AFM76

Issue 76 www.ubmaviationnews.com

The business andfinancing ofairline operations

November-December 2011

PLUS:

n FUTURE FREIGHT TECHNOLOGIES

n BOMBARDIER ON ITS MISSIONTO COMPETE

n THE FULL COST OF AVIATION TAX

n MRO FOR THE 787

HOLDING HOPE: CARGOAND THE WORLD ECONOMY

Project2_Layout 1 07/11/2011 11:43 Page 1

A 20% fuel burn benefit and a 15% cash operating cost

advantage* only come from a 100% new aircraft

designed for today’s operational realities — not an old

airliner that has been altered or reconfigured. The CSeries

aircraft is a new choice for a changed world.

Bombardier, CSeries and CS100 are Trademark(s) of Bombardier Inc. or its subsidiaries.

* 20% fuel burn benefit and 15% cash operating cost advantage vs. average in-production aircraft of 110-seat & 130-seat categories @ 500 NM.

The CSeries aircraft program is currently in development phase and as such is subject to changes in family strategy, branding, capacity, performance, design and / or systems. All specifications and data are approximate, may change without notice and are subject to certain operating rules, assumptions and other conditions. The actual aircraft and configuration may differ from the image shown.

www.cseries.com


November-December 2011 • Issue 76

The business andfinancing of airline operations

TRADING, LEGAL AND FINANCE:34 Protection versus growth: BilateralrestrictionHistorically, the aviation sector has beencharacterised by restrictive bilateral agree-ments between governments, which agreeexclusive sovereignty over flights in theirown airspace. In the 1980s the focus ofbilateral agreements switched from statesagreeing to restrict competition in their ownairspace, to states agreeing reciprocal access.Marjorie Holmes, partner, at Reed Smith explains.

40 Deals News Catch up on the last month of aircraft deals.

AIRPORTS AND ROUTES:44 Cargo routes and the world economyFollowing the meltdown in 2008, the globaleconomic recovery was tracked by air freighttraffic which improved as exports resumed.But by late 2011, many regions were againseeing sharp falls in cargo volumes, which,worryingly, can signal an impendingrecession. Alex Derber investigates whether the development or discontinuation of aircargo routes is a similar barometer for macro-economic trends and in which regions, if any,growth is occurring.

48 The full cost of aviation tax Later this year, the European Commission willpublish its package of aviation policies, whichwill cover such things as noise emissions,ground handling and slots. Considering this,Mary-Anne Baldwin reports the views on theindustry from the World Route DevelopmentStrategy Summit, which took place at WorldRoutes in Berlin, in October.

MAINTENANCE OPERATIONS:54 MRO for the 787: The future ofmaintaining aircraftThe perennial battle between OEMs andcommercial MRO organisations foraftermarket revenue is entering a new phasewith the service entry of the 787 and itsassociated GoldCare support services. Bernard Fitzsimons reports.

INDUSTRY DATA:58 Data including transactions andmarket, list and lease rates.

C O N T E N T S

EDITORMary-Anne Baldwin: [email protected]: +44 (0) 207 579 4843

JOURNALISTAlex Derber: [email protected]

CONTRIBUTORSChris Kjelgaard, Bernard Fitzsimons, Marjorie Holmes,and Martin Roebuck

DESIGN & PRODUCTIONKalven Davis: [email protected]:+44 (0) 207 579 4851

DISPLAY ADVERTISINGSimon Barker: [email protected] Samuel: [email protected]: +44 (0) 207 579 4845/46

GROUP PUBLISHER & SALESAnthony Smith: [email protected]:+44 (0) 207 579 4875

AIRLINE FLEET MANAGEMENT(ISSN 1757-8833) – Online: 1757-8841 (USPS 022-324)

is published bi-monthly by UBM Aviation Publications Ltd and

distributed in the USA by SPP, 95 Aberdeen Road, Emigsville PA.

Periodicals postage paid at Emigsville, PA. POSTMASTER: send

address changes to AIRLINE FLEET MANAGEMENT, c/o PO Box 437,

Emigsville PA 17318.

Subscription records are maintained at

UBM Aviation Publications Ltd. 7th Floor, Ludgate House, 245 Blackfriars Road, London, SE1 9UY, UK.

UK annual subscription cost is £150.Overseas annual subscription cost is £170 or $300

E-EDITOR & CIRCULATION MANAGER Paul Canessa: [email protected]: +44 (0) 207 579 4873

Website: www.ubmaviationnews.com

Printed in England by Pensord.

Airline Fleet Management™ is a licensed trademark of UBM

Aviation Publications Limited. All trademarks used under license

from UBM Aviation Publications Limited.

©1999 – 2010, UBM Aviation Publications Limited.

All rights reserved.

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 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 any means without the express permission of UBM Aviation

Publications limited.

Cover images: Courtesy of Lufthansa

NEWS ROUND-UP3 The latest on deals, mergersappointments and more.

FOCUS:12 Regional aircraft: Bombardier’smission to competeATR and Embraer appear to be cruising athigh altitude while Bombardier, the maincompetitor to both, is cutting productionrates amid an apparent dearth of orders. Butthe Canadian manufacturer is confident thatongoing sales campaigns will soon start toredress the balance. Bernard Fitzsimons talks to the company’s marketing VP, PhilippePoutissou.

FLEET OPERATIONS:18 Slot Allocation: The rules andschemes explained Europe and the US have taken markedlydifferent approaches to addressing capacityconstraints at busy airports. The former hasfavoured regulation, whereas the latter hastaken a largely laissez-faire approach. Now,however, both are seeking a new way to dealwith the demands of 21st century travel. Alex Derber investigates.

22 Future FreightThe air cargo business is changing fast and emerging technologies should offer a substantial increase in the industry’sproductivity and quality standards. Chris Kjelgaard learns that freighter aircraft are becoming more efficient andenvironmentally friendly, but that thebiggest drivers of productivity will beinformation technology and automation.

28 Low-cost airport selectionTwo airports served by low-cost carriers,France’s Marseille and Romania’s Timisoara,are under scrutiny by the EuropeanCommission (EC) for potential abuse of stateaid rules. Smaller airports have been exempton the basis that they help stimulate theeconomies of less developed regions, butannouncing the investigation, JoaquinAlmunia, commissioner responsible forcompetition, pointedly commented: “Someregional airports in Europe are no longer sonew or small.” Martin Roebuck reports.

AFM76 TOC _TOC 04/11/2011 10:52 Page 2

November-December 2011 AFM • ISSUE 76 | 3

The latest on deals, mergers, appointments and more NEWS ROUND-UP

NEWSHIGHLIGHTS Fly doubles fleet inportfolio dealDublin-based Fly Leasing has complet-ed the purchase of a $1.4bn portfolio ofaircraft from Australian lessor GlobalAviation Asset Management. The 49 air-craft, mostly 737s and A320s, take Fly’sfleet to a total of 109 aircraft. Theacquisition was funded from existingunrestricted cash and the assumption ofexisting non-recourse debt. Fly Leasing’sportfolio is managed by Babcock & BrownAircraft Management.

RBS Aviation narrowsbidders for next round The Royal Bank of Scotland (RBS) hasshortlisted six potential buyers for thesecond round of bids on its aviationarm, Dow Jones Newswires has re-ported, citing a source close to thecompany. The deal, which is led byGoldman Sachs, is expected to close itssecond round in early November. Aconsortium led by Macquarie Group,Air Lease Corp, General Electric andTerra Firma, which owns AWAS, arethought to be among the bidders.

Hawaiian Seeks to Trim itsHedgesDespite big jumps in sales and operatingincome, net profit at Hawaiian Airlinesdipped in 3Q 2011 to $26m from $30mthe year before. Hawaiian exceededrevenue forecasts in the quarter, increasingsales by almost a third to $456m on theback of a 16 per cent rise in capacity. But,having hedged half its fuel requirementsat roughly $100 per barrel, the airline wasleft to rue its bets as the price of WTI crudeoscillated around the $90 mark, meaningthat the derivative contracts cost it $10mfrom July to October. Hawaiian has lost$24m in the first nine months of 2011, incontrast to a $40m profit in the sameperiod last year.

Merkel opens fourthFrankfurt runwayGerman Chancellor Angela Merkel has officially opened Frankfurt Inter-national Airport’s fourth runway.Constructed at a cost of €760m($1.05bn), the runway will boost theairport’s capacity by 50 per cent from83 takeoffs and landings per hour to apotential 126. This translates to a po-tential increase in passengers per yearfrom 53 million to 89 million by 2020.

Stakes are high at Qantas

Rather than see a tortuous series of debilitating strikesextend indefinitely, Qantas’ management broughtmatters to a head over the last weekend in Octoberand grounded the Australian flag carrier’s entiredomestic and international fleet. The intention was toforce unions back to the negotiating table viagovernment arbiter Fair Work Australia (FWA), whodid indeed order an end to industrial action, spurringflights to resume.

The Australian Licenced Aircraft EngineersAssociation (ALAEA) took industrial action in morethan 40 strikes across Australia from August to lateOctober and Qantas estimated that it lost 60,000 man-hours of maintenance as a result. The airlinecancelled 500 flights in a four-week period andgrounded a growing number of its aircraft that couldnot be maintained.

The warring parties now have a maximum of 42 daysto resolve their differences – which centre on Qantas’plan to offshore much of its international operations –before FWA steps in with compulsory arbitration.

This raises two obvious questions: whether Qantasmanagement expects its actions over the weekend tobring unions to heel; and, if not, how muchconfidence it has in FWA finding in its favour. Itseems highly unlikely that locking out staff withoutpay over a weekend would hasten compromise. Thedebate has now become so acrimonious and sopolarised – death threats on one side and massgroundings on the other – that concessions fromeither end appear fantastical.

That leaves compulsory arbitration, but this hastraditionally favoured unions in Australia, and it ishard to see a body called Fair Work Australiaapproving a policy that cuts jobs for Australians. Allof this leaves one mystified as to why Alan Joyce,Qantas’ CEO, has taken such a gargantuan gamble,one which potentially jeopardises not only his plansfor the airline, but also its reputation with customersat home and abroad. Perhaps we should be asking ifit really is win or bust, or whether Joyce is keepingsome cards closer to his chest.

Flying Vs, pilotless aircraft and travelling five timesfaster than the speed of sound could all become realityby 2075 – if investment is made now. A new report fromthe UK’s Institution of Mechanical Engineers (IME), Aero2075: Flying into a bright future?, serves both to highlightfuture aircraft innovations and to urge government toensure the UK is at the forefront of developments. Theinnovations outlined by the IME are wide-ranging andoften radical. Future possibilities could include a largemothership aircraft carrier system with individual unitsthat are released over a destination and then float downas navigated by the passenger – potentially taking youstraight to your front door. Meanwhile, ‘flying fuelstations’ would eliminate the need for aircraft to takeoff with full tanks, thus saving weight. And recent

progress in the development of drone aircraft couldeventually translate to pilotless aircraft, according tothe IME. More familiar possibilities, such as solar-powered and blended- wing aircraft, are also discussedin the report. The study also notes the potential ofsupersonic jets flying faster than the speed of sound andeven hypersonic aircraft that are capable of travellingmore than five times the speed of sound. Aircraft of anyspeed could be configured in a “V-shaped, echelonformation when at cruise”, according to the IME, withfollowing aircraft enjoying a drag reduction and liftadvantage from the airflow generated by the aircraft infront. “Taken directly from nature, the concept is akinto the aerodynamic nature of a flock of geese,” thereport states.

The latest vision of the future

AFM76 News_AFM News 04/11/2011 11:20 Page 3

4 | AFM • ISSUE 76 November-December 2011

NEWS ROUND-UP The latest on deals, mergers, appointments and more

ILFC finalises AeroTurbineacquisitionInternational Lease Finance Corporation(ILFC) has completed its previouslyannounced acquisition of AeroTurbinefrom AerCap Holdings. AeroTurbine willoperate as a wholly owned subsidiary ofILFC. In connection with the transaction,Citigroup Global Markets acted as ILFC’sfinancial advisor, and Debevoise &Plimpton acted as ILFC’s legal advisor.

Lufthansa counts cost ofnight banLufthansa Cargo has said a recentcourt ruling banning night flightsfrom its hub at Frankfurt airport willcost it tens of millions of euros. Theairline has appealed the decision, butwill have to wait until 2012 to seewhether that is successful. In themeantime, it has cut two flights aweek to China, introduced stopoversin Cologne for flights to China, andmoved one freighter to Cologne.

ExpressJet name retainedafter mergerSkyWest subsidiary Atlantic SoutheastAirlines is to adopt the ExpressJet Airlines‘ExpressJet’ name for its combined identityupon completion of the merger betweenthe two companies. The merger is ex-pected to be completed by December 31,2011, at which time the name would beeffective. “Our company-wide vote clearlyestablished the ExpressJet name with thelegacy Atlantic Southeast branding as thewinner and a brand identity our people canbe proud of going forward,” commentedBrad Holt, Atlantic Southeast president and COO.

SWA posts shock lossLosses on fuel hedging contractstotalling $227m have driven US budgetcarrier Southwest Airlines (SWA) to arare quarterly loss. Without the reversethe airline would have comfortablybeen in the black for 3Q 2011,although profit was down 37 per centon the previous year, to $122m.Including non-cash items meant a netloss of $140m for SWA. Figures fromAirTran, which SWA bought this yearfor $1.7bn, were included for the firsttime in SWA results: total revenuesjumped a third, to $4.3bn, as a resultof the purchase.

NEWSHIGHLIGHTS

P&W buys Rolls out of IAE venture but creates another

Airline enthusiasm for ancillary sales is growingstronger, with global ancillary revenues projected torise by $10bn in 2011. Analysis by IdeaWorks andAmadeus forecasts total ancillary sales of $32.5bn in2011, with much of the boost coming from USmajors, who will almost double non-core sales to$12.5bn in the year. Their ability to do this rests onthe sale of frequent flier miles, which constitute halfof all ancillary revenues and dwarf baggage fees,which account for only a fifth.

Early converts to the ancillaries model, however,appear to be running out of ideas for new services

and fees. On average, carriers like easyjet, Ryanairand Spirit earned about a fifth of total sales fromancillaries – much the same as in 2010 and 2009. That said, low-cost carriers worldwide did improveancillary sales by a third in 2011, up to almost $5bn.

But to discover whether that increase is notmerely a function of higher total sales would requirea look at changes in per passenger ancillary sales,which the report omits. From 2008 to 2009, forinstance, airlines such as Allegiant and Ryanair weredriving up per passenger ancillary sales by aboutfour percentage points.

Etihad Airways has reported “strong profitability” at an EBITDAR level, with the airline moving into monthlyprofitability. Revenues for 3Q were up 39 per cent on 3Q 2010 to $1.1bn, with passenger numbers up 18 percent to 2.25m. Seat factor increased by 3.8 per cent to 80.7 per cent. However, operating costs rose by 12 percent. “Despite the continuing challenges of high fuel prices and economic downturn in many of the marketsin which Etihad operates, we are seeing strong growth in all our key commercial indicators,” said CEO, JamesHogan. He added that the airline is maintaining “a rigorous focus on costs” and listed breaking even as a“clear target” for 2011.

Etihad reports increased revenues for 3Q

Pratt & Whitney (P&W) and Rolls-Royce have agreeda joint venture (JV) to develop new engines for thenext generation of mid-size aircraft. On starting thenew venture, they close another: P&W is to pay Rolls-Royce $1.5bn for its share in International AeroEngines (IAE), which makes the V2500 engine for theA320. Rolls will also receive flight-hour payments onall V2500-powered aircraft for 15 years.

P&W said it intends to offer a portion of these sharesto its IAE partners MTU Aero Engines AG (MTU) andJapanese Aero Engines Corporation (JAEC). In addition,Rolls-Royce will make a “modest” investment in thePW1100G-JM for the A320neo programme.

Rolls and P&W will hold an equal share in their newcollaboration on engines for 120 to 130-seatpassenger aircraft. The venture will focus on high-bypass ratio geared turbofan technology. The pairwill also collaborate on future studies for next-generation propulsion systems, including advancedgeared engines, open rotor technology and otheradvanced configurations.

Rolls has said that the sale of shares will create£140m ($220m) in operating profits next year,though much of the profit is likely to balance therecent acquisition of Tognum for £1.4bn ($2.2bn).

Major move for ancillaries


Choosing CFM* to power the A320neo isn’t just playing safe, it’s playing smart. The CFM history of record-breaking reliability is legendary. Now, the LEAP engine with its proven architecture and ground-breaking technology,

delivers 15% lower fuel consumption and 15% lower CO2 emissions than the engines it will replace. Don’t jump into the unknown. Leap into the future.Visit www.cfm56.com/leap

*CFM, LEAP and the CFM logo are all trademarks of CFM International, a 50/50 joint company of Snecma (Safran Group) and GE.

LEAP

There are lots of risky options in life.Choosing the LEAP engine isn’t one of them.

AFNM_LEAP_CANNON_278x210.indd 1 11/10/2011 14:10



NEWSHIGHLIGHTSFerrovial sells stake in BAAFerrovial is to lower its stake in the airport company BAA to 49.99 percent, wiping BAA’s debts from itsbalance sheet – at least for accountingpurposes. Ferrovial is to finalise thesale of 5.88 per cent of the group toAlinda Capital Partners in late 2011,after which Ferrovial will no longer beBAA’s majority shareholder. The sale,which will win Ferrovial €325m($442m), values BAA at $7.43bn –more than double the previousestimate.

Arik Air revealed as 747-8customerNigerian airline Arik Air has ordered two747-8 Intercontinental aircraft from Boeing,in a deal valued at $635m at list prices. Theorder was previously attributed to anunidentified customer on Boeing’s website.The airline said the 747-8 fitted “perfectly”into its long-term plans for growth.

Bankruptcy fears for AAAmerican Airlines (AA) stock fell 33per cent on October 3 on rumours thatparent AMR would file for chapter 11bankruptcy protection. The airlinesaid there was no solid reason for thespeculation, which some haveattributed to an unusually highnumber of pilot retirements sinceAugust. AA is the only US major neverto have entered chapter 11.

Qantas concludes orderQantas Airways has finalised a contractwith Airbus for 110 A320s. This figureincludes 78 A320neos. The airline said theaircraft would be deployed across theQantas Group on short-to-medium hauldomestic and international operations.The order confirms a commitment for theA320s that Qantas announced on August16, 2011. Qantas also confirmed that theA320 would be used to launch its newpremium airline in Asia, and said the basefor the subsidiary would be in eitherSingapore or Kuala Lumpur.

MC announces Russian leaseMC Aviation Partners, the aircraft leas-ing arm of Mitsubishi, has arranged theonward lease of two A321s to Russia’sNordwind Airlines, a charter operatorbased at Moscow Sheremetyevo. TheA321 are the first Airbus types to beoperated by Nordwind, which willlease them for six years.

BAA is to bring forward the sale of either GlasgowInternational or Edinburgh airport after beinggranted approval from the UK CompetitionCommission (CC). The commission had stipulatedthat BAA first sell Stansted, though this will bedelayed by the company’s second appeal against thecommission’s decision.

“In view of the real risk of delay arising as a resultof this second appeal and also given the fact thatBAA is not challenging the Scottish airport sale, theCC has now decided that it would be in the interestsof affected passengers and airlines to proceed withthe sale of either Glasgow or Edinburgh airport

An Airbus aircraft has flown what the manufacturerclaims was “the world’s greenest commercial flight”,while a £400m ($641m) composite wing manufact-uring facility for the A350 has been opened.

The flight, operated by Air France from Toulouse-Blagnac to Paris-Orly using an A321, combined theuse of biofuels and optimised air traffic managementprocedures for the first time. The biofuel, derivedfrom used cooking oil, was not used sparingly either– constituting 50 per cent of the fuel in each engine.However, as has been pointed out before, usedcooking oil does not appear to be a long-term fuelsolution as availability is a severe problem.

The air traffic management procedures includedroute optimisation so the shortest distance wasflown, as well as a continuous descent approach(CDA). CDA avoids the need for level flight prior tothe final approach and also needs less engine thrust,resulting in less fuel burn. According to Airbus,overall CO2 emissions were halved to 54g perpassenger and kilometre compared with a regularflight – equivalent to fuel efficiency of 2.2 litres offuel per passenger and 100 kilometres.

Meanwhile, British Prime Minister David Cameronwas called upon to officially open Airbus’ new wingfactory in Wales, UK, where the 31 metre longcomposite wings for the A350 XWB will be ass-embled. As well as the lightweight wings providingfuel savings, the Wales facility is itself labelledenvironmentally-friendly by Airbus – with the factoryin part powered by three large solar tracking arraysand a wood pellet biomass power plant boiler.

Boeing expects more Dreamliner cancellations

BAA’s sale of Scottish airport pushed forward

Fuels, flights andfacilities – Airbus showsgreen credentials

first,” the commission said in a statement.After the sale of one of the Scottish airports, BAA

will still own Heathrow, Southampton, Aberdeen,either Glasgow or Edinburgh and, for a limited time,Stansted. Colin Matthews, CEO of BAA, stated: “We will continue with our judicial review pro-ceedings against the Competition Commission’sdecision requiring BAA to sell Stansted. We believethe South East airports market has changed and BAA has changed since the Competition Com-mission’s 2009 decision. It is also clearer now thanit has ever been that Heathrow and Stansted servedifferent markets.”

Boeing’s VP marketing, Randy Tinseth, has predicted that more customers will scrap their 787 orders afterChina Eastern cancelled an order for 24 787s and opted for 45 737NGs instead. Analysts have suggested thatChinese carriers might soon cancel 787 orders en masse due to concerns over economic recovery in their long-haul markets of Europe and the US. Meanwhile, China Eastern also committed to 15 new A330s, some ofwhich will replace five A340s that it has put up for sale. Its 787 cancellation was due to delays rolling out thenew aircraft. It will pay a similar price for the 45 737s, minus a sum of indemnity to be paid to it by Boeing.


GE Aviation

the information and insights you need. the mobility you want.

GE’s myEngines™ digital services connects you to real-time engine and fl eet data, so you can make optimal decisions – anywhere, anytime.

You operate 24/7, 365 days a year. Now, with myEngines, you can stay connected to maintenance activities, engine performance and asset confi guration to save time and reduce costs – even when you’re away from the offi ce. Accessible from laptops and leading smartphones and tablets, myEngines allows you to manage your fl eet from virtually anywhere, with a direct link to OEM data and expertise – all at the touch of a button.

For more information, including demonstrations and trials, email us at [email protected].

geaviation.com/onpoint

67425_myengines_fp4c_ad.indd 1 8/22/11 1:46 PM



Cargolux still in disputewith Boeing over 747-8FsBoeing has been thrown into discussionswith Cargolux regarding the delayeddelivery of two 747-800 freighters. Theaircraft were due to be delivered toCargolux on September 19 and 21 but thecargo carrier rejected the aircraft due tocontractual issues. The pair later resolvedthe issues and Cargolux accepted deliveryof the two freighters on October 12. Theairline has an additional 13 747-800Fs on order.

SkyWest penalised forload manifest violationsThe Federal Aviation Administration(FAA) has proposed a civil penalty of$160,000 against SkyWest Airlines forallegedly operating four regional jetaircraft on four revenue passengerflights when they were not incompliance with Federal AviationRegulations. The FAA alleges SkyWestoperated these flights without a loadmanifest that accurately reflected theweight of the cargo and baggage,when the total weight of the aircraftwas not computed under approvedprocedures, and when the aircraftwere not loaded according to anapproved load schedule. SkyWest has30 days from receipt of the civilpenalty letter to respond to the FAA.

US sanctions Iranian carrierPrivately owned Iranian airline Mahan Airhas been hit with sanctions by the UStreasury in response to a ‘plot’ to assass-inate the Saudi Ambassador, allegedlyplanned by Iranian security forces. “MahanAir’s close co-ordination with the [Qodssecurity force] – secretly ferrying oper-atives, weapons and funds on its flights –reveals yet another facet of the IslamicRevolutionary Guards Corp’s extensiveinfiltration of Iran’s commercial sector tofacilitate its support for terrorism,” saidDavid Cohen of the treasury department.Mahan assets in the US have been frozenAmerican citizens have been barred fromdoing business with the airline.

Nigeria’s aviation agencies may be stripped of theirallowances as the majority of the country’s con-cession and lease agreements are failing to deliverdividends. The news was announced by PrincessStella Adaeze Oduah, who was appointed as Nigeria’sMinister of Aviation in mid-2011. “I inherited horribleconcession agreements which no development-oriented administration can sustain,” she told theHouse of Representatives.

Oduah said she does not intend for the agreementsto be maintained unless they start to create revenuefor the industry. “There is no reason they should beleft untouched as if they are cast in stone. More than70 per cent of concessions and leases in the sector arenot performing and have not given us a premium onthe terms of the contracts,” she told lawmakers. “Wewill review and cancel those agreements and leasesthat are not yielding the expected dividends.”

On another topic, Oduah said she shared thecountry’s ambition to have a flag carrying airline butnoted the work that must come first. “We must havea national carrier, but we need to have theappropriate framework to drive and actualise thisdream,” she said.

NEWSHIGHLIGHTS

Nigeria’s aviationindustry to loseconcession allowances

Europe is falling behind in its attempts to improve airtraffic management (ATM). An independent Perform-ance Review Body (PRB) report, as well as draftrecommendations from the European Commission,show that European nations are failing to meet legis-lated targets in improving operational, financial andenvironmental efficiency.

States are currently committed to improving thecost efficiency of air navigation services by 3.5 percent annually for between 2012 and 2104, but theInternational Air Transport Association (IATA) haswarned that “inaction” is costing the competitivenessof Europe’s connectivity €256m ($353m) a year. This ison top of the €1bn ($1.4bn) lost by “watering down”the PRB’s originally proposed target of a 4.5 per centannual gain in cost efficiency.

“When targets are agreed, state leadership mustensure that they are met. This is not the time for

complacency,” said Tony Tyler, IATA’s director generaland CEO. “Everybody agrees that high costs, delays,environmental waste and circuitous routings are notacceptable. But the problems are not going to fixthemselves.” Tyler said that air navigation serviceproviders (ANSPs) have failed to keep pace with theefficiency improvements offered by new technologyand aircraft, adding that it is the “responsibility of states to ensure that their air navigation serviceproviders are delivering what is needed”.

The PRB report shows that 21 of 29 European statesfailed to make the required contributions to the cost-efficiency target. “The real story is with the ‘Big Five’ANSPs – Germany, UK, France, Italy and Spain…Being responsible for 54 per cent of the costs of airnavigation services in Europe, the success of theperformance scheme is dependant on these statesmeeting their share of the required cost reductions.”

European ATM veers off course

Vietnam’s stuttering climb towards aviation liberal-isation has faltered once again with MalaysianAirAsia’s announcement that it has called off its jointventure (JV) with VietJet. The Malaysian stockexchange was told that various conditions of a JVagreement signed in early 2010 had not been satisfiedin time. The main problem appears to have been therefusal by Vietnamese authorities to allow AirAsia touse its branding in VietJet AirAsia, of which it was toown 30 per cent. It is little surprise that AirAsia’s JVmodel – which has seen it set up or preparesubsidiaries in Thailand, Indonesia, the Philippinesand Japan – came unstuck in Vietnam, where thecommunist government, while doing much toencourage privatisation in other industries, remainssuspicious of opening up the airline market.Vietnam, with a population of roughly 90 million,

today has only two private airlines, one of which fliespurely domestic routes. The Philippines, which hasan equivalent population, is home to at least 10private passenger operators.

Air Mekong, one of Vietnam’s first privatised air-lines, only got off the ground last year after an officiallaunch almost a decade earlier, while Jetstar Pacificalso encountered problems with Vietnam’s CivilAviation Authority (VCAA). In both cases, foreigninvestment – from America’s Skywest for Air Mekongand from Australia’s Jetstar – proved difficult tostomach.

Even after granting a transport license to JetstarPacific, the VCAA blocked 10 international routes thecarrier wanted to implement, saying it was notallowed to use branding containing the word “JET”and an orange star, or “Jetstar – orange star”. Thatoccurred in 2008, but AirAsia’s problems in 2011 lookremarkably similar.

Mekong blues



The latest on deals, mergers, appointments and more NEWS ROUND-UP

Air France ousts Gourgeon Air France-KLM has ousted chief executive Pierre-Henri Gourgeon and appointed Jean-Cyril Spinetta inhis place. Spinetta was formerly chief executive ofthe group and will retake the role in addition to hisresponsibilities as chairman of Air France-KLM. Theairline group has suffered a continued loss ofearnings during Gourgeon’s reign, which started inJanuary 2009. Alexandre de Juniac will takeGourgeon’s other role of CEO of the Air France unit.Leo van Wijk, head of KLM, has been made deputyCEO of Air France-KLM. Philippe Calavia will remainin his position as CFO.

Albrecht becomes CEO of Austrian AirlinesJaan Albrecht has been appointed as Austrian Airlines’new CEO, with effect from November 1, 2011. He joinsAndreas Bierwirth and Peter Malanik on the airline’sexecutive board. “In Jaan Albrecht we are pleased tohave won a top manager for Austrian Airlines fromthe Champions League of our industry. As CEO of theStar Alliance, he made a decisive contribution toshaping the successful development of the world’slargest airline alliance,” said Stefan Lauer, chair of thesupervisory board of Austrian Airlines.

Southwest promotes executive personnelSouthwest Airlines has announced a number of staffchanges. Bob Jordan, Southwest’s current EVP ofstrategy and planning, has been promoted to EVPand chief commercial officer. He maintains his roleas president of AirTran Airways. Jeff Lamb,Southwest’s current SVP of administration and chiefpeople officer, has been promoted to EVP and chiefpeople and administrative officer. Ellen Torbert,Southwest’s current VP of customer support andservices, has been promoted to the newly createdrole of VP of diversity and inclusion.

Hawaiian names new CFOScott Topping will become CFO of Hawaiian Holdingsand its subsidiary Hawaiian Airlines on November 1.He succeeds Peter Ingram, who has assumed a newrole at Hawaiian as chief commercial officer.

Trio join ALC as VPsAir Lease Corporation (ALC) has added Chi Yan,Michael Bai, and Jenny Van Le as VPs. Yan and Bai willwork in ALC’s marketing team in China and Asia,while Van Le will cover financing and leasing in thecompany’s legal department. “Collectively, theseexecutives bring 27 years of experience in aircraftleasing from ILFC to the executive ranks at ALC,” saidGrant Levy, EVP at ALC.

Retiring McQuay replaced by YoungermanStan Younger is to take over leadership ofBombardier’s Aircraft Service Centre networkreplacing Michael McQuay, who is to retire after 40years in aviation. Younger took up his new positionon October 9, 2011. He most recently served as headof Cessna’s 10 company-owned service facilities.

Air Seychelles makes Steller appointmentAir Seychelles has hired Bram Steller as its new CEO, effective October 1. Steller, a Dutchman, waspreviously chief operating officer at Kenya Airways.He will take over from Maurice Loustau-Lalanne.

JetBlue CFO steps downJetBlue Airways CFO Ed Barnes has resigned. Hejoined the airline in 2006 as VP, cost managementand financial analysis, and was promoted to CFO in2008. JetBlue treasurer Mark Powers will serve asinterim CFO, effective immediately, while a searchfor a new CFO is conducted.

Kellner is new Boeing directorBoeing has appointed Larry Kellner as a new director.Kellner is president of private equity firm EmeraldCreek, and from 2004 to 2009 was chairman and CEOof Continental Airlines.

Boeing appointmentsBoeing has appointed Donna Hrinak as president ofits Brazil division. Hrinak will start her role fromOctober 14, based in a new Boeing office in Sao Paulo.Meanwhile, the company has appointed Larry Kellneras a new director. Kellner is president of privateequity firm Emerald Creek, and from 2004 to 2009was chairman and CEO of Continental Airlines.Boeing has also appointed Matthew Knowles ascommunications director, UK and Ireland.

Adelaide Airport announces new MD Adelaide Airport has appointed Mark Young as its newmanaging director. Young will take up the positionfrom November 1, moving from his current role asthe airport’s CFO. The airport’s chairman, DavidMunt, said Young “played a key role” in the airport’sexpansion and passenger growth, leading a $405mrefinancing programme for the airport in 2010.

Boeing’s Bell to retire in AprilBoeing CFO James Bell is to retire from the company,effective April 1, 2012. He will be replaced by GregSmith, who is currently corporate controller andfinance VP. Smith will take up the role as of February1, 2012. The pair will work together over the comingmonths to ensure a smooth transition. Diana Sands,VP of investor relations and financial planning andanalysis, has been appointed corporate controller,which is also effective February 1, 2012. Bell hasserved as CFO since 2003 and was also appointedcorporate president in 2008. He served as thecompany's interim CEO for several months in 2005.

Joseph DiLallo heads aviation finance at KeyJoseph DiLallo has been named VP of corporateaviation finance at Key Equipment Finance, a bank-held equipment finance company. DiLallo willoversee finance solutions for all types of new andused corporate aircraft and helicopters for clients inthe western US.

PEOPLE IN THE NEWS

China Southern takesfirst A380China Southern Airlines has taken deliveryof its first A380, becoming the firstoperator in the country to receive Airbus’giant, and the seventh globally. The aircraftmade its maiden voyage on October 17 onthe Beijing-Guangzhou-Beijing route,following test flights over the weekend.China Southern has ordered five A380s intotal, with the second expected to bedelivered at the end of this year.

SIA’s long-haul budgetairline to fly in AprilSingapore Airlines (SIA) is to start itsnew long-haul low-cost carrier in April2012. SIA will launch the subsidiaryusing a 777-200 and will later acquirean additional 14 Boeing aircraft, fourof which will be delivered by July2012. The budget airline is to serveEurope, the US, Australia and NewZealand.

India to lift ban on foreignairline investmentIndia’s Civil Aviation Ministry is to allowforeign airlines to buy up to 24 per cent ofIndia’s domestic airlines, according to localnews sources. India’s airlines, many of whichare suffering sustained financial losses, havebeen blocked from foreign airlineinvestment, though other types of foreigncompanies are entitled to buy shares. Theaviation ministry is expected to refer itsdecision to the department of industrialpolicy and promotion, after which it willmove to the cabinet for final approval.

US tax hike will cost jobs,says ATAA hike in US air taxes will do little toimprove security and may result in aloss of air services and jobs, the AirTransport Association of America(ATA) has claimed. The US Adminis-tration is proposing two new taxes; a$100 departure tax applicable on allflights and a passenger security tax,which would double existing taxes to $5 for each one-way trip in 2012and triple the tax to $7.50 by 2017.“Paying more taxes doesn’t meansafer travel. There is no clear plan ofhow security will be improved, nor isthere any accountability for whetherthe additional resources will be usedefficiently or effectively,” said ATA’sCEO, Nicholas Calio, in a speech to theAeroClub, Washington.


AirAsia X launches London Gatwick serviceLONG-HAUL, LOW-COST CARRIER AIRASIA X HAS LAUNCHED FLIGHTS to London Gatwick, switching itsexisting Kuala Lumpur-London flight from Stansted Airport from October 24. AirAsia X first launched flightsto London in March 2009 and currently offers six flights per week. Its arrival in the UK market has seenpassenger traffic to and from Malaysia increase by around a third and in the past year the airline carriedaround 121,000 passengers on the route, giving it a third of the total Kuala Lumpur-London market.

But, its business model is more than just point-to-point traffic as the route has fast turned Kuala Lumpurinto a regional hub connecting three continents, with Australians and New Zealanders regularly flying intothe Malaysian capital and connecting on. On the other side British and European travellers are using AirAsiaX’s service to Kuala Lumpur and in turn connecting onto AirAsia’s extensive route network to travelthroughout South-East Asia, to such popular destinations as Vietnam, Indonesia and Thailand.

AirAsia X says the move to Gatwick will facilitate onward development of the route with additionalconnecting options thanks particularly to the strong network of easyJet from the airport. It will continue touse an A340-300 with 327 seats on the route and will initially reduce frequencies to three times per week, butwill revert to five weekly flights in December and up to six rotations at a later date.

Austrian boosts winter flights to TorontoAUSTRIAN AIRLINES IS TO ADD AN EXTRA WEEKLY ROTATION on its Vienna-Toronto services this winter tomeet increasing demand on the route. The European carrier is to offer four weekly flights from October 30,up from its normal three-times-weekly schedule offered during previous winter schedules. The flights will beoperated using a 767-300ER.

There has been a notable rise in demand for air services between Europe and Toronto with traffic up 9.5 percent in the past year to approximately three million passengers. Austrian has just a 2.6 per cent share of thistraffic, handling an estimated 76,000 passengers in the past year. But despite rising passenger demand Austrian’smarket share has slipped slightly due to increasing flights between Toronto and other points across Europe.

Safi Airways set for route growthAFGHANISTAN CARRIER SAFI AIRWAYS IS EXPECTED TO ANNOUNCE A NEW ROUTE into Asia after recentlywelcoming another A320 into its fleet. The aircraft, configured with 12 business class and 132 economy seats,will initially be used to boost capacity on flights between Kabul and Dubai.

The airline’s COO, Michael McTighe, has confirmed the new arrival will “boost Safi Airways’ plans todevelop new routes in the GCC and expand further into Asia”.

Alongside its twice-daily Kabul-Dubai route, Safi Airways currently offers a four times weekly service fromthe Afghan capital to Delhi. It had previously also operated flights to Europe, but was forced to suspend itsservices after the European Union added it to its operational blacklist due to safety issues.

The airline is currently the third largest operator in Afghanistan with a 16.9 per cent share of the estimated1.3 million passengers that travelled to or from the country in the past year. Kam Air dominates this sectorwith a 27 per cent share of traffic, followed by Ariana Afghan Airlines with an 18 per cent share.

Vladivostok Air launches Singapore serviceRUSSIAN CARRIER VLADIVOSTOK AIR HAS INAUGURATED A TWICE WEEKLY SERVICE between Vladivostokand Singapore, via Hong Kong, the ninth new route to be introduced at Singapore’s Changi InternationalAirport this year. The airline is using a two-class A320 on the route every Tuesday and Friday.

There are growing trade and tourism ties between Singapore and Russia and since the launch of the Russia-Singapore Business Forum (RSBF) in 2006, bilateral trade between the two countries has more than doubled,reaching S$5.2bn ($4.1bn) in 2010.

Passenger traffic between Singapore and Russia reached an all-time-high of 65,000 in 2010, representing a31 per cent growth year-on-year. Singapore also welcomed 55,000 Russian visitors in 2010, according to officialTourism Board statistics, an increase of nine per cent compared with 2009. During the first eight months ofthis year, air traffic movements and visitor arrivals from Russia increased by a further 34 per cent and fiveper cent, respectively, compared with the same period last year.

EasyJet adds new link to CreteBUDGET CARRIER EASYJET HAS CONFIRMED IT WILL LAUNCH A LINK to Heraklion in Crete from LondonLuton Airport from April 21, 2012, adding to its existing UK links to the Mediterranean island from Bristol,London Gatwick and Manchester. An estimated 268,000 passengers travelled on scheduled flights between theUK and Heraklion last year and easyJet held a 49 per cent share of this market, with passenger traffic up 3.1per cent on the previous 12-month period.

The airline will initially offer just a weekly rotation on the route but could boost its schedules subject tocustomer demand. It presently offers 10 flights per week from London Gatwick, three from Manchester andtwo from Bristol. It also flies to Crete from its Berlin Schoenefeld base on a twice-weekly basis.

Ryanair selects Wroclaw asfirst Polish baseIrish budget carrier Ryanair is to open abase in the Polish city of Wroclaw inspring 2012, its first in Poland and 46thacross Europe. The airline will initiallystation a single 737-800 at Wroclaw’sCopernicus Airport from March,boosting its network by more than athird with the addition of six newroutes.

The low-cost carrier is already thelargest at the facility offering links to 15destinations in Belgium, Ireland, Italy,Norway, Spain and the UK. It currentlyoffers more than 40 flights per weekaccounting for a 30 per cent share ofthe available weekly seats.

The new additions to its networknext year comprise Bournemouth,Chania, Malmö, Malta, Paris Beauvaisand Venice Treviso. All but one of thesedestinations are new for Wroclaw, withWizz Air already providing a three timesweekly link to Paris Beauvais.

In addition to this growth, Ryanairrevealed that it is considering establish-ing operations from the new WarsawModlin Airport, which is due to opennext summer. The former militaryairfield is currently being converted intoa civilian facility for use mainly by low-cost carriers.

Air Algerie boosts links toMontrealAir Algerie is to launch a thirdweekly rotation on its Algiers-Montreal route this winter, offeringa Saturday departure alongside itsestablished Tuesday and Fridayservices. The new frequency will beintroduced in the first week ofNovember and is the airline’s solelink to North America.

In the past year an estimated67,000 passengers travelled bet-ween Algiers and Montreal, amarket that has declined by around18 per cent in the past 12 months.The airline’s yield has also sig-nificantly weakened as averageone-way fares have slipped from$390 to $362 and its overall share ofthe market has declined from 76 to65 per cent.

Although Air Algerie is the onlyairline offering a non-stop service, itfaces competition from Air France,via Paris Charles de Gaulle, andRoyal Air Maroc via Casa-blanca.The French national carrier has seenits share of the traffic rise 41 percent in the past year and notably ithas a much stronger yield than itsNorth African rivals with averageone-way fares of $605. However,these are also down significantly onthe performance 12 months earlier.

ROUTES NEWS

10 | AFM • ISSUE 75 September-October 2011



FINANCING THE WORLD'S FLEET, ONE AIRLINE AT A TIMEOver $3 billion of committed aircraft purchases since 2010

Jackson Square Aviation is one of the world's fastest growing privately-held aviation capital provider, with a fleet of over 70 new and committed next generation aircaft, serving multiple airlines throughout the world.

Operating leases · Finance leases

Engine finance · Pre-delivery payments

Acquisition of three Boeing 737-800’s

Sale/leaseback of two 2010 Airbus A319-100’s

Sale/leaseback of two 2011 Boeing 737-800 deliveries

Sale/leaseback of five 2011 Boeing 737-800 deliveries

Sale/leaseback of three 2011 Airbus A320-200 deliveries with PDP funding

Sale/leaseback of four Boeing 737-800 deliveries and one 2008 Airbus 319-100

Sale/leaseback of one 2010 Airbus A320-200 delivery and one 2010 A319-100 delivery

PDP funding of four 2011 Airbus A320-200 deliveries and sale/ leaseback of two 2008 Airbus A319-100’s

Sale/leaseback of one 2011 Boeing 777-300ER delivery and three 2011 Airbus A320-200 deliveries

Sale/leaseback of two 2011 Airbus A330-300 deliveries

Sale/leaseback of seven 2011-2012 Airbus A320-200 deliveries with PDP funding

Sale/leaseback of three 2011 Boeing B777-300ER deliveries


ATR and Embraer appear to be cruising at high altitudewhile Bombardier, the main competitor to both, iscutting production rates amid an apparent dearth oforders. But the Canadian manufacturer is confidentthat ongoing sales campaigns will soon start to redressthe balance. Bernard Fitzsimons talks to the company’smarketing VP, Philippe Poutissou.

AFTER THREE DECADES IN THE BUSINESS, REGIONALturboprop manufacturer ATR is enjoying its best year for

sales with a total of 145 aircraft sold by the end ofSeptember. Accordingly, production will be ramped up from oneper week – the current rate – to 72 throughout next year, 80 in2013 and 85 in 2014.

Embraer delivered the last two of 890 ERJ145 family aircraftearlier this year and saw its orders for the EJet pass the 1,000mark just seven years after the first delivery.

Deliveries of around 100 aircraft per year left Embraer with abacklog of 248 aircraft at the end of September, including 160E190s, 29 E195s, 53 E175s and six E170s.

The trend toward bigger aircraft is clear – most of Embraer’srecent orders have been for the E190, while ATR 72s outnumber42s by 136 to nine in this year’s order book. This suggests thatthe mooted 70-seat variants of the Sukhoi Superjet andMitsubishi Regional Jet may never leave the back burner wherethey have languished since the early days of their programmes.

Sukhoi Civl Aircraft and its marketing partner, SuperjetInternational, continue to make progress despite slow deliveriesand reported technical problems with the three aircraft deliveredby mid-October. Adding launch orders for the Sukhoi Business Jetto 2011’s firm orders from airlines and lessors and total ordersreach 73. Mitsubishi expects to fly the MRJ next year and startdeliveries to its launch customer ANA two years later.


FOCUS: Regional jet manufacture

Delivered in August, the first of 30 E190s for China’sCDB Leasing will be operated by China Southern.

Aeroflot’s second SSJ100entered service in August.

AFM76_Regional Jets new_AFM71 04/11/2011 13:30 Page 12



REGIONAL AIRCRAFT:BOMBARDIER’S MISSIONTO COMPETE

The first of 18 ATR 72-600s was deliveredto TRIP Linhas Aéreas in October.




Embraer, meanwhile, is evaluating its options ahead of a decisionon its next move. Now that both Airbus and Boeing haveconfirmed re-engining plans for their single-aisle models, theBrazilian manufacturer is finalising its own strategy; anticipatedbefore the end of the year, it is widely expected to involve abigger jet.

Bombardier’s offeringsBombardier has irons in each of these fires, with its Q400 turbo-prop, CRJ-700/900/1000 regional jets and all-new CSeries. But, itis cutting production rates for both the Q400 and CRJ next year.However, Bombardier has delivered around 2,700 regional jetsand turboprops.

Philippe Poutissou, the company’s marketing VP, explains thatalong with both varieties of regional aircraft, Bombardier has twotypes of customer. “Because we have a large installed base wesee continued demand from the existing customer base,” he says.For example, many airlines are looking to expand their existingfleet – as was the case with Lufthansa’s partner Eurowings, which took additional CRJ900s this year, and established CRJoperators, Brit Air and Air Nostrum, which up-gauged their fleetsto the CRJ1000.

Carriers in North America are also likely to grow their fleet, saysPoutissou. While he admits that the market has been relativelyslow over recent years because of challenges faced by its major

The first of 15 Q400s for india’s SpiceJet was delivered in August.




Korean Air has ordered 10 CS300s with 10options and a further 10 purchase rights.

For an ultra quiet aircraft,it’s making a lot of noiseThe noise and emission levels of the new Sukhoi Superjet 100 are substantially better than the ICAO rules require. The noise and excitement comes from regionaloperators around the world who recognise that the Sukhoi Superjet 100 family has the combination of state of the art technology, reliability – plus lower fuel consumptionand operating costs – they need to build networks and profitability. Sound good?Find out more at www.superjetinternational.com

We know where the world’s going

airlines, he still believes that Latin America is a “sound base fromwhich we will see continued demand for the aircraft.”

At the same time, both the Q400 and CRJ continue to find newmarkets. “On the CRJ, we have a fleet that is being built up in SouthAmerica,” he says. “Puna in Uruguay ordered three more aircraft atthe beginning of this year to add to their growing fleet of CRJ900s.”Meanwhile, Q400s started operations with three new customers,including Jazz – “the first Q400s that have gone into the AirCanada system” – and two airlines in new growth markets.

India’s SpiceJet has ordered 15 aircraft to expand its network intosecondary markets. The first entered service in October: “By allaccounts they’re quite pleased with it and in fact they ramped upthe utilisation of the aircraft quite quickly,” Poutissou comments.

“We also have just recently delivered the aircraft to Smart Aviationin Egypt, and again that’s a new market for the Q400 so we’revery much looking forward to the aircraft in that area.” The levelof marketing activity remains quite high, he adds, both withexisting and new customers.

The CSeries has also continued to attract orders with five newtransactions in the 2Q, three with undisclosed customers as wellas significant orders from Korean Air and Braathens Aviation,parent of Norwegian regional operator Malmö Aviation. “Thatcertainly was very encouraging for the CSeries programme,”Poutissou comments. “We now have eight customers, 133 firmorders, 119 options and 10 purchase rights, so just over 250commitments for the aircraft. And our teams are engagedthroughout the world with quite a wide range of operators, as well as lessors, who are interested in evaluating the CSeries.

Some are fairly early in understanding what the aircraft can doand others are very heavily engaged to the point of talkingcommercial terms.”

As with any new programme, “there’s quite a bit of interest inunderstanding how we’re progressing, so the discussionstypically take longer than they would with our establishedprogrammes, such as the Q4000 and the CRJ.”

One interesting trend Poutissou identifies is growing interestfrom Latin America and Africa: “It’s no secret that the demandfor new aircraft has been shifting from our traditional markets ofNorth America and Europe into the new markets for aircraft orthe high growth market for aircraft and aviation, such as Asia

and of course China. Something we don’t hear about asoften is that there is quite a bit of interest from Latin Americaas well as Africa, which are areas where demand for air travel

is growing at fairly high rates, albeit from a smaller basethan the Asian market.”




Having stretched the CRJ to 100 seats in its latest version,Bombardier is also looking at a bigger Q400. “We certainly havea lot of interest from the media and from customers and so wecontinue to evaluate how we can take advantage of that interest.”He adds; “We’re uniquely positioned in that the Q400 today hassome growth potential, so we’re looking at what this Q400 couldbe and how it could meet the customer demand.” However, as aprogramme has not yet been launched, “we can’t offer anyspecifics or a firm date for when this aircraft would be available.”

Turboprop demandDemand for turboprops has increased significantly since the 2005step change in fuel prices and Poutissou expects the trend tocontinue. “If you look at our forecast for the next 20 years –we’re unique in that we look at turboprop and regional jetdemand – we foresee that of the 6,100 aircraft to be delivered inthe 20- to 100-seat category, just over 40 per cent of those areexpected to be turboprops.” That is a major difference comparedwith the delivery rates seen at the beginning of the last decade.

“If you look at the delivery rates for all the manufacturers in 2000to 2005, turboprops represented more like 15 to 20 per cent ofthe deliveries. But going forward we think it will stabilise ataround 40 per cent.”

That is not only because of fuel prices. “A lot of the turbopropfleet that is in service today is older than the regional jet fleet aswell, so you have a replacement cycle for turboprops that islikely to come sooner than that for regional jets. If you think ofthe earlier generation, what I call the classic turboprops, youhave a whole bunch of 50-seat turboprops, whether they wereFokkers or ATRs or Saabs or early Dash 8s from Bombardier, thatare going to hit their replacement cycle sooner than CRJs and EJets.”

Bombardier’s latest regional jet has had a very good entry intoservice (EIS) with Air Nostrum and Brit Air, says Poutissou. “Wedid our CRJ1000 deliveries in December, I think they actually putit into scheduled service right around the new year. Certainly thereports we have are that the aircraft went into service with ahigher than expected despatch reliability. It hit 99.4 per cent inthe first six months, which was intended in that it’s a commonaeroplane to the existing CRJ700 and -900, so there was a lot oflearning from those programmes.

“But the other pleasant surprise was the reports from our engin-eers and from the operators that the fuel consumption of theaircraft was actually better than we had anticipated early on. Infact, the number they are now showing is that it was four per

cent better than what we were marketing the aircraft at. Sothat’s all very attractive. As the airlines will put it, when you takean existing aircraft, you stretch it and you don ‘t increase the fuelconsumption by the same percentage; you’re essentially gettingfree seats. They like that.”

The Q400One element in ATR’s recent success is the orders it has attractedfrom lessors. Similarly, Poutissou says leasing companies aretaking more interest in the Q400: “We’ve certainly seen with thelarger single-aisle aircraft that the lessors have been in the marketin a big way. But they’re also looking to own assets that are veryliquid; that’s really their business model. They want to be able toown assets that will have good demand when they’re looking toput the aircraft out for lease, but they also want to make surethat it has a life beyond that lease term.”

A number of Q400s are already owned by lessors. “They weren’tnecessarily purchased from us by lessors but the lessors have thengone in and done sale and leaseback transactions or assisted infinancing aircraft that are placed with existing operators. Whatthey find attractive about an aircraft like the Q400 is that it is veryversatile, and not only in the various airline business models –such as the low-fare model, or the hub feeding model, or thehigh service model we’re seeing with Porter in Canada.”

The aircraft has also found its way into special missionapplications with conversions to support fire-fighting missions inFrance with the Sécurité Civile. “We have a few Q400s that arein corporate as well and we have a few Q400s that have been putinto cargo use. So the lessors are looking to make sure that theassets have a good life beyond their current application. TheQ400 is fairly unique in the market today – it is the largest, and Ilike to call it the most productive turboprop, because it providesmore payload, more seats and a higher speed than any otherturboprop out there. They [lessors] see that as an attractive assetto have for the long-term.

“Many lessors are actually looking to diversify their portfolios. Everylessor is of course interested in the very large fleets of 737s andA320s but that’s also where the most competition exists, so theystart to look for other assets that are liquid and that have goodlong-term value. They certainly see that in the large turboprops.”

The market is always fluctuating and economic conditions arechallenging, as Poutissou accepts. “The best we can do is to makesure we have competitive products out there and we support theoperators in their business planning… that’s our mission.”

The CRJ1000 entered service with AirNostrum at the beginning of the year.


AIR TRAVEL HAS BECOME VASTLY MORE AFFORDABLEin the past 20 years. The benefits to consumers of market

liberalisation, low-cost carriers (LCCs) and cut-throatcompetition have progressed from the US to Europe to Asia. Butever-increasing passenger numbers put a strain on infra-structure and increases demand for the limited capacity offeredby existing airports.

For airlines, those limits can be defined by slots. The EuropeanCommission describes a slot as “a permission given by a co-ordinator to use the full range of airport infrastructure necessaryto operate an air service at a co-ordinated airport on a specificdate and time for the purpose of landing or take-off.”

Increasing demand for a limited pool of resources inevitablymeans that those resources become more expensive. In 2008British carrier, BMI, boosted its net asset value from £12m ($19m)to £800m ($1,273m) by incorporating its portfolio of slots atLondon Heathrow into its balance sheet.

Today, BMI’s parent, Lufthansa, is keen to offload the loss-makingBritish carrier, and has valued its slightly diminished holding of8.7 per cent of Heathrow’s slots at €515m ($717m). However, itwould probably have to accept a lower price as any sale wouldencumber a buyer with a dysfunctional airline as well as thesought-after slots at Heathrow.

Regulatory evolution to slot allocationThe European Union (EU) first regulated slot allocation in 1993.Principally, it declared that an airline which operated a slot in agiven scheduling period was entitled to that same slot in thefollowing period. This is commonly known as the ‘use it or lose it’rule, whereby a carrier – subject to certain exceptions – is liableto forfeit a slot that it has used less than 80 per cent of the timeduring the previous scheduling period.

Unused slots and newly created ones are placed in a pool. Half ofthese pooled slots should be distributed first to new entrants,which are defined as those holding a small number of slots in theprevious period, while the remainder should be distributed fairlyby a fully independent co-ordinator. Each EU member state hasits own co-ordinator and no distinction is drawn between slotsfor international or domestic services.

Europe and the US have taken markedly differentapproaches to addressing capacity constraints at busyairports. The former has favoured regulation, whereasthe latter has taken a largely laissez-faire approach.Now, however, both are seeking a new way to deal withthe demands of 21st century travel. Alex Derberinvestigates.

Oddly enough, given the values ascribed to them, there islittle agreement on who owns slots. At the world’s busiestairports, where demand for landing and take-offpermissions either constantly or periodically exceedssupply, many airlines still hold slots that they weregranted by aviation regulators decades ago, when airportcapacity was not an issue. That airlines or their ownersshould benefit from the sale of those rights, handed outoriginally for free by public bodies, rankles some.

While European regulation specifies that “slots may beexchanged, one for one, between air carriers”, it is silenton the question of secondary trading – the sale of slotsfrom one airline to another. This occurs in an informal, so-called ‘grey’ market, which can lead to inefficiency, as thecommission noted in 2008: “Where there is notransparent market for the scarce resource of slots atcongested airports, incumbent air carriers are often notaware of, or confronted with, the full opportunity costs of

SLOT ALLOCATION:THE RULES AND SCHEMES EXPLAINED


FLEET OPERATIONS: Slots

AFM76_Slots_AFM74 04/11/2011 11:04 Page 18



the slots they hold. As a consequence an air carrier mayretain a slot even when its market value far exceeds thevalue that the air carrier generates from retaining andusing the slots.”

In Europe the lack of a formal trading regime has led to agrey market where slots allocated by an independent co-ordinator can then be exchanged for other slots, sold formoney or exchanged for other types of consideration.Regulators tacitly approve of such trading, though they doinsist that only aircraft operators ‘own’ slots.

The US, in contrast, has for the most part left slot allocationunregulated and as a result slot trading has evolveddifferently. Accordingly, slots in the US can be owned bynon-airlines, such as banks, often as the result of the slotsbeing put up as security by an airline for a loan.

Generally, there is no slot allocation in the US, and aircraft

gain access to or departure from an airport simply byqueuing in the air or on the tarmac. Most US airportspublish their runway capacities and airlines schedule theirflights accordingly, accepting that they may be subject toholding patterns and substantial delays at busy airports,especially during bad weather when landing and take-offcapacity shrinks. Rights to use other airport facilities, suchas gates, are negotiated separately.

However, at a handful of very busy airports, such as NewYork JFK, slots have been allocated to control seriouscongestion, but the FAA has emphasised that it has theright to withdraw such slots. Airlines in Europe, by contrast,assume that they ‘own’ slots provided that they satisfy the‘use it or lose it’ rule. As a consequence, US carriers tend toamortise the cost of their slots over seven years, whileholders of European slots – despite the theoretical risk ofslots being withdrawn for abusive practise – tend to regardthem as being owned in perpetuity.




airline composition at Europe’s major hubs, where 93 per cent ofslots are operated by carriers with historic rights. These airlineswill often hang on to slots for several seasons even if the servicesthey operate through them are loss-making.

One solution to this problem is to create a transparent marketwhere slots are bought and sold rather than allocated accordingto historical use. Mechanisms for sale could be auctions bygovernment or an appropriate independent regulator, theestablishment of a formal marketplace for secondary tradingbetween airlines, or a combination of the two. The goal of anymarket-based system would be to promote the efficient use anddistribution of slots.

A test bed for this market-based approach is in the US, whereslots were first imposed at four highly congested airports – NewYork JFK, New York La Guardia, Chicago O’Hare and WashingtonRonald Reagan – in 1986. Domestic slots were initially allocatedaccording to historical or ‘grandfather’ rights and these, despitethe lack of a definitive proprietary interests in them, were thentraded in a variety of ways.

A cursory evaluation of airline composition at the four ‘high-density’ airports suggests that slot trading did little to encouragenew players at busy hubs: at all four airports the dominantairlines in 1986 had by 1999 massively increased their presences.However, others have pointed out that guaranteed slots – asopposed to queues – could have motivated those carriers torationalise their operations at the big hubs, thereby increasingefficiency.

Limits of the present systemsA report published by the commission in 2011 found thatEuropean airports could handle 28 million more passengers ayear if slot allocation rules were revised. The commissionidentified four main problems with the current system: sub-optimal use of capacity at some airports; the power of incumbentcarriers to retain slots at the expense of new entrants at anairport; inadequate operation of slot co-ordination; and lack ofconsistency with the Single European Sky.

To encourage better use of capacity and help new entrants atairports, the commission has proposed changes to the criteriagoverning minimum use and suggested granting more slots tonew entrants. Such changes could make a dramatic difference to

Line maintenance services that generate greater liftfor your fleet and your bottom line.

It’s in our power.™


“

”



Service soars with the Eagle.

With more than 85 years of experience producing and maintaining dependable engines, Pratt & Whitney Global Service Partners constantly innovates new ways to serve its customers. From our EcoPower®

engine wash services that maximize fuel effi ciency to our Engine Management Programs that minimize downtime to our EcoFlight™ Solutions fuel conservation service that optimizes

airline operations, our 24/7 line maintenance services combine the experience of an OEM with the fl exibility of an MRO. Discover the OEMRO® advantage at pw.utc.com/OEMRO.

Nonetheless, the FAA wanted to encourage new entrants to theairline market, partly to better serve small communities, and in2000 it began to ease slot restrictions at the busy hubs wherethey applied. Congestion at affected airports rocketed and theFAA has since proposed several alternatives, including slotauctions and congestion-based landing fees, whereby it costs anairline more to land at busy periods.

EU slot reformThe European Commission is due to report in November 2011 itsproposals for reform of slot allocation. Leaked copies of thereport suggest that, like in the US, it will favour slot auctions,which has drawn ire from regional airline representatives, who argue that such auctions squeeze out small carriers frombig hubs.

“Over time, regional airlines will be driven from hub airportsand will lose routes. In turn, regional airports will lose their con-nections to hubs and people in the regions will suffer reducedmobility and reduced economic flow,” argued Andrew Bray ofthe European Regions Airline Association (ERAA) in a blog post.

As auctions would probably mean the end of the 50 per cent rulefor allocating pooled slots to new entrants (or those with onlysmall slot holdings at an airport), one can see why the ERAA isworried. However, providing slots to smaller players could beensured through different mechanisms. Ideally, that goal wouldbe achieved through the secondary trading of auctioned slots,but a more direct method would be to offer discounts to regionalairlines for certain slots at auction.

Talk of auctions at Europe’s busiest airports, though, may be adistraction, as they would only apply to newly created slots orthose given up by established airlines. At an airport like Heathrow,where government has decided there will be no additionalrunway, capacity is unlikely to increase and 99 per cent of slotsare already held by airlines with grandfather rights they would beunwilling to lose. In 2006, 92 per cent of London Gatwick’s slotswere retained year to year by an airline. Moreover, the existenceof secondary trading means that an airline is far more likely to sellits slot rather than return it to a pool.

Market-based measures may well improve the efficient allocationand operation of slots in the long-term, but any new system willinevitably be tacked on to the old rule-based one, wheregrandfather rights apply. How European and US regulatorsreconcile the two will be crucial to relieving the strain on airportcapacity going forward.

Over time, regional airlines will be driven

from hub airports and will lose routes. In turn,

regional airports will lose their connectionsto hubs and people in the regions will suffer

reduced mobility and reduced economic flow



FLEET OPERATIONS: Future freight

FUTUREFREIGHT

The air cargo business is changing fast and emerging technologies should offer a substantialincrease in the industry’s productivity and quality standards. Chris Kjelgaard learns that freighteraircraft are becoming more efficient and environmentally friendly, but that the biggest driversof productivity will be information technology and automation.

AFM76_Future Freight_AFM74 04/11/2011 10:47 Page 22



ALTHOUGH AIR CARGO VOLUME DROPPED IN THE LATTERhalf of 2011 from its post-recession peak in the 2Q 2010

(when annual volumes were increasing at a rate of nearly40 per cent), IATA expects worldwide air cargo revenues this yearto reach $67bn. This is $1bn more than in 2010 and $29bn morethan in 2002 – which gives a good indication of the growth in air cargo. IATA forecasts that the 1.4 per cent revenue tonne-kilometre traffic growth from 2010 to 2011 will bring a total2011 revenue of $67bn.

Furthermore, despite today’s short-term blips, longer-term pro-jections for the air cargo industry indicate solid growth. For 2012,IATA forecasts cargo traffic growth of 4.2 per cent and theindustry will achieve a revenue total of $70bn for the first time,according to Michael Vorwerk, president of IATA Cargo NetworkServices. However, IATA expects cargo yields to remain flat in the2011-2012 period as movements in fuel prices and marketdemand cancel out each other’s effects on yield.

“We expect a continued but slowing growth in airfreight over thelong run, averaging between three to four per cent,” says Robertvan de Weg, senior VP of sales and marketing for the freightairline, Cargolux.

Lufthansa Cargo’s view is even more optimistic. Markus Witte,Lufthansa Cargo’s head of technology development, says: “Weassume annual growth of five per cent per year” as a long-termaverage. Although growth may dip in a given year, subsequentyears of recovery will then see growth of more than five per cent,keeping the average up. Within the overall picture, LufthansaCargo sees stronger traffic growth in Asia compensating foraverage annual growth of just two to three per cent in somedeveloped nations.

Technological development in the near-termThe air cargo industry is beginning to embrace a host of newtechnologies that should allow it to maintain a long-term growthtrend while substantially improving the industry’s cost, efficiencyand quality. There is good news for the shipper too, according toMarc Baan, VP of communications, marketing and e-freight forAir France-KLM Cargo. IATA’s business case for its e-freightinitiative (discussed in more detail later) indicates that shipperswill be the main beneficiaries of the efficiency improvementsgenerated by the initiative. “For Air France-KLM Cargo andMartinair Cargo [a subsidiary of AF-KL Cargo] this is important, asthis means that air cargo will become more attractive comparedto other means of transportation,” says Baan.

Markus Witte, head of technologydevelopment Lufthansa Cargo

There seems a strong consensus on which new technologies willmost significantly affect the air cargo business. Most crucial isfuel efficiency and environmental friendliness, both of whichmust continue to increase. Big changes are being made in thisarea – of example, Cargolux has recently taken delivery of thefirst 747-8F, the most capable freighter type ever built.

Air France-KLM Cargo and Cargolux, in particular, say the use ofsustainable biofuels – which are being extensively trialled by AirFrance in their daily operations – will be critical in making air cargo‘green’ and thus more acceptable to an increasingly environ-mentally-conscious public. However, the experts agree that in yearsto come, information technology and cargo-tracking technologieswill affect the airfreight business even more than aircraft efficiency.

Information and control are fundamental areas of technologicaldevelopment for the air cargo industry, according to Vorwerk.

“The replacement and/or upgrade of legacy operational airlinesystems will enable airlines to use modern technologies andmessaging standards that will improve significantly the qualityof information provided within the supply chain,” he says.

“Introduction of XML-based messaging enables the air cargosupply chain to structure and transmit more business data content,which is required to replace current paper documents and to fulfilincreasing regulatory requirements – for example, security.Technologies such as web services allow the exchange of data andupdates between partners in the supply chain in real time.”

Adds Vorwerk: “The intelligent and efficient use of modern,state-of-the-art information technology for process control,process improvement and visibility in air cargo transportation will help establish and maintain more efficient and more robustprocesses in air cargo operations and ground-handling.Furthermore, developments in cloud computing and relatedtechnologies will make it easier and more cost-effective to usemobile devices and thereby to extend the reach and exchange ofrequired information processes.”

Lufthansa Cargo’s Witte envisages “a basket of technologies. Iwould call them automatic identification and tracking techn-ologies”, which he believes will have the greatest near-term impact.Combined with the information-processing power of modern IT,tracking technologies – such as 1D and 2D barcoding, or taggingwith radio frequency identification devices (RFIDs) – it’s allowing aircargo shippers, forwarders and carriers to track individual pieces ofcargo on a real-time basis. “This will enable us to improve ourproductivity tremendously,” says Witte.


24 | AFM • ISSUE 76 November December 2011


Van de Weg says that, along with new aircraft technologies andenvironmental and sustainability improvements in aviation, “theinternet, with its ease of access to communication” is having thegreatest impact today on how the air cargo industry conductsbusiness. Likely to have most impact is radio-frequencyidentification (RFID), which, explains van de Weg, allows “real-time and piece-level tracking of shipments as they pass throughthe logistics – for example, arrival to warehouse, loading onaircraft or hand-over to consignee.” RFID will be capable of

“eliminating human errors and delays because of data input, incontrast to barcodes. This represents a real efficiency gain.”

Vorwerk says widespread introduction of RFID technology is notquite that simple. “RFID is a technology that shares informationbut has yet to find its niche for any mode of cargo movement. 1Dand 2D barcodes are still the most favoured format and these doallow for a large amount of information. Ground handlers alsowant more data to be sent to them electronically to allowsmoother data flows from the customer direct to the forwarder,to the consignee and to government agencies.”

However, notes van de Weg, the use of barcodes can introducemistakes because of the way data is gathered. This is very unlikelywhen using RFID tags. On the plus side for barcodes, “as RFIDtechnology becomes more acceptable and less costly, it may beused, but driving a barcode instead to the [internet] cloudthrough a URL may even provide more capabilities than will RFID,”says Vorwerk.

Air France-KLM Cargo agrees that the implementation of RFID“on a large scale seems challenging,” but it also believes thetechnology will have a big impact. “We have… been conductingpilots with RFID chips at our Schiphol hub,” says Baan. One suchpilot programme involved co-operation with DHL Forwarding,TNT, Schiphol Airport and the Amsterdam seaport. “We continueto investigate possibilities on how RFID can support our processesand foresee [an] impact especially for special products, likepharma [pharmaceuticals] and valuables. Before the end of thisyear, we will start a project to evaluate the value of RFID onpharma flows in co-operation with one of our global freightforwarders. For the highly sensitive and expensive pharma flows,it is crucial to maintain temperature. Using RFID can allow us toreact more rapidly to any deviation in temperature fromacceptable parameters.”

“Mobile devices like iPhones and iPads are definitely changing theway business is transacted all over the world,” says Vorwerk.

“The lower cost of these electronic devices and the use of Wi-Fiand cellular transmissions make them useful on a global basis.This will change the way air cargo is moved in the future as well,from things like getting up-to-date shipment status, sharinginformation and providing tools, to managing aircraft loadingand weight and balance.”

According to Vorwerk, mobile devices will bring an end to paperprocess and “put the person on the shed floor in charge.” Headds: “By removing paper from the process, you can re-engineerthe handling of the cargo to include cargo verification usingbarcode information, weigh the cargo with new electronicdevices, improve build-up of cargo for better aircraft utilisationand pass on information about the shipment itself electronically.”

IATA’s e-freight initiative, robotics and theInternet of ThingsIATA’s four-phase e-freight initiative, launched in December 2004,is at the heart of making the air cargo industry paperless. In-volving shippers, forwarders, airlines, ground-handling agentsand customs authorities, e-freight’s mandate is to use electronicmessaging to create a paper-free process that will eventuallyreplace all 32 of the paper documents that currently accompanyevery piece of cargo. To date, e-freight is live in 44 countries and 380 airports. A commercial vendor community has beenestablished to support IATA’s e-freight vision, pilot programmesand e-messaging quality measurement. IATA has published the e-freight Handbook, a comprehensive guide to e-freight, and hasmade it available online.

New electronic messaging standards have replaced 20 paperdocuments for shipments to some airports and in 2011, IATA istargeting e-freight to document 10 per cent of all cargo on livetrade lanes globally.

IATA’s goal is that by 2015, e-freight messaging is the sole sourceof paper documentation for 20 of the 32 shipping documents.According to IATA, this would save the air cargo industry $4.9bnannually; reduce the average cargo transfer time by 24 hours;eliminate documentation errors caused by manual data-entry andinterpretation of paper documents; allow online tracking andtracing of individual pieces of cargo; and eliminate the need for7,800 tonnes of paper documents each year. That is theequivalent of 80 747 freighters full of paper.

“AF-KL Cargo and Martinair Cargo strongly believe in e-freight andother e-developments to improve efficiency, transparency andquality in the air cargo chain,” says Baan. “We have been thefront-runner in e-freight development from the start and ourexperiences are really positive, but we see that it still is difficult toget the critical masses to adopt e-freight.”

Robert van de Weg,Cargolux sr VPmarketing.

Michael Vorwerk,president, cargonetwork services, IATA.




There is still much work to do on the e-freight initiative, believesBaan. “The paperless challenge is a long-term one. The IATA e-freight project allows us to currently replace 12 documents inthe supply chain for 44 countries. Next to that, we have astandard for eight other paper documents, which is notapplicable in all those countries. We still need to define astandard for the 12 remaining documents in order to be able toreally go paperless in the airfreight supply chain. This is a long-term challenge, for which the whole industry needs to push. AF-KL Cargo is working together with the different authorities andother key players in the chain to adopt a paperless way ofworking. We believe that e-freight is the future, and it is ourambition to remain front-runner in this development.”

Beyond even current tracking technologies and the e-freightinitiative, Witte sees other technologies ‘on his radar’, which hebelieves will ultimately have a huge impact on the way the aircargo industry does business. One is the ‘Internet of Things’, aconcept that envisages the use of current tracking technologies –such as RFID and 1D or 2D barcoding, as well as future sensingtechnologies yet to be developed – to uniquely identify everyobject in the world and create a virtual representation of it online.By doing so, the possibilities for making logistics more efficientare vast.

Witte says that Lufthansa Cargo is performing high-level re-search with other organisations – particularly the Fraunhofer-Gesellschaft, Europe’s largest applied-research organisation – toinvestigate how the Internet of Things could influence theairfreight industry. Lufthansa Cargo wants to understand howthe Internet of Things could affect the air cargo industry’s internallogistics within the warehouse, its external logistics in terms ofinterlining cargo shipments between airlines, and how it couldstreamline the process of consigning, forwarding, shipping,inspecting and delivering airfreight.

Another emerging technology on Witte’s radar is robotics. Whilethe science of robotics is taking rapid strides, it is still functionallyfar from adequate for routine use by the air cargo industry, saysWitte. But its potential regarding the automation the entire aircargo-handling process is clear. Today’s robots that are designedto pick up objects tend to have one grasping arm and are capableof repetitively picking up and moving objects of a uniform sizeand shape. However, this is not very useful for the airfreightbusiness, which deals with a vast number of differently sized anddifferently shaped objects. However, according to Witte, futuregenerations of robots will have multiple limbs capable of

grasping, manipulating and moving objects of different sizes andshapes. Hence robotics will be of considerable interest to the aircargo industry.

Lufthansa Cargo is also closely following the evolution ofautomatically-guided ground vehicles. Large numbers of suchvehicles now exist and are in use at some airports. LondonHeathrow Airport has recently introduced automated pod-cars toshuttle individual passengers or small groups between terminalson special roadways, replacing more than 80 CO2-emitting busruns between terminals each day. However, Witte says they arestill too expensive for routine use in cargo-handling. Vehicles withdrivers still make more sense economically, but this may notremain the case for long.

Quantifying benefits and identifyingessential skillsIt is not easy to quantify how much efficiency these technologicaladvances will deliver. Nor is it easy to decide what performancemetrics will be needed to measure these improvements. But onethings is clear, says Witte: these emerging technologies willimpact the airfreight business and change how people work andthe skills they need to do so. There is still a great deal of manuallabour involved in today’s cargo handling and documentation. Inthe future, as automation of cargo handling and digitising ofdocumentation becomes prevalent, workers in the air cargobusiness will need to acquire certain skills, particularly thoseneeded to manage the ‘human/machine interface’.

Van de Weg has his own view on how much the emergingtechnologies can improve the efficiency and productivity of aircargo. He suggests they may have an effect similar to thatachieved by “giving the warehouse floor a ruggedised, hand-held[wireless computer] that allows for a five to 10 per cent resourcereduction in office functions that normally also deal with datainput arising from a paper-based warehouse administration.”

Vorwerk notes that “costs can [be] and are measured, ifcompanies develop internal measurement standards”. Forinstance, “Cargo 2000, ISO and other standards are key if theyare followed. Simple things however, can be measured with justsome simple observations. How many times a day does a personre-key in data? How many files are pulled? How much time isspent making phone calls when the information could be pushedto the customer electronically via e-mail, text-messaging or otherelectronic devices? Simple time-study measurements will showvalue.” However, “Something that is harder to measure is howmuch money will you make?”

Where the likely effects of new technologies on the air cargoindustry can be measured, the numbers look very encouraging.

“Detailed studies done by IATA and others show significantimprovements in process time, reducing warehousing cost andcycle times in the movement of cargo,” says Vorwerk.

Although air cargo is becoming more efficient, van de Weg pointsout that other modes of transport such as sea freight arebecoming more efficient too, so it is not clear whether air cargocan take significant market share from any other transport mode.But this is not a problem, believes Witte. “Modality is basically adecision made by the shipper – it’s a matter of managing thesupply chain.” He adds: “Air cargo is just one to two per cent oftotal [world cargo] volume, but in value it’s about 30 per cent,”and air cargo should be able to retain its high-value nature.

“I estimate that the introduction of new technologies will help usdefend our position”, says Witte. That is a reassuring message forthe air cargo industry from one of its leading technologists.

“

”

Modality is basically a decision made by the

shipper – it’s a matter of managing the supply

chain. Air cargo is just one to two per cent of

total [world cargo] volume, but in value it’s

about 30 per cent

Marc Baan, VPcommunications and e-freight, Air France -KLM cargo.


When the stakes are high, support

is invaluable

premier powerplant* management support at our ngertips

www.royalaero.com*including main engines, APU’s & thrust reversers

Royal Aero Technical is part of the Royal Aero Group GmbH

R A Technical LtdNo.20 London Road, Horsham, W. Sussex, RH12 1AY, United Kingdom

T: +44(0) 1403 720020E: [email protected]

Predictive nancial exposure analysisRisk assessmentAsset valuationLease management (acceptance & return)Independent shop visit managementTechnical counselDownturn planningFleet health check



FLEET OPERATIONS: LCC airport selection

Two airports served by low-cost carriers, France’s Marseille and Romania’s Timisoara, are underscrutiny by the European Commission (EC) for potential abuse of state aid rules. Smaller airports havebeen exempt on the basis that they help stimulate the economies of less developed regions, butannouncing the investigation, Joaquin Almunia, commissioner responsible for competition, pointedlycommented: “Some regional airports in Europe are no longer so new or small.” Martin Roebuck reports.

Check-in time with Norwegian at Gatwick is now down to 43 seconds.

THE EC IS CONCERNED ABOUT THE REDUCED CHARGESMarseille offered incumbent airlines and discounts for newroute launches after it received €7.6m ($10.5m) towards

the construction of its MP2 low-cost terminal in 2005 to 2007.The commission questions whether the aid was “proportionateto the objectives pursued” and is also investigating aid given toWizz Air at Timisoara, as well as support for infrastructuredevelopment at a number of German airports.

Despite previous run-ins with the European authorities oversubsidies, Ryanair is not under investigation at this time. Withmost airlines (even low-cost carriers) looking to provide multipledaily frequencies to capital cities and large regional centres in thesearch for higher-yielding business passengers, Ryanair is nowalmost alone in pursuing smaller, more remote destinations –

“flying into the forest”, as the strategy was memorably describedduring the recent World Low Cost Airlines Congress in London.

The carrier exacts a high price in return for its business. It hasacquired a reputation for forcing down airport charges and

demanding marketing support from their regional owners orlocal tourist authorities.

Discussing the difficult trading climate at the congress, KenO’Toole, the carrier’s director of new route development, said:

“The challenge for airports in dealing with Ryanair becomes evengreater in sharing some of the growth we can bring. Passengerswill only fly if the fare is cheap enough to stimulate their interest.We will continue to look for cost reduction from airports.

“We’re tough, we have Ryanair interests at heart but [thecommercial benefit] has to be two ways. The majority of ourbases have been with us since inception. There is one to two percent attrition per year,” O’Toole claimed.

Data compiled by analyst Ralph Anker suggests a much greateryear-to-year churn. Ryanair was flying 1,148 routes in September2010 and over the last year has launched 289 services, more thanthe next seven airlines combined. But it also terminated 170routes, around 15 per cent of its total.

LOW-COSTAIRPORTSELECTION

AFM76_LCC Airports_AFM74 04/11/2011 11:59 Page 28



Several of Europe’s fastest growing airports in 2010 couldattribute much of their passenger growth to the ‘Ryanair effect’,including Kaunas, which rose 77.3 per cent; Trapani, which rose57.5 per cent; and Brindisi, which climbed 47.2 per cent.Conversely, Ryanair’s withdrawal of flights from Reus, Lübeck andShannon left them among the biggest losers.

But O’Toole insisted: “It is not in our interest to drop a routewithout giving it an opportunity to develop. We are prepared tolose money for up to 18 months if we see forward progressionon the fare. If we’re still losing money then, it’s not in our interest– or the airport’s.”

Typical of Ryanair’s hardball approach was its announcement thatit would cut its 11 aircraft based at Alicante down to two fromOctober 2011, and reduce weekly flights by more than two-thirds. Its CEO, Michael O’Leary, said he had no choice becausestate-owned Spanish airport operator Aena was forcing him topay more than €2m ($4.15m) a year for “unnecessary facilities”such as airbridges.

He claims this equates to a cost of 32 cents per passenger, anddelays turnaround because boarding is only possible through thefront door. “Ryanair is an efficient low-cost carrier and we havemany other alternatives across Europe if Alicante doesn’t want toprovide low-cost facilites,” O’Leary said.

The carrier has since rescinded its immediate threat and will notcut Alicante services until November 2012. However, it has heldmeetings with the new Corvera airport 50km away, scheduled toopen next summer. Corvera, owned by the regional governmentof Murcia, is outside Aena control and may have greater flexibility.

Listening to the customerBAA’s sale of London Gatwick to Global Infrastructure Partners(GIP) two years ago, which was enforced under a UK competitionruling, illustrates the benefits that airports under separateownership can deliver to passengers, says Simon Edwards, theairport’s airline business development manager. Gatwick’s capitalprogramme has neared £1bn ($1.58bn) since GIP took charge andincludes developments that were not previously under

(Inset photo) BudapestAirport welcomed the fivemillionth passenger to flythere with Wizz Air. Luckytraveller Gergely Tatár wasgreeted by Balázs Varró,head of communicationsWizz Air (left), and PatrickBohl, head of airlinedevelopment and strategyfor the airport (right).




Kam Jandu saysBudapest Airport haskept passenger chargesat its low-cost terminalwell below those of themain terminal and ofrival Vienna.

Pegasus was able todictate terms at Istanbul’sformerly quiet KürtkoySabiha Gökçen Airport.

consideration, such as a streamlined security system. Other workwas already in the pipeline, but the new owner was careful toconsult its customers on their most important priorities. Edwardsclaims that BAA’s previous attitude was to tell carriers: “This ishow it works.”

In August, the airport introduced special assistance lanes toimmigration in its South Terminal complementing similar lanes in outbound security. The lanes are designed for passengers with young families, and Gatwick is the only UK airport to offerthis facility.

Such initiatives appear to be bearing fruit. August passengernumbers increased by 3.6 per cent year-on-year and aircraft loadfactor improved by 1.4 percentage points to 88.4 per cent,Gatwick’s highest ever figure. To keep the momentum going, theairport took the radical decision to eliminate landing charges forthe winter season, when flights halve from summer levels.Historically, these charges have made up 15 per cent of winteraviation revenue.

Around 43 per cent of the population in Gatwick’s catchmentarea, south of London, is of the highest socio-economic ranking(groups A and B), yet perhaps counter-intuitively, LCCs areresponsible for much of its recent increase in traffic.

EasyJet now has 49 aircraft based there and has introducedflexible fares as it targets business travellers. “We’re talking tothem about the potential use of business lounges and ourpremium security lanes,” Edwards says.

Norwegian Air Shuttle, which now offers 90 departures a weekfrom Gatwick, achieved a 20 per cent yield improvement aftermigrating from Stansted. The carrier wanted to replicate thecompletely self-service check-in system that it operates inScandinavia, and has whittled check-in time down to just 43seconds.

For Malaysia’s longhaul LCC, AirAsia X, which is also switchingfrom Stansted after just two years there, Gatwick’s catchmentand the prospect of higher yields were again important criteria,along with the airport’s superior rail connections to London.

The Gatwick Express takes passengers rapidly and frequently tothe city of London for business or to the West End for theshopping, and AirAsia X opted for the South Terminal specificallybecause of the direct rail link (it could also have chosen the NorthTerminal as Gatwick does not concentrate LCCs in a single facility).

Domestic air connections were also a factor as AirAsia X plans todouble its weekly UK services to six from mid-December and willbe shipping 327 passengers on each A340-300 flight. Eleven UKairports can be reached from Gatwick and Edwards also expectsAirAsia X passengers to fly back out to Europe. “We don’t havethe frequencies offered by Heathrow, but we serve a wider rangeof destinations,” he says.

The contrasting fortunes of Gatwick and Stansted’s dedicatedlow-cost and cargo operation are becoming clearer by the day.Stansted is an efficient airport designed for 30 million passengers,yet is likely to fall below 18 million this year, 30 per cent down onits 2007 peak. Despite its earlier disposal of Gatwick, BAA hasalso been ordered by the UK government to sell Stansted. It isseeking a judicial review, but the long-running dispute isunhelpful for an airport that depends on Ryanair and easyJet for90 per cent of its passenger traffic.

A 1.2 per cent decline in passenger numbers for the first sevenmonths of 2011 underlines the vulnerability of secondary airportssuch as Stansted, BAA has admitted. Strategy director AndrewMacmillan said LCCs were “moving their planes around Europe insearch of cheaper landing fees”.

Underlining the point, easyJet will transfer three A319s fromStansted when it sets up at London Southend next April. The carrierwill launch 10 European destinations from Southend, its 11th UKbase, which is completing a multi-million pound upgrade of itspassenger terminal and has already opened a new railway station.Up to eight trains per hour are promised to the main Olympicvenue and central London. EasyJet claims passengers will be ableto get from the aircraft to the train in 15 minutes.

Where capitals fight for trafficEastern Europe is structured differently and international hubs stillhave much low-cost business to compete for. Kam Jandu, directorof aviation at Budapest Airport, says 22 per cent of passengersflying from there are non-Hungarian.

Travellers from Romania, Bulgaria, Croatia, Serbia, Bosnia andUkraine are prepared to drive hundreds of kilometers becausethey have so few direct connections from their own countries.They helped Budapest grow nine per cent in the first eightmonths of 2011.

There is little rival infrastructure within Hungary, according toJandu. “Vienna is our biggest competitor and stole a lot of trafficfrom us in the past when we were less proactive”.

Budapest’s dedicated LCC facility is Terminal 1, the oldest part ofthe airport, while the newer Terminals 2a and 2b host full-servicecarriers. The terminals are 6km apart, so budget passengers, whoaccount for 24 per cent of overall traffic, do not directly benefitfrom Budapest’s new SkyCourt shopping and catering facility,which links Terminals 2a and b.

Low-cost traffic is mainly origin and destination (O&D), so fewpassengers need to transfer from Terminal 1. It’s a “limitedproduct” with few retail outlets, no business lounges and noairbridges, Jandu says, but passengers can get kerbside to airsidewithin 15 minutes if they wish.

The terminal’s rail link to central Budapest benefits those on shortleisure stays, but the commercial proposition to carriers is the realclincher. Charges are €5 ($7) per passenger lower than atTerminal 2 and €8 ($11) less than at Vienna, a sufficient incentiveto attract easyJet, Wizz Air, Jet2.com, Germanwings andNorwegian to Budapest.


Launch customer 747-8 Intercontinental

Just in time to say goodbye.

Keeping you in the air. The best time to develop services for tomorrow’s technology is today. That’s why we’re doing that now — along with integrating new models, materials and technologies in our portfolio as quickly as possible. Our goal is to keep your aircraft off the ground, tomorrow as well as today. So let the future arrive: our services will be waiting. Talk to us.

Lufthansa Technik AG, Marketing & SalesE-mail: [email protected] Call us: +49-40-5070-5553

More mobility for the world

116_210x278_JustInTime_AirlineFleetManag_ICv2_RZ01.indd 1 20.10.2011 10:05:25 Uhr



Wizz Air introduced Forli, Italy, and Târgu Mure in centralRomania for the summer season, and increased flights from twoto three services per day to London Luton. Jet2.com meanwhileadded a second UK service, three times a week to Edinburgh, toits existing daily Manchester schedule.

Turkish LCC Pegasus Airlines demonstrated the power of a majoranchor tenant when it decided to operate from Kürtkoy SabihaGökçen, a little-used former military airport on the Asian side ofIstanbul, and lobbied successfully for a change of name. “No onehas ever heard of Kürtkoy,” says Pegasus’ president and CEOSertaç Haybat. “Sabiha Gökçen serves Istanbul.”

The airport was handling one million passengers a year, had nopublic transport and offered just 150 parking spaces – more thanenough, Pegasus was initially told, because passengers’ wiveswould drive them there.

The airport moved into private ownership in 2008 and the newmanagement has been more realistic, rebuilding the terminal(with space for 5,700 cars) and successfully attracting newbusiness. Pegasus accounted for half of the 11.6 millionpassengers who flew through Sabiha Gökçen last year. Land isavailable for a second runway, which could be built in five years.Haybat claims the airport could eventually overtake Istanbul’smain international hub, Atatürk in the European half of the city.

Pegasus operates to 19 domestic and 13 internationaldestinations. “We mostly fly to major cities but if we cannegotiate a good deal at a secondary airport, we will use them,”Haybat says. “You can get attractive terms but the price of fuelcan be very high.”

Aircraft overtake the busAzul Brazilian Airlines, an LCC founded only three years ago hasrevitalised the Brazilian market by re-establishing a country-widenetwork of point-to-point connections.

Trey Urbahn, chief commercial officer at Azul, says that formerflag carrier, Varig, and three or four large competitors formerlyoperated from up to 200 commercial airports across the country.He estimates that no more than 120 are fully operational today.GOL and TAM, the survivors of a major shake-out in the aviationsector, built hub-and-spoke systems that left travellers unable tofly directly between cities with populations of a million or over –such as Curitiba, Campinas, Vitoria and Salvador.

Azul now connects 40 cities. It has opened 21 new domesticroutes this year and hopes to repeat this in 2012, using secondarylocations where main airports are full or the required slots areunavailable.

This has encouraged bus travellers to go by air for the first time.Urbahn claims the number of air journeys in Brazil overtookinterstate bus trips for the first time in August. “It’s whathappened in the US 40 years ago. Long-distance bus journeys aregoing to disappear.”

For example, only 35 passengers a day were travelling fromCampinas to Salvador, because it used to take four and a halfhours to transit via Sao Paulo. With flying time now down to onehour and 45 minutes, numbers have swelled to 600.

“We offer an enormous number of city pairs that were notavailable before. We have broken rule number one in the low-cost rulebook by offering big connectivity,” Urbahn says.

However, with only one per cent of existing routes carrying morethan 150 people per day, he claims the 737s and A320s that GOLand TAM operate are too big. Azul’s fleet of 40 E195s, E190s andATR72s enables it to penetrate markets its rivals cannot. “TheATRs enable us to test new routes of less than 500kmwhere small jets are not feasible,” Urbahn says. “With 70-seatturboprops you can build routes and operate cost-effectively twoor three times a day.”

The potential bonus is exclusivity. On more than half of its routes,Azul is the sole carrier. Yet out in the rural areas, even given amarket that’s growing at 25 per cent a year, Azul has found itdifficult to win support from civic leaders, except in locations suchas Iguazu where tourist boards are more proactive.

“You have to work hard even to convince local authorities to investin basic facilities such as adequate fire cover,” Urbahn says. “Wevisit the mayor and the civic associations to work out what thetravel patterns are and where service has been lacking. They don’thave perfect information, so there is risk in entering a new market.But in such an under-served market, you can afford to go in small.”

China’s first LCC, Spring Airlines, has generated greaterenthusiasm. “Regional governments are offering land toencourage us in and stimulate local economies,” spokesmanZhang Wuan told the London conference. This has enabledSpring to open up northern cities such as Shenyang andShijiazhuang that were previously overshadowed by Beijing.

The carrier has extended the same philosophy to its internationalservices and is operating to smaller Japanese airports such asIbaraki and Takamatsu from its Shanghai hub.

Thai Smile, an LCC that is to be launched by Thai Airways nextyear, will serve five domestic destinations initially but couldreplace the parent airline from 2013 on routes to regionaldestinations such as Penang in Malaysia, and Hyderabad in India.Woranate Laprabang, MD of the Thai airline, explains that thenew subsidiary could reintroduce services previously suspendedby Thai, including Surabaya, Indonesia and Kaohsiung, Taiwan. Itwill also look for secondary destinations the group has neverserved, including Cochin and Ahmedabad in India, Da Nang inVietnam, and Kota Kinabalu in Malaysia.

“We’re also interested in opening up the Chinese tourist marketthrough secondary airports such as Shenzhen and Hangzhou,”says Laprabang. “But they’re mainly state-owned airports in thispart of the world, so it’s difficult to negotiate rates.”

Azul has redrawn theaviation map in Brazil,introducing point-to-pointservices at pricescompetitive with long-distance buses.


Our work... flies with you.Put your components in our hands. Because at Iberia Maintenance we have the capacity

to overhaul and repair over 7,000 kits per year and we know how to care for everything down to the

tiniest detail, so your aircraft will operate faultlessly. But we really like to go that bit further:

we want to take you further, because our work... flies with you.

IBERIA MAINTENANCE Commercial & Development Direction. Madrid - Barajas Airport, La Muñoza. 28042 Madrid, Spain.Phone: +34 91 587 49 71 / Fax: +34 91 587 49 91. E-mail: [email protected]

www.iberiamaintenance.com

check_FPA:AFNM57 17/9/08 15:39 Page 3

Historically, the aviation sector has been characterised by restrictivebilateral agreements between governments, which agree exclusivesovereignty over flights in their own airspace. In the 1980s the focus ofbilateral agreements switched from states agreeing to restrict competitionin their own airspace, to states agreeing reciprocal access. Marjorie Holmes,partner, at Reed Smith explains.

THE DEREGULATION OF EUROPE’S AVIATION SECTOR in the 1990s led to themandatory inclusion of a clause in all European Union (EU) bilateral air service agreements.The clause extended the benefit of an agreement to all EU member states. Among the

backdrop of these developments, airlines have continued to agree co-operation through differenttypes of agreements including slot allocation, the joint operation of routes, codesharing, co-operative joint ventures, and the co-ordination of schedules.

Joint operation of routesThe joint operation of routes by two airlines within the European Union (EU) is one of the mostcommon types of agreement between airlines. This typically covers the creation of joint programmesand schedules, the sharing of cost and revenue, co-operation on the sale of capacity, and the jointoperation of flights.

PROTECTION VERSUSGROWTH:BILATERALRESTRICTION


TRADING, LEGAL & FINANCE: Bilateral restriction

AFM76_Bilateral_AFM74 04/11/2011 10:55 Page 34



Where they were of limited duration, these agreements used toenjoy a block exemption (under Regulation 1617/93). However,this exemption expired in 1999 and was not renewed.

Until 2004, it was possible to seek an individual exemption fromthe national competition authorities of EU member states. Thiswas an unusual procedure in relation to most other sectors thataffect trade across Europe, as individual exemption would besought from the European Commission. This differencehighlights the unique aspect of the aviation industry in the sensethat an airline must first agree access to slots with the nationalregulator of the aviation sector (the Civil Aviation Authority in theUK) in order to fly to destination airports within that nation.

Joint operation agreements are therefore now subject to theprohibition on anti-competitive agreements and the prohibition ofthe abuse of a dominant position as provided for by the Treaty onthe Functioning of the European Union (TFEU). This means thatjoint operation agreements that where previously automaticallypermitted by the block exemption, are now subject to the scrutinyof competition law and now require self-assessments (also knownas Article 1EC Regulation 1/2003) to claim exemption.

Joint operation agreements may now qualify for exemptionwhere they result in over-riding benefits to consumers. This is thecase between Maersk Air and Deutsche Lufthansa (1991), where

the joint operation agreement involved marketing or financialassistance by a larger airline to a smaller airline for a limitedperiod to allow the smaller airline a commercial position on anew route.

Another scenario in which an exemption may be claimed is whentwo smaller airlines agree joint operation on a route in order tocompete with a larger airline, which had previously dominatedthat route. Pre-2004, when the commission granted individualexemptions, it granted Finnair and Maersk Air a six-yearexemption in relation to such an agreement.

Conversely, joint operation agreements which do not providebenefits (such as those described above), for example where twoairlines agree to co-operate on a route in which they alreadyenjoy significant market power, are now be likely to be prohibitedon the basis that they are anti-competitive.

Codeshare agreements under the spotlight Another common type of co-operative agreement between air-lines is the codesharing agreement. Codeshare agreements allowseats on a flight operated by one carrier to be offered for sale byanother carrier, under its own code and flight number. The carrieroperating the flight is known as the ‘operating carrier’, while thecarrier marketing the flight under its own code is known as the‘marketing carrier’.




Codeshare agreements often involve an underpinning set ofoperational and commercial agreements relating to access to,and prices for, seat inventory.

Codeshare agreements have been categorised for competitionlaw purposes. In a report written for the commission and pub-lished in January 2007, it defines codeshares in its three forms;parallel operation on a trunk route, which is “where two airlinesfly the same route and have a reciprocal codesharing agreementwhereby airline X sells seats on airline Y’s flight and vice versa.”

Also, where there is unilateral operation on a trunk route, whichis “when airline X has a codesharing agreement with airline Y, forX to sell seats on airline Y, in relation to a route that only airlineY flies.”

And lastly, ‘behind and beyond’ routes –“where airline X, fliesbetween points A to B and airline Y flies between points B to C,and airline X has a codesharing agreement with airline Y to sellseats on airline Y’s flight between B to C.”

In the 1990s, through a series of three civil aviation liberalisationpackages in the EU, a single european aviation market wascreated, guaranteeing that airlines within the EU are entitled tooperate under the same conditions. Bilateral air serviceagreements between an EU member state and another countrymust now include an EU designation clause, which recognisesthat the terms of the agreement apply equally to all EU airlines.

The European Court of Justice (ECJ) in its 2002 Open SkiesJudgement confirmed this position. As such, where a countrynow agrees slots with a particular airline in a particular EUmember state, it must also allow slots for airlines in other EUmember states. This deregulation within the EU led to an increasein the popularity of codeshare agreements.

The commission and commentators have recognised thatcodeshare agreements can provide benefits to passengers suchas quality and frequency of service, but the commission hasnevertheless expressed concern about their potentially anti-competitive effect.

The 2007 Report found that, “in many cases, routes withcodeshares have shown increasing capacity and decreasing fares,although the evidence appears to suggest that in some cases,codeshare partners on parallel operated routes do not competeas much as occurs on similar routes without such arrangements.”

The report also found that in general, codeshares to behind andbeyond points are seen by industry stakeholders (including usergroups and the travel trade) as advantageous to customers asthey provide “increased destinations and connectivity” and that

“airlines commonly cite greater network extent and customerreach as their primary motivation for entering into codeshareagreements.”

However, conversely, the report found that “parallel operationcodeshares are perceived as potentially more of an issue, in thatthey may deter entry by competitors, although on relatively thinroutes airlines contend that they provide better departure time(and consequent connection) opportunities for customers.”

Competition and the Office of Fair TradingIn 2002, before individual exemptions were abolished, the Officeof Fair Trading (OFT) decided that an airline alliance agreementbetween British Midland and United Airlines, which includedunilateral codeshare agreements, would provide benefits toconsumers that outweigh its anti-competitive effects.

The OFT considered that, although the agreement would inprinciple infringe the prohibition against anti-competitiveagreements, the requirements for an individual exemption underArticle 101 were met because the alliance would create customerbenefits including new and improved connecting and non-stopservices.

The decision recognised the network effects that characterise theaviation industry and examined the outcome of the agreement interms of networks. In particular, it looked at the effect of otherairlines to obtaining feed traffic from British Midland’s Europeannetwork from Heathrow and competition between the StarAlliance and other alliances. The decision noted that networkeffects may also exist in the form of competition for corporate


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

AOG 24/7 SUPPORT

www.willislease.com +1.415.408.4769

WILLIS LEASE FOR ALL YOUR ENGINE NEEDS

ENGINE LEASING

• Conserve your capital• Customized lease terms

to suit your requirements• All engine types• Short-term, long-term, AOG

POOLING

• The means to keep your spares working for you • Easy access to spares when you need them • Online leasing reservation system• Pre-approved terms and conditions

TRADING

• Buying and selling engines• Purchase / leasebacks• Convert non-liquid assets to cash

ENGINE LEASING.PLANE AND SIMPLE.



The investigations involve parallel codeshare agreements wherethe airlines agree to sell seats on each others’ flights on theGermany-Turkey routes (in the case of Lufthansa/Turkish Airlines),and on the Belgium-Portugal routes (TAP Portugal/BrusselsAirlines), where each party to the agreement already operatestheir own flights between their own airport hubs. The codeshareagreements also permit carriers to sell as many seats on theirpartner’s flights on a free-flow basis, whereby they can sell asmany as they want so long as seats are available.

The commission has indicated that it considers that free-flow,parallel codeshare agreements of the type under scrutiny in thesecases may have an anti-competitive effect leading to higherprices and less service quality for customers on the relevantroutes. Given that the airlines already operate their own flightsbetween the hubs, the commission believes that they should becompeting with each other to sell seats on these routes.

It is notable that the commission launched the investigations onits own initiative and not as a result of a complaint. It seems likelythat the investigations were, in part, prompted by the findings ofthe 2007 Report, which highlighted that codeshare agreementson parallel routes may be more susceptible to anti-competitivepractices.

In conclusion, it is clear that codeshare agreements can beviewed as both beneficial and harmful to competition. Whetherthe parties in a codeshare both operate flights on the routeswithin that agreement, appears to have a significant impact onwhether the competition authorities view the codesharenegatively or positively.

Codeshare agreements operated on a unilateral basis, on a trunkroute, or on a behind and beyond route, are more likely to beseen to increase competition as they allow one airline to competeon a route that it does not already operate. Otherwise they areindividually exempt from competition prohibitions as it provides abenefit to consumers.

In contrast, the commission’s on-going investigations suggestthat parallel codeshare agreements are likely to attract scrutinyfrom the regulator. This may be the case where there is no limitto the number of seats that may be sold by the marketing carrieron the operating carrier’s flight. The commission considers thatthese types of codeshare agreements may have an anti-competitive effect as they remove the competition that wouldotherwise be present between two airlines.

In sectors with low barriers to entry, if two parties have anagreement which restricts competition and as a result increasesprices, a third party can enter the market and introducecompetitive pressure. This is difficult in the aviation sector asairlines must first be given take off and landing slots by nationalaviation regulators. Given that the volume of available slots islimited, both by airport capacity and airspace, there is a uniqueconstraint on decreasing barriers to entry in the aviation sector.Other barriers to the sector include the higher frequenciesenjoyed by larger airlines and their position at hub airports.

As a result of the unique dynamics at play in the aviation sector,the commission should be careful to avoid imposing a blanketprohibition on parallel codeshare agreements as this could leadto an unnecessary reduction in services offered to the consumer.Instead, the commission should follow the Department ofJustice’s (DoJs) lead and require parties in parallel codeshares toagree conditions that prohibit collusion on fares or otherwisereduce competition.

deals or for members of frequent flyer programmes where thecustomer or member’s choice of airline for a particular flight maybe influenced by the network of the carriers as well as the serviceon the particular route.

However, the decision related to an alliance expansion agreementinvolving the co-operation between two airlines on route,schedule and price co-ordination, and codesharing, jointmarketing and revenue sharing. The decision does not thereforeconsider the anti-competitive effect or benefit to customers thatmay be achieved by codesharing in isolation of the overall allianceexpansion agreement.

Although cases in this area have generally considered codeshareagreements in combination with other types of co-operativeagreements, the commission has recently placed codeshares inthe spotlight. Two investigations into parallel codeshareagreements on trunk routes were launched in February 2011, inone case, between Deutsche Lufthansa and Turkish Airlines andthe other between TAP Portugal and Brussels Airlines.


Conversion Center

Commercial Jet is anauthorized conversionfacility for AeronauticalEngineers, Incorporated

Email: [email protected]

Mailing AddressPO BOX 668500Miami, FL 33166

Headquarter Facility4600 NW 36 Street, Bldg 896Miami Intl. Airport, FL 33166

FAA approved Repair Station OMJR606K. Commercial Jet logo and C-JET Priority Care are registered trademarks of Commercial Jet, Inc.AEI is a registered trademark of Aeronautical Engineers, Inc

sm

.

Inside USAOutside USA 305-341-5150Fax 305-871-0076

1-877 319-0683

When aircraft face unexpected operational issues, Commercial Jet

has the solution: We call it Our industry-leading

solution for unscheduled maintenance is designed to return your

aircraft to service quickly and efficiently.

C-JET Priority Caresm

Known for reliable and responsive aviation services for more than 20

years, Commercial Jet has earned the trust of the world's leading

airlines, owners and operators. We have the expertise and capacity to

handle your most challenging maintenance and modification jobs

including freighter conversions and pre-servicing new aircraft.

Of course, we are experts in nose-to-tail scheduled maintenance as

well. For advanced MRO solutions, contact Commercial Jet today.

.

Unscheduled maintenance problem?

Need to bring an aircraft on line?

Seeking a reliable “nose-to-tail” service partner?

Right on Schedule


FLEET FINANCE – Deals reportAircraft Transactions September 1 – October 1, 2011

Boeing727-212 Unknown Broken Wing 21348 JT8d-17 1977-07 Sold 2011.09.07737-230 MFP Aeronautics Bank Of Utah 23158 JT8d-15 1985-01 Sold 2011.09.23737-219 Santaco Airlines Star Air Cargo 23470 JT8d-15a 1985-12 Sub-Leased 2011.09.16737-229c Nolinor Aviation Laserline Lease Finance 21738 JT8d-17 1979-05 Sold 2011.09.16737-347 Aersale Aersale 23440 CFM56-3b1 1986-03 Sold 2011.09.22737-347 Sky King Aersale 23440 CFM56-3b1 1986-03 Leased 2011.09.30737-33a Air Batumi Alba Star 23628 CFM56-3b1 1986-10 Returned 2011.09.02737-33a RPK Capital I Alba Star 23628 CFM56-3b1 1986-10 Returned 2011.09.02737-3b7 Nordic Aviation Vision Air Int. 23700 CFM56-3b2 1987-09 Returned 2011.09.14737-3s3 Deutsche Bank US Airways 23712 CFM56-3b2 1986-12 Returned 2011.09.30737-3s3 Deutsche Bank US Airways 23733 CFM56-3b2 1987-01 Returned 2011.09.21737-3s3 Mountain Capital Wells Fargo 23733 CFM56-3b2 1987-01 Sold 2011.09.21737-3y0 Pembroke Germania 23921 CFM56-3c1 1988-01 Returned 2011.09.15737-3y0 A.J. Walter Pembroke 23921 CFM56-3c1 1988-01 Sold 2011.09.15737-3l9 Pembroke Germania 24221 CFM56-3b2 1988-08 Returned 2011.09.15737-3l9 A.J. Walter Pembroke 24221 CFM56-3b2 1988-08 Sold 2011.09.15737-35b Pembroke Germania 24237 CFM56-3b2 1988-09 Returned 2011.09.15737-35b A.J. Walter Pembroke 24237 CFM56-3b2 1988-09 Sold 2011.09.15737-35b Pembroke Germania 24238 CFM56-3b2 1988-09 Returned 2011.09.15737-35b A.J. Walter Pembroke 24238 CFM56-3b2 1988-09 Sold 2011.09.15737-322 Midamerican Aircraft N380ua 24655 CFM56-3c1 1990-01 Sold 2011.09.21737-3y0 Southern Aircraft Consultancy JMV Aviation 24681 CFM56-3b1 1990-09 Sold 2011.09.08737-3m8 Aerosur ACG 25071 CFM56-3b2 1991-04 Leased 2011.09.26737-306 Equatorial Congo Airlines Privatair 27421 CFM56-3b1 1993-02 Leased 2011.09.08737-36n Celestial Shenzhen Airlines 28555 CFM56-3c1 1996-12 Returned 2011.09.21737-4k5 TUI Jet4you 24125 CFM56-3c1 1989-02 Returned 2011.09.30737-476 Samair Bank Of Utah 24439 CFM56-3c1 1992-03 Leased 2011.09.08737-406 SLF KLM KLM 24530 CFM56-3c1 1989-08 Returned 2011.09.29737-406 AG JetLeasing . SLF KLM 24530 CFM56-3c1 1989-08 Sold 2011.09.29737-406 Willis Lease AG Jet Leasing . 24530 CFM56-3c1 1989-08 Sold 2011.09.29737-4h6 AAR Int. MAS 26460 CFM56-3c1 1993-09 Returned 2011.09.21737-430 Flightlease Sky Airlines 27004 CFM56-3c1 1992-07 Returned 2011.09.08737-59d NBB BMA Lease Georgian Airways 24694 CFM56-3c1 1990-03 Returned 2011.09.28737-59d Tag Aviation NBB BMA Lease 24694 CFM56-3c1 1990-03 Sold 2011.09.28737-5k5 TUI Jetairfly 24927 CFM56-3b1 1990-11 Returned 2011.09.18737-5k5 Babcock & Brown TUI 24927 CFM56-3b1 1990-11 Sold 2011.09.18737-530 Classic 500 Lufthansa 25270 CFM56-3b1 1991-08 Sold 2011.09.22737-522 Merpati Airline Orix 26704 CFM56-3c1 1993-07 Leased 2011.09.04737-55s Armavia Geofly 28471 CFM56-3c1 1997-04 Leased 2011.09.02737-55s Slovakian Airlines Armavia 28471 CFM56-3c1 1997-04 Sub-Leased 2011.09.20737-524(W) Continental Airlines Wells Fargo 28899 CFM56-3c1 1997-07 Lease-Buyout 2011.09.15737-524(W) Utair Aviation BLF 28900 CFM56-3c1 1997-07 Leased 2011.09.15737-7ax Aramco Aramco 30183 CFM56-7b20 2000-10 Returned 2011.09.29737-7ax Aar Parts Trading Aramco 30183 CFM56-7b20 2000-10 Sold 2011.09.29737-7q8(W) ILFC Australia . Virgin Australia 30707 CFM56-7b24 2001-09 Returned 2011.09.08737-7h4(W) Southwest Airlines Boeing 36677 CFM56-7b24e 2011-08 Delivered 2011.09.14737-7h4(W) Southwest Airlines Boeing 36966 CFM56-7b24e 2011-09 Delivered 2011.09.27737-7k2(W) KLM Boeing 38634 CFM56-7b22e3 2011-08 Delivered 2011.09.06737-7k2(W) KLM Boeing 39257 CFM56-7b22e3 2011-08 Delivered 2011.09.28737-85p Lombard Air Europa 28384 CFM56-7b26 1999-10 Returned 2011.09.14737-8as(W) Utair Aviation RBGermic Aviation 29936 CFM56-7b24 2002-10 Leased 2011.09.14737-883 German Sky Airlines Sky Airline 30194 CFM56-7b26 2000-08 Sub-Leased 2011.09.28737-86j(W) Macquarie Aircraft Air Berlin 30570 CFM56-7b26 2001-06 Returned 2011.09.20737-8q8(W) Miami Air Int. Tui Airlines 30670 CFM56-7b26 2004-03 Returned 2011.09.05737-823(W) American Airlines Boeing 31129 CFM56-7b26e 2011-08 Delivered 2011.09.09737-823(W) American Airlines Wells Fargo 31129 CFM56-7b26e 2011-08 Sale-Leaseback 2011.09.14737-823(W) American Airlines Boeing 33220 CFM56-7b26e 2011-08 Delivered 2011.09.29737-8as(W) Ryanair Boeing 34988 CFM56-7b24e 2011-08 Delivered 2011.09.26737-8as(W) Ryanair Boeing 34989 CFM56-7b24e 2011-09 Delivered 2011.09.29737-8as(W) Ryanair Boeing 34990 CFM56-7b24e 2011-09 Delivered 2011.09.29737-8as(W) Ryanair Boeing 34991 CFM56-7b24e 2011-08 Delivered 2011.09.27737-8as(W) Ryanair Boeing 34992 CFM56-7b24e 2011-08 Delivered 2011.09.26737-8eh(W) GOL Transavia Airlines 35831 CFM56-7b27 2010-01 Returned 2011.09.23737-8eh(W) GOL Boeing 35852 CFM56-7b27e 2011-08 Delivered 2011.09.01737-8eh(W) GOL Transavia Airlines 36596 CFM56-7b27 2010-01 Returned 2011.09.16737-86n(W) GECAS Boeing 36825 CFM56-7b26e 2011-08 Delivered 2011.09.12737-86n(W) Jet Airways GECAS 36825 CFM56-7b26e 2011-08 Leased 2011.09.12737-86n(W) GECAS Boeing 36826 CFM56-7b26e 2011-08 Delivered 2011.09.16737-86n(W) Royal Air Maroc GECAS 36826 CFM56-7b26e 2011-08 Leased 2011.09.16737-86j(W) Air Berlin Boeing 36877 CFM56-7b26e 2011-09 Delivered 2011.09.26737-86j(W) ICBC Air Berlin 36877 CFM56-7b26e 2011-09 Sold 2011.09.26737-86j(W) China Southern ICBC 36877 CFM56-7b26e 2011-09 Leased 2011.09.26737-86j(W) Air Berlin Boeing 36886 CFM56-7b26e 2011-08 Delivered 2011.09.21


AIRCRAFT DEALS REPORT

Equipment New Owner/ Previous Owner/ Serial No. or No. of Date of Manf orModel Operator Operator (Orders)/(Options) Engine Model First Exp Deliv Equipment Date

AFM76_Deals _AF&NM Special Feature 04/11/2011 11:27 Page 40

737-8eh(W) GOL Transavia Airlines 37600 CFM56-7b27 2010-02 Returned 2011.09.30737-86j(W) RBS Aerospace Air Berlin 37754 CFM56-7b26 2010-05 Returned 2011.09.27737-8v3(W) BOC Aviation Boeing 37959 CFM56-7b26e 2011-08 Delivered 2011.09.22737-8v3(W) Copa Airlines BOC Aviation 37959 CFM56-7b26e 2011-08 Leased 2011.09.22737-8v3(W) ACG Boeing 38100 CFM56-7b26e 2011-08 Delivered 2011.09.01737-8v3(W) Copa Airlines Aviation Capital Group 38100 CFM56-7b26e 2011-08 Leased 2011.09.01737-84p(W) Hainan Airlines Boeing 38145 CFM56-7b26e 2011-08 Delivered 2011.09.26737-81b(W) China Southern Boeing 38913 CFM56-7b26e 2011-08 Delivered 2011.09.21737-8jp(W) NAS Boeing 39009 CFM56-7b26e 2011-09 Delivered 2011.09.29737-87l(W) Shenzhen Airlines Boeing 39150 CFM56-7b26e 2011-08 Delivered 2011.09.21737-8fz(W) Babcock & Brown Boeing 39321 CFM56-7b26e 2011-08 Delivered 2011.09.21737-8fz(W) MAS Babcock & Brown 39321 CFM56-7b26e 2011-08 Leased 2011.09.21737-838(W) Qantas Airways Boeing 39358 CFM56-7b24e 2011-08 Delivered 2011.09.12737-838(W) Qantas Airways Qf B738 39358 CFM56-7b24e 2011-08 Sale-Leaseback 2011.09.12737-81d(W) AWAS Boeing 39416 CFM56-7b26e 2011-08 Delivered 2011.09.19737-81d(W) Garuda Indonesian AWAS 39416 CFM56-7b26e 2011-08 Leased 2011.09.19737-8kn(W) Flydubai Boeing 40248 CFM56-7b26e 2011-08 Delivered 2011.09.12737-8kn(W) Avolon Boeing Company 40248 CFM56-7b26e 2011-08 Sold 2011.09.12737-8kn(W) Flydubai Avolon 40248 CFM56-7b26e 2011-08 Leased 2011.09.12737-823(W) American Airlines Boeing 40766 CFM56-7b26e 2011-08 Delivered 2011.09.20737-823(W) American Airlines Wilmington Trust 40766 CFM56-7b26e 2011-08 Sale-Leaseback 2011.09.22737-8zq(W) Tassili Airlines Boeing 40887 CFM56-7b26e 2011-09 Delivered 2011.09.28737-800(W) Utair Aviation Boeing (33) CFM56-7b26 2015-11 Ordered 2011.09.26747-446 Aersale Aersale 24423 CF6-80c2b1f 1989-08 Sold 2011.09.27747-446 Atlas Air Aersale 24784 CF6-80c2b1f 1990-05 Sold 2011.09.22747-446 Aersale 25260 Aersale 25260 CF6-80c2b1f 1991-08 Sold 2011.09.15747-446 Air Atlanta Icelandic Aersale 25260 CF6-80c2b1f 1991-08 Leased 2011.09.16747-446 Biman h Airlines Air Atlanta 25260 CF6-80c2b1f 1991-08 Sub-Leased 2011.09.21747-438 Qantas Airways TJT Leasing 25315 RB211-524g 1991-09 Lease-Buyout 2011.09.30747-438 RIL Aviation Ojr Qantas Airways 25547 RB211-524g 1992-08 Returned 2011.09.20747-438 A.J. Walter RIL Aviation Ojr 25547 RB211-524g 1992-08 Sold 2011.09.20747-4h6 Garuda Indonesian Pullmantur Air 25703 PW4056 1994-03 Sub-Leased 2011.09.28747-412 Garuda Indonesian Pullmantur Air 26549 PW4056 1994-04 Leased 2011.09.29747-4h6 Penerbangan Malaysia MAS 27044 PW4056 1994-08 Returned 2011.09.08747-4h6 Wells Fargo Penerbangan Malaysia 27044 PW4056 1994-08 Sold 2011.09.08747-412 Garuda Indonesian Pullmantur Air 27178 PW4056 1993-12 Leased 2011.09.29747-412 Wells Fargo Singapore Airlines 28028 PW4056 2001-03 Sold 2011.09.21747-444 Wells Fargo South African Airways 29119 RB211-524g/H2-T 1998-10 Sold 2011.09.23747-444 Wells Fargo Wells Fargo 29119 RB211-524g/H2-T 1998-10 Sold 2011.09.30747-444 Transaero Airlines Wells Fargo 29119 RB211-524g/H2-T 1998-10 Leased 2011.09.30747-419 ILFC Air New Zealand 29375 CF6-80c2b1f 1999-08 Returned 2011.09.30747-446 Transaero Airlines SB Leasing Ireland 29899 CF6-80c2b1f 1999-03 Leased 2011.09.27757-2g5 East Trust-Sub 2 Euro Atlantic Airways 24176 RB211-535e4 1988-03 Returned 2011.09.22757-2g5 Federal Express East Trust 24176 RB211-535e4 1988-03 Sold 2011.09.22757-236 Federal Express Pals I 24371 RB211-535e4 1989-03 Sold 2011.09.19757-28a Thomas Cook Mint Airways 24544 RB211-535e4 1990-03 Sub-Leased 2011.09.23757-258 Mk Aviation S.A. El Al 24884 RB211-535e4 1990-10 Returned 2011.09.01757-258 Federal Express Mk Aviation S.A. 24884 RB211-535e4 1990-10 Sold 2011.09.01757-256 Comtel-Air Privilege Style 26241 RB211-535e4 1993-07 Leased 2011.09.30757-28a(Etops) Mint Airways Thomas Cook 26276 RB211-535e4 1996-02 Returned 2011.09.23757-23n(W) Rak Airways Jet2 27973 RB211-535e4 1996-10 Sub-Leased 2011.09.30767-222 Boeing Company Wells Fargo 21874 JT9d-7r4d 1983-01 Sold 2011.09.02767-222 Boeing Company Wells Fargo 21875 JT9d-7r4d 1983-01 Sold 2011.09.02767-246 Jet Asia Airways Dynamic Jetlease 23214 JT9d-7r4d 1985-06 Leased 2011.09.09767-266er Executive Jet Executive Usa 23178 JT9d-7r4e 1984-06 Sold 2011.09.20767-201er Wells Fargo Wells Fargo 23900 CF6-80c2b2f 1987-09 Sold 2011.09.01767-201er US Airways Wells Fargo 23900 CF6-80c2b2f 1987-09 Leased 2011.09.01767-201er Wells Fargo Wells Fargo 23901 CF6-80c2b2f 1987-11 Sold 2011.09.01767-201er US Airways Wells Fargo 23901 CF6-80c2b2f 1987-11 Leased 2011.09.01767-201er Wells Fargo Wells Fargo 23902 CF6-80c2b2f 1988-04 Sold 2011.09.01767-201er US Airways Wells Fargo 23902 CF6-80c2b2f 1988-04 Leased 2011.09.01767-23ber Saudi Arabian Air Italy 23974 CF6-80c2b4 1988-03 Sub-Leased 2011.09.24767-201er Wells Fargo Wells Fargo 26847 CF6-80c2b2f 1993-03 Sold 2011.09.01767-201er US Airways Wells Fargo 26847 CF6-80c2b2f 1993-03 Leased 2011.09.01767-224er Northwestern Insurance Continental Airlines 30436 CF6-80c2b4f 2001-03 Returned 2011.09.16767-383er Pacific Airfinance Muzun Leasing 25088 PW4062-3 1991-02 Sold 2011.09.03767-383er Business Air Pacific Airfinance 25088 PW4062-3 1991-02 Leased 2011.09.03767-338er Qantas Airways Ril Aviation 25363 CF6-80c2b6 1991-10 Lease-Buyout 2011.09.02767-3y0er Euro Atlantic Sunwing Airlines 25411 PW4060 1991-11 Returned 2011.09.12767-3y0er National Air Services Euro Atlantic Airways 25411 PW4060 1991-11 Sub-Leased 2011.09.28767-304er Saudi Arabian Air Italy 28039 CF6-80c2b7f 1996-03 Sub-Leased 2011.09.23767-304er Saudi Arabian Air Italy 28041 CF6-80c2b7f 1996-04 Sub-Leased 2011.09.24767-3w0er Air LeaseCorp China Eastern Airlines 28148 RB211-524h 1996-06 Sold 2011.09.01767-3w0er Orient Thai Airlines Air LeaseCorp 28148 RB211-524h 1996-06 Leased 2011.09.02767-3bger Crane Aviation Deutsche Structured Finance 30566 PW4062 2000-10 Sold 2011.09.01767-3bger Ethiopian Airlines Crane Aviation Partners 30566 PW4062 2000-10 Leased 2011.09.02767-33aer AWMS Hawaiian Airlines 33424 PW4060 2003-02 Returned 2011.09.24767-316er LAN Airlines Boeing 40798 CF6-80c2b7f 2011-08 Delivered 2011.09.27777-212er Air Madagascar Euro Atlantic Airways 28513 Trent892b 1998-05 Leased 2011.09.18

Equipment New Owner/ Previous Owner/ Serial No. or No. of Date of Manf orModel Operator Operator (Orders)/(Options) Engine Model First Exp Deliv Equipment Date






Equipment New Owner/ Previous Owner/ Serial No. or No. of Date of Manf orModel Operator Operator (Orders)/(Options) Engine Model First Exp Deliv Equipment Date777-2q8er Aircraft Air Austral 29908 PW4090 1999-06 Returned 2011.09.09777-2dzlr Qatar Airways Boeing 41061 GE90-110b1l 2011-08 Delivered 2011.09.30777-35rer Jet Airways Turk Hava Yollari 35159 GE90-115b 2007-06 Returned 2011.09.15777-35rer Jet Airways Turk Hava Yollari 35162 GE90-115b 2007-08 Returned 2011.09.11777-3dzer Qatar Airways Boeing 38248 GE90-115b 2011-08 Delivered 2011.09.13777-31her Emirates Boeing 38987 GE90-115b 2011-08 Delivered 2011.09.20777-31her Emirates JSA Aircraft 38987 GE90-115b 2011-08 Sale-Leaseback 2011.09.20777-3fxer Etihad Airways Boeing 39683 GE90-115b 2011-08 Delivered 2011.09.14777-3f2er Turk Hava Yollari Boeing 40797 GE90-115b 2011-08 Delivered 2011.09.22777-312er Singapore Airlines Boeing (8) GE90-115b 2013-04 Ordered 2011.09.14777-300er Unknown Boeing (1) GE90-115b 2015-04 Ordered 2011.09.30787-881 ANA Boeing 34488 Trent1000 2009-11 Delivered 2011.09.25AirbusA300b4-622r Wells Fargo Japan Airlines 670 PW4158 1992-10 Sold 2011.09.01A300b4-622r Wells Fargo Wells Fargo 670 PW4158 1992-10 Sold 2011.09.22A300b4-622r Wells Fargo Japan Airlines 683 PW4158 1993-01 Sold 2011.09.08A300b4-622r Wells Fargo Japan Airlines 783 PW4158 1998-01 Sold 2011.09.16A300b4-622r Unknown Bank Of Utah 838 PW4158 2002-08 Leased 2011.09.30A310-304 White Airways Whitejets 494 CF6-80c2a2 1988-11 Returned 2011.09.29A310-304 National Air Services Hi Fly 495 CF6-80c2a2 1989-02 Sub-Leased 2011.09.27Acj318-100 Unknown Airbus (1) 2013-07 Ordered 2011.09.25A319-111 Brussels Airlines Celestial Aviation 2196 CFM56-5b5/P 2004-03 Leased 2011.09.01A319-111 Oh Aircraft Easyjet 2224 CFM56-5b5/P 2004-04 Returned 2011.09.16A319-111 Skyexpress Oh Aircraft 2224 CFM56-5b5/P 2004-04 Leased 2011.09.16A319-132 Wells Fargo Wells Fargo 2669 V2524-A5 2006-01 Sold 2011.09.01A319-132 US Airways Wells Fargo 2669 V2524-A5 2006-01 Leased 2011.09.02A319-132 Wells Fargo Wells Fargo 2690 V2524-A5 2006-02 Sold 2011.09.01A319-132 US Airways Wells Fargo 2690 V2524-A5 2006-02 Leased 2011.09.02A319-132 TAM ILFC 2784 V2524-A5 2006-05 Leased 2011.09.28A319-112 Deucalion Air Berlin 3346 CFM56-5b6/3 2007-12 Returned 2011.09.16A319-112 Air Namibia Deucalion 3346 CFM56-5b6/3 2007-12 Leased 2011.09.16A319-112 Deucalion Air Berlin 3586 CFM56-5b6/3 2008-07 Returned 2011.09.19A319-111 Easyjet Airbus 4837 CFM56-5b5/3 2011-09 Delivered 2011.09.09A319-112 Lufthansa Airbus 4841 CFM56-5b6/3 2011-09 Delivered 2011.09.19A319-115 Tibet Airlines Airbus (2) CFM56-5b7/3 2013-06 Ordered 2011.09.01Acj319-115 UAE Government Airbus 4822 CFM56-5b7/3 2011-08 Delivered 2011.09.29Acj319-100 Unknown Airbus (1) 2013-09 Ordered 2011.09.14A320-211 Astraeus Airlines Dubrovnik Airlines 136 CFM56-5a1 1990-10 Returned 2011.09.01A320-231 Wells Fargo Wells Fargo 164 V2500-A1 1991-07 Sold 2011.09.28A320-211 ANA NBB Brand 245 CFM56-5a1 1991-09 Lease-Buyout 2011.09.22A320-231 Evergreen Trade Wilmington Trust Company 292 V2500-A1 1992-01 Sold 2011.09.01A320-211 Smartlynx Airlines Travel Service Airlines 310 CFM56-5a1 1992-03 Returned 2011.09.29A320-211 ANA NBB Meadow 365 CFM56-5a1 1992-09 Lease-Buyout 2011.09.22A320-214 Goair Orbest Orizonia Airlines 3933 CFM56-5b4/3 2009-05 Sub-Leased 2011.09.03A320-212 Fly Aruba Wells Fargo 407 CFM56-5a3 1993-02 Leased 2011.09.12A320-232 Wilmington Trust CIT Leasing 4257 V2527-A5 2010-03 Sold 2011.09.23A320-232 Qantas Airways Wilmington Trust 4257 V2527-A5 2010-03 Leased 2011.09.23A320-232 Jetstar Airways Jetstar Airways 4257 V2527-A5 2010-03 Sub-Leased 2011.09.23A320-232 Wilmington Trust CIT Leasing 4303 V2527-A5 2010-05 Sold 2011.09.23A320-232 Qantas Airways Wilmington Trust 4303 V2527-A5 2010-05 Leased 2011.09.23A320-232 Jetstar Airways Jetstar Airways 4303 V2527-A5 2010-05 Sub-Leased 2011.09.23A320-214 Air Arabia Air Arabia Maroc 4310 CFM56-5b4/3 2010-05 Returned 2011.09.16A320-231 ACG Wells Fargo 447 V2500-A1 1993-09 Sold 2011.09.28A320-214 China Eastern Airbus 4711 CFM56-5b4/3 2011-08 Delivered 2011.09.11A320-214 China Eastern Airbus 4722 CFM56-5b4/3 2011-08 Delivered 2011.09.28A320-214 China Eastern Airbus 4729 CFM56-5b4/3 2011-09 Delivered 2011.09.30A320-231 Orix Thomas Cook 476 V2500-A1 1994-04 Returned 2011.09.20A320-231 PB Leasing Wilmington Trust 476 V2500-A1 1994-04 Sold 2011.09.20A320-216 Airasia Airbus 4807 CFM56-5b6/3 2011-08 Delivered 2011.09.01A320-216 Thai Airasia Airasia 4807 CFM56-5b6/3 2011-08 Leased 2011.09.01A320-232 Qatar Airways Airbus 4810 V2527-A5 2011-07 Delivered 2011.09.01A320-232 Tiger Airways Airbus 4812 V2527-A5 2011-08 Delivered 2011.09.22A320-214 Jackson Square Airbus 4814 CFM56-5b4/3 2011-08 Delivered 2011.09.29A320-214 Wells Fargo Airbus 4814 CFM56-5b4/3 2011-08 Sold 2011.09.29A320-214 Virgin America Wells Fargo 4814 CFM56-5b4/3 2011-08 Leased 2011.09.29A320-214 GECAS Airbus 4816 CFM56-5b4/3 2011-08 Delivered 2011.09.27A320-214 Spring Airlines GECAS 4816 CFM56-5b4/3 2011-08 Leased 2011.09.27A320-232 AWAS Airbus 4817 V2527-A5 2011-09 Delivered 2011.09.21A320-232 Royal Jordanian AWAS 4817 V2527-A5 2011-09 Leased 2011.09.21A320-232 Indigo Airbus 4818 V2527-A5 2011-08 Delivered 2011.09.12A320-232 Indigo Dunlewy Aviation 4818 V2527-A5 2011-08 Sale-Leaseback 2011.09.12A320-214 Air France Airbus 4820 CFM56-5b4/3 2011-09 Delivered 2011.09.23A320-214 Air France Aderry Aviation . 4820 CFM56-5b4/3 2011-09 Sale-Leaseback 2011.09.26A320-214 Avianca Airbus 4821 CFM56-5b4/3 2011-09 Delivered 2011.09.30A320-214 Aircol 22 Airbus 4821 CFM56-5b4/3 2011-09 Sold 2011.09.30A320-214 Avianca Aircol 22 4821 CFM56-5b4/3 2011-09 Leased 2011.09.30A320-214 GECAS Airbus 4823 CFM56-5b4/3 2011-09 Delivered 2011.09.30A320-214 Saudi Arabian GECAS 4823 CFM56-5b4/3 2011-09 Leased 2011.09.30A320-233 Volaris Airbus 4828 V2527e-A5 2011-09 Delivered 2011.09.29


Source: OAG Fleet iNET, 2011



Equipment New Owner/ Previous Owner/ Serial No. or No. of Date of Manf orModel Operator Operator (Orders)/(Options) Engine Model First Exp Deliv Equipment DateA320-233 Wells Fargo Airbus 4828 V2527e-A5 2011-09 Sold 2011.09.29A320-233 Volaris Wells Fargo 4828 V2527e-A5 2011-09 Leased 2011.09.29A320-214 Air China Airbus 4829 CFM56-5b4/3 2011-09 Delivered 2011.09.27A320-233 Volaris Airbus 4832 V2527e-A5 2011-08 Delivered 2011.09.08A320-233 Wells Fargo Airbus 4832 V2527e-A5 2011-08 Sold 2011.09.08A320-233 Volaris Wells Fargo 4832 V2527e-A5 2011-08 Leased 2011.09.08A320-214 BOC Aviation Airbus 4835 CFM56-5b4/3 2011-09 Delivered 2011.09.13A320-214 Aeroflot BOC Aviation 4835 CFM56-5b4/3 2011-09 Leased 2011.09.13A320-214 LAN Airlines Airbus 4839 CFM56-5b4/3 2011-08 Delivered 2011.09.14A320-214 LAN Airlines Jrq 2 Trust 4839 CFM56-5b4/3 2011-08 Sale-Leaseback 2011.09.14A320-232 Shenzhen Airlines Airbus 4845 V2527-A5 2011-09 Delivered 2011.09.21A320-214 Air Arabia Airbus 4848 CFM56-5b4/3 2011-09 Delivered 2011.09.29A320-214 BOC Aviation Airbus 4849 CFM56-5b4/3 2011-09 Delivered 2011.09.29A320-214 Vueling Airlines BOC Aviation 4849 CFM56-5b4/3 2011-09 Leased 2011.09.29A320-214 RBS Aerospace Airbus 4851 CFM56-5b4/3 2011-09 Delivered 2011.09.30A320-214 Wells Fargo Airbus 4851 CFM56-5b4/3 2011-09 Sold 2011.09.30A320-214 Virgin America Wells Fargo 4851 CFM56-5b4/3 2011-09 Leased 2011.09.30A320-214 Cebu Pacific Air Airbus 4852 CFM56-5b4/3 2011-09 Delivered 2011.09.29A320-214 GECAS Airbus 4854 CFM56-5b4/3 2011-09 Delivered 2011.09.29A320-214 China Southern GECAS 4854 CFM56-5b4/3 2011-09 Leased 2011.09.29A321-211 Blade Leasing Turk Hava Yollari 1219 CFM56-5b3/P 2000-04 Returned 2011.09.16A321-211 Fukurokuju . Blade Leasing 1219 CFM56-5b3/P 2000-04 Sold 2011.09.16A321-232 Air China Airbus 4834 V2530-A5 2011-08 Delivered 2011.09.09A321-231 US Airways Airbus 4843 V2533-A5 2011-09 Delivered 2011.09.23A321-231 US Airways Airbus 4847 V2533-A5 2011-09 Delivered 2011.09.22A321-231 US Airways Airbus 4850 V2533-A5 2011-09 Delivered 2011.09.29A321-231 Sichuan Airlines Airbus 4856 V2533-A5 2011-09 Delivered 2011.09.29A321-211 Atlasjet Dgvr Alpha 675 CFM56-5b3/P 1997-05 Leased 2011.09.26A330-243 Hi Fly Xl Airways France 1008 Trent772b-60 2009-03 Returned 2011.09.01A330-243 Garuda Indonesian Hi Fly 1008 Trent772b-60 2009-03 Sub-Leased 2011.09.27A330-202 Cayenne Aviation Airbus Financial Services 1123 CF6-80e1a4b 2010-05 Sold 2011.09.28A330-202 Alitalia Cayenne Aviation 1123 CF6-80e1a4b 2010-05 Leased 2011.09.28A330-202 Cayenne Aviation Airbus Financial Services 1135 CF6-80e1a4b 2010-07 Sold 2011.09.28A330-202 Alitalia Cayenne Aviation 1135 CF6-80e1a4b 2010-07 Leased 2011.09.28A330-243 Aircastle Advisor . Airbus 1249 Trent772b-60 2011-07 Delivered 2011.09.06A330-243 South African Aircastle Advisor . 1249 Trent772b-60 2011-07 Leased 2011.09.06A330-243 MTAD Airbus 1250 Trent772b-60 2011-08 Delivered 2011.09.27A330-202 CIT Leasing Airbus 1251 CF6-80e1a4b 2011-09 Delivered 2011.09.28A330-202 Qantas Airways CIT Leasing 1251 CF6-80e1a4b 2011-09 Leased 2011.09.28A330-202 Jetstar Airways Airbus 1251 CF6-80e1a4b 2011-09 Sub-Leased 2011.09.28A330-202 Air LeaseCorp Airbus 1252 CF6-80e1a4b 2011-08 Delivered 2011.09.15A330-202 ALC Blarney. Airbus 1252 CF6-80e1a4b 2011-08 Sold 2011.09.15A330-202 Alitalia ALC Blarney 1252 CF6-80e1a4b 2011-08 Leased 2011.09.15A330-202 Hi Fly Castle 211 CF6-80e1a4 1998-03 Leased 2011.09.15A330-243 Garuda Indonesian Monarch Airlines 265 Trent772b-60 1999-02 Sub-Leased 2011.09.30A330-243 Garuda Indonesian Thomas Cook 266 Trent772b-60 1999-06 Sub-Leased 2011.09.30A330-243 Garuda Indonesian Air Transat 271 Trent772b-60 1999-03 Sub-Leased 2011.09.30A330-243 Garuda Indonesian Thomas Cook 301 Trent772b-60 1999-10 Leased 2011.09.30A330-223 Saudi Arabian Atlasjet 364 PW4168a 2000-10 Sub-Leased 2011.09.26A330-243 Garuda Indonesian Air Transat 369 Trent772b-60 2000-11 Sub-Leased 2011.09.30A330-243 Garuda Indonesian Air Transat 480 Trent772b-60 2002-05 Sub-Leased 2011.09.28A330-322 Saudi Arabian Onur Air 087 PW4168 1995-03 Sub-Leased 2011.09.23A330-343e Garuda Indonesian Orbest Orizonia Airlines 1097 Trent772b-60 2010-02 Sub-Leased 2011.09.27A330-343e Garuda Indonesian Orbest 833 Trent772b-60 2007-03 Sub-Leased 2011.09.28A330-343e Singapore Airlines Airbus (15) Trent772b-60 2013-05 Ordered 2011.09.15A340-311 GMTHoldings Virgin Atlantic 002 CFM56-5c2 1992-02 Returned 2011.09.01A340-312 Hi Fly Squadron Leasing 133 CFM56-5c3/F 1996-11 Leased 2011.09.15A380-841 Singapore Airlines Airbus 065 Trent970-84 2010-09 Delivered 2011.09.29A380-861 Korean Air Lines Airbus 068 GP7270 2011-03 Delivered 2011.09.07A380-841 Singapore Airlines Airbus 071 Trent970-84 2010-11 Delivered 2011.09.14October767-346 Orient Thai Airlines Japan Airlines 23961 JT9d-7r4d 1987-10 Sold 2011.10.01777-35rer Thai Airways Int. Jet Airways 35159 GE90-115b 2007-06 Sub-Leased 2011.10.01787-86d Shanghai Airlines Boeing (-9) Genx-1b64 - Cncl-Order 2011.10.01787-89p China Eastern Airlines Boeing (-15) Genx-1b64 - Cncl-Order 2011.10.01A319-112 Bh-Air Air Namibia 3139 CFM56-5b6/P 2007-06 Returned 2011.10.01A319-111 RBS Aerospace Iberia 3255 CFM56-5b5/P 2007-09 Returned 2011.10.01A319-112 Air Namibia Deucalion Capital 3586 CFM56-5b6/3 2008-07 Leased 2011.10.01Acj319-133 Rizon Jet Airbus 4842 V2527m-A5 2011-09 Delivered 2011.10.01A320-216 Air LeaseCorp Iberia 3203 CFM56-5b6/P 2007-07 Sold 2011.10.01A320-231 Aircraft Holdings Network PB Leasing 476 V2500-A1 1994-04 Sold 2011.10.01A320-232 AWAS Airbus 4853 V2527-A5 2011-09 Delivered 2011.10.01A320-214 BOC Aviation Airbus 4855 CFM56-5b4/3 2011-09 Delivered 2011.10.01A320-232 Qatar Airways Airbus 4858 V2527-A5 2011-09 Delivered 2011.10.01A320-214 Gulf Air Airbus 4860 CFM56-5b4/3 2011-09 Delivered 2011.10.01A320-214 Avianca Airbus 4862 CFM56-5b4/3 2011-09 Delivered 2011.10.01A320-214 Aircol Airbus 4862 CFM56-5b4/3 2011-09 Sold 2011.10.01A320-214 Virgin America Airbus 4867 CFM56-5b4/3 2011-09 Delivered 2011.10.01A320-214 Wells Fargo Airbus 4867 CFM56-5b4/3 2011-09 Sold 2011.10.01


GLOBAL AIR FREIGHT HAS TRADITIONALLY BEEN USEDas an indicator of approaching growth or decline in theglobal economy. The fortunes of cargo airlines are

intimately tied those of the economies they serve. From 2002 to2007 the sector grew continuously, from 35 million freight tonnekilometres (FTKs) to 47 million. But in July 2008, two months priorto the collapse of Lehman Brothers, the International Air TransportAssociation (IATA) reported a “sharp dip” in growth, and by theend of that year, global FTKs were down compared to 2007. InDecember 2008 alone, cargo volumes slumped an unprecedented23 per cent.

A recovery only began in 2010, but only by 2012 does IATA expectglobal freight to reach its pre-recession high. That forecast,however, may be revised as IATA subsequently reported thatfreight volumes had peaked in July 2010. Ominous to thosefearing a double-dip recession, by mid-2011 the air freight markethad contracted by six per cent from its post-recession high. Thatdecline continued into September 2011, causing IATA to state:

“The decline in air freight volumes in the past two months looks tobe an early indication of a further decline in world trade andeconomic conditions.”

Regional route growth and contractionWhile monthly data on global freight volumes is readily available,similar information about air cargo route growth and decline ismore elusive. OAG provides the most useful data, though itsfigures exclude the operations of FedEx, UPS, DHL and TNT, whichchange their frequencies and routings too often to track effectively.

“There does seem to be a very simple correlation between newroute development in cargo and the world economy,” says TonyGriffin SVP of ASM, which tracks passenger and cargo routedevelopment.

OAG data clearly shows the massive impact of the recession inthe US on air cargo routes: from a high of 854 intra-NorthAmerica cargo routes at the start of 2007, the market shed morethan half in the next five years, with an astonishing 289 routesaxed in 2010 alone.

Europe suffered less, gaining a net 13 routes from 2007 to 3Q 2011,although there were cuts as the financial crisis hit the world exportmarket in 2008. Worryingly, in 2011 20 more routes have been cutthan implemented – more even than in the dark days of 2008.

Following the meltdown in 2008, the global economic recovery was tracked by air freight trafficwhich improved as exports resumed. But by late 2011, many regions were again seeing sharp fallsin cargo volumes, which, worryingly, can signal an impending recession. Alex Derber investigateswhether the development or discontinuation of air cargo routes is a similar barometer formacroeconomic trends and in which regions, if any, growth is occurring.

CARGO ROUTES ANDTHE WORLD ECONOMY

No wonder Ivor Llewellyn, cargo associate at ASM feels that“there’s not a great deal of growth at the moment”. He adds: “In

terms of new routes it’s all been fairly flat, but the growth marketshave been South America, maybe Central America and some of theAfrican countries.”

If one examines new route creation, the data does not supportLlewellyn’s point, as cargo connections from Europe and NorthAmerica to Africa and South America have either stayed at 2007levels or declined since then. The picture is very different, though, ifone examines frequencies: in the last five years freight frequenciesbetween Europe and South America have more than doubled, andthose to Africa have risen by a quarter. Routes between Asia andAfrica, meanwhile, rose from 37 to 50 in 2007, no doubt driven byChina’s huge spending on the continent.

Asia-Pacific has also fared well, despite feeling some of the industry-wide blip in 2008. A net 24 intra-Asia cargo routes were lost that year, but the region now boasts 591 routes, up from 570 in 2007.Cargo frequencies increased by 10 per cent during thesame period. The number of air freight con-nections to North America and Europe, though,has declined somewhat, perhaps reflectinga growing reliance on local ratherthan Western consumerdemand.

AIRPORTS & ROUTES: Cargo routes


AFM76_Cargo routes new pics_AFM74 04/11/2011 11:00 Page 44



Factors in route selectionIt does not necessarily follow that cargo route development andcontraction tracks gross domestic product (GDP) as precisely asfreight volumes. After all, a route can remain in place even iffreighters are flying with lighter loads or reduced frequencies.Nonetheless, OAG data does show that there is a broadcorrelation between frequency and route changes over time andwhere markets are sufficiently developed (i.e. where there aremore than a handful of routes in operation).

Almost always, the size of a market will lead airline decisions on route development, but other factors are also significant. Forexample, Europe’s multi-mode transport infrastructure allows acarrier to consolidate several cargo hubs on the continent intoone, and then use feeder services – be they road, rail or smalleraircraft – for onward transport.

“Routes might also be cut when the balance of inbound oroutbound cargo makes it non-viable,” says Griffin. “That’sparticularly true of countries that are big exporters like China.There’s not a lot that goes back to China from the UK, but there’sa lot that goes in.”

This imbalance was not always a problem, according to Llewellyn:“Freighter operators into the UK used to say that the rate that was

achieved on the in-bound leg virtually paid for the return leg andanything they could put on the return leg was a bonus.”

Such largesse was not to last, however, as air cargo rates soften-ed due to competition from faster shipping and falling demand.Figures from the US Bureau of Labour Statistics show rates fallingfrom mid-2008 to a nadir in late 2009. “Shipping tends to bite intoair cargo when there’s a lack of capacity and airlines increase ratesto the point where people look for an alternative mode of transport,”says Llewellyn.

To counter inbound and outbound imbalances,freighter operators sometimes implementtriangular routes. Others such as Ever-green Air go further, offering world-circling services that can operate fromthe East Coast of the US to the West,onto Africa, onto Asia and back to theairline’s Oregon headquarters.

200

0

400

600

800

1000

North America

Europe

Asia-Pacific

2007 2008 2009 2010 2011

Internal cargo routes changes by region

source: OAG




Griffin points out that triangular or multi-leg routes are notrestricted to cargo operators. “It is sometimes mirrored on thepassenger side, though it’s not that common these days,” he says.

“KLM, for instance, operates Amsterdam to Kilimanjaro and thenonto Dar es Salaam and back to Amsterdam. That’s because themarket to Kilimanjaro spends time there, but then moveselsewhere else, like Nigeria, before flying back to Europe.”

Dedicated cargo flights operate lower frequencies than passengerservices, though both can be used to transport freight. For expressdelivery of small items, or for integration into some logistics chains,the seven-days-a-week utility of scheduled passenger connectionscan be ideal. But for bulky items, or those reliant on swift delivery,dedicated freight services are far more suitable.

“Most of [cargo airline] route planning tends to be towards theend of the week because manufacturers usually produce duringthe week and start shipping products out towards the end. That’snot changed – the heaviest utilisation of freight aircraft is over theweekend,” says Griffin.

Perhaps surprisingly, the ease of loading goods is not a decisivefactor in route selection. Airside infrastructure in many parts ofAfrica, for example, is sub-standard, yet European freighteroperators added 1,000 flights to the region between 2007 and2011. “It’s so demand-rich that they just can’t ignore it becausethey know a competitor will come in and do it instead,” saysMark Clarkson, VP of consulting services at ASM.

Clarkson has personal experience of the problems caused by poorinfrastructure – both technical and bureaucratic – at Lagos airportin Nigeria. Though he knows that carriers try to overcome thesedifficulties, he acknowledges that a lack of proper processes and

oversight of security “inhibits their potential to serve thosemarkets quite severely”.

Griffin agrees that poor processes and infrastructure restrictgrowth, but points out that in spite of such issues, “those typesof market tend to be higher yielding for both passenger andcargo operations, so an airline wouldn’t necessarily be put off”.

Future trade lane developmentAt the October 2011 World Route Development Forum severalsenior industry figures stated that the passenger sector wasreaching a limit for the creation of new routes. “There really isn’tsomething out there that hasn’t been tried,” said Alex de Gunten,executive director of ALTA, the Latin America and Caribbean airtransport association.

Fortunately for cargo carriers, that argument probably does nothold for freight, due to both emerging markets and new aircrafttechnology.

“The fact that there are orders for cargo-only aircraft suggests thatthe airline world doesn’t think cargo routes are saturated andthere must be new opportunities, particularly when you look atGDP growth in markets such as Brazil, China and India. Are weactually just scratching the surface at the moment? There couldbe huge pent-up demand around the corner for products withinthose countries,” says Griffin.

“In some regions of Africa, once they get certain facilities orpolicies in place there could be a lot of new markets or one-stopmarkets converting into non-stop markets,” adds Clarkson.

New, long-range cargo aircraft should be crucial to opening upsome of those markets. However, orders for the 747-8 Freighterhave so far been light and Airbus has indefinitely suspended a freighter variant of the A380. The world cargo fleet is stilldominated by converted passenger aircraft that are two-decades-old, all of which calls into question operators’ appetite for newtechnology and, by extension, new types of route.

Nonetheless, Llewellyn believes demand will surface and points tothe European Unions Emission Trading Scheme (EU ETS) and theprice of fuel as motivations for cargo airlines to invest in new,fuel-efficient aircraft types.

“If those efficiencies can be made,” concludes Griffin, “there is thepotential for operators to go to places where previously theycouldn’t, perhaps bringing more secondary destinations intoview.” He adds: “World trade is increasing all the time so I believethe demand for new freighter aircraft will be there.”


data analytics consulting events media

OAG alerts: so customizable it practically bends over backwards for you

OAG alerts is a web-based solution that delivers flight schedule changes as they happen. No more information overload, log into the user friendly screen, set up your change alerts, and see live changes as they occur. Tailored to include only details that matter to you: immediately see updates in routes, flight numbers, frequency, flight times and more. With OAG alerts, the choice is yours.

Get ready to spring into action. Learn more at www.oag-alerts.com/afm

It’s new, it’s unique and it’s flexible

Your business. Our knowledge. Your advantage.

AFM_slinky_ad_210x278mm.indd 1 10/17/11 9:20 AM

PASSENGER TAXES COST AIRLINES AN ADDITIONAL$3.6bn in 2010, according to Athar Husain Khan, deputysecretary general of the Association of European Airlines

(AEA) and the UK’s air passenger duty (APD) is to rise and extranine per cent in November.

Olivier Jankovec, director general of ACI Europe noted that therate of a country’s financial recovery, critical in this time of timerecession, bares direct correlation to the amount it pays in tax.The UK, for example, has 8.5 per cent higher charges than theaverage for Europe and is struggling to boost its GDP growthamidst concerns of a double dip.

Vijay Poonoosamy, VP of international public affairs at Etihadquoted a recent study by InterVISAS, an aviation consultant,which showed that every 10 per cent of growth in aviation resultsin a 0.7 per cent growth in gross domestic product (GDP). Hethen argued that conversely, a drop in air travel would result inlower GDP.

Poonoosamy noted that the Netherlands dropped plans tocharge its national aviation industry €312m ($417m) in taxesbecause it would have slashed €1.2bn ($1.7bn) from its GDP. Putsimply, aviation equals business; put a constraint on one and youput a constraint on the other.

One airline feeling the effect is Vueling. Its senior manager ofnetwork planning, Javier Suarez, commented at the summit thatairport taxation in particular “puts a lot of pressure on us”. Henoted that the airline can not offer €19 ($27) flights if there is a€25 ($35) tax. “It has an amazing affect on our operation.”

Later this year, the European Commission will publish its package of aviation policies, whichwill cover such things as noise emissions, ground handling and slots. Considering this, Mary-Anne Baldwin reports the views on the industry from the World Route Development StrategySummit, which took place at World Routes in Berlin, in October.

THE FULL COST OFAVIATION TAX

The need for investment Husain Khan argued that should proceeds from these taxes –some of which are labeled ‘environmental’ – be used to pay formore efficient air traffic management (ATM) systems it could save16 million tons of CO2 emissions each year. Such calculations,coupled with no assurance from governments that they will makesuch investments, lead many to believe that the charges are a ‘taxgrab’ and a means to buoy national deficits.

Jankovec noted the “pure hypocrisy” of environmental taxescarrying such a moniker as the proceeds do not go towards theenvironment but to such things as hospitals and schools. Thoughthese are worthy causes, they are not the responsibility of theaviation industry.

AIRPORTS & ROUTES: Routes update


////////////////////////////////////////////// Emirates is “happy to look at any opportunity” for route development. ////////////////////////////////////////////////////////

TWEETS FROM WORLD ROUTESFOLLOW EVENTS AS THEY HAPPEN AT AIRLINEFLEETMAG

////////////////////////////////// Instead of having a ‘doomsday perspective’ on aviation growth, Emirates sees “unrestrained potential that needs to be tapped” /////////////////////////

////////////////// easyJet’s new base in Southend, UK, will bring new routes especially in corporate catchment areas. “It’s actually a regional airport for London.” /////////////////

AFM76_World Routes_AFM76 04/11/2011 11:41 Page 48



Coupled with the lack of investment in ATM, the EuropeanCommission intends to impose stricter slot allocation rulesbelieving the industry is responsible for airport congestion. AEA’sHusain Khan says: “The problem lies not in the allocation ofavailable capacity, it lies in the lack of capacity at congestedairports. The need to introduce any form of slot restriction at anairport is an indication of failure on the part of governments orairport authorities to invest in essential aviation infrastructure. It isin no way the result of weakness in the regulation.”

Alex de Gunten, executive director of ALTA notes a similar trend inLatin America. According to him, 14 out of Latin America’s 16airports will be congested by 2014 and airlines hoping to moveinto the region will find it near impossible to access slots becauseof a lack of government investment into infrastructure. “About 50per cent of all the taxes go to general government and the industryloses that investment,” says de Gunten. He argued that althoughit is a growth region there is no ‘easy money’ as only airlines thatinvested in the region years ago will reap rewards tomorrow.

One charge that would cover the cost of environmentalimprovements is in addition to those already discussed. TheStoltenberg Report has proposed that $100bn in additional taxeswill be spent to lower carbon emissions in developing countries;$16bn of which would come from the aviation sector.

///////////////

//////////////

/////////////////

THE NEWS FROM WORLD ROUTESEgypt’s tourism is reboundingThe number of tourists visiting Egypt will be back to average levels by the endof 2011, the Egyptian minister for tourism, Mounir Fakhry Abdel Nour, toldattendees of World Routes. Tourism figures dropped 80 per cent as a result of thecountry’s uprising which saw president Hosni Mubarak pulled from his post.The Egyptian government is offering a per-seat financial incentive capped at$5,000 per flight.

AirBerlin postpones deliveries and hints at canceled routesAirBerlin told delegates at World Routes that it would announce within the nextfour weeks whether it would cancel more routes. The airline has alreadyscrapped flights servicing Münster-Osnabrück, flights from cologne and Bonn toValencia, Stansted, Vienna and Sylt and various flights to Morocco. Following theevent, airBerlin announced that it will to postpone the delivery of 11 A320 andeight 737 aircraft in order to ease its debt. The airline will now receive 31 aircraftthrough 2012 to 2013 but will delay the delivery of 19 aircraft, the last of whichwill arrive in 2016.

SriLankan announces fleet expansion plans SriLankan Airlines suggested it may purchase an additional six widebody aircraftto replace its A340s and A300s. Kapila Chandrasena, the airline’s CEO said that itwill look to own 25 per cent of these new aircraft, the rest of which will be leasedwith deliveries starting in 2014. SriLankan aims to “roughly double” its fleet inthe next five years.

From left to right: Prashant Sukul, jointsecretary ministry of civil aviation for India;Olivier Jankovec, director general, ACIEurope; Athar Husain Khan, deputysecretary general, AEA; Folasade Odutola,director Air Transport Bureau, ICAO; VijayPoonoosamy, VP public affairs, Etihad.




Regarding the European Union’s Emission Trading Scheme (EU ETS),due to come into effect in January 2012, de Gunten remarked: “It’san outrageous and ridiculous proposal… it’s an easy way out forpoliticians” and claimed the aviation industry has been “singled out”.

Folasada Odutola, director of the Air Transport Bureau, ICAO,commented that ICAO is in support of charges that are inrelation to the cost of services, particularly when the proceeds goback to the industry, but it has little means to enforce this. Thebody does have a policy to support these beliefs yet Odutolanotes that it is merely a “gentleman’s agreement” and by nomeans a law.

The effect on growthAccording to Jankovec, tax and in particular, the ETS are two keyissues affecting European air travel. He warns that as a resultEurope’s airports are likely to miss the opportunities offered bygrowth economies such as Latin America and Asia.

Peter Harbison, excusive chairman of the Centre for Asia PacificAviation (CAPA), noted China’s growth potential and that it is ina “brilliant position” for connective flights. The real growthpotential is at the bottom of the pyramid – the mass of economytravelers. Additionally, China’s airlines, most of which areinherently low-cost, are also expanding outward.

According to Harbison, the Northern triangle – Northern China,Korea and Japan – could yield an additional 200 millionpassengers if regulatory restraints were removed and Japan,which will become a playground for premium carriers, “is startingto become much more liberal.”

But countering the positive effects of liberalisation, the ETS willmake it considerably more expensive for those in emergingeconomies to trade with or travel to the EU. “It’s going to be upto Europe to set policies that make investors feel they want toinvest in the European airport sector,” Jankovec commented.

//////////////////////////////////////// No plans for Finnair to push its brand in the UK, it will use BA to bolster its UK sales. ////////////////////////////////////////

////////////////////////////////////////////////// easyJet has no plans to offer loyalty scheme. “We don’t want to come across the same pitfalls as other airlines.” ////////////////////////////////////////////////

Icelandair to open Reykjavik-Denver routeIcelandair is to open a new route between Reykjavik to Denver May 11, 2012,connecting Denver to over 20 Scandinavian destinations. The airline will operatefour weekly flights using a 757 aircraft.

Emirates to increase capacity on Dallas-Fort Worth routeEmirates has said it may increase capacity on its Dallas-Fort Worth route – threemonths ahead of its first flight on the new service. Emirates will start its serviceon February 6 flying a 777-200LR. Emirates already has an interline agreementwith American Airlines on flights to New York and it flies to Houston, SanFranciso and Los Angeles. Seattle will be added on March 1.

Ecuador’s tourism minster seeks authorisation to buildaccess to MantaFreddy Ehlers, minister for tourism in Ecuador said he has been in discussions withairlines about making Manta the “main gateway into South America and Asia” andis seeking authorisation to fly from Asia, through Tahiti to South America.


Amsterdam52° 21’ 0” N / 4° 55’ 0” E

Johannesburg26° 12’ 0” S / 28° 5’ 0” EJohannesburgJohannesburgJohannesburgJohannesburgJohannesburgJohannesburg26° 12’ 0” S / 28° 5’ 0” E26° 12’ 0” S / 28° 5’ 0” E

Washington47° 23’ 30” N / 121° 34’ 14” WWashingtonWashingtonWashingtonWashingtonWashingtonWashingtonWashingtonWashington47° 23’ 30” N / 121° 34’ 14” W

Bangkok13° 45’ 0” N / 100° 31’ 0” EBangkokBangkokBangkokBangkokBangkokBangkokBangkokBangkokBangkokBangkokBangkokBangkokBangkokBangkokBangkokBangkokBangkokBangkok13° 45’ 0” N / 100° 31’ 0” E13° 45’ 0” N / 100° 31’ 0” E13° 45’ 0” N / 100° 31’ 0” E13° 45’ 0” N / 100° 31’ 0” E

Abu Dhabi24° 28’ 0” N / 54° 22’ 0” EAbu DhabiAbu DhabiAbu DhabiAbu DhabiAbu DhabiAbu DhabiAbu Dhabi24° 28’ 0” N / 54° 22’ 0” E24° 28’ 0” N / 54° 22’ 0” E24° 28’ 0” N / 54° 22’ 0” E24° 28’ 0” N / 54° 22’ 0” E

AmsterdamAmsterdamAmsterdamAmsterdamAmsterdam52° 21’ 0” N / 4° 55’ 0” E52° 21’ 0” N / 4° 55’ 0” E52° 21’ 0” N / 4° 55’ 0” E52° 21’ 0” N / 4° 55’ 0” E52° 21’ 0” N / 4° 55’ 0” E

ATC GLOBAL 2012 EXHIBITION & CONFERENCE6–8 MARCH, AMSTERDAM RAI

Register online at www.atcglobalhub.com/afm

CONNECT WITH OVER 5,400 INDUSTRY PROFESSIONALSAT THE WORLD’S DEFINITIVE ATM EVENT

• Discover new ATM products and services offered by 220 leading suppliers• Access 45+ free educational sessions• Discuss key industry issues with ATM leaders at the prestigious two-day conference

Organised by Conference sponsored by

Supported by Media PartnersConference endorsed by

ATCGlobal12NewAd_278x210+3mm.indd 1 27/10/2011 10:52



////////////////////// Southwest will fly to Mexico by 2013, said its director John Kirby at World Routes Development Strategy Summit. ///////////////////

////////////////////// Oneworld’s Michael Blunt refers to rival alliances as like McDonald’s – they have a larger market share but “you don’t want to eat there everyday”. ////////////////////

Copa’s new route signals looser restrictionsCopa Airlines’ forthcoming service between Panama City and Monterrey airport,both in Mexico, is the result of looser bilateral restrictions, Pablo Cosme,president of air service development at the Mexican airport group, OMA, said atWorld Routes. The easing of rules was itself a result of the demise of Mexicana,which favoured flying over its Mexico City. Copa will operate a 737-700 on theservice from December 2011.

EasyJet to start Gatwick-Kefalonia routeEasyJet will start a thrice-weekly service from London Gatwick to Kefalonia,Greece starting April 28. The flights are scheduled only for a summer service.

Arik Air announces Abu Dhabi-Lagos routeArik Air has announced its new service to Abu Dhabi, which will commenceNovember 29. The airline will fly three non-stop weekly flights from Lagos to theUAE capital. Arik currently flies to 25 destinations in 19 cities from Lagos.

“The impact is devastating,” says Prashant Sukul, joint secretary,ministry of aviation for India, in particular noting the effect onregional airports. “We see this as one of the main problems forairport growth in Europe.”

Agreement comes from far and wide. Just prior to the strategysummit, Sukul, who claims that the ETS includes “shades ofdiscrimination”, joined industry leaders from across the globe todiscuss the scheme. Sukul told delegates that during this meeting25 countries including China, Brazil, Russia and India wrote ajoint declaration opposing the ETS. The letter will be sent to theEU, after which a further meeting will be held in Norway. This, heargued, will have more effect that the legal proceedings taken byAmerican Airlines, which he believes is unlikely to win.

Yet those opposing the scheme will not stop at a strongly word-ed letter. “People are talking about retaliatory measures,” hewarned. “The whole thing is going to become messy.”

ResolutionGovernments across the globe view the aviation industry asresilient and therefore ripe for taxing. Passenger and cargo travelis an undisputed necessity, therefore demand will remain, butairlines exist on tiny profit margins that are then chiseled by highfuel prices, a poor economy, natural disasters and of course taxes.

Governments must be convinced that the few extra dollars oreuros a tax adds to a ticket price have a significant impact on anairline’s bottom lines.

John Hanlon, secretary general for ELFAA warned that theindustry must “sensitise” the customer to tax and what it coststhem. Indeed, a consensus across the panels was that the publicmust be made aware of the charges they are forced to incur bygovernments, why they incur them and where that money goes.The hope is that the public can force a change in tax, even if theindustry is unable.

The UK’s ‘Hands off our holiday Mr Tax man’ scheme, urgespeople to email their MP and take part in a Twitter or Linked-Indebate to oppose the Chancellor’s budget plans to increase UKAPD by double inflation next year.

Its aim is not only to educate the public on the costs they incur(since 2007, the UK’s APD for short-haul routes has increased by140 per cent to EU countries and for long-haul routes by 325 percent for example, to Australia) but to build public pressureagainst government. The scheme has so far resulted in 30,000emails sent to MDs but it is unclear whether letters, be they fromthe public or national officials, will be enough to protect theindustry.

Left to right: Peter Harbison, chairman, CAPA with Olivier Jankovec, director general, ACI Europe.

Aaron Heslehurst, BBC news anchor and summit moderator.


As the world’s third largest airline MRO, we proudly serve more than 150 aviationand airline customers at multiple locations around the globe. Our expansive shopsemploy LEAN and Six Sigma processes for maximum efficiency and attention to detail on everything from airframe, component and engine jobs to line maintenance.For uncompromising quality and quick turnarounds to meet your schedule atcompetitive costs, make the move to Delta TechOps. We’ll keep your fl eet moving.

For an inside look at the advantages Delta TechOps brings to your aircraft maintenance,

visit TechOpsMRO.com or call +1-404-773-5192.


The perennial battle between OEMs and commercialMRO organisations for aftermarket revenue is enteringa new phase with the service entry of the 787 and itsassociated GoldCare support services. Bernard Fitzsimons reports.

IT HAS BEEN A LONG TIME COMING. IT WAS SEVEN YEARSago that Boeing started work on a revolutionary lifecyclesupport programme for its new airliner, but the 787s

protracted development left it with nothing to support. Now theaircraft is in service and the choice between GoldCare ortraditional support arrangements has moved from the theoreticalto the real.

Last year, Boeing secured its first GoldCare customer, TUI Travel.Boeing announced earlier this year that the service would includethe 737NG. The manufacturer’s VP of fleet management, BobAvery, said the company was also evaluating extending theprogramme to cover the 777 and 747-8.

However, Boeing will not maintain the aircraft itself. Much of thedesign and manufacture of the 787 was outsourced to a globalnetwork of partners, likewise GoldCare relies on existing MROs,both independent and airline-affiliated, to carry out any workthat is required. But the OEM aims to co-ordinate that supportitself, monitoring electronic logbook information in real-time,identifying problems and pre-positioning parts and personnel sothat unscheduled maintenance is reduced and aircraft availabilityis maximised.

One GoldCare supplier believes this is the inexorable future.Amsterdam-based Nayak Aircraft Services became a GoldCarepartner in October and its MD, Patrick Morcus, is convinced thatBoeing’s concept is “the future of maintaining aircraft.” Hebelieves OEMs will take more responsibility regarding theiroperations, and will take more of the after-sales market.

What makes GoldCare different is Boeing’s firm commitment toairlines, says Morcus. Signing the service agreement will assureairlines of a good service. “Boeing is the first one [OEM] reallyguaranteeing its customers that they can run their operation anddo it smoothly. With good quality, reliable partners you are ableto get more out of your operation.”

Outsourcing MROMorcus believes that in-house MRO “is already difficult and will get even more difficult in the future.” Many airlines have


MAINTENANCE OPERATIONS: MRO for the 787

MRO FOR THE 787:THE FUTURE OFMAINTAININGAIRCRAFT

downsized their technical departments and their operations maybe negatively impacted if MRO is not outsourced.

Not everybody will recognise this yet, says Morcus. “But I’ve beenout there with Boeing, I’ve talked to the team.” According toMorcus, Boeing has an expert team who has talked with numerousairlines to find out how best to run its operation. “I think that’s abig advantage over other MROs. They are focusing on an elementsuch as components or line maintenance, but Boeing is going astep further and really putting everything together.

“Boeing is saying, ‘give me your flight schedule and I will arrange itfully, including warranties and so on, and if you are not flying wewill compensate you.’ With the 787 they are fully confident thatthey are the only ones getting the maximum out of the aircraft.”

Delays to the aircraft may have made GoldCare difficult to sell,Morcus acknowledges, but momentum has built ahead of the firstdelivery: “I think it’s a starting point. They will be aggressively goingonto the market and starting to compete with the large MROs.”

Outsourcing is a philosophy well known to Nayak as linemaintenance represents 70 per cent of its operations. It businesshas been profitable and has grown every year since a managementbuyout in 2000, a fact Morcus attributes to a focus on quality:

“The standard discussion is about quality and pricing, and we arereally focusing on quality rather than the lowest price.”

With 23 line stations and the ability to handle almost any aircrafttype, Morcus says that Nayak is the biggest independent linemaintenance provider in Europe. Its major customers each havetheir own maintenance organisations or third-party contracts,

“but we are always contracted separately for the line maintenance.”

The focus for Nayak is on punctual flight operations. Thepenalties on airlines for late departures and schedule disruptionmean there is increasing pressure to get aircraft out on time.Airlines no longer have spare aircraft, so if an aircraft cannot flythere is “a domino effect,” says Morcus.

Flexibility is another consideration.”Airlines are trying new routes;they need to have relatively flexible line maintenance. That is ourcore business. We move people around and often if they want tochange to a different route, we are already there. We offer flexiblepricing and we are more flexible than their own solutions.

Nayak also has contracts with business aircraft OEMs, DassaultAviation and Embraer, to provide line maintenance support fortheir customers’ aircraft. “The customers pay by the flight hourand then we take care of the work.”

However, the arrangement with Boeing is different. UnderGoldCare, Nayak will provide the full scope of work including C-checks. In line with Boeing’s ideas, it will be a flexible concept.

“You sign up with Boeing and they organise it according to theflight schedule,” he explains. “We said, ‘you have a customerrequest, we will sit together and make a project plan and whereverit is on the planet, we will go there.’ So it can be line maintenancewithin our current route network on the 23 stations we have, butif they would like us to start up something in China then we willgo to China and we will set it up there. That’s the philosophy.”

Another aspect of the flexible approach is the use of customers’premises: “If we go to an existing airline that already has ahangar we will set up facilities there and make sure that we canuse their facilities instead of bringing aircraft to our main base formaintenance in Cologne. So we use existing infrastructures toprovide the wider scope of work.”

AFM76_MRO_AFM71 04/11/2011 11:14 Page 54



Nobody knows how successful GoldCare will be, Morcusacknowledges, but it could spell significant growth for Nayak:

“We already had big growth the last five years but it could beanother challenging five years to come.”

Other offeringsBoeing is not the only airframer seeking to extend its supportbeyond the factory gate. Airbus has built a 16-strong MRONetwork, which includes many of the biggest maintenanceproviders and has half a dozen customers for its flight hourservices (FHS). Singapore Airlines, China Southern and BritishAirways have each signed FHS contracts covering components fortheir A380s.

At the same time, established MROs are far from conceding themarket for maintenance of the 787. Once its A380 support wasup and running, Lufthansa Technik announced plans to startproviding technical services for the both the 787 and the 747-8.For the Dreamliner, the company said it would develop a conceptspecific to the aircraft that would extend from the world-wide,short-notice supply of spare parts to the maintenance and repairof materials and systems. It has invested in test procedures andfacilities to enable it to maintain systems such as the 5,000 psi(pound square inch) hydraulics, and develop test and repairprocedures for the composite structure.

The first business to result from this was a 10-year deal to providetotal component support for the 35 787s ordered by JapanAirlines (JAL). Lufthansa Technik has also agreed a long-termcontract with Hamilton Sundstrand, one of the early members ofBoeing’s GoldCare team, to provide MRO services on its 787components, including its innovative bleedless air system andliquid cooling technology.

But Hamilton Sundstrand, the 787’s largest system supplier withnine major systems and more than 1,300 parts on each aircraft,has its own aftermarket programme and supplier network for theaircraft. It previously licensed Mubadala Aerospace to provide787 integrated component solutions through the Abu Dhabienterprise’s ADAT, SR Technics and Sanad Aero Solutionssubsidiaries. And it has its own 10-year contracts to provide bothAll Nippon Airways and JAL with total supply chain maintenancesolutions that include inventory support, repairs, logistic supportand technical co-operation on the electric power, airmanagement, nitrogen generation, emergency power andprimary and remote power distribution systems. HamiltonSundstrand says the JAL deal is worth an estimated $350m if theoption of a 10-year extension is exercised.

Boeing 787 maintenance training

Nayak’s 23 line stations make it Europe’s biggest line maintenance provider

AFM76_MRO_AFM71 04/11/2011 11:15 Page 55



Air France Industries KLM Engineering & Maintenance (AFI KLME&M) is also developing what it has called a deliberatelyambitious support offering for the 787. It plans to offer poolaccess, maintenance services on power-by-the-hour or time-and-materials terms and logistic services, while its Epcor subsidiarywill offer support for the Hamilton Suundstrand APS 5000auxiliary power unit.

“We want to play a significant role in this promising segment,”explains Gijs van Rooijen, AFI KLM E&M’s product supportdirector for components. Another aim, he says, is to “contributeto restoring balance to a market generally catered to by theOEMs. With our experience as an airline operator and for that ofour repair and overhaul centres, we are able to make a differenceby curbing surging prices, which have already seen maintenancecosts rocket relative to the time when the first aircraft were sold.”

Joint enterprisesBoth main airframers, meanwhile, are investing directly in newhangars. Boeing already has an MRO joint venture (JV) atShanghai’s Pudong airport, where Shanghai Aviation Servicesopened a new hangar in 2009.

In January, work started on what was originally planned as asecond JV, this time with Air India in Nagpur. The result was a$100m investment tied to Air India’s purchase of 787s. Due toopen in 2013, the Nagpur facility will be financed and built byBoeing but operated by Air India, which already has hangars atDelhi, Mumbai and Trivandrum. The airline plans to move itsMRO division with around 11,000 staff into a separate subsidiary.

More recently, Airbus and India’s biggest shipbuilder, Pipavav,agreed to an MRO JV at a location yet to be selected. Airbus’parent EADS will have a minority stake in the project.

The potential of the Indian market is encouraging airline-affiliatedMROs and OEMs to get involved. Last November, AFI KLM E&Mclinched a strategic partnership agreement with Max Aerospaceto establish Max MRO Services, intended to provide componentsupport to local operators. MAS-GMR Aerospace Engineering, aJV between Malaysia Airlines’ subsidiary Malaysian AerospaceEngineering and Hyderabad airport operator, GMR, was due tostart operations at Hyderabad in October.

The size and complexity of the $40bn-plus air transport MRObusiness means no single business model or approach is likely todominate in the short-term. As the big MRO providers continueto expand, the relationships become ever more inter-dependent.Another recent agreement has seen AFI KLM E&M take oncomponent support for Malaysia Airlines’ 737-800s as part of the737 component services programme it operates in partnershipwith Boeing.

And there is still much for all parties to learn. Nayak’s Morcus, forexample, has commissioned a study to investigate whether thereis a relationship between spending on line maintenance andairline performance. “The performance of a fleet and an aircraftis growing more important than ever before,” he affirms. “Iknow from experience with a lot of airlines that nobody is reallymaking this connection, the technical issues are still independentof the commercial operation. It looks like nobody reallyinvestigates how airlines are dealing with it today and how theyshould consider doing it.”

Nayak Aircraft Services founders and MDs, Herbert Busch, (left) and Germán Larrabe, (right) formalise the Boeing GoldCare partnership with Boeing Commercial AirlineServices fleet management VP, Jay Maloney, and supplier MD, Diane Hein.

ANA instructor, Tatsuo Yanagisawa, (left) and maintenancemanager, Koichi Sato complete component identification exercisesduring the first 787 maintenance training class.

AFM76_MRO_AFM71 04/11/2011 11:16 Page 56

Contract Owner Operator Event Date S/N A/C Model Variant Reg No Name Name Remarks16/08/2011 E3123 BAE SYSTEMS (HS) 146 300 9G-SBB Riva Investments Riva Investments Purchased - parked16/08/2011 39115 Boeing 737 (NG) 800 Winglets B-5593 China Aircraft Leasing Shandong Airlines Pur'd - sale leaseback on del16/08/2011 UE-162 Hawker Beechcraft 1900 D N162ZV Royal Bank of Canada Royal Bank of Canada Pur'd - parked17/08/2011 838 Airbus A300 620R (P&W) N836AC Aerostar Asset Mgmt Aerostar Asset Mgmt Pur'd - parked17/08/2011 4813 Airbus A320 230 (IAE) VT-IEI Dunlewy Aviation Leasing IndiGo Airlines Pur'd - sale leaseback on del17/08/2011 E2077 BAE SYSTEMS (HS) 146 200 ZS-SOV Freedom Air Freedom Air Pur'd - parked17/08/2011 49323 Boeing (McDonnell-Douglas) MD-80 82 (MDC) N412AA Magnum AirDynamics Magnum AirDynamics Pur'd - parked17/08/2011 21278 Boeing 737 (JT8D) 200Adv (Sge3Hkits) N464AT Sky King Sky King Pur'd off lease/term comp-pkd17/08/2011 805 Bombardier (de Havilland) DHC-6 Twin Otter 300 N42729 CAAMS CAAMS Pur'd - parked17/08/2011 3055 Fairchild/Dornier 328 100 OE-LKH Welcome Air Welcome Air Pur'd18/08/2011 21598 Boeing 737 (JT8D) 200Adv (Sge3Hkits) YV502T Venezolana Venezolana Pur'd - parked18/08/2011 7348 Bombardier (Canadair) CRJ Regional Jet 100ER N798CA Sky Swallows Sky Swallows Pur'd - parked19/08/2011 602 Airbus A300 620R (P&W) N4602 Aircraft Solutions Universal Asset Pur'd - parked19/08/2011 1169 Airbus A330 200 (GE) VH-EBO AWAS Qantas Pur'd - subject to lease19/08/2011 641 BAE SYSTEMS (Jetstream) Jetstream 31 HI Unconfirmed Unconfirmed Pur'd - parked19/08/2011 25248 Boeing 737 (CFMI) 400 JA8932 Japan TransOcean Air Japan TransOcean Air Pur'd off lease/term complete19/08/2011 26341 Boeing 747 400 (GE) N349AS Atlas Air Atlas Air Pur'd - parked19/08/2011 519 Bombardier (de Havilland) Dash 8 300 C-GPAR Provial Airlines Provial Airlines Pur'd19/08/2011 145223 Embraer ERJ-145 LR ZS-BBI Acia Investments Solenta Aviation Pur'd19/08/2011 AC-696 Fairchild (Swearingen) Metro III ZS-JAM Joint Aid-Mgmt Joint Aid-Mgmt Pur'd - parked19/08/2011 AC-696 Fairchild (Swearingen) Metro III N227LD Aviation Services of America Aviation Services of America Pur'd - parked20/08/2011 105 Bombardier (de Havilland) Dash 8 100 5Y-BZI ALS ALS Pur'd21/08/2011 7364 Bombardier (Canadair) CRJ Regional Jet 100ER N807CA Sky Swallows Sky Swallows Pur'd - parked22/08/2011 22951 Boeing 737 (CFMI) 300 HS-AAV FL Technics FL Technics Pur'd - parked22/08/2011 23357 Boeing 737 (CFMI) 300 HS-AAS FL Technics FL Technics Pur'd - parked22/08/2011 23358 Boeing 737 (CFMI) 300 HS-AAR FL Technics FL Technics Pur'd - parked22/08/2011 23368 Boeing 737 (CFMI) 300 HS-AAQ FL Technics FL Technics Pur'd - parked22/08/2011 28397 Boeing 777 300 (P&W) JA8945 Japan Airlines Japan Airlines Pur'd off lease/term complete22/08/2011 4144 Bombardier (de Havilland) Dash 8 400 ZS-YBR Rand Merchant Bank Rand Merchant Bank Pur'd - parked22/08/2011 4146 Bombardier (de Havilland) Dash 8 400 ZS-YBT Rand Merchant Bank Rand Merchant Bank Pur'd - parked23/08/2011 1939 Airbus A318 110 (CFM) N801FR Insignia Frontier Airlines Pur'd - sale leaseback23/08/2011 2017 Airbus A318 110 (CFM) N803FR Insignia Frontier Airlines Pur'd - sale leaseback23/08/2011 7056 Bombardier (Canadair) CRJ Regional Jet 200LR N409SW Bombardier Capital SkyWest Airlines Pur'd - subject to lease23/08/2011 7056 Bombardier (Canadair) CRJ Regional Jet 200LR N409SW SkyWest Airlines SkyWest Airlines Pur'd off lease/term complete24/08/2011 4815 Airbus A320 210 (CFM) CC-BAP Avolon Aerospace LAN Airlines Pur'd - sale leaseback on del24/08/2011 299 ATR ATR 72 200 SP-EFK EuroLOT EuroLOT Pur'd24/08/2011 E3381 BAE SYSTEMS (Avro) RJ Avroliner RJ100 HB-IYS Triangle Regional Leasing Swiss European Air Lines Pur'd - subject to lease24/08/2011 33219 Boeing 737 (NG) 800 Winglets N872NN Aerfunding American Airlines Pur'd - sale leaseback on del24/08/2011 36119 Boeing 737 (NG) 800 Winglets EI-UNK SJK Aircraft Jackson Square Aviation Pur'd - parked24/08/2011 39255 Boeing 737 (NG) 700 Winglets PH-BGM Sofia Leasing KLM Royal Dutch Airlines Pur'd - sale leaseback on del24/08/2011 27648 Boeing 747 400 (GE) N920UN Pembroke Exchanges Transaero Pur'd - sale leaseback- parked24/08/2011 25088 Boeing 767 300ER (P&W) HS-BIE Pacific AirFinance Pacific AirFinance Pur'd - parked24/08/2011 565 Bombardier (de Havilland) Dash 8 300 OY-EDK Nordic Aviation Contractors Nordic Aviation Capital Pur'd - parked24/08/2011 8156 Fairchild/Dornier 228 200 CC- Unconfirmed Unconfirmed Pur'd - parked25/08/2011 4800 Airbus A320 210 (CFM) F-HBNH MSN 4800 Air France Pur'd - sale leaseback on del25/08/2011 53529 Boeing (McDonnell-Douglas) MD-90 30 N959DN Delta Air Lines Delta Air Lines Pur'd - parked25/08/2011 589 Bombardier (de Havilland) Dash 8 300 N589AW Bombardier Services Bombardier Services Pur'd - parked26/08/2011 423 Airbus A300 600R (GE) N91050 Apollo Aviation Group Apollo Aviation Group Pur'd - parked26/08/2011 2041 BAE SYSTEMS (HS) ATP Freighter (LFD) LX-WAV European Turboprop Mgmt West Air Luxembourg Pur'd - subject to lease26/08/2011 2044 BAE SYSTEMS (HS) ATP Bulk Freighter SE-MAY European Turboprop Mgmt West Air Europe Pur'd off lease/term complete26/08/2011 2056 BAE SYSTEMS (HS) ATP Freighter (LFD) LX-WAF European Turboprop Mgmt West Air Luxembourg Pur'd off lease/term complete26/08/2011 47843 Boeing (McDonnell-Douglas) DC-10 30F (M) G-CGXU Turbine Motor Works Turbine Motor Works Pur'd - parked26/08/2011 49459 Boeing (McDonnell-Douglas) MD-80 82 (MDC) N440AA Magnum AirDynamics Magnum AirDynamics Pur'd - parked26/08/2011 23777 Boeing 737 (CFMI) 300 N155AW OH Capital Assets OH Capital Assets Pur'd - parked26/08/2011 19000462 Embraer 195 LR SP-LNC Zuma Leasing LOT - Polish Airlines Pur'd - sale leaseback on del26/08/2011 20150 Fokker 50 - 9M-MGA Werner Aero Service Werner Aero Service Pur'd - parked29/08/2011 24445 Boeing 737 (CFMI) 400 EX- Sayegh Group Aviation Sayegh Group Aviation Pur'd - parked29/08/2011 4377 Bombardier (de Havilland) Dash 8 400 NextGen VT-SUC Maple Leaf Financing SpiceJet Pur'd - sale leaseback on del29/08/2011 4378 Bombardier (de Havilland) Dash 8 400 NextGen VT-SUD Maple Leaf Financing SpiceJet Pur'd - sale leaseback on del30/08/2011 666 BAE SYSTEMS (Jetstream) Jetstream 31 - N525PA Salsa America Salsa America Pur'd - parked30/08/2011 741 BAE SYSTEMS (Jetstream) Jetstream 31 - N539PA Pan Am Clipper Pan Am Clipper Pur'd - parked30/08/2011 771 BAE SYSTEMS (Jetstream) Jetstream 31 - N529PA Pan Am Clipper Pan Am Clipper Pur'd - parked30/08/2011 28471 Boeing 737 (CFMI) 500 EK-73771 Armavia Armavia Pur'd - parked30/08/2011 28471 Boeing 737 (CFMI) 500 EK-73771 Mika Armavia Pur'd - sale leaseback- parked30/08/2011 34193 Boeing 737 (NG) 800 Winglets VH-VZR QF B738 2011 Qantas Pur'd - sale leaseback on del30/08/2011 40765 Boeing 737 (NG) 800 Winglets N870NN NAS Investments American Airlines Pur'd - sale leaseback on del30/08/2011 20349 Boeing 747 100F (M) N682UP Stewart Industries Int. Stewart Industries Int. Pur'd - parked30/08/2011 15124 Bombardier (Canadair) CRJ900 Regional Jet 900ER N326MS Undisclosed Undisclosed Pur'd - parked30/08/2011 15126 Bombardier (Canadair) CRJ900 Regional Jet 900ER N329MS Undisclosed Undisclosed Pur'd - parked30/08/2011 589 Bombardier (de Havilland) Dash 8 300 N589AW US Department of State US Department of State Pur'd - parked30/08/2011 589 Bombardier (de Havilland) Dash 8 300 N589AW TKC Aerospace TKC Aerospace Pur'd - parked31/08/2011 737 Airbus A300 620R (P&W) N4737 European Air Transport European Air Transport Pur'd - parked31/08/2011 4827 Airbus A320 210 (CFM) A9C-AM MC Aviation/Mitsubishi Gulf Air Pur'd - sale leaseback on del31/08/2011 24681 Boeing 737 (CFMI) 300 N554MS JMV Aviation SARL JMV Aviation SARL Pur'd - parked31/08/2011 24681 Boeing 737 (CFMI) 300 N554MS Aerovista Aerovista Pur'd - parked31/08/2011 28647 Boeing 737 (NG) 800 HL7567 Global Knafaim Leasing Korean Air Pur'd - subject to lease31/08/2011 23961 Boeing 767 300 (P&W) JA8265 Japan Airlines Japan Airlines Pur'd off lease/term complete31/08/2011 7034 Bombardier (Canadair) CRJ Regional Jet 200LR N407SW AAR Parts Trading AAR Parts Trading Pur'd - parked31/08/2011 7034 Bombardier (Canadair) CRJ Regional Jet 200LR N407SW Mesa Airlines Mesa Airlines Pur'd31/08/2011 1852 Bombardier (Shorts) SC.7 Skyvan 3 N50DA North Star Air Cargo North Star Air Cargo Pur'd - parked31/08/2011 1852 Bombardier (Shorts) SC.7 Skyvan 3 N50DA Whitehorse Flight Center Whitehorse Flight Center Pur'd - parked31/08/2011 1907 Bombardier (Shorts) SC.7 Skyvan 3 N754BD Whitehorse Flight Center Whitehorse Flight Center Pur'd - parked31/08/2011 1907 Bombardier (Shorts) SC.7 Skyvan 3 N754BD North Star Air Cargo North Star Air Cargo Pur'd - parked31/08/2011 1911 Bombardier (Shorts) SC.7 Skyvan 3 N549WB Whitehorse Flight Center Whitehorse Flight Center Pur'd - parked31/08/2011 1911 Bombardier (Shorts) SC.7 Skyvan 3 N549WB North Star Air Cargo North Star Air Cargo Pur'd - parked31/08/2011 1926 Bombardier (Shorts) SC.7 Skyvan Skyliner N114LH Whitehorse Flight Center Whitehorse Flight Center Pur'd31/08/2011 1926 Bombardier (Shorts) SC.7 Skyvan Skyliner N114LH North Star Air Cargo North Star Air Cargo Pur'd31/08/2011 145204 Embraer ERJ-145 LR N644AE American Airlines American Eagle Pur'd - sale leaseback31/08/2011 145212 Embraer ERJ-145 LR N645AE American Airlines American Eagle Pur'd - sale leaseback

AIRCRAFT TRANSACTIONS – Western built jets and turboprops 16 Aug to 5 Oct 2011


INDUSTRY DATA: FLEET FINANCE, FIRM ORDERS, AIRCRAFT TRANSACTIONS, LIST PRICES AND LEASE RATES

AFM76_Data revision_AFNM 29/11/2011 12:45 Page 58



Contract Owner Operator Event Date S/N A/C Model Variant Reg No Name Name Remarks31/08/2011 145234 Embraer ERJ-145 LR N649PP American Airlines American Eagle Pur'd - sale leaseback31/08/2011 AC-641 Fairchild (Swearingen) Metro III VH-SEF Commonwealth Bank of Australia Commonwealth Bank of Australia Pur'd - parked01/09/2011 670 Airbus A300 620R (P&W) N2670 Aircraft Solutions Universal Asset Mgmt Pur'd - parked01/09/2011 177 ATR ATR 72 200 F-GKPD Airlinair Airlinair Pur'd off lease/term complete01/09/2011 24884 Boeing 757 200 (RR) N964FD FedEx FedEx Pur'd - parked01/09/2011 32954 Boeing 767 200ER (GE) P4-CLA Comlux Aviation Comlux Aviation Pur'd01/09/2011 19015 Bombardier (Canadair) CRJ1000 Regional Jet 1000EL NextGen F-HMLJ Constellation Finance Brit Air Pur'd - sale leaseback on del01/09/2011 145709 Embraer ERJ-145 LR SE-RAG Goiania Comercio E Servicos City Airline Pur'd01/09/2011 AT-513/AC-513 Fairchild (Swearingen) Metro III VH-TAO M/V Purchasing Brindabella Airlines Pur'd - subject to lease02/09/2011 4711 Airbus A320 210 (CFM) B-6799 Nomura Babcock & Brown China Eastern Airlines Pur'd - sale leaseback on del02/09/2011 521 ATR ATR 72 500 N521NA Avitra Aviation Avitra Aviation Pur'd - parked02/09/2011 21874 Boeing 767 200 (P&W) N613UA Boeing Boeing Pur'd - parked02/09/2011 21875 Boeing 767 200 (P&W) N614UA Boeing Boeing Pur'd - parked02/09/2011 25363 Boeing 767 300ER (GE) VH-OGL Qantas Qantas Pur'd off lease/term complete02/09/2011 352 Bombardier (de Havilland) Dash 8 300 N8300L Aircraft Lease Finance Corp Aircraft Lease Finance Corp Pur'd - parked02/09/2011 352 Bombardier (de Havilland) Dash 8 300 N8300L Dynamic Aviation Group Dynamic Aviation Group Pur'd - parked02/09/2011 145059 Embraer ERJ-145 LR N605KS American Airlines American Eagle Pur'd - sale leaseback02/09/2011 145081 Embraer ERJ-145 LR N613AE American Airlines American Eagle Pur'd - sale leaseback02/09/2011 145172 Embraer ERJ-145 LR N638AE American Airlines American Eagle Pur'd - sale leaseback05/09/2011 20178 Fokker 50 - HP-1605PST Air Panama Air Panama Pur'd - parked06/09/2011 24655 Boeing 737 (CFMI) 300 N380RP RPK Capital RPK Capital Mgmt Pur'd - parked06/09/2011 145048 Embraer ERJ-145 LR N602AE American Airlines American Eagle Pur'd - sale leaseback06/09/2011 145062 Embraer ERJ-145 LR N606AE American Airlines American Eagle Pur'd - sale leaseback06/09/2011 145101 Embraer ERJ-145 LR N619AE American Airlines American Eagle Pur'd - sale leaseback07/09/2011 21348 Boeing 727 200Adv (Sge3Hkits) XA- Unconfirmed Unconfirmed M Pur'd - parked08/09/2011 683 Airbus A300 620R (P&W) N2683 Aircraft Solutions Universal Asset Mgmt Pur'd - parked08/09/2011 4832 Airbus A320 230 (IAE) N507VL JSA Aircraft 4832 Volaris Pur'd - sale leaseback on del08/09/2011 228 ATR ATR 42 300F Bulk Freighter ZS-XCD Solenta Aviation Solenta Aviation Pur'd08/09/2011 571 ATR ATR 42 500 OY-EDL Nordic Aviation Nordic Aviation Capital Pur'd - parked08/09/2011 521 ATR ATR 72 500 N521NA Nordic Aviation Nordic Aviation Capital Pur'd - parked08/09/2011 21931 Boeing 727 200F(M)Adv (Sge3HK)ZS-IRE SKA SA Aircraft Leasing AirQuarius Aviation Pur'd - parked08/09/2011 23642 Boeing 737 (CFMI) 300 N301UA Universal Asset Mgmt Universal Asset Mgmt Pur'd - parked08/09/2011 23643 Boeing 737 (CFMI) 300 N302UA Universal Asset Mgmt Universal Asset Mgmt Pur'd - parked08/09/2011 23644 Boeing 737 (CFMI) 300 N303UA Universal Asset Mgmt Universal Asset Mgmt Pur'd - parked08/09/2011 23665 Boeing 737 (CFMI) 300 N304UA Universal Asset Mgmt Universal Asset Mgmt Pur'd - parked08/09/2011 23666 Boeing 737 (CFMI) 300 N305UA Universal Asset Mgmt Universal Asset Mgmt Pur'd - parked08/09/2011 23667 Boeing 737 (CFMI) 300 N306UA Universal Asset Mgmt Universal Asset Mgmt Pur'd - parked08/09/2011 23668 Boeing 737 (CFMI) 300 N307UA Universal Asset Mgmt Universal Asset Mgmt Pur'd - parked08/09/2011 23669 Boeing 737 (CFMI) 300 N308UA Universal Asset Mgmt Universal Asset Mgmt Pur'd - parked08/09/2011 23670 Boeing 737 (CFMI) 300 N309UA Universal Asset Mgmt Universal Asset Mgmt Pur'd - parked08/09/2011 23671 Boeing 737 (CFMI) 300 N310UA Universal Asset Mgmt Universal Asset Mgmt Pur'd - parked08/09/2011 27044 Boeing 747 400 (P&W) N420AC Aircastle Advisor Aircastle Advisor Pur'd - parked08/09/2011 29307 Boeing 757 200 (RR) TC-OGS Hagondale Saudi Arabian Airlines Pur'd - subject to lease08/09/2011 145102 Embraer ERJ-145 LR N620AE American Airlines American Eagle Pur'd - sale leaseback08/09/2011 145115 Embraer ERJ-145 LR N625AE American Airlines American Eagle Pur'd - sale leaseback08/09/2011 145121 Embraer ERJ-145 LR N627AE American Airlines American Eagle Pur'd - sale leaseback08/09/2011 145132 Embraer ERJ-145 LR N630AE American Airlines American Eagle Pur'd - sale leaseback09/09/2011 27143 Boeing 737 (CFMI) 400 SX-BMC Safair Aviation Aergo Capital Pur'd - parked09/09/2011 31129 Boeing 737 (NG) 800 Winglets N874NN Aerfunding American Airlines Pur'd - sale leaseback on del09/09/2011 29308 Boeing 757 200 (RR) TC-OGT Hagondale Saudi Arabian Airlines Pur'd - subject to lease09/09/2011 145097 Embraer ERJ-145 LR N618AE American Airlines American Eagle Pur'd - sale leaseback09/09/2011 145139 Embraer ERJ-145 LR N631AE American Airlines American Eagle Pur'd - sale leaseback09/09/2011 145143 Embraer ERJ-145 LR N632AE American Airlines American Eagle Pur'd - sale leaseback09/09/2011 145158 Embraer ERJ-145 LR N635AE American Airlines American Eagle Pur'd - sale leaseback09/09/2011 145193 Embraer ERJ-145 LR N642AE American Airlines American Eagle Pur'd - sale leaseback09/09/2011 UE-237 Hawker Beechcraft 1900 D N237YV MTW Aerospace MTW Aerospace Pur'd - parked09/09/2011 UE-294 Hawker Beechcraft 1900 D 5Y- Unconfirmed Unconfirmed Pur'd09/09/2011 300 Saab 340 B N370PX C&L Aerospace C&L Aerospace Pur'd - parked12/09/2011 4818 Airbus A320 230 (IAE) VT-IEJ Avolon IndiGo Airlines Pur'd - sale leaseback on del12/09/2011 39358 Boeing 737 (NG) 800 Winglets VH-VZS QF B738 2011 Qantas Pur'd - sale leaseback on del12/09/2011 40248 Boeing 737 (NG) 800 Winglets A6-FDV Avolon FlyDubai Pur'd - sale leaseback on del12/09/2011 38707 Boeing 777 200LRF (GE) N892FD FedEx FedEx Pur'd12/09/2011 145124 Embraer ERJ-145 LR N628AE American Airlines American Eagle Pur'd - sale leaseback12/09/2011 145191 Embraer ERJ-145 LR N641AE American Airlines American Eagle Pur'd - sale leaseback12/09/2011 145213 Embraer ERJ-145 LR N646AE American Airlines American Eagle Pur'd - sale leaseback12/09/2011 3013 Fairchild/Dornier 328 100 N335PH Berry Aviation Berry Aviation Pur'd off lease/term complete13/09/2011 4839 Airbus A320 210 (CFM) CC-BAQ AWAS LAN Airlines Pur'd - sale leaseback on del13/09/2011 4184 Bombardier (de Havilland) Dash 8 400 C-GARX Skyservice Business Aviation Skyservice Business Aviation Pur'd - parked13/09/2011 14500926 Embraer ERJ-145 LR N941LT American Airlines American Eagle Pur'd - sale leaseback13/09/2011 145105 Embraer ERJ-145 LR N621AE American Airlines American Eagle Pur'd - sale leaseback13/09/2011 145109 Embraer ERJ-145 LR N623AE American Airlines American Eagle Pur'd - sale leaseback13/09/2011 145744 Embraer ERJ-145 LR N657AE American Airlines American Eagle Pur'd - sale leaseback13/09/2011 145778 Embraer ERJ-145 LR N663AR American Airlines American Eagle Pur'd - sale leaseback14/09/2011 14500801 Embraer ERJ-145 LR N674RJ American Airlines American Eagle Pur'd - sale leaseback14/09/2011 14500807 Embraer ERJ-145 LR N676AE American Airlines American Eagle Pur'd - sale leaseback14/09/2011 14500833 Embraer ERJ-145 LR N683AE American Airlines American Eagle Pur'd - sale leaseback14/09/2011 145170 Embraer ERJ-145 LR N637AE American Airlines American Eagle Pur'd - sale leaseback14/09/2011 145762 Embraer ERJ-145 LR N659AE American Airlines American Eagle Pur'd - sale leaseback15/09/2011 2669 Airbus A319 130 (IAE) N839AW Archway Aviation US Airways Pur'd - subject to lease15/09/2011 2690 Airbus A319 130 (IAE) N840AW Archway Aviation US Airways Pur'd - subject to lease15/09/2011 0290 Airbus A320 210 (CFM) C-FKCR Undisclosed Air Canada Pur'd - subject to lease15/09/2011 3299 Airbus A320 210 (CFM) HS-ABB Avolon Thai AirAsia Pur'd - sale leaseback15/09/2011 3394 Airbus A320 210 (CFM) HS-ABD Avolon Thai AirAsia Pur'd - sale leaseback15/09/2011 1707 Airbus A321 230 (IAE) G-OZBE CIT Aerospace Monarch Airlines Pur'd - sale leaseback15/09/2011 1763 Airbus A321 230 (IAE) G-OZBF CIT Aerospace Monarch Airlines Pur'd - sale leaseback15/09/2011 2234 Airbus A321 230 (IAE) G-OZBI CIT Aerospace Monarch Airlines Pur'd - sale leaseback2011-09-15 1283 Airbus A330 200 (GE) EI-EJL Air Lease Corporation Alitalia On order-sale leaseback arranged2011-09-15 47707 Boeing (McDonnell-Douglas) DC-9 34CF 5Y-UAE J&V Aviation Aircraft Traders Pur'd - parked2011-09-15 48512 Boeing (McDonnell-Douglas) MD-11 Freighter (M) (GE) OH-LGC M48512 Nordic Global Airlines Pur'd - subject to lease



Contract Owner Operator Event Date S/N A/C Model Variant Reg No Name Name Remarks2011-09-15 48513 Boeing (McDonnell-Douglas) MD-11 Freighter (M) (GE) OH-LGD M48513 Nordic Global Airlines Pur'd - subject to lease2011-09-15 21952 Boeing 727 200F(M)Adv(Sge3HK) PR-MTJ Air Brasil Linhas Aereas Air Brasil Linhas Aereas Pur'd - parked2011-09-15 30566 Boeing 767 300ER (P&W) ET-AMG Crane Aircraft Partners Ethiopian Airlines Pur'd - subject to lease2011-09-15 547 Bombardier (de Havilland) Dash 8 200 5N-GRS Govt, Cross River State, Nigeria Govt, Cross River State, Nigeria Pur'd - parked15/09/2011 120196 Embraer EMB-120 Brasilia - ZS-PSB Summerset Charters Summerset Charters Pur'd15/09/2011 14500814 Embraer ERJ-145 LR N679AE American Airlines American Eagle Pur'd - sale leaseback15/09/2011 14500820 Embraer ERJ-145 LR N680AE American Airlines American Eagle Pur'd - sale leaseback15/09/2011 14500824 Embraer ERJ-145 LR N681AE American Airlines American Eagle Pur'd - sale leaseback15/09/2011 14500826 Embraer ERJ-145 LR N682AE American Airlines American Eagle Pur'd - sale leaseback15/09/2011 14500843 Embraer ERJ-145 LR N686AE American Airlines American Eagle Pur'd - sale leaseback15/09/2011 145317 Embraer ERJ-145 LR B-3040 Hebei Airlines Hebei Airlines Pur'd off lease/term complete15/09/2011 145349 Embraer ERJ-145 LR B-3041 Hebei Airlines Hebei Airlines Pur'd off lease/term complete15/09/2011 145352 Embraer ERJ-145 LR B-3042 Hebei Airlines Hebei Airlines Pur'd15/09/2011 145377 Embraer ERJ-145 LR B-3043 Hebei Airlines Hebei Airlines Pur'd15/09/2011 145470 Embraer ERJ-145 LR B-3045 Hebei Airlines Hebei Airlines Pur'd15/09/2011 UC-103 Hawker Beechcraft 1900 C-1 N205CA Corporate Air Corporate Air Pur'd - parked16/09/2011 783 Airbus A300 620R (P&W) N5783 Aircraft Solutions Universal Asset Mgmt Pur'd - parked16/09/2011 21738 Boeing 737 (JT8D) 200QCAd (Sge3HK) C-GNRD Nolinor Aviation Nolinor Aviation Pur'd16/09/2011 4350 Bombardier (de Havilland) Dash 8 400 NextGen ZS-YBW Rand Merchant Bank Rand Merchant Bank Pur'd - parked16/09/2011 4366 Bombardier (de Havilland) Dash 8 400 NextGen ZS-YBX Rand Merchant Bank Rand Merchant Bank Pur'd - parked16/09/2011 120268 Embraer EMB-120 Brasilia ER N286AS Deborah C Aharon Deborah C Aharon Pur'd - parked16/09/2011 14500810 Embraer ERJ-145 LR N677AE American Airlines American Eagle Pur'd - sale leaseback16/09/2011 14500868 Embraer ERJ-145 LR N693AE American Airlines American Eagle Pur'd - sale leaseback16/09/2011 145087 Embraer ERJ-145 LR N615AE American Airlines American Eagle Pur'd - sale leaseback16/09/2011 145766 Embraer ERJ-145 LR N661JA American Airlines American Eagle Pur'd - sale leaseback16/09/2011 145793 Embraer ERJ-145 LR N671AE American Airlines American Eagle Pur'd - sale leaseback16/09/2011 3213 Fairchild/Dornier 328JET - OY-NCT Sun-Air of Scandinavia Sun-Air of Scandinavia Pur'd - parked19/09/2011 E2261 BAE SYSTEMS (Avro) RJ Avroliner RJ85 JU-9915 Eznis Airways Eznis Airways Pur'd19/09/2011 14500907 Embraer ERJ-145 LR N923AE American Airlines American Eagle Pur'd - sale leaseback19/09/2011 145086 Embraer ERJ-145 LR N614AE American Airlines American Eagle Pur'd - sale leaseback19/09/2011 145150 Embraer ERJ-145 LR N634AE American Airlines American Eagle Pur'd - sale leaseback19/09/2011 145783 Embraer ERJ-145 LR N665BC American Airlines American Eagle Pur'd - sale leaseback19/09/2011 145794 Embraer ERJ-145 LR N672AE American Airlines American Eagle Pur'd - sale leaseback19/09/2011 3106 Fairchild/Dornier 328 100 09-3106 US Air Force Special Ops US Air Force Special Ops Pur'd20/09/2011 53530 Boeing (McDonnell-Douglas) MD-90 30 N960DN Delta Air Lines Delta Air Lines Pur'd - parked20/09/2011 25270 Boeing 737 (CFMI) 500 D-ABJA Classic 500 Automatic Pur'd - parked20/09/2011 25547 Boeing 747 400 (RR) VH-OJR A J Walter Aviation A J Walter Aviation Pur'd - parked20/09/2011 38987 Boeing 777 300ER (GE) A6-EGF Jackson Square Aviation Emirates Airline Pur'd - sale leaseback on del20/09/2011 238 Bombardier (de Havilland) DHC-4A Turbo Caribou - N238PT Aughrim Aughrim Pur'd20/09/2011 145707 Embraer ERJ-140 LR N847AE American Airlines American Eagle Pur'd - sale leaseback20/09/2011 145734 Embraer ERJ-140 LR N851AE American Airlines American Eagle Pur'd - sale leaseback20/09/2011 14500813 Embraer ERJ-145 LR N678AE American Airlines American Eagle Pur'd - sale leaseback20/09/2011 14500836 Embraer ERJ-145 LR N685AE American Airlines American Eagle Pur'd - sale leaseback20/09/2011 14500894 Embraer ERJ-145 LR N906AE American Airlines American Eagle Pur'd - sale leaseback20/09/2011 14500895 Embraer ERJ-145 LR N907AE American Airlines American Eagle Pur'd - sale leaseback20/09/2011 UC-92 Hawker Beechcraft 1900 C-1 CN- Unconfirmed Unconfirmed Pur'd20/09/2011 UE-167 Hawker Beechcraft 1900 D TZ- Malian Aero Company Malian Aero Company Pur'd20/09/2011 UE-368 Hawker Beechcraft 1900 D C- Unconfirmed Unconfirmed Pur'd - parked21/09/2011 49472 Boeing (McDonnell-Douglas) MD-80 82 (MDC) N446AA Air Capital Group Air Capital Group Pur'd - parked21/09/2011 36886 Boeing 737 (NG) 800 Winglets D-ABKY Avolon airberlin Pur'd - sale leaseback on del21/09/2011 28028 Boeing 747 400 (P&W) N747WV Undisclosed Transaero Pur'd - parked21/09/2011 14500874 Embraer ERJ-145 LR N696AE American Airlines American Eagle Pur'd - sale leaseback21/09/2011 14500897 Embraer ERJ-145 LR N908AE American Airlines American Eagle Pur'd - sale leaseback21/09/2011 14500912 Embraer ERJ-145 LR N931AE American Airlines American Eagle Pur'd - sale leaseback21/09/2011 14500918 Embraer ERJ-145 LR N933JN American Airlines American Eagle Pur'd - sale leaseback21/09/2011 14500923 Embraer ERJ-145 LR N939AE American Airlines American Eagle Pur'd - sale leaseback21/09/2011 145777 Embraer ERJ-145 LR N662EH American Airlines American Eagle Pur'd - sale leaseback22/09/2011 670 Airbus A300 620R (P&W) N2670 European Air Transport European Air Transport Pur'd - parked22/09/2011 4725 Airbus A320 230 (IAE) G-EUYL BBAM British Airways Pur'd - sale leaseback on del22/09/2011 E3382 BAE SYSTEMS (Avro) RJ Avroliner RJ100 HB-IYR Triangle Regional Leasing Swiss European Air Lines Pur'd - subject to lease22/09/2011 40766 Boeing 737 (NG) 800 Winglets N873NN NAS Investments American Airlines Pur'd - sale leaseback on del22/09/2011 24784 Boeing 747 400 (GE) N287AS Atlas Air Atlas Air Pur'd - parked22/09/2011 24176 Boeing 757 200 (RR) N962FD FedEx FedEx Pur'd - parked22/09/2011 19016 Bombardier (Canadair) CRJ1000 Regional Jet 1000EL NextGen F-HMLK Constellation Finance Brit Air Pur'd - sale leaseback on del22/09/2011 145235 Embraer ERJ-135 LR N711PH American Airlines American Eagle Pur'd - sale leaseback22/09/2011 145283 Embraer ERJ-135 LR N721HS American Airlines American Eagle Pur'd - sale leaseback22/09/2011 145692 Embraer ERJ-140 LR N846AE American Airlines American Eagle Pur'd - sale leaseback22/09/2011 145722 Embraer ERJ-140 LR N850AE American Airlines American Eagle Pur'd - sale leaseback22/09/2011 145754 Embraer ERJ-140 LR N858AE American Airlines American Eagle Pur'd - sale leaseback22/09/2011 145784 Embraer ERJ-145 LR N667GB American Airlines American Eagle Pur'd - sale leaseback23/09/2011 4820 Airbus A320 210 (CFM) F-HBNI Aderry Aviation Air France Pur'd - sale leaseback on del23/09/2011 584 ATR ATR 42 500 PR-TKH TRIP TRIP Pur'd23/09/2011 959 ATR ATR 72 500 OH-ATN Finnair Aircraft Finance FinnComm Airlines Pur'd - sale leaseback on del23/09/2011 49473 Boeing (McDonnell-Douglas) MD-80 82 (MDC) N447AA Air Capital Group Air Capital Group Pur'd - parked23/09/2011 49474 Boeing (McDonnell-Douglas) MD-80 82 (MDC) N448AA Air Capital Group Air Capital Group Pur'd - parked23/09/2011 49475 Boeing (McDonnell-Douglas) MD-80 82 (MDC) N449AA Air Capital Group Air Capital Group Pur'd - parked23/09/2011 49926 Boeing (McDonnell-Douglas) MD-80 88 N382MS AeroTurbine AeroTurbine Pur'd - parked23/09/2011 23158 Boeing 737 (JT8D) 200Adv (Sge3Hkits) N127EA MFP Aeronautics MFP Aeronautics Pur'd - parked23/09/2011 29119 Boeing 747 400 (RR) ZS-SAZ Midair Midair Pur'd - parked23/09/2011 14500806 Embraer ERJ-145 LR N675AE American Airlines American Eagle Pur'd - sale leaseback23/09/2011 145055 Embraer ERJ-145 LR N603KC American Airlines American Eagle Pur'd - sale leaseback23/09/2011 145160 Embraer ERJ-145 LR N636AE American Airlines American Eagle Pur'd - sale leaseback23/09/2011 145760 Embraer ERJ-145 LR N658AE American Airlines American Eagle Pur'd - sale leaseback23/09/2011 145797 Embraer ERJ-145 LR N673AE American Airlines American Eagle Pur'd - sale leaseback26/09/2011 34 A.S.T.A. (GAF) Nomad N24A VH-XGZ GippsAero GippsAero Pur'd - parked26/09/2011 49611 Boeing (McDonnell-Douglas) MD-80 87 N532PT Sunrise Asset Mgmt Allegiant Air Pur'd - parked26/09/2011 34988 Boeing 737 (NG) 800 Winglets EI-ESL Avolon Ryanair Pur'd - sale leaseback on del26/09/2011 34992 Boeing 737 (NG) 800 Winglets EI-ESM Avolon Ryanair Pur'd - sale leaseback on del26/09/2011 36877 Boeing 737 (NG) 800 Winglets B-5598 ICBC Leasing ICBC Leasing Pur'd





Contract Owner Operator Event Date S/N A/C Model Variant Reg No Name Name Remarks26/09/2011 153 Bombardier (de Havilland) DHC-6 TO 200 C- Unconfirmed Unconfirmed Pur'd - parked26/09/2011 145736 Embraer ERJ-140 LR N852AE American Airlines American Eagle Pur'd - sale leaseback26/09/2011 145742 Embraer ERJ-140 LR N853AE American Airlines American Eagle Pur'd - sale leaseback26/09/2011 145743 Embraer ERJ-140 LR N854AE American Airlines American Eagle Pur'd - sale leaseback26/09/2011 145079 Embraer ERJ-145 LR N612AE American Airlines American Eagle Pur'd - sale leaseback26/09/2011 145093 Embraer ERJ-145 LR N617AE American Airlines American Eagle Pur'd - sale leaseback26/09/2011 145182 Embraer ERJ-145 LR N639AE American Airlines American Eagle Pur'd - sale leaseback26/09/2011 145200 Embraer ERJ-145 LR N643AE American Airlines American Eagle Pur'd - sale leaseback26/09/2011 UE-74 Hawker Beechcraft 1900 D ZS-OKM Pavati Trading Air Ghana Pur'd - subject to lease27/09/2011 49325 Boeing (McDonnell-Douglas) MD-80 82 (MDC) ZS-SUH Gryphon Airlines Gryphon Airlines Pur'd27/09/2011 34991 Boeing 737 (NG) 800 Winglets EI-ESN Avolon Ryanair Pur'd - sale leaseback on del27/09/2011 145710 Embraer ERJ-140 LR N848AE American Airlines American Eagle Pur'd - sale leaseback27/09/2011 145748 Embraer ERJ-140 LR N856AE American Airlines American Eagle Pur'd - sale leaseback27/09/2011 145752 Embraer ERJ-140 LR N857AE American Airlines American Eagle Pur'd - sale leaseback27/09/2011 14500849 Embraer ERJ-145 LR N688AE American Airlines American Eagle Pur'd - sale leaseback27/09/2011 145740 Embraer ERJ-145 LR N656AE American Airlines American Eagle Pur'd - sale leaseback27/09/2011 145788 Embraer ERJ-145 LR N669MB American Airlines American Eagle Pur'd - sale leaseback28/09/2011 1123 Airbus A330 200 (GE) EI-EJG Cayenne Aviation Alitalia Pur'd - subject to lease28/09/2011 1135 Airbus A330 200 (GE) EI-EJH Cayenne Aviation Alitalia Pur'd - subject to lease28/09/2011 E2136 BAE SYSTEMS (HS) 146 200 N145FF Tronosjet Maintenance Tronos Pur'd - parked28/09/2011 24694 Boeing 737 (CFMI) 500 G-THOC TAG Aviation TAG Aviation Pur'd - parked28/09/2011 29730 Boeing 747 400F (RR) 4K-SW888 Silk Way Airlines Silk Way Airlines Pur'd - parked28/09/2011 145044 Embraer ERJ-145 LR N600BP American Airlines American Eagle Pur'd - sale leaseback28/09/2011 145058 Embraer ERJ-145 LR N604AE American Airlines American Eagle Pur'd - sale leaseback28/09/2011 145074 Embraer ERJ-145 LR N611AE American Airlines American Eagle Pur'd - sale leaseback28/09/2011 145108 Embraer ERJ-145 LR N622AE American Airlines American Eagle Pur'd - sale leaseback28/09/2011 145111 Embraer ERJ-145 LR N624AE American Airlines American Eagle Pur'd - sale leaseback28/09/2011 145117 Embraer ERJ-145 LR N626AE American Airlines American Eagle Pur'd - sale leaseback28/09/2011 145148 Embraer ERJ-145 LR N633AE American Airlines American Eagle Pur'd - sale leaseback29/09/2011 277 Airbus A300 F4-200 (GE) N277EF Undisclosed Undisclosed Pur'd - parked29/09/2011 0164 Airbus A320 230 (IAE) N164CG AeroTurbine AeroTurbine Pur'd - parked29/09/2011 4814 Airbus A320 210 (CFM) N843VA Jackson Square Aviation Virgin America On order-sale leaseback arranged29/09/2011 4828 Airbus A320 230 (IAE) N506VL JSA Aircraft Volaris Pur'd - sale leaseback on del29/09/2011 24530 Boeing 737 (CFMI) 400 N530WL Willis Lease Finance Willis Lease Finance Pur'd - parked29/09/2011 30183 Boeing 737 (NG) 700 N739A AAR Parts Trading AAR Parts Trading Pur'd - parked29/09/2011 34989 Boeing 737 (NG) 800 Winglets EI-ESO Avolon Ryanair Pur'd - sale leaseback on del29/09/2011 34990 Boeing 737 (NG) 800 Winglets EI-ESP Avolon Ryanair Pur'd - sale leaseback on del29/09/2011 3742 Bombardier (Shorts) 360 300 N742CC N974AA Air Cargo Carriers Pur'd - sale leaseback29/09/2011 145685 Embraer ERJ-140 LR N845AE American Airlines American Eagle Pur'd - sale leaseback29/09/2011 14500853 Embraer ERJ-145 LR N689EC American Airlines American Eagle Pur'd - sale leaseback29/09/2011 14500883 Embraer ERJ-145 LR N699AE American Airlines American Eagle Pur'd - sale leaseback29/09/2011 14500902 Embraer ERJ-145 LR N918AE American Airlines American Eagle Pur'd - sale leaseback29/09/2011 14500906 Embraer ERJ-145 LR N922AE American Airlines American Eagle Pur'd - sale leaseback29/09/2011 14500911 Embraer ERJ-145 LR N928AE American Airlines American Eagle Pur'd - sale leaseback29/09/2011 145069 Embraer ERJ-145 LR N609DP American Airlines American Eagle Pur'd - sale leaseback30/09/2011 4821 Airbus A320 210 (CFM) N821AV Soundair Avianca Pur'd - sale leaseback on del30/09/2011 24655 Boeing 737 (CFMI) 300 N380RP MidAmerican Aerospace MidAmerican Aerospace Pur'd - parked30/09/2011 36802 Boeing 737 (NG) 800 B-5519 Undisclosed Air China Pur'd - subject to lease30/09/2011 23719 Boeing 747 400 (P&W) N661US Crane Aircraft Partners Delta Air Lines Pur'd - subject to lease30/09/2011 36199 Boeing 777 200LRF (GE) D-AALG Nomura Babcock & Brown AeroLogic Pur'd - subject to lease30/09/2011 145064 Embraer ERJ-145 LR N607AE American Airlines American Eagle Pur'd - sale leaseback30/09/2011 145068 Embraer ERJ-145 LR N608LM American Airlines American Eagle Pur'd - sale leaseback30/09/2011 145222 Embraer ERJ-145 LR N647AE American Airlines American Eagle Pur'd - sale leaseback30/09/2011 145225 Embraer ERJ-145 LR N648AE American Airlines American Eagle Pur'd - sale leaseback30/09/2011 145764 Embraer ERJ-145 LR N660CL American Airlines American Eagle Pur'd - sale leaseback30/09/2011 145785 Embraer ERJ-145 LR N668HH American Airlines American Eagle Pur'd - sale leaseback01/10/2011 230 Airbus A330 220 (P&W) OY-GRN Air Greenland Air Greenland Pur'd off lease/term complete01/10/2011 23778 Boeing 737 (CFMI) 300 N156AW Undisclosed US Airways Pur'd - subject to lease01/10/2011 24219 Boeing 737 (CFMI) 300QC G-ZAPW Aircraft 24219 Titan Airways Pur'd - subject to lease01/10/2011 25300 Boeing 757 200 Winglets (RR) N666A Aircraft Solutions American Airlines Pur'd - subject to lease01/10/2011 23961 Boeing 767 300 (P&W) HS-BKB Orient Thai Airlines Orient Thai Airlines Pur'd - parked03/10/2011 0234 Airbus A320 210 (CFM) F-HGNT Snecma Snecma Pur'd - parked03/10/2011 957 BAE SYSTEMS (Jetstream) Jetstream 31 Super EP C-FPSJ Pascan Aviation Pascan Aviation Pur'd03/10/2011 145629 Embraer ERJ-140 LR N833AE American Airlines American Eagle Pur'd - sale leaseback03/10/2011 145631 Embraer ERJ-140 LR N834AE American Airlines American Eagle Pur'd - sale leaseback03/10/2011 145647 Embraer ERJ-140 LR N837AE American Airlines American Eagle Pur'd - sale leaseback03/10/2011 145656 Embraer ERJ-140 LR N840AE American Airlines American Eagle Pur'd - sale leaseback03/10/2011 145422 Embraer ERJ-145 LR N651AE American Airlines American Eagle Pur'd - sale leaseback03/10/2011 145432 Embraer ERJ-145 LR N652RS American Airlines American Eagle Pur'd - sale leaseback03/10/2011 145433 Embraer ERJ-145 LR N653AE American Airlines American Eagle Pur'd - sale leaseback03/10/2011 145437 Embraer ERJ-145 LR N654AE American Airlines American Eagle Pur'd - sale leaseback03/10/2011 045 Saab 2000 AEW 10-045 Pakistan Air Force Pakistan Air Force Pur'd04/10/2011 2014 BAE SYSTEMS (HS) ATP Freighter (LFD) G-BTPG Atlantic Airlines Atlantic Airlines Pur'd off lease/term comp-parked04/10/2011 24858 Boeing 737 (CFMI) 400 PH-BDW Willis Lease Finance Willis Lease Finance Pur'd - parked04/10/2011 25310 Boeing 737 (CFMI) 500 D-ABJE Classic 500 Automatic Pur'd - parked04/10/2011 145425 Embraer ERJ-140 LR N800AE American Airlines American Eagle Pur'd - sale leaseback04/10/2011 14500835 Embraer ERJ-145 LR N684JW American Airlines American Eagle Pur'd - sale leaseback04/10/2011 14500846 Embraer ERJ-145 LR N687JS American Airlines American Eagle Pur'd - sale leaseback04/10/2011 14500858 Embraer ERJ-145 LR N690AE American Airlines American Eagle Pur'd - sale leaseback04/10/2011 14500866 Embraer ERJ-145 LR N692AE American Airlines American Eagle Pur'd - sale leaseback04/10/2011 14500869 Embraer ERJ-145 LR N694AE American Airlines American Eagle Pur'd - sale leaseback04/10/2011 145092 Embraer ERJ-145 LR N616AE American Airlines American Eagle Pur'd - sale leaseback04/10/2011 145417 Embraer ERJ-145 LR N650AE American Airlines American Eagle Pur'd - sale leaseback05/10/2011 49927 Boeing (McDonnell-Douglas) MD-80 88 N379MS AeroTurbine AeroTurbine Pur'd - parked05/10/2011 145469 Embraer ERJ-140 LR N801AE American Airlines American Eagle Pur'd - sale leaseback05/10/2011 145471 Embraer ERJ-140 LR N802AE American Airlines American Eagle Pur'd - sale leaseback05/10/2011 145487 Embraer ERJ-140 LR N804AE American Airlines American Eagle Pur'd - sale leaseback05/10/2011 145521 Embraer ERJ-140 LR N809AE American Airlines American Eagle Pur'd - sale leaseback05/10/2011 145525 Embraer ERJ-140 LR N810AE American Airlines American Eagle Pur'd - sale leaseback







FIRM ORDERS – 16 August to 14 October 2011

Airbus A318 ACJ (Engines Unannounced) Unannounced non-commercial customer 25/09/2011 Order 1 Unannounced-Unannounced ACJ (Engines Unannounced) Unannounced-UnannouncedAirbus A319 110 (CFM) Aircraft Purchase Fleet Ltd 15/09/2011 Type Swap 3 CFM56-5B5/3 110 (CFM) CFM56-5B5/3Airbus A319 110 (CFM) Aviation Capital Group 15/09/2011 Type Swap 1 CFM56-5B6/P 110 (CFM) CFM56-5B6/PAirbus A319 ACJ (Engines Unannounced) Unannounced non-commercial customer 14/09/2011 Order 1 Unannounced-Unannounced ACJ (Engines Unannounced) Unannounced-UnannouncedAirbus A319 110 (CFM) Tibet Airlines 02/09/2011 Order 2 CFM56-5B7/3 110 (CFM) CFM56-5B7/3Airbus A320 200 neo (Engines Unannounced) Jetstar 06/10/2011 Order 78 Unannounced-Unannounced 200 neo (Engines Unannounced) Unannounced-UnannouncedAirbus A320 200 (Engines Unannounced) Jetstar Japan 06/10/2011 Order 8 Unannounced-Unannounced 200 (Engines Unannounced) Unannounced-UnannouncedAirbus A320 200 (Engines Unannounced) Qantas 06/10/2011 Order 24 Unannounced-Unannounced 200 (Engines Unannounced) Unannounced-UnannouncedAirbus A320 210 (CFM) Lao Airlines 26/08/2011 Order 2 CFM56-5B4/3 210 (CFM) CFM56-5B4/3Airbus A321 200 (Engines Unannounced) Aviation Capital Group 15/09/2011 Type Swap 3 Unannounced-Unannounced 200 (Engines Unannounced) Unannounced-UnannouncedAirbus A321 230 (IAE) Aviation Capital Group 15/09/2011 Type Swap 7 V2500-2533-A5SelectOne 230 (IAE) V2500-2533-A5SelectOneAirbus A321 210 (CFM) Nouvelair Tunisie 15/09/2011 Type Swap 1 CFM56-5B3/3 210 (CFM) CFM56-5B3/3Airbus A330 200F (Engines Unannounced) Avianca 27/09/2011 Order 4 Unannounced-Unannounced 200F (Engines Unannounced) Unannounced-UnannouncedAirbus A330 340HGW (RR) Singapore Airlines 15/09/2011 Order 15 Trent-772B-60EP 340HGW (RR) Trent-772B-60EPATR ATR 72 500 Nordic Aviation Capital 29/09/2011 Order 2 PW100-127M 500 PW100-127MATR ATR 72 600 Air Lease Corporation 15/09/2011 Order 2 PW100-127M 600 PW100-127MATR ATR 72 600 EVA Air 09/09/2011 Order 10 PW100-127M 600 PW100-127MATR ATR 72 600 TRIP 09/09/2011 Order 9 PW100-127M 600 PW100-127MBoeing 737 (NG) 800 Winglets UTair 26/09/2011 Order 33 CFM56-7B26E 800 Winglets CFM56-7B26EBoeing 737 (NG) 900ER UTair 26/09/2011 Order 7 CFM56-7B26E 900ER CFM56-7B26EBoeing 737 (NG) 900ER Delta Air Lines 24/08/2011 Order 100 CFM56-7B26E 900ER CFM56-7B26EBoeing 777 300ER (GE) Unannounced commercial customer 30/09/2011 Order 1 GE90-115B 300ER (GE) GE90-115BBoeing 777 200LRF (GE) Unannounced commercial customer 22/09/2011 Order 6 GE90-110B1L 200LRF (GE) GE90-110B1LBoeing 777 300ER (GE) Unannounced commercial customer 14/09/2011 Order 8 GE90-115B 300ER (GE) GE90-115BBoeing 777 200LRF (GE) Ethiopian Airlines 06/09/2011 Order 4 GE90-110B1L 200LRF (GE) GE90-110B1LBoeing 777 300ER (GE) Unannounced commercial customer 19/08/2011 Order 2 GE90-115B 300ER (GE) GE90-115BBombardier (de Havilland) Dash 8400 NextGen Luxair - Luxembourg Airlines 16/08/2011 Order 4 PW100-150A 400 NextGen PW100-150AEmbraer 190 LR GECAS 06/10/2011 Order 6 CF34-10E5 LR CF34-10E5Embraer 195 LR Air Dolomiti 29/09/2011 Order 5 CF34-10E5A1 LR CF34-10E5A1Embraer ERJ-135 Legacy 650 Minsheng Financial Leasing Co. Ltd 10/10/2011 Order 13 AE 3007-A2 Legacy 650 AE 3007-A2Hindustan Aeronautics Saras Indian Air Force 15/09/2011 Order 15 PT6A-67A PT6A-67A

Mfr & Type Variant Customer Order Order/ Number Engines at Order Variant at delivery Engines at deliverydate Type Swap

Data supplied courtesy of Ascend Online Fleets / Ascend V1 database.

ENGINE DATA CHANGES 15 August to 14 October 201115 Aug 2011 14 Oct 2011 15 Aug 2011 14 Oct 2011 15 Aug 2011 14 Oct 2011

Type Engine Current mkt Current mkt % Current mkt Current mkt % Current mkt Current mkt %full-life value full-life value change half-life value half-life value change lease rate lease rate change

B737-300 CFM56-3B1 $2.18m $2.18m 0.0% $0.70m $0.70m 0.0% $0.025m $0.025m 0.0%B737-400 CFM56-3B2 $2.38m $2.38m 0.0% $0.90m $0.90m 0.0% $0.027m $0.027m 0.0%B737-500 CFM56-3C1 $2.98m $2.98m 0.0% $1.50m $1.50m 0.0% $0.030m $0.030m 0.0%A321-200 CFM56-5B3/P $7.94m $8.05m 1.4% $5.85m $5.85m 0.0% $0.070m $0.070m 0.0%A319-100 CFM56-5B5/P $6.24m $6.35m 1.8% $4.15m $4.15m 0.0% $0.050m $0.050m 0.0%A340-300 CFM56-5C4/P $6.60m $6.67m 1.0% $4.35m $4.35m 0.0% $0.052m $0.052m 0.0%B737-600 CFM56-7B22 $7.01m $7.07m 0.9% $4.90m $4.90m 0.0% $0.059m $0.059m 0.0%B737-700 CFM56-7B24 $7.36m $7.42m 0.8% $5.20m $5.20m 0.0% $0.062m $0.062m 0.0%B737-800 CFM56-7B26 $7.76m $7.82m 0.8% $5.55m $5.55m 0.0% $0.065m $0.065m 0.0%B737-900ER CFM56-7B27 $8.21m $8.27m 0.7% $6.00m $6.00m 0.0% $0.067m $0.067m 0.0%CRJ-200 CF34-3B1 $2.05m $2.05m 0.0% $1.00m $1.00m 0.0% $0.020m $0.020m 0.0%CRJ-700 CF34-8C1 $3.67m $3.67m 0.0% $2.20m $2.20m 0.0% $0.027m $0.027m 0.0%E170 CF34-8E5 $4.15m $4.15m 0.0% $2.68m $2.68m 0.0% $0.033m $0.033m 0.0%B767-200ER CF6-80A2 $4.19m $4.19m 0.0% $1.00m $1.00m 0.0% n/a $0.000m n/aA300-600R CF6-80C2A5 $6.88m $6.88m 0.0% $3.50m $3.50m 0.0% $0.050m $0.050m 0.0%MD-11 CF6-80C2D1F $7.26m $7.26m 0.0% $3.75m $3.75m 0.0% $0.070m $0.060m -14.3%A330-200 CF6-80E1A3 $14.07m $14.07m 0.0% $9.35m $9.35m 0.0% n/a $0.000m n/aB777-300ER GE90-115B $26.82m $26.12m -2.6% $20.70m $20.00m -3.4% $0.210m $0.210m 0.0%A320-200 V2527-A5 $7.23m $7.23m 0.0% $5.00m $5.00m 0.0% $0.058m $0.058m 0.0%MD-82 JT8D-217C $1.70m $1.70m 0.0% $0.60m $0.60m 0.0% $0.023m $0.023m 0.0%B747-400 PW4056 $6.59m $6.59m 0.0% $3.00m $3.00m 0.0% $0.060m $0.060m 0.0%B767-300ER PW4060 $7.09m $7.09m 0.0% $3.50m $3.50m 0.0% $0.065m $0.065m 0.0%A310-300 PW4152 $6.54m $6.54m 0.0% $2.50m $2.50m 0.0% $0.055m $0.055m 0.0%B757-200 RB211-535E4 $7.60m $7.60m 0.0% $3.90m $3.90m 0.0% $0.050m $0.050m 0.0%Fokker 100 RB183 Tay 650-15 $2.50m $2.50m 0.0% $1.40m $1.40m 0.0% $0.026m $0.026m 0.0%A340-600 Trent 556-61 $13.29m $13.29m 0.0% $7.80m $7.80m 0.0% $0.110m $0.110m 0.0%A330-300 Trent 772B-60 $14.06m $14.06m 0.0% $8.60m $8.60m 0.0% $0.120m $0.120m 0.0%B777-200ER Trent 895 $20.61m $20.61m 0.0% $14.00m $14.00m 0.0% $0.155m $0.155m 0.0%ERJ-145 ER AE3007-A1P $2.50m $2.50m 0.0% $1.40m $1.40m 0.0% $0.030m $0.030m 0.0%B717-200 BR715A $3.33m $3.33m 0.0% $2.00m $2.00m 0.0% $0.045m $0.045m 0.0%

AFM76_Data_AFNM 04/11/2011 10:26 Page 62

Data supplied courtesy of Ascend Online Fleets / Ascend V1 database

Mfr & type Fleet Stored Total Fleet Fleet Stored % Seats Stored Total Seats Seats Stored%

STORED AIRCRAFT 14 October 2011

A.S.T.A. (GAF) Nomad 9 68 13.24 30 139 21.58ATR ATR 42 31 356 8.71 1,420 13,747 10.33ATR ATR 72 35 518 6.76 2,090 31,637 6.61Aerospatiale 262 4 5 80.00 53 79 67.09Airbus A300 70 350 20.00 13,156 35,650 36.90Airbus A310 36 181 19.89 4,182 21,112 19.81Airbus A319 25 1,310 1.91 2,110 169,093 1.25Airbus A320 87 2,656 3.28 13,346 422,708 3.16Airbus A321 12 668 1.80 2,355 125,984 1.87Airbus A330 24 808 2.97 6,243 218,347 2.86Airbus A340 28 367 7.63 5,756 97,030 5.93Airbus A380 2 61 3.28 924 28,602 3.23Alenia C-27J Spartan 1 45 2.22 0 0Avcraft 328JET 2 2 100.00 20 20 100.00BAE SYSTEMS (Avro) RJ Avroliner 46 162 28.40 4,152 14,711 28.22BAE SYSTEMS (BAC) One-Eleven 4 12 33.33 147 315 46.67BAE SYSTEMS (HS) 146 68 161 42.24 5,656 11,550 48.97BAE SYSTEMS (HS) 748 25 65 38.46 426 669 63.68BAE SYSTEMS (HS) ATP 17 54 31.48 456 716 63.69BAE SYSTEMS (Jetstream) Jetstream (HP/Scottish) 2 2 100.00 0 0BAE SYSTEMS (Jetstream) Jetstream 31 69 237 29.11 1,149 4,111 27.95BAE SYSTEMS (Jetstream) Jetstream 41 22 92 23.91 612 2,517 24.31Boeing 707 37 185 20.00 1,144 4,825 23.71Boeing 717 26 155 16.77 2,539 17,700 14.34Boeing 727 136 386 35.23 6,653 12,525 53.12Boeing 737 (CFMI) 249 1,728 14.41 31,302 216,827 14.44Boeing 737 (JT8D) 213 439 48.52 21,929 42,947 51.06Boeing 737 (NG) 53 3,780 1.40 3,851 585,149 0.66Boeing 747 142 904 15.71 31,526 195,259 16.15Boeing 757 66 995 6.63 10,841 151,241 7.17Boeing 767 66 931 7.09 11,599 177,006 6.55Boeing 777 11 961 1.14 2,871 282,192 1.02Boeing (McDonnell-Douglas) DC-10 32 191 16.75 1,425 5,515 25.84Boeing (McDonnell-Douglas) DC-3 9 68 13.24 327 2,452 13.34Boeing (McDonnell-Douglas) DC-8 34 73 46.58 58 201 28.86Boeing (McDonnell-Douglas) DC-9 176 278 63.31 11,793 19,248 61.27Boeing (McDonnell-Douglas) MD-11 4 192 2.08 100 5,143 1.94Boeing (McDonnell-Douglas) MD-80 245 890 27.53 34,914 127,876 27.30Boeing (McDonnell-Douglas) MD-90 59 108 54.63 8,678 16,221 53.50Bombardier (Canadair) CL-415 9 73 12.33 0 0Bombardier (Canadair) CL-44 1 1 100.00 0 0Bombardier (Canadair) CRJ Regional Jet 140 1,025 13.66 6,404 47,979 13.35Bombardier (Canadair) CRJ900 Regional Jet 15 255 5.88 1,188 20,910 5.68Bombardier (Shorts) 330 2 45 4.44 0 30 0.00Bombardier (Shorts) 360 20 105 19.05 382 1,001 38.16Bombardier (Shorts) SC.5 Belfast 1 1 100.00 0 0Bombardier (Shorts) SC.7 Skyvan 12 60 20.00 35 129 27.13Bombardier (de Havilland) DHC-5 Buffalo 13 51 25.49 0 38 0.00Bombardier (de Havilland) DHC-6 Twin Otter 62 542 11.44 1,077 8,212 13.11Bombardier (de Havilland) Dash 7 9 56 16.07 392 2,310 16.97Bombardier (de Havilland) Dash 8 68 980 6.94 3,292 52,251 6.30CASA 212 55 248 22.18 910 3,246 28.03CASA C-295 1 82 1.22 0 0CASA CN-235 9 188 4.79 128 430 29.77Carstedt Aviation CJ600 1 1 100.00 0 0Embraer 170 8 187 4.28 532 13,380 3.98Embraer 190 12 382 3.14 972 37,246 2.61Embraer 195 1 81 1.23 108 9,429 1.15Embraer EMB-110 Bandeirante 53 253 20.95 602 1,573 38.27Embraer EMB-120 Brasilia 61 260 23.46 1,770 6,980 25.36Embraer ERJ-135 58 315 18.41 1,847 7,104 26.00Embraer ERJ-145 65 682 9.53 3,227 33,348 9.68Fairchild F-27 3 3 100.00 87 87 100.00Fairchild (Swearingen) Metro 48 476 10.08 593 4,913 12.07Fairchild/Dornier 228 29 174 16.67 447 2,050 21.80Fairchild/Dornier 328 20 100 20.00 589 3,070 19.19Fairchild/Dornier 328JET 58 108 53.70 1,713 3,029 56.55Fokker 100 67 227 29.52 6,384 22,292 28.64Fokker 50 40 186 21.51 1,916 8,316 23.04Fokker F.27 28 118 23.73 792 2,899 27.32Fokker F.28 24 63 38.10 1,612 4,038 39.92General Dynamics (Convair) 580 14 69 20.29 95 437 21.74General Dynamics (Convair) 600 1 1 100.00 0 0Gulfstream Aerospace Gulfstream I 10 37 27.03 103 337 30.56Handley Page Jetstream (HP/Scottish) 1 1 100.00 18 18 100.00Hawker Beechcraft 1900 51 617 8.27 950 9,674 9.82Hawker Beechcraft 99 4 140 2.86 30 292 10.27Hindustan Aeronautics 748 2 65 3.08 0 96 0.00Hindustan Aeronautics Saras 1 1 100.00 14 14 100.00Indonesian Aerospace 212 14 68 20.59 275 828 33.21Indonesian Aerospace CN-235 4 46 8.70 111 299 37.12Israel Aerospace Industries Arava 14 70 20.00 19 116 16.38Lockheed Galaxy 9 111 8.11 0 0Lockheed Hercules 204 1,553 13.14 100 244 40.98Lockheed L-1011 TriStar 16 28 57.14 3,131 5,196 60.26Lockheed L-188 Electra 8 20 40.00 89 89 100.00NAMC YS-11 16 37 43.24 252 316 79.75Saab 2000 3 58 5.17 150 2,712 5.53Saab 340 104 402 25.87 3,312 11,581 28.60




Average CMV Dry Lease RateManufacturer Type List Price Oldest Newest %Change Oldest Newest %Change

LIST PRICES AND LEASE RATES

Airbus A300-600R $120.15m $7.00m $12.50m 0.0% $0.140m $0.180m 0.0% 267

Airbus A310-200 $57.00m $2.00m $2.00m 0.0% $0.070m $0.070m 0.0% 240

Airbus A310-300 $81.50m $4.50m $8.00m 0.0% $0.100m $0.120m 0.0% 240

Airbus A318-100 $62.50m $12.00m $24.50m 0.0% $0.125m $0.185m 0.0% 100

Airbus A319-100 $77.70m $11.00m $30.00m -5.2% $0.125m $0.265m 0.0% 124

Airbus A320-200 $85.00m $4.00m $38.65m -10.8% $0.060m $0.310m -8.7% 150

Airbus A321-100 $56.00m $11.95m $18.75m 0.0% $0.150m $0.180m 0.0% 185

Airbus A321-200 $99.70m $19.50m $43.40m 0.5% $0.195m $0.375m 0.0% 185

Airbus A330-200 $200.80m $42.00m $83.75m -1.3% $0.450m $0.765m 0.0% 250

Airbus A330-300 $222.50m $25.00m $97.25m 0.0% $0.330m $0.870m 0.0% 269

Airbus A340-200 $127.50m $15.00m $15.00m 0.0% $0.320m $0.320m 0.0% 250

Airbus A340-300 $228.00m $18.00m $50.25m -12.9% $0.225m $0.475m -18.1% 269

Airbus A340-500 $261.80m $54.00m $76.00m -2.9% $0.525m $0.760m 0.0% 258

Airbus A340-600 $275.40m $60.00m $90.00m -0.6% $0.575m $0.835m 0.0% 322

Airbus A350-800 $236.60m - - - - - - 250

Airbus A350-900 $267.60m - - - - - - 280

Airbus A380-800 $375.30m $147.00m $186.00m 0.6% $1.450m $1.745m 0.0% 555

Boeing B717-200 $40.00m $7.90m $11.45m 0.0% $0.105m $0.145m 0.0% 117

Boeing B737-300 $40.00m $2.50m $5.75m -5.4% $0.055m $0.090m 0.0% 134

Boeing B737-400 $44.00m $4.00m $7.55m 0.0% $0.090m $0.120m 0.0% 144

Boeing B737-500 $34.50m $2.70m $5.50m 0.0% $0.055m $0.075m 0.0% 104

Boeing B737-600 $56.90m $11.00m $19.50m 0.0% $0.150m $0.200m 0.0% 103

Boeing B737-700 $67.90m $15.30m $32.10m 0.0% $0.165m $0.285m 2.5% 134

Boeing B737-800 $80.80m $19.70m $40.75m 0.0% $0.235m $0.350m 0.0% 154

Boeing B737-900 $71.75m $18.90m $23.05m 0.0% $0.190m $0.220m 0.0% 172

Boeing B737-900ER $85.80m $32.90m $44.40m 0.0% $0.310m $0.375m 0.0% 215

Boeing B747-400 $250.00m $18.50m $54.25m -4.1% $0.350m $0.670m 0.0% 347

Boeing B747-8 $317.50m - - - - - - 467

Boeing B757-200 $79.80m $6.50m $20.60m 0.0% $0.120m $0.230m 0.0% 188

Boeing B767-200ER $144.10m $4.50m $14.50m 0.0% $0.160m $0.230m 0.0% 158

Boeing B767-300ER $164.30m $9.00m $58.40m -3.1% $0.205m $0.520m 0.0% 190

Boeing B777-200 $186.50m $21.80m $37.05m 0.0% $0.350m $0.430m 0.0% 313

Boeing B777-200ER $232.30m $42.00m $117.75m 0.0% $0.560m $0.995m 0.0% 313

Boeing B777-200LR $262.40m $90.00m $135.00m 0.0% $0.810m $1.045m 0.0% 313

Boeing B777-300 $222.00m $43.50m $64.00m 0.0% $0.575m $0.705m 0.0% 382

Boeing B777-300ER $284.10m $86.00m $147.00m 0.0% $0.860m $1.285m 0.0% 350

Boeing B787-8 $185.20m - $105.00m - - - - 220

Boeing McDonnell Douglas MD-11 $119.10m $10.00m $10.00m 0.0% $0.150m $0.150m 0.0% 285







Bombardier (Canadair) CRJ-100/200 $24.20m $2.25m $6.60m 0.0% $0.040m $0.080m 0.0% 50

Bombardier (Canadair) CRJ-700/705 $35.57m $10.00m $21.20m 0.0% $0.110m $0.225m 0.0% 70

Bombardier (Canadair) CRJ-900 $40.81m $13.80m $23.55m 0.0% $0.150m $0.245m 0.0% 86

Bombardier Q200 $15.70m $3.70m $8.50m 0.0% $0.055m $0.085m 0.0% 37



Embraer ERJ-135ER $17.14m $4.70m $5.25m 0.0% $0.050m $0.050m 0.0% 37

Embraer ERJ-145ER $22.25m $4.80m $8.70m 0.0% $0.060m $0.085m 0.0% 50

Embraer E170 LR $34.18m $14.00m $23.25m 0.0% $0.150m $0.230m 0.0% 70




Fokker Fokker 70 $24.50m $3.50m $3.50m 0.0% $0.055m $0.055m 0.0% 80

Fokker Fokker 100 $31.60m $3.00m $3.70m 0.0% $0.060m $0.070m 0.0% 108

ATR ATR42-500 $16.90m $5.30m $14.60m 0.0% $0.065m $0.130m 0.0% 48

ATR ATR72-500 $20.50m $5.60m $18.50m 0.0% $0.070m $0.180m 0.0% 70

Seating*(Typical C+Y)

Data supplied courtesy of Ascend Online

Region Net Delivered Leased Purchased Fleet as of Orders new 2nd hand 24 October 2011

WORLDWIDE FLEET SUMMARY BY REGION — August to October 2011

Undisclosed 56 3 0 6 NAAfrica 14 11 24 31 2596Asia-Pacific 189 80 60 45 7626Central America 0 8 9 22 1279Europe 179 39 55 67 8169Middle East 0 21 13 4 2063North America 108 94 220 492 17624South America 4 18 14 22 3271

Source: OAG Fleet iNET, October 2011




To us, each transaction builds a relationship. And it’s these long relationships that provide

stability and predictable performance for our customers, fi nancial partners and suppliers.

After all, if we make the deal work for everyone today, we’ll all look forward to doing the

next one tomorrow. Learn more at www.aviationcapital.com

Operating Leases • Asset Management • Aviation InvestmentMain Office: Newport Beach +1 949 219 4600 • Regional Offices: London, Santiago, Seattle, Shanghai, Singapore

It’s about a lease that lasts fi ve years

and a relationship with no expiration date.

It’s about more than the plane.

Fin_ACG No Expiration Date Ad_v3_AFM.indd 1 5/4/11 9:26 AM

AFM76

Documents

Transcript of AFM76