Presentation to Engine Investor & Financier New York Roadshow. April 3 rd International Bureau of Aviation

Transcription

1 International Bureau of Aviation Presentation to Engine Investor & Financier New York Roadshow April 3 rd 2007 Phil Seymour Managing Director IBA Group Limited Meadowcroft House 180 Balcombe Road Horley, Surrey RH6 9AE United Kingdom +44 (0)

2 Discussion regarding new issues Introduction New Industry Issues PMA Parts Manufacturer Life time support

3 IBA Group Ltd. the first choice aviation consultancy whenever and wherever a client wants to minimise risk or maximise opportunity providing cost-effective, considered and prompt advice.

4 20 th Year of Operations at IBA Group Independent of any financial institution, operator, lessor, manufacturer or supplier Originally formed in 1988 as technical consultancy Now encompasses both technical & commercial aviation issues Produce a range of related aviation publications Main office situated near Gatwick Airport, U.K. Affiliates in North America, South America & Australia

5 IBA Group Ltd. Technical Management Services Engine Management Services Consulting & Commercial Services Asset Valuations IBA Group has developed 4 business units to better address the individual needs of our clients Products from each group can be combined to provide an overall package of services to suit any needs Experienced, dedicated & skilled professionals with a wide range of technical & commercial expertise

6 IBA s Position in the Aviation Consulting Scene Appraisal: ISTAT Senior Certified Appraiser Technical: UK CAA E3 Approved. Application for EASA OPS 1, Part M Subpart G we can plan and manage the maintenance on aircraft/engines. Commercial: Airline, Lessor and Financier Board level experience.

7 New Industry Issues PMA Parts and Manufacturer Support Programmes are aspects for consideration in the industry as a whole but there are also specific considerations that the financiers, lessors and lessees need to consider.

8 New Industry Issues PMA Parts Parts Manufacturer Approval. A US FAA Process has been around for 40 yrs. Lower costs are driving Airlines to these parts. Recent OEM developments have created considerable industry debate.

9 New Industry Issues PMA Parts Parts Manufacturer Approval. OEM Reaction Major Players Impact on leases and aircraft values. Drafting of Replacement Parts clauses

10 New Industry Issues Manufacturer Life Time Support Programmes. Prime drivers have been the engine manufacturers, now shifting towards the airframers New aircraft sales driven by huge discounts on the engine prices dependant on the ongoing engine maintenance requirements. A by-product is that this is a useful strategy to prevent PMA parts being used.

11 Value Added? IBA Experience If only.. If only the history of this engine was all in one place If only we had the manufacturers approval for all repairs and modifications If only the airline had kept the manufacturer updated with all of the changes it had made If only the manuals and publications were updated with all of the airlines modification and revision status If only all of the parts and the certification was collated into an easy to access file

12 New Industry Issues 100% 90% 80% Values as percentage of start value 70% 60% 50% 40% 30% 20% Half-life Goldcare + engines Goldcare 10% 0% Age in Years

13 Value Added? Airline technical departments, Lessors and Technical Advisers may be less busy doing their current monitoring tasks Changing business models for us all?

14 New Industry Issues Assignment, accessibility for the Lessor, since it is usually a OEM - Airline contract. Requires more documentation to protect Lessor interests Overall aim is that aircraft/engine values are enhanced and the result is lower cost financing since there is ultimately less risk for the equity/debt providers from stronger residual values, lower transition costs, shorter downtime.

15 New Industry Issues Devil is in the detail does Total mean Total? Oxford English Dictionary: Total Complete, comprising the whole, absolute, unqualified. Some airlines will want true Total support, others may want to choose from the menu A la Carte Care?

16 International Bureau of Aviation Presentation to Engine Investor & Financier New York Roadshow April 3 rd 2007 Phil Seymour Managing Director IBA Group Limited Meadowcroft House 180 Balcombe Road Horley, Surrey RH6 9AE United Kingdom +44 (0)