE) CC-CYJ Patagon Leasing Limited LAN Airlines P. - sale & lease-back on del
27-Jan-09 E3157 BAE SYSTEMS (HS) 146 300 D- WDL WDL Purchased - parked
27-Jan-09 22751 Boeing 737 (JT8D) 200 Adv. (St3 Hsk) ZS-IJA Inter Air South Africa Inter Air South Africa Purchased - parked
28-Jan-09 7004 Bombardier (Canadair) CRJ Regional Jet 200LR C-FYFS Avionco Canada Ltd Avionco Canada Ltd Purchased - parked
28-Jan-09 49827 Boeing (McDonnell-Douglas) MD-80 87 ZS-TRK 1Time 1Time Purchased - parked
28-Jan-09 49829 Boeing (McDonnell-Douglas) MD-80 87 ZS-TRJ 1Time 1Time Purchased - parked
28-Jan-09 25193 Boeing 767 300ER (GE) N366AA Undis. Bank / Broker / Lessor American Airlines P. - subject to existing lease
29-Jan-09 21380 Boeing 747 200SF (GE) N740SA Air Mobility Inc Southern Air P. - subject to existing lease
29-Jan-09 7187 Bombardier (Canadair) CRJ Regional Jet 200ER C-GEXM Avmax Int/l Aircraft Leasing Inc Corporate Jet Air P. - subject to existing lease
29-Jan-09 48758 Boeing (McDonnell-Douglas) MD-11 ER (GE) ET-AML Ethiopian Airlines Ethiopian Airlines Purchased - parked
29-Jan-09 25840 Boeing 737 (CFMI) 400 ZS-OTG Lexshell 779 Investments (PTY) Comair - Comm. Airways P. - subject to existing lease
30-Jan-09 145644 Embraer ERJ-135 Legacy 600 HB-JED Diamair SA Diamair SA P. off lse/fin. term comp.
30-Jan-09 22140 Boeing 737 (JT8D) 200 Adv. ZS-OMG KAL Aviation KAL Aviation Purchased - parked
30-Jan-09 23006 Boeing 737 (JT8D) 200 Adv. ZS-OVE KAL Aviation KAL Aviation Purchased - parked
30-Jan-09 23008 Boeing 737 (JT8D) 200 Adv. ZS-OVF KAL Aviation KAL Aviation Purchased - parked
30-Jan-09 15064 Bombardier (Canadair) CRJ900 Regional Jet900ER N564ES Bombardier Capital Inc Bombardier Capital Inc Purchased - parked
30-Jan-09 15065 Bombardier (Canadair) CRJ900 Regional Jet900ER N565ES Bombardier Capital Inc Bombardier Capital Inc Purchased - parked
30-Jan-09 21800 Boeing 737 (JT8D) 200 Adv. (St3 Hsk) ZS-OVG KAL Aviation KAL Aviation Purchased - parked
30-Jan-09 22857 Boeing 737 (JT8D) 200 Adv. ZS-OOD KAL Aviation KAL Aviation Purchased - parked
30-Jan-09 3637 Airbus A321 230 (IAE) TC-JMH Turkish Airlines (THY) Turkish Airlines (THY) Purchased - parked
30-Jan-09 22856 Boeing 737 (JT8D) 200 Adv. ZS-OOC KAL Aviation KAL Aviation Purchased - parked
30-Jan-09 3673 Airbus A321 230 (IAE) TC-JMI Turkish Airlines (THY) Turkish Airlines (THY) Purchased - parked
30-Jan-09 22634 Boeing 737 (JT8D) 200 Adv. ZS-OIV KAL Aviation KAL Aviation Purchased - parked
02-Feb-09 22932 Boeing 727 200F RE Advanced N416JC Vortex Aviation Capital Vortex Aviation Capital Purchased - parked
02-Feb-09 21832 Boeing 747 200SF (GE) N761SA Air Mobility Inc Southern Air P. - subject to existing lease
03-Feb-09 36852 Boeing 737 (NG) BBJ1 HL Unconf. Korean Corporate Operator Unconf. Korean Corp. Opr. Purchased - parked
03-Feb-09 22780 Boeing 757 200 (RR) G-MONB FedEx FedEx Purchased - parked
06-Feb-09 27709 Boeing 737 (CFMI) 300 Wingl. N636WN Undis. Bank / Broker / Lessor Southwest Airlines P. - subject to existing lease
06-Feb-09 120270 Embraer EMB-120 Brasilia ER N270YV Wachovia Financial Svcs Inc DBA SkyWest Airlines P. - subject to existing lease
06-Feb-09 8124 Fairchild/Dornier 228 18-Jul-00 5Y- Unconf. Kenyan Operator Unconf. Kenyan Operator Purchased - parked
09-Feb-09 625 Airbus A300 620R (P&W) N751FD FedEx FedEx Purchased - parked
09-Feb-09 110354 Embraer EMB-110 Bandeirante P1 TG- Aereo Ruta Maya Aereo Ruta Maya Purchased - parked
09-Feb-09 110348 Embraer EMB-110 Bandeirante P1 TG- Aereo Ruta Maya Aereo Ruta Maya Purchased - parked
09-Feb-09 120304 Embraer EMB-120 Brasilia ER N227SW Pimegal Consultants Ltd Pimegal Consultants Ltd Purchased - parked
09-Feb-09 AC-665 Fairchild (Swearingen) Metro III VH-OZN Wingaway Air Wingaway Air Purchased
09-Feb-09 UC-72 Hawker Beechcraft 1900 C-1 N15503 Frontier Alaska Aviation Trust Hageland Aviation Svcs P. - subject to existing lease
09-Feb-09 UC-24 Hawker Beechcraft 1900 C-1 N1553C Frontier Alaska Aviation Trust Hageland Aviation Svcs P. - subject to existing lease
09-Feb-09 UC-154 Hawker Beechcraft 1900 C-1 N404GV Frontier Alaska Aviation Trust Hageland Aviation Svcs P. - subject to existing lease
09-Feb-09 UC-83 Hawker Beechcraft 1900 C-1 N575A Frontier Alaska Aviation Trust Frontier Flying Service P. - subject to existing lease
09-Feb-09 UC-99 Hawker Beechcraft 1900 C-1 N575F Frontier Alaska Aviation Trust Frontier Flying Service P. - subject to existing lease
09-Feb-09 UC-155 Hawker Beechcraft 1900 C-1 N575G Frontier Alaska Aviation Trust Frontier Flying Service P. - subject to existing lease
09-Feb-09 UC-160 Hawker Beechcraft 1900 C-1 N575Q Frontier Alaska Aviation Trust Frontier Flying Service P. - subject to existing lease
09-Feb-09 UC-93 Hawker Beechcraft 1900 C-1 N575U Frontier Alaska Aviation Trust Frontier Flying Service P. - subject to existing lease
09-Feb-09 UC-149 Hawker Beechcraft 1900 C-1 N575X Frontier Alaska Aviation Trust Frontier Flying Service P. - subject to existing lease
09-Feb-09 UC-162 Hawker Beechcraft 1900 C-1 N575Y Frontier Alaska Aviation Trust Frontier Flying Service P. - subject to existing lease
10-Feb-09 3778 Airbus A320 210 (CFM) VQ-BAX AerVenture Leasing 1 Ltd Aeroflot Russian Airlines P. - sale & lease-back on del
10-Feb-09 22371 Boeing 737 (JT8D) 200 Adv. ZS-SGE Star Air Cargo Star Air Cargo Purchased - parked
10-Feb-09 25280 Boeing 767 300ER (P&W) N202AC Renalia Inc Aircastle Advisor LLC Purchased - parked
10-Feb-09 120304 Embraer EMB-120 Brasilia ER N227SW Region Avia Region Avia Purchased - parked
11-Feb-09 91 Airbus A320 230 (IAE) N634AW AeroTurbine Inc AeroTurbine Inc Purchased - parked
11-Feb-09 866 BAE SYSTEMS (Jetstream) Jetstream 31 Super XA- Unconf. Mexican Operator Unconf. Mexican Operator Purchased - parked
11-Feb-09 27708 Boeing 737 (CFMI) 300 Wingl. N635SW Undis. Bank / Broker / Lessor Southwest Airlines P. - subject to existing lease
11-Feb-09 190 Bombardier (de Havilland) DHC-6 Twin Otter 18-Jul-00 N190KM Kevin McCole Kevin McCole Purchased
11-Feb-09 UE-82 Hawker Beechcraft 1900 D HK- Leasing Horizonte Leasing Horizonte Purchased - parked
13-Feb-09 U-75 Hawker Beechcraft 99 99 N Unconf. American Operator Unconf. American Operator Purchased - parked
14-Feb-09 3160 Fairchild/Dornier 328JET N328CR SC Toyo Motor Leasing IFN S.A SC Toyo Motor Ls. IFN S.A Purchased - parked
15-Feb-09 345 Airbus A320 210 (CFM) EP-IED Iran Air Iran Air Purchased - parked
15-Feb-09 857 Airbus A320 230 (IAE) EP-MHJ Iran Air Iran Air Purchased - parked
15-Feb-09 575 Airbus A320 230 (IAE) EP-MHN Iran Air Iran Air Purchased - parked
15-Feb-09 53459 Boeing (McDonnell-Douglas) MD-90 30-Jan-00 OH-BLC SAS Struktur Gˆta Kommanditbolag Blue 1 P. - subject to existing lease
15-Feb-09 53544 Boeing (McDonnell-Douglas) MD-90 30-Jan-00 OH-BLD SAS Struktur Gˆta Kommanditbolag Blue 1 P. - subject to existing lease
15-Feb-09 53457 Boeing (McDonnell-Douglas) MD-90 30-Jan-00 OH-BLE SAS Struktur Gˆta Kommanditbolag Blue 1 P. - subject to existing lease
15-Feb-09 53543 Boeing (McDonnell-Douglas) MD-90 30-Jan-00 OH-BLF SAS Struktur Gˆta Kommanditbolag Blue 1 P. - subject to existing lease
15-Feb-09 53458 Boeing (McDonnell-Douglas) MD-90 30-Jan-00 OH-BLU SAS Struktur Gˆta Kommanditbolag Blue 1 P. - subject to existing lease
15-Feb-09 25079 Boeing 737 (CFMI) 26-Oct-00 5N-BMB Chanchangi Airlines Chanchangi Airlines Purchased - parked
15-Feb-09 25089 Boeing 737 (CFMI) 26-Oct-00 5N-BMC Chanchangi Airlines Chanchangi Airlines Purchased - parked
15-Feb-09 145002 Embraer ERJ-145 LR PR- Policia Federal Brazil Policia Federal Brazil Purchased - parked
16-Feb-09 7159 Bombardier (Canadair) CRJ Regional Jet 100ER P4- Verseil Jet AVV Verseil Jet AVV Purchased - parked
17-Feb-09 3790 Airbus A319 110 (CFM) N790MX Whitney Ireland Leasing Ltd Mexicana Pur. - sale to S.P.C. by less. on del.
17-Feb-09 3032 Fairchild/Dornier 328 09-Apr-00 PK- Aero Nusantara Indonesia (ANI) Aero Nusantara Indon. (ANI) Purchased - parked
18-Feb-09 49777 Boeing (McDonnell-Douglas) MD-80 87 (MDC) (St4 rdy) VP-CTF AMAC Aerospace AMAC Aerospace Purchased - parked
18-Feb-09 22327 Boeing 767 200ER (GE) N327AA Undis. Bank / Broker / Lessor American Airlines P. - subject to existing lease
18-Feb-09 145724 Embraer ERJ-135 LR N839RP Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased - parked
19-Feb-09 34 Airbus A320 210 (CFM) N303US GECAS Asset Management Svcs GECAS Asset Mgmt Svcs Purchased - parked
19-Feb-09 733 BAE SYSTEMS (Jetstream) Jetstream 31 C-FREQ Starlink Aviation Starlink Aviation Purchased
19-Feb-09 39043 Boeing 737 (NG) 800 Wingl. N512AS BOC Aviation (USA) Corp Alaska Airlines P. - sale & lease-back
19-Feb-09 35192 Boeing 737 (NG) 800 Wingl. N513AS BOC Aviation (USA) Corp Alaska Airlines P. - sale & lease-back on del
19-Feb-09 39044 Boeing 737 (NG) 800 Wingl. N516AS BOC Aviation (USA) Corp Alaska Airlines P. - sale & lease-back on del
19-Feb-09 28652 Boeing 737 (NG) 600 N645DM US Air Force US Air Force Purchased - parked
19-Feb-09 647 Bombardier (de Havilland) DHC-6 Twin Otter 300 N300WH CAAMS LLC CAAMS LLC Purchased
20-Feb-09 3783 Airbus A320 230 (IAE) VH-VQA Wombat VI Leasing Pty Ltd Jetstar P. - sale & lease-back on del

Aircraft transactions — 20 February 2009 to 17 March 2009

20-Feb-09 169 Airbus A340 310 (CFM) HB-JMK Austrian Airlines Lse and Fin. Co. Ltd Swiss P. - sale & lease-back
20-Feb-09 28271 Boeing 737 (CFMI) 400SF N211BF Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased - parked
20-Feb-09 145167 Embraer ERJ-145 EU G-EMBK Aircraft Solution Lux II Sarl Universal Asset Mgmt Inc P. - subj. to exist. lease - pkd
23-Feb-09 49413 Boeing (McDonnell-Douglas) MD-80 27-Mar-00 N399NV Allegiant Air Allegiant Air Purchased - parked
23-Feb-09 14500841 Embraer ERJ-135 Legacy 600 D-ARIF Unconf. German Operator Unconf. German Operator Purchased
24-Feb-09 24367 Boeing 757 200 (RR) N914FD FedEx FedEx Purchased - parked
24-Feb-09 22780 Boeing 757 200 (RR) N935FD FedEx FedEx Purchased - parked
24-Feb-09 22225 Boeing 767 200SF (GE) N748AX 767 Aircraft One LLC ABX Air P. - sale & lease-back
24-Feb-09 722 Bombardier (de Havilland) DHC-6 Twin Otter 26-Oct-00 C-FWKO Kenn Borek Air Kenn Borek Air Purchased - parked
25-Feb-09 3546 Airbus A321 230 (IAE) G-OZBT Monarch Airlines Monarch Airlines Purchased - parked
25-Feb-09 21695 Boeing 727 200F (M) Adv. (S3 Hk) HP-1653CTH Alvar Enterprises Alvar Enterprises Purchased
25-Feb-09 35690 Boeing 737 (NG) 800 Wingl. N506AS Undis. Bank / Broker / Lessor Alaska Airlines P. - sale & lease-back
25-Feb-09 35190 Boeing 737 (NG) 800 Wingl. N592AS Undis. Bank / Broker / Lessor Alaska Airlines P. - sale & lease-back
26-Feb-09 3575 Airbus A321 230 (IAE) G-TTII Monarch Airlines Monarch Airlines Purchased - parked
26-Feb-09 UE-288 Hawker Beechcraft 1900 D HB-AEN Swiss Air Force Swiss Air Force P. off lse/fin. term comp.
03-Mar-09 24496 Boeing 767 300ER (GE) N183AQ Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased - parked
03-Mar-09 3176 Fairchild/Dornier 328JET UR-AER Aerostar Aerostar Purchased
04-Mar-09 3822 Airbus A319 110 (CFM) VT-SCO Indian Orange Limited Air India P. - sale & lease-back on del
04-Mar-09 23592 Boeing 737 (CFMI) 300 N76354 Continental Airlines Continental Airlines P. off lse/fin term comp. - pkd
04-Mar-09 35346 Boeing 737 (NG) 800 Winglets JA317J DIA Waltz Ltd Japan Airlines International P. - sale & lease-back on del
04-Mar-09 7454 Bombardier (Canadair) CRJ Regional Jet 200LR VQ-BBV Rusline Rusline Purchased - parked
04-Mar-09 7454 Bombardier (Canadair) CRJ Regional Jet 200LR VQ-BBV Worldwide Aircraft Ferrying Ltd Rusline P. - sale & lease-back - pkd
05-Mar-09 E2024 BAE SYSTEMS (HS) 146 200 G-FLTB Wicklow Hill Tronos Plc Purchased - parked
05-Mar-09 E3205 BAE SYSTEMS (HS) 146 300 G-FLTC E3205 Trading Ltd Tronos Plc Purchased - parked
05-Mar-09 964 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP N964AE J & E Aircraft Co J & E Aircraft Co Purchased - parked
05-Mar-09 49230 Boeing (McDonnell-Douglas) MD-80 82 (MDC) N950U MidAmerican Aerospace Ltd MidAmerican Aerospace Ltd Purchased - parked
05-Mar-09 49230 Boeing (McDonnell-Douglas) MD-80 82 (MDC) N950U VCG Aviation Services LLC VCG Aviation Services LLC Purchased - parked
05-Mar-09 28271 Boeing 737 (CFMI) 400SF B-2892 China Southern Airlines China Postal Airlines Purchased - parked
05-Mar-09 1066 Lockheed L-1011 TriStar 50 N700TS Ashrock Metals Ashrock Metals Purchased - parked
06-Mar-09 26 A.S.T.A. (GAF) Nomad N22B N5190Y North London Parachute Centre N. London Parachute Centre P. off lse/fin term comp.
06-Mar-09 28036 Boeing 737 (CFMI) 300 Winglets N620SW Undis. Bank / Broker / Lessor Southwest Airlines P. - subject to existing lease
06-Mar-09 23593 Boeing 737 (CFMI) 300 N76355 Continental Airlines Continental Airlines P. off lse/fin term comp.
06-Mar-09 DC-902B Fairchild (Swearingen) Metro 23 N902WB Bay Aeroservices Inc Bay Aeroservices Inc Purchased - parked
06-Mar-09 20307 Fokker 50 OY-PCJ Nordic Aviation Capital Nordic Aviation Capital Purchased - parked
09-Mar-09 120320 Embraer EMB-120 Brasilia ER N293SW Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased - parked
10-Mar-09 E3336 BAE SYSTEMS (Avro) RJ Avroliner RJ100 OO-DWG Undis. Bank / Broker / Lessor Brussels Airlines P. - subject to existing lease
10-Mar-09 563 Bombardier (de Havilland) Dash 8 300 D2-EWT Government of Angola Government of Angola Purchased
10-Mar-09 1140 Lockheed L-188 Electra PF C- Uncon. Canadian Operator Uncon. Canadian Operator Purchased - parked
11-Mar-09 304 ATR ATR 42 300 VH-AVV Asia Pacicfic Aero pty Asia Pacicfic Aero pty Purchased - parked
11-Mar-09 45926 Boeing (McDonnell-Douglas) DC-8 63C (St3 Hshkits) N781AL Executive Air Services Inc Executive Air Services Inc Purchased - parked
11-Mar-09 47733 Boeing (McDonnell-Douglas) DC-9 51 N682RW National City Bank Olympia Aviation/
Detroit RedWings/
Detroit Tigers Pur. - sale & lease-back
11-Mar-09 35347 Boeing 737 (NG) 800 Winglets JA318J SL Seagull Ltd Japan Airlines It/l P. - sale & lease-back on del
11-Mar-09 19000249 Embraer 190 AR N298JB JetBlue Airways JetBlue Airways P. off lse/fin term comp.
11-Mar-09 19000249 Embraer 190 AR N298JB PM Ltd JetBlue Airways P. - sale & lease-back on del
11-Mar-09 212 Saab 340 B N685PA Turbo Lease LLC Penair Pur. - sale & lease-back
12-Mar-09 30830 Boeing 737 (NG) 700 Winglets N742AL Arik Air Arik Air Purchased - parked
12-Mar-09 35254 Boeing 777 300ER (GE) C-FITU General Electric Capital Corp Air Canada Pur. - sale & lease-back
12-Mar-09 177 CASA CN-235 300 N383EC Turbo Flite Aviation LLC Turbo Flite Aviation LLC Purchased - parked
12-Mar-09 182 CASA CN-235 300 N768KD Atlanta Air Capital Leasing LLC Atlanta Air Cap. Leasing LLC Purchased - parked
12-Mar-09 176 CASA CN-235 300 N835CE Turbo Flite Aviation LLC Turbo Flite Aviation LLC Purchased - parked
12-Mar-09 120188 Embraer EMB-120 Brasilia N266AS Triangle Aviation RDD LLC Triangle Aviation RDD LLC Purchased - parked
12-Mar-09 360 Saab 340 B VH-UYE Westpac Banking Corp Westpac Banking Corp Purchased - parked
13-Mar-09 UB-39 Hawker Beechcraft 1900 C C-FJTF Fowler Financial Holdings Inc Fowler Financial Holdings Inc Purchased - parked
15-Mar-09 299 Airbus A300 B4-200FF (GE) EP-MDA Iran Air Iran Air Purchased
15-Mar-09 2054 Airbus A320 210 (CFM) EK-32054 Vertir Airlines Vertir Airlines Purchased - parked
15-Mar-09 2054 Airbus A320 210 (CFM) EK-32054 Revenue Enterprises Ltd Revenue Enterprises Ltd Purchased - parked
15-Mar-09 312 Airbus A320 210 (CFM) EP- Iran Air Iran Air Purchased - parked
15-Mar-09 303 Airbus A320 210 (CFM) EP-IEE Iran Air Iran Air Purchased - parked
15-Mar-09 855 ATR ATR 72 500 F-OMRU Coviro 5 SAS Air Austral P. - sale & lease-back on del
15-Mar-09 49569 Boeing (McDonnell-Douglas) MD-80 83 (MDC) UR-BXN Khors Air Khors Air Purchased - parked
15-Mar-09 49937 Boeing (McDonnell-Douglas) MD-80 83 (MDC) (S4 ready) YR-HBA Medallion Air Medallion Air Purchased - parked
15-Mar-09 23516 Boeing 737 (JT8D) 200 Ad (S3 Hshkits) EX-25004 Eastok Avia Kyrghyzstan Airlines P. off lse/fin term comp.
15-Mar-09 29929 Boeing 737 (NG) 800 Winglets EI-CSP CIT Aerospace International CIT Aerospace Purchased - parked
15-Mar-09 29933 Boeing 737 (NG) 800 Winglets EI-CST CIT Aerospace International CIT Aerospace Purchased - parked
15-Mar-09 487 Bombardier (de Havilland) Dash 8 300 9Y-WIT Caribbean Airlines Caribbean Airlines P. off lse/fin term comp.
15-Mar-09 239 Bombardier (de Havilland) Dash 8 100 LN-WIP AeroCentury (Msn239) Trust Wideroe P. - subject to existing lease
15-Mar-09 145014 Embraer ERJ-145 EP CS-TPG Banco Comercial Portugues PGA - Portugalia Airlines Pur. - sale & lease-back
15-Mar-09 145017 Embraer ERJ-145 EP CS-TPH Banco Comercial Portugues PGA - Portugalia Airlines Pur. - sale & lease-back
15-Mar-09 145031 Embraer ERJ-145 EP CS-TPI Banco Comercial Portugues PGA - Portugalia Airlines Pur. - sale & lease-back
15-Mar-09 145036 Embraer ERJ-145 EP CS-TPJ Banco Comercial Portugues PGA - Portugalia Airlines Pur. - sale & lease-back
15-Mar-09 145041 Embraer ERJ-145 EP CS-TPK Banco Comercial Portugues PGA - Portugalia Airlines Pur. - sale & lease-back
15-Mar-09 145051 Embraer ERJ-145 EP CS-TPL Banco Comercial Portugues PGA - Portugalia Airlines Pur. - sale & lease-back
15-Mar-09 145095 Embraer ERJ-145 EP CS-TPM Banco Comercial Portugues PGA - Portugalia Airlines Pur. - sale & lease-back
16-Mar-09 24240 Boeing 737 (CFMI) 300 N336UA United Airlines United Airlines P. off lse/fin term comp. - pkd
16-Mar-09 24240 Boeing 737 (CFMI) 300 N336UA Pacific Airfinance 2 LLC Pacific Airfinance 2 LLC Purchased - parked
16-Mar-09 24240 Boeing 737 (CFMI) 300 N336UA Qwest Air Parts Inc Qwest Air Parts Inc Purchased - parked
16-Mar-09 24253 Boeing 737 (CFMI) 300 N349UA United Airlines United Airlines P. off lse/fin term comp. - pkd
16-Mar-09 28282 Boeing 747 400SF (GE) N483YR Yangtze River Express Yangtze River Express P. off lse/fin term comp. - pkd
16-Mar-09 37548 Boeing 767 300ER (GE) JA621J JS Aviation Co Ltd Japan Airlines International P. - sale & lease-back on del
16-Mar-09 19000257 Embraer 190 AR N304JB JetBlue Airways JetBlue Airways P. off lse/fin term comp.
16-Mar-09 19000257 Embraer 190 AR N304JB PM Ltd JetBlue Airways P. - sale & lease-back on del
16-Mar-09 145620 Embraer ERJ-135 LR N844RP Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased - parked
16-Mar-09 UE-197 Hawker Beechcraft 1900 D F-GLNE Fleet Management Airways SA French Ministry of the Interior P. - subject to existing lease
17-Mar-09 21247 Boeing 727 200F (M) Advanced ZS-IAC Safair Operations Pty Ltd Imperial Air Cargo P. - subject to existing lease


Aircraft & Engines
Aircraft transactions — 17 March 2009 to 08 April 2009

17-Mar-09 UE-196 Hawker Beechcraft 1900 D F-GLND Fleet Management Airways SA Twin Jet P. - subject to existing lease
17-Mar-09 UE-348 Hawker Beechcraft 1900 D F-GTKJ Fleet Management Airways SA Twin Jet P. - subject to existing lease
18-Mar-09 3829 Airbus A320 230 (IAE) SX-DVX General Electric Capital Corp Aegean Airlines P. - sale & lease-back on del
18-Mar-09 3827 Airbus A320 210 (CFM) VT-WAJ Celestial ECA Trading 2 Limited Go Air P. - sale & lease-back on del
18-Mar-09 27424 Boeing 737 (CFMI) 500 G-GFFE Pineapple Ltd Pineapple Ltd Purchased - parked
18-Mar-09 23252 Boeing 737 (CFMI) 300 N674AA GA Telesis LLC GA Telesis LLC Purchased - parked
18-Mar-09 423 Bombardier (de Havilland) Dash 8 300 C-GUAI Air Inuit Air Inuit Purchased
18-Mar-09 145725 Embraer ERJ-135 LR N840RP Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased - parked
18-Mar-09 UE-319 Hawker Beechcraft 1900 D ZS-SHA National Airways Corporation National Airways Corp. Purchased - parked
18-Mar-09 UE-323 Hawker Beechcraft 1900 D ZS-SHB National Airways Corporation National Airways Corp. Purchased - parked
19-Mar-09 28303 Boeing 737 (NG) 600 SU-MWC Midwest Airlines (Egypt) Midwest Airlines (Egypt) Purchased - parked
19-Mar-09 4013 Bombardier (de Havilland) Dash 8 400 LN-RDA SAS Struktur Skand Kommanditbolag SAS P. - subj. to exist. lease - pkd
19-Mar-09 4018 Bombardier (de Havilland) Dash 8 400 LN-RDB SAS Struktur Skand Kommanditbolag SAS P. - subj. to exist. lease - pkd
19-Mar-09 4012 Bombardier (de Havilland) Dash 8 400 LN-RDP SAS Struktur Skand Kommanditbolag SAS P. - subj. to exist. lease - pkd
19-Mar-09 11543 Fokker 70 PH-KZU KLM cityhopper KLM cityhopper Purchased - parked
19-Mar-09 1230 Lockheed L-1011 TriStar 100 N194AT Fadia Musleh Barq Aviation P. - subj. to exist. lease - pkd
20-Mar-09 2968 Airbus A320 210 (CFM) HB-IOS Air Berlin 3. LeaseLux S.a.r.l. airberlin Pur. - sale & lease-back
20-Mar-09 22428 Boeing 747 200SF (GE) F-GCBD Avico UK and Ireland Ltd Avico UK and Ireland Ltd Purchased - parked
23-Mar-09 49392 Boeing (McDonnell-Douglas) MD-80 83 (MDC) N392AP Air One LLC Air One LLC Purchased - parked
23-Mar-09 22476 Boeing 727 200F (M) A (S3 Hshk) HK- Lineas Aereas Suramericanas Lineas Aereas Suramericanas Purchased
23-Mar-09 22973 Boeing 767 200 (P&W) N570JH Purple Wing Co Ltd Purple Wing Co Ltd Purchased - parked
23-Mar-09 7739 Bombardier (Canadair) CRJ Regional Jet 200ER N677SA Trust N693BR Trust N693BR Purchased - parked
24-Mar-09 24242 Boeing 737 (CFMI) 300 N338UA Qwest Air Parts Inc Qwest Air Parts Inc Purchased - parked
25-Mar-09 29568 Boeing 737 (NG) 800 Winglets N979AN AFS Investments 48 LLC American Airlines P. - sale & lease-back on del
25-Mar-09 10350 Fokker F.27 600 N702FE Executive Jet Support Ltd Executive Jet Support Ltd Purchased - parked
25-Mar-09 10350 Fokker F.27 600 N702FE 19th Hole Corp 19th Hole Corp Purchased - parked
25-Mar-09 10615 Fokker F.27 500RF N713FE Executive Jet Support Ltd Executive Jet Support Ltd Purchased - parked
25-Mar-09 10615 Fokker F.27 500RF N713FE 19th Hole Corp 19th Hole Corp Purchased - parked
26-Mar-09 994 Airbus A330 300 (GE) OH-LTM Finnair Aircraft Finance Ltd Finnair P. - sale & lease-back on del
26-Mar-09 1559 BAE SYSTEMS (HS) 748 Srs 1 G- Uncon. British Operator Uncon. British Operator Purchased - parked
26-Mar-09 47233 Boeing (McDonnell-Douglas) DC-9 32 (St3 Hushkits) N608NW Clipper Aviation Services Clipper Aviation Services Purchased - parked
27-Mar-09 2991 Airbus A320 210 (CFM) HB-IOT Air Berlin 3. LeaseLux S.a.r.l. airberlin Pur. - sale & lease-back
27-Mar-09 997 Airbus A330 340 (RR) 9V-STD Olympian Aviation Singapore Airlines Pur. - sale to S.P.C. by less. on del
27-Mar-09 24209 Boeing 737 (CFMI) 300SF 5N-BMA Axiom Air Axiom Air Purchased - parked
27-Mar-09 27476 Boeing 767 300ER (GE) JA98AD All Nippon Airways Trading Earth Ltd Air Do P. - subject to existing lease
27-Mar-09 150 CASA 212 100 J5-GZZ Uncon. Guinea Bissau Operator Uncon. Guinea Bissau Op. Purchased - parked
27-Mar-09 19000267 Embraer 190 LR OH-LKO Finnair Aircraft Finance Ltd Finnair P. - sale & lease-back on del
27-Mar-09 DC-886B Fairchild (Swearingen) Metro 23 VH-HVH Westpac Banking Corp Hardy Aviation P. - subject to existing lease
27-Mar-09 AC-667 Fairchild (Swearingen) Metro III VH-TGD Westpac Banking Corp Hardy Aviation Pur. - sale & lease-back
28-Mar-09 22641 Boeing 727 200F (M) Ad (St3 Hshk) VH-VLI CSDS Aircraft Sales & Leasing JetEx P. - sale & lease-back - pkd
30-Mar-09 24241 Boeing 737 (CFMI) 300 N337UA Aircraft Solutions 737-300 LLC Universal Asset Mgmt Inc Purchased - parked
30-Mar-09 29890 Boeing 737 (NG) 600 N824SR US Air Force US Air Force Purchased - parked
30-Mar-09 35590 Boeing 777 200LR (GE) A6-EWJ Pembroke Group Emirates Airline P. - sale & lease-back on del
30-Mar-09 19000259 Embraer 190 AR N982TA JAG IX LLC TACA International Airlines Pur. - sale to S.P.C. by less. on del
30-Mar-09 19000265 Embraer 190 AR N983TA JAG X LLC TACA International Airlines P. - sale & lease-back on del
30-Mar-09 1229 Lockheed L-1011 TriStar 500 N163AT Fadia Musleh Barq Aviation P. - sale & lease-back - pkd
30-Mar-09 1229 Lockheed L-1011 TriStar 500 N163AT Barq Aviation Barq Aviation Purchased - parked
31-Mar-09 3604 Airbus A319 110 (CFM) HB-IOX Air Berlin 7 LeaseLux S.a.r.l. airberlin Pur. - sale & lease-back
31-Mar-09 1134 Airbus A320 210 (CFM) N112US BNY Capital Funding LLC US Airways Pur. - sale & lease-back
31-Mar-09 40 Airbus A320 210 (CFM) N304US GECAS Asset Management Services GECAS Asset Mgmt Svcs Purchased - parked
31-Mar-09 E3181 BAE SYSTEMS (HS) 146 300 OB- Star Peru Star Peru Purchased
31-Mar-09 30740 Boeing 737 (NG) 700 N737KA NAS Investments 1 Inc GECAS Purchased - parked
31-Mar-09 33203 Boeing 737 (NG) 800 Winglets N980AN AFS Investments 48 LLC American Airlines P. - sale & lease-back on del
31-Mar-09 25280 Boeing 767 300ER (P&W) UR-DNM Dniproavia Dniproavia Purchased
31-Mar-09 8081 Bombardier (Canadair) CRJ Regional Jet Challenger 850 D-ATRI Chopper Dynamix Inc DC Aviation P. - sale & lease-back on del - pkd
31-Mar-09 15063 Bombardier (Canadair) CRJ900 Regional Jet900ER C-FXCE Bombardier Inc Bombardier Inc Purchased - parked
01-Apr-09 53298 Boeing (McDonnell-Douglas) MD-80 81 N822TH Grandmax Group Ltd Grandmax Group Ltd Purchased - parked
01-Apr-09 53298 Boeing (McDonnell-Douglas) MD-80 81 N822TH Richard Trudell Inc Grandmax Group Ltd P. - sale & lease-back - pkd
01-Apr-09 522 Bombardier (de Havilland) Dash 8 200 C-GRGK Regional 1 Airlines Regional 1 Airlines Purchased
01-Apr-09 533 Bombardier (de Havilland) Dash 8 300 RA-67251 SAT Airlines SAT Airlines Purchased - parked
01-Apr-09 533 Bombardier (de Havilland) Dash 8 300 RA-67251 Jione Financial Co Ltd SAT Airlines P. - sale & lease-back - pkd
01-Apr-09 145737 Embraer ERJ-135 LR N841RP Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased - parked
01-Apr-09 20257 Fokker 50 OY-PCI Nordic Aviation Capital Nordic Aviation Capital Purchased - parked
02-Apr-09 1344 Airbus A319 110 (CFM) F-GRHP Air France Air France P. off lse/fin term comp.
02-Apr-09 2837 Airbus A319 CJ (CFM) VT-IAH Global Jet Aircraft Leasing Co. Ltd Reliance Industries P. - subject to existing lease
02-Apr-09 1806 Airbus A320 210 (CFM) N203FR CIT Leasing Corp CIT Aerospace Purchased - parked
02-Apr-09 22932 Boeing 727 200F RE Advanced 9Q- Ban Air Cargo Ban Air Cargo Purchased
02-Apr-09 120203 Embraer EMB-120 Brasilia ER VH-ANN Westpac Banking Corp AirNorth P. - subject to existing lease
02-Apr-09 DC-840B Fairchild (Swearingen) Metro 23 VH-ANY Westpac Banking Corp AirNorth P. - subject to existing lease
03-Apr-09 1531 Airbus A321 210 (CFM) N181UW US Airways US Airways P. off lse/fin term comp.
03-Apr-09 1932 Airbus A321 210 (CFM) OY-VKC Macquarie AirFinance Thomas Cook Airlines Scand. P. - subject to existing lease
03-Apr-09 1960 Airbus A321 210 (CFM) OY-VKD Macquarie AirFinance Thomas Cook Airlines Scand. P. - subject to existing lease
03-Apr-09 29682 Boeing 737 (NG) 800 N Babcock & Brown Aircraft Mgmt LLC Babcock & Brown AM LLC Purchased
03-Apr-09 28617 Boeing 737 (NG) 800 Winglets SE-RHS OH Aircraft I-15 LLC Viking Airlines P. - subj. to exist. lease - pkd
04-Apr-09 UE-78 Hawker Beechcraft 1900 D ZS- Specialized Aircraft Services Inc Specialized Aircraft Svcs IncPurchased - parked
07-Apr-09 35148 Boeing 737 (NG) 800 Winglets OO-JAQ Macquarie AirFinance JetAir Fly P. - sale & lease-back on del
07-Apr-09 7704 Bombardier (Canadair) CRJ Regional Jet 200LR C-FYJV Avmax Group Inc Avmax Int/l Aircraft Leas. Inc Purchased - parked
07-Apr-09 7470 Bombardier (Canadair) CRJ Regional Jet 200LR C-FYKX Avmax Group Inc Avmax Int/l Aircraft Leas. Inc Purchased - parked
07-Apr-09 20254 Fokker 50 PH-KXN Mass Holding NV Mass Jet Lease BV Purchased - parked
08-Apr-09 1006 Airbus A330 340 (RR) 9V-STE Picollo Aviation Singapore Airlines Pur. - sale to S.P.C. by less. on del

Aircraft transactions — 08 April 2009 to 24 April 2009

08-Apr-09 899 BAE SYSTEMS (Jetstream) Jetstream 31 Super N484UE American King Air Services Inc American King Air Svcs Inc Purchased - parked
08-Apr-09 47257 Boeing (McDonnell-Douglas) DC-9 32PC (M) (S3 Hshks) N983AX DHL Network Ops (USA) Inc ABX Air P. - sale & lease-back - pkd
08-Apr-09 49405 Boeing (McDonnell-Douglas) MD-80 87 N205AM Allegiant Air Allegiant Air Purchased - parked
08-Apr-09 23571 Boeing 737 (CFMI) 300 N69333 Continental Airlines Continental Airlines P. off lse/fin term comp.
08-Apr-09 23020 Boeing 767 200PC (GE) N787AX 767 Aircraft One LLC Cargo Aircraft Management Inc Purchased - parked
08-Apr-09 7690 Bombardier (Canadair) CRJ Regional Jet 200LR C-FYKT Avmax Group Inc Avmax Int/l A/c Leasing Inc Purchased - parked
08-Apr-09 44 Bombardier (de Havilland) Dash 7 N702GG US Army US Army Purchased - parked
08-Apr-09 17000280 Embraer 170 AR VH-ANV JAG VIII LLC AirNorth P. - sale & lease-back on del
08-Apr-09 156 Saab 340 A SE-ISE Erik Thun AB NEX Time Jet AB P. - subject to existing lease
09-Apr-09 3852 Airbus A320 210 (CFM) F-HBII Zidragon Aviation Leasing Limited Aigle Azur P. - sale & lease-back on del
09-Apr-09 29647 Boeing 737 (NG) 800 N Aviation Capital Group Aviation Capital Group Purchased
09-Apr-09 35106 Boeing 737 (NG) 800 Winglets VT-JBE MCAP Europe Ltd Jet Airways P. - subject to existing lease
09-Apr-09 7652 Bombardier (Canadair) CRJ Regional Jet 200ER N679SA Trust N693BR Trust N693BR Purchased - parked
09-Apr-09 15063 Bombardier (Canadair) CRJ900 RJ 900ER N563ES Bombardier Capital Inc Bombardier Capital Inc Purchased - parked
09-Apr-09 391 Bombardier (de Havilland) DHC-6 Twin Otter 300 OB- Uncon. Peruvian Operator Uncon. Peruvian Operator Purchased
09-Apr-09 UE-284 Hawker Beechcraft 1900 D VT-KDA Reliance Commercial Dealers Reliance Transport & Travel LTD P. - subject to existing lease
09-Apr-09 233 Saab 340 B N233CJ S3B Leasing LLC Fairbrook Leasing Inc P. - subj. to exist. lease - pkd
09-Apr-09 233 Saab 340 B N233CJ Turbo Lease LLC Fairbrook Leasing Inc P. - subj. to exist. lease - pkd
09-Apr-09 252 Saab 340 B N252CJ S3B Leasing LLC Fairbrook Leasing Inc P. - subj. to exist. lease - pkd
09-Apr-09 252 Saab 340 B N252CJ Turbo Lease LLC Fairbrook Leasing Inc P. - subj. to exist. lease - pkd
10-Apr-09 36636 Boeing 737 (NG) 700 Winglets N930WN BOC Aviation (USA) Corp Southwest Airlines P. - sale & lease-back on del
14-Apr-09 695 Airbus A330 300 (GE) VH-QPH QF Caylon 2009-2 Pty Limited Qantas Pur. - sale & lease-back
14-Apr-09 E2066 BAE SYSTEMS (HS) 146 200 G-CCJP Star Peru Star Peru Purchased - parked
14-Apr-09 49907 Boeing (McDonnell-Douglas) MD-80 81 YV LASER LASER Purchased - parked
14-Apr-09 21455 Boeing 727 200F (M) Ad (R St3 Sys) C-GKFJ Kelowna Flightcraft Kelowna Flightcraft Purchased
14-Apr-09 29934 Boeing 737 (NG) 800 Winglets EI-CSV CIT Aerospace International CIT Aerospace Purchased - parked
14-Apr-09 35147 Boeing 737 (NG) 800 Winglets G-FDZS Babcock & Brown A/c Mgmt LLC Thomson Airways P. - sale & lease-back on del
14-Apr-09 27198 Boeing 757 200 (RR) N907FD FedEx FedEx Purchased - parked
14-Apr-09 7467 Bombardier (Canadair) CRJ Regional Jet 200LR C-FYKZ Avmax Group Inc Avmax Int/l A/c Leasing Inc Purchased - parked
14-Apr-09 4238 Bombardier (de Havilland) Dash 8 400 VH-QOP QF Dash 8 Leasing No 4 Pty Ltd Sunstate Airlines P. - sale & lease-back on del
14-Apr-09 4241 Bombardier (de Havilland) Dash 8 400 VH-QOR QF Dash 8 Leasing No 4 Pty Ltd Sunstate Airlines P. - sale & lease-back on del
14-Apr-09 169 Gulfstream Aerospace Gulfstream I N200AE Berry GP Inc Berry GP Inc Purchased
15-Apr-09 309 Airbus A310 200 (GE) N409AT Qwest Air Parts Inc Qwest Air Parts Inc Purchased - parked
15-Apr-09 3833 Airbus A320 210 (CFM) CN-NMB Air Arabia Air Arabia Maroc Purchased - parked
15-Apr-09 2054 Airbus A320 210 (CFM) EP- Iran Air Iran Air Purchased - parked
15-Apr-09 1736 BAE SYSTEMS (HS) 748 Srs 2B (SCD) 9G-MKV MK Airlines MK Airlines P. off lse/fin term comp.
15-Apr-09 35348 Boeing 737 (NG) 800 Winglets JA319J SMFL Aircraft Capital Japan Co Ltd Japan Airlines International P. - sale & lease-back on del
15-Apr-09 24018 Boeing 747 300 (P&W) 5N-MBB Max Air (Nigeria) Max Air (Nigeria) Purchased - parked
15-Apr-09 11509 Fokker 100 EP-OPI Iranian Air Transport Iranian Air Transport Purchased - parked
15-Apr-09 11509 Fokker 100 F-GLIR Aircraft Financing and Trading BV Aircraft Financing/Trading BV Purchased - parked
16-Apr-09 41055 BAE SYSTEMS (Jetstream) Jetstream 41 9N-AIO Agni Air Agni Air Purchased - parked
17-Apr-09 49585 Boeing (McDonnell-Douglas) MD-80 87 N214AM Allegiant Air Allegiant Air Purchased - parked
17-Apr-09 35485 Boeing 737 (NG) 800 Winglets 4X-EKH El Al El Al Purchased
17-Apr-09 35146 Boeing 737 (NG) 800 Winglets PH-TFC Babcock & Brown Aircraft Mgmt LLC Arkefly P. - sale & lease-back on del
17-Apr-09 36337 Boeing 737 (NG) 800 Winglets VT-AYA Four Lions Aircraft LLC Air India Express P. - sale & lease-back on del
17-Apr-09 21787 Boeing 747 200F (SCD) (GE) N753SA Air Mobility Inc Ethiopian Airlines P. - subject to existing lease
17-Apr-09 27619 Boeing 767 300ER (P&W) N281LF ILFC Ireland Ltd ILFC Purchased - parked
17-Apr-09 19000272 Embraer 190 AR N306JB JetBlue Airways JetBlue Airways P. off lse/fin term comp.
17-Apr-09 19000272 Embraer 190 AR N306JB PM Ltd JetBlue Airways P. - sale & lease-back on del
17-Apr-09 120150 Embraer EMB-120 Brasilia N789TX Undis. Bank / Broker / Lessor Air Minas P. - sale & lease-back - pkd
17-Apr-09 283 Saab 340 B VH-UYI Westpac Banking Corporation Westpac Banking Corp. Purchased - parked
20-Apr-09 1404 Airbus A319 110 (CFM) F-GRHQ Air France Air France P. off lse/fin term comp.
20-Apr-09 257 Airbus A320 230 (IAE) VT-EVP GMT Aircraft Leasing 12 LLC Air India P. - subject to existing lease
20-Apr-09 327 Airbus A320 230 (IAE) VT-EVQ GMT Aircraft Leasing 12 LLC Air India P. - subject to existing lease
20-Apr-09 336 Airbus A320 230 (IAE) VT-EVR GMT Aircraft Leasing 12 LLC Air India P. - subject to existing lease
20-Apr-09 658 ATR ATR 72 500 D-ANFG ATR Contact Air P. - subject to existing lease
20-Apr-09 660 ATR ATR 72 500 D-ANFH ATR Contact Air P. - subject to existing lease
20-Apr-09 662 ATR ATR 72 500 D-ANFI ATR Contact Air P. - subject to existing lease
20-Apr-09 664 ATR ATR 72 500 D-ANFJ ATR Contact Air P. - subject to existing lease
20-Apr-09 666 ATR ATR 72 500 D-ANFK ATR Contact Air P. - subj. to exist. lease - pkd
20-Apr-09 668 ATR ATR 72 500 D-ANFL ATR Contact Air P. - subject to existing lease
20-Apr-09 28676 Boeing 777 200ER (P&W) F-ORUN Air Austral Air Austral P. off lse/fin term comp.
20-Apr-09 7 Saab 2000 SE-LXH Swedish Aircraft Holdings AB Saab Aircraft Leasing AB P. off lse/fin term comp. - pkd
20-Apr-09 217 Saab 340 B N217JJ Lambert Leasing Inc Saab Aircraft Leasing Inc Purchased - parked
20-Apr-09 217 Saab 340 B XA-TKL Erik Thun AB Erik Thun AB Purchased - parked
21-Apr-09 1972 Airbus A321 210 (CFM) OY-VKT Rain VIII LLC Thomas Cook Airlines Scand. P. - subject to existing lease
21-Apr-09 862 ATR ATR 72 500 F-OIQR Anna B Snc Air Tahiti P. - sale & lease-back on del
21-Apr-09 29930 Boeing 737 (NG) 800 Winglets EI-CSQ CIT Aerospace International CIT Aerospace Purchased - parked
21-Apr-09 35640 Boeing 737 (NG) 800 Winglets N358MT Celestial Aviation Trading 14 Ltd GECAS Pur. - sale to S.P.C. by less. on del - pkd
22-Apr-09 247 Airbus A320 230 (IAE) VT-EVO GMT Aircraft Leasing 12 LLC Air India P. - subject to existing lease
22-Apr-09 29936 Boeing 737 (NG) 800 Winglets EI-CTA Germic Avn Safety & Regulatory Cons Germic Avn Safety & Reg. C. Purchased - parked
22-Apr-09 29937 Boeing 737 (NG) 800 Winglets EI-CTB Germic Avn Safety & Regulatory Cons Germic Avn Safety & Reg. C. Purchased - parked
22-Apr-09 7186 Bombardier (Canadair) CRJ Regional Jet 200ER C-GEXI Avmax Int/l Aircraft Leasing Inc Corporate Jet Air Pur. - sale & lease-back
23-Apr-09 23377 Boeing 737 (CFMI) 300 N233MQ Engage Aviation LLC Engage Aviation LLC Purchased - parked
23-Apr-09 24063 Boeing 747 400 (P&W) PK-LHF Lion Air Lion Air Purchased - parked
23-Apr-09 24065 Boeing 747 400 (P&W) PK-LHG Lion Air Lion Air Purchased - parked
23-Apr-09 22191 Boeing 757 200 (RR) N144DC L-3 Capital LLC L-3 Capital LLC Purchased
23-Apr-09 205 Bombardier (de Havilland) Dash 8 100 C-FLAD Regional 1 Airlines Regional 1 Airlines Purchased
23-Apr-09 117 Bombardier (de Havilland) Dash 8 100 C-GZKH Provincial Airlines Provincial Airlines Purchased
23-Apr-09 145551 Embraer ERJ-135 LR N845RP Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased - parked
23-Apr-09 8100 Fairchild/Dornier 228 200 PJ-DVA Divi Divi Air Divi Divi Air Purchased
24-Apr-09 3877 Airbus A320 230 (IAE) HA-LPU General Electric Capital Corp Wizz Air P. - sale & lease-back on del
24-Apr-09 1007 Airbus A330 300 (GE) OH-LTN Finnair Aircraft Finance Ltd Finnair P. - sale & lease-back on del
24-Apr-09 E2048 BAE SYSTEMS (HS) 146 200 G-FLTA Westall Ltd Westall Ltd Purchased - parked
24-Apr-09 E2047 BAE SYSTEMS (HS) 146 200 G-OZRH Calder Ltd Calder Ltd Purchased - parked
24-Apr-09 49790 Boeing (McDonnell-Douglas) MD-80 83 (MDC) G-FLTL Bajoran Ltd Bajoran Ltd Purchased - parked
24-Apr-09 31067 Boeing 737 (NG) 800 Winglets N982AN AFS Investments 48 LLC American Airlines P. - sale & lease-back on del


Aircraft & Engines
Aircraft transactions — 27 April 2009 to 21 May 2009

27-Apr-09 41053 BAE SYSTEMS (Jetstream) Jetstream 41 N153KM Kirland 41053 LLC Kirland Aviation LLC P. - sale & lease-back - pkd
27-Apr-09 41053 BAE SYSTEMS (Jetstream) Jetstream 41 N153KM Kirland Aviation LLC Kirland Aviation LLC Purchased - parked
27-Apr-09 145597 Embraer ERJ-145 LR N559MD General Electric Capital Corp GECAS P. - subj. to exist. lease - pkd
27-Apr-09 145607 Embraer ERJ-145 LR N607MD General Electric Capital Corp GECAS P. - subj. to exist. lease - pkd
28-Apr-09 1920 Airbus A320 210 (CFM) B-6573 Spring Airlines Spring Airlines Purchased
28-Apr-09 41052 BAE SYSTEMS (Jetstream) Jetstream 41 ZS- Uncon. South African Operator MCC Aviation (Pty) Ltd Purchased - parked
28-Apr-09 22071 Boeing 737 (JT8D) 200 Ad (St3 Hshk) 9Q- Lignes Aeriennes Congolaises Lignes Aeriennes Congolaises Purchased
28-Apr-09 32965 Boeing 777 200LRF (GE) F-GUOB BOC Aviation Air France P. - sale & lease-back on del
29-Apr-09 3869 Airbus A321 230 (IAE) N570TA Airlease Twenty Nine Ltd TACA International Airlines P. - sale & lease-back on del
29-Apr-09 1010 Airbus A330 340 (RR) 9V-STF Ad Astra Aviation Singapore Airlines Pur. - sale to S.P.C. by less. on del
29-Apr-09 1009 Airbus A330 240 (RR) N968AV Aircol 5 Avianca P. - sale & lease-back on del
29-Apr-09 150 Airbus A340 310 (CFM) HB-JMJ Bernina Aircraft Leasing Inc Swiss P. - subject to existing lease
29-Apr-09 154 Airbus A340 310 (CFM) HB-JMM Bernina Aircraft Leasing Inc Swiss P. - subject to existing lease
29-Apr-09 32966 Boeing 777 200LRF (GE) F-GUOC BOC Aviation Air France P. - sale & lease-back on del
30-Apr-09 85 Airbus A300 B4-200F (GE) N363DH DHL Express (USA) Inc Astar Air Cargo P. - subject to existing lease
30-Apr-09 1305 Airbus A319 110 (CFM) EI-DFA VGS Investments One Ltd Meridiana P. - subject to existing lease
30-Apr-09 131 Airbus A340 310 (CFM) B-2381 Bank of Communications Fin. Leas. Co Ltd China Eastern Airlines Pur. - sale & lease-back
30-Apr-09 141 Airbus A340 310 (CFM) B-2382 Bank of Communications Fin. Leas. Co Ltd China Eastern Airlines Pur. - sale & lease-back
30-Apr-09 24252 Boeing 737 (CFMI) 300 N348UA Aircraft Solutions 737-300 LLC Universal Asset Mgmt Inc Purchased - parked
30-Apr-09 29680 Boeing 737 (NG) 800 Winglets N Babcock & Brown A/c Mgmt LLC Babcock & Brown A.M LLC Purchased
30-Apr-09 26270 Boeing 757 200 (P&W) N592BC BCC Equipment Leasing Corp Boeing Capital Corp Purchased - parked
30-Apr-09 25131 Boeing 757 200 (P&W) N594BC BCC Equipment Leasing Corp Boeing Capital Corp Purchased - parked
30-Apr-09 23216 Boeing 767 300 (P&W) N767NG JALUX Inc JALUX Inc Purchased - parked
30-Apr-09 23216 Boeing 767 300 (P&W) N767NG GA Telesis LLC GA Telesis LLC Purchased - parked
30-Apr-09 24157 Boeing 767 200ER (P&W) N983JM Jet Midwest Jet Midwest Purchased - parked
30-Apr-09 35588 Boeing 777 300ER (GE) A6-ECQ DS-Rendite-Fonds Flugz IX GmbH & C Emirates Airline P. - sale & lease-back on del
30-Apr-09 24 Bombardier (de Havilland) Dash 8 100 C-FZCC CHC Global Ops Canada (2008) CHC Global Ops Canada Purchased - parked
01-May-09 3139 Airbus A319 110 (CFM) LZ-AOA B H Air B H Air Purchased - parked
01-May-09 3188 Airbus A319 110 (CFM) LZ-AOB B H Air B H Air Purchased - parked
01-May-09 34323 Boeing 737 (NG) 700 Winglets VH-VBY VB 700 2009 Pty Ltd Virgin Blue Airlines Pur. - sale & lease-back
01-May-09 34322 Boeing 737 (NG) 700 Winglets VH-VBZ VB 700 2009 Pty Ltd Virgin Blue Airlines Pur. - sale & lease-back
01-May-09 7426 Bombardier (Canadair) CRJ Regional Jet 200LR VP- Uncon. Corporate Operator Uncon. Corporate Opr. Purchased - parked
01-May-09 697 Bombardier (de Havilland) DHC-6 Twin Otter 300 Vista Liner N178GC Cortez Fisher LLC Grand Canyon Airlines Pur. - sale & lease-back
04-May-09 23091 Boeing 737 (JT8D) 200 A (St3 Hshk) N319DL MidAmerican Aerospace Ltd MidAmerican Aerospace Ltd Purchased
04-May-09 23103 Boeing 737 (JT8D) 200 A (St3 Hshk) N331DL MidAmerican Aerospace Ltd MidAmerican Aerospace Ltd Purchased - parked
04-May-09 22197 Boeing 757 200 (RR) N811AD Megalith Group Megalith Group Purchased - parked
05-May-09 22928 Boeing 727 200F RE Advanced HK- Lineas Aereas Suramericanas Lineas Aereas Suramericanas Purchased - parked
06-May-09 3859 Airbus A320 210 (CFM) F-GKXT Skylease MSN 3859 Limited Air France Pur. - sale to S.P.C. by less. on del
06-May-09 3884 Airbus A321 210 (CFM) F-GTAV Whitney Leasing Ltd Air France Pur. - sale to S.P.C. by less. on del
06-May-09 E3387 BAE SYSTEMS (Avro) RJ Avroliner RJ100 A6-AAB Presidential Flight Presidential Flight Purchased - parked
06-May-09 E2299 BAE SYSTEMS (Avro) RJ Avroliner RJ85 G- BAE SYSTEMS (Operations) Ltd BAE SYSTEMS Rgn A/c A. M Purchased - parked
06-May-09 23919 Boeing 747 200F (SCD) (GE) N783SA Air Mobility Inc Southern Air Pur. - sale & lease-back
06-May-09 24157 Boeing 767 200ER (P&W) FAC- Colombian Air Force Colombian Air Force Purchased - parked
06-May-09 414 Bombardier (de Havilland) DHC-6 Twin Otter 300 VQ-T Air Turks & Caicos (2003) Air Turks & Caicos (2003) Purchased
07-May-09 32897 Boeing (McDonnell-Douglas) DC-3 C-47TP N146RD IAL Corp Dodson Aviation Inc Pur. - sale & lease-back
07-May-09 23672 Boeing 737 (CFMI) 300 N311UA VPAF LLC VPAF LLC Purchased - parked
07-May-09 19000109 Embraer 190 Lineage 1000 A6-ARK Aamer Abdul Jalil Al Fahim Prestige Jet Del. - pur. of usd/demo a/c
07-May-09 3169 Fairchild/Dornier 328JET UR-DAV Aerostar Aerostar Purchased
08-May-09 409 ATR ATR 42 300 9N-AIT Buddha Air Buddha Air Purchased
08-May-09 22927 Boeing 727 200F RE Advanced HK- Lineas Aereas Suramericanas Lineas Aereas Suramericanas Purchased - parked
08-May-09 267 Saab 340 B N366PX Compass Air IX Corp Compass Capital Corp P. - sale & lease-back - pkd
11-May-09 1415 Airbus A319 110 (CFM) F-GRHR Air France Air France P. off lse/fin term comp.
11-May-09 5225 Lockheed Hercules L-100-30 Derco Aerospace Derco Aerospace Purchased - parked
12-May-09 564 Bombardier (de Havilland) Dash 8 300 C-FYRO Field Aviation Company Inc Field Aviation Company Inc Purchased - parked
12-May-09 3141 Fairchild/Dornier 328JET D- 328 Support Services GmbH 328 Support Services GmbH Purchased - parked
12-May-09 3120 Fairchild/Dornier 328JET D- 328 Support Services GmbH 328 Support Services GmbH Purchased - parked
13-May-09 1012 Airbus A330 340 (RR) 9V-STG Sunshine Aviation Singapore Airlines Pur. - sale to S.P.C. by less. on del
13-May-09 33938 Boeing 737 (NG) 700 N357AT Aerolineas Argentinas Aerolineas Argentinas Purchased
14-May-09 3899 Airbus A321 230 (IAE) VH-VWX CIT Aerospace International Jetstar P. - sale & lease-back on del
15-May-09 22020 Boeing 727 200 A (St3 Hshk) D2- Uncon. Angolan Operator Uncon. Angolan Operator Purchased
15-May-09 20262 Fokker 50 PH-KXX Mass Holding NV Mass Jet Lease BV Purchased - parked
15-May-09 UE-93 Hawker Beechcraft 1900 D HK- Aerolet Aerolet Purchased
18-May-09 899 BAE SYSTEMS (Jetstream) Jetstream 31 Super 6V- Senegal Air Senegal Air Purchased
18-May-09 32897 Boeing (McDonnell-Douglas) DC-3 C-47TP N146RD Lee County Mosquito Control Dist Lee County Mosquito Ctrl Dist Purchased
18-May-09 24729 Boeing 767 300ER (P&W) N767NF Undis. Bank / Broker / Lessor Undis. Bank / Broker / Lessor Purchased - parked
19-May-09 E1104 BAE SYSTEMS (HS) 146 100 VH-NJE Regional One Inc Regional One Inc Purchased - parked
19-May-09 24 Bombardier (de Havilland) Dash 8 100 N1000 Dynamic AvLease Inc Dynamic AvLease Inc Purchased
19-May-09 AC-713B Fairchild (Swearingen) Metro III C-FJKK Carson Air Ltd Carson Air Ltd Purchased
19-May-09 10372 Fokker F.27 500 5Y Uncon. Kenyan Operator Uncon. Kenyan Operator Purchased - parked
20-May-09 49908 Boeing (McDonnell-Douglas) MD-80 81 YV LASER LASER Purchased - parked
20-May-09 35486 Boeing 737 (NG) 800 Winglets 4X-EKJ El Al El Al Purchased
20-May-09 3661 Bombardier (Shorts) 360 N Engage Aviation LLC Engage Aviation LLC Purchased - parked
20-May-09 3686 Bombardier (Shorts) 360 Advanced N Engage Aviation LLC Engage Aviation LLC Purchased - parked
20-May-09 3608 Bombardier (Shorts) 360 N Engage Aviation LLC Engage Aviation LLC Purchased - parked
21-May-09 662 Bombardier (de Havilland) Dash 8 300 N806MR USAF USAF Purchased
21-May-09 3733 Bombardier (Shorts) 360 300 N569FU Aacme LLC Engage Aviation LLC Purchased - parked
21-May-09 3038 Fairchild/Dornier 328 100 PK- Aero Nusantara Indonesia (ANI) Aero Nusantara Indonesia Purchased - parked

© 2008 KPMG, an Irish partnership and a member firm of the KPMG network of independent member
firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
For
outstanding
Talk to
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KPMG
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KPMG is the leading

provider of advisory
services to the
cross-border leasing
industry in Ireland.
To find out more

about how we can
help you manage the
tax and accounting
issues associated with
big ticket leasing
transactions contact
Ivor Conlon,
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today at
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Copyright photographer S. Ognier
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Fing FC09:FGuideFC 3/6/09 13:41 Page 1

THE 2009-2010 GUIDE TO

FINANCING IN A HARD MARKET Sponsored by:

ENGINE LEASING GETS STICKY

THE WORLD’S LARGEST A3

EST A380 FLEET IS POWERED BY THE ENGINE THAT SAVES

Published bi-monthly by UBM Aviation Industry Press Limited.

Airline Fleet Management™ is a licensed trademark of UBM Aviation

Aircraft records scanning, processing and storage to airlines, lessors

From For a demonstration contact: +44 (0)1293 817 655

More mobility for the world

Financing & Investing in

Philip Tozer-Pennington looks at aviation financing thus far during 2009.

Summing up the past 18 months in the banking sector!

THERE IS NO SIMPLE LIST OF BANKS CURRENTLY CONDUCTING BUSINESS that

4 S Guide to Financing & Investing in Aircraft & Engines

Guide to Financing & Investing in Aircraft & Engines S 5

Financing & Investing in

6 S Guide to Financing & Investing in Aircraft & Engines

Putting the best future imaginable on the wing.

Financing & Investing in

8 Guide to Financing & Investing in Aircraft & Engines

Guide to Financing & Investing in Aircraft & Engines S 9

Financing & Investing in

Some believe the market can contain an increase in engines.

If Stern is right, the current dearth of spare engines will mean

What’s in a name: understanding market per-

An online poll conducted recently by AFM (see page 44 to 46)

Lessors must look to their market to see what aspects of an engine

10 S Guide to Financing & Investing in Aircraft & Engines

one step ahead

Let us customize an OnPoint solution for all

58145_june_gfia.indd 1 5/11/09 12:19:00 PM

Financing & Investing in

AFM Engine Leasing Poll

3. VALUE FOR MONEY

12 S Guide to Financing & Investing in Aircraft & Engines

Preserve Capital with the Willis Lease Engine Pooling Program

CONTACT US TO: POOL s BUY s SELL s LEASE s EXCHANGE

Financing & Investing in

AFM Engine Leasing Poll

Very much 54%

The leasing game

Despite UK Prime Minister Gordon Brown’s recent referral to the

Bridging the funding gap

Tony Diaz, executive vice president at CIT Aerospace, says: “The

14 S Guide to Financing & Investing in Aircraft & Engines

Financing & Investing in

16 S Guide to Financing & Investing in Aircraft & Engines

Financing & Investing in

AIRLINE MERGERS AND ACQUISITIONS MUST, HOWEVER,

In cases where the merging parties are competitors, the

The aim in requiring such a commitment is mainly to facilitate

18 S Guide to Financing & Investing in Aircraft & Engines

Your OEM may tell you there’s more to

The fact is we manufacture over 5000 parts that

contact HEICO at (954) 744-7500 or visit www.heico.com

Financing & Investing in

THE CURRENT FRAMEWORK FOR AVIATION LIBERALISATION IN Why is reform needed?

20 S Guide to Financing & Investing in Aircraft & Engines

5. Clarification of rules applicable to traffic distribution

Guide to Financing & Investing in Aircraft & Engines S 21

For further information visit www.powerjet.aero