Overview of the Middle Eastern aircraft market and financing requirements

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1 Overview of the Middle Eastern aircraft market and financing requirements MICHAEL B. COX Vice Chairman, Seabury Advisory Group Global Head of Corporate Advisory Services

2 9% Annual Fleet Growth for the Past Years In Service and in storage commercial passenger aircraft in the Middle East 1,00 1, 1,0 1,100 1, % Today In Service In Storage Notes: Middle East for purposes of this presentation includes Bahrain, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon. Oman, Palestine, Qatar, Saudi Arabia, Syria, United Arab Emirates, Yemen Republic. Commercial passenger aircraft include wide bodies, narrow bodies, regional jets, and turboprops Source: Ascend as of September 1, 1 1

3 Uptick in Market Activity in 1 in the Middle East Additional financing transactions in 1: Purchased - subject to existing lease: 1 Purchased sale and lease- back: 8 Securitized: 9 8 1, ,09 Additional financing transactions in 1: Purchased - subject to existing lease: Purchased sale and lease- back: 10 Securitized: 1,08 In Service Fleet 1 Delivered Purchased (used) Sold Parked Reactivated Retired Converted In Service Fleet 1 Delivered Purchased (used) Sold Parked Reactivated Retired Converted In Service Fleet 1 Source: Ascend as of September 1, 1; Seabury Analysis

4 Middle East Market Growth Potential Current fleet and backlog by operator region Backlog to current fleet ratio (number of aircraft) Asia Pacific 0,99, North America 1,0,990, Europe,, Middle East 11 1, 1, Latin America and Caribbean 1 1,0 1,9 In Service Backlog In Storage On Order On Option Letter Of Intent Unannounced,00 Option Letter Of Intent Africa Source: Ascend as of September 1, 1 0.9

5 Middle Eastern Fleet Second Youngest Average commercial passenger fleet age by region Latin America and Caribbean Europe Asia Pacific Middle East North America Africa Average commercial passenger fleet age by operator (for Top 1 in Middle East by fleet size) 1 Source: Ascend as of September 1,

Regional Turboprop 1 1 19 11 119 8 8 10 9 1 1 8 19 19

6 Current Fleet Dominated by Four Carriers In service commercial passenger fleet Wide Body Narrow Body 1 Regional Turboprop Other Source: Ascend as of September 1, 1

7 In Backlog: Local Leasing Companies and Saudi Start- Up Commercial passenger fleet backlog Wide Body Narrow Body Regional 8 Turboprop Other Source: Ascend as of September 1, 1

8 Other Carriers Emerging with Large Orders Relative to Current Fleet Backlog / current fleet ratio. 0. On Order On Option 0. Letter of Intent Other Source: Ascend as of September 1, 1 0.0

9 Backlog Dominated by Next Generation Aircraft: Both Wide Body and Narrow Body Backlog by aircraft type Next gen Current gen B A A0 B8 B A80 ATR A0 CSeries E- 190/19 CRJ91 DHC- 8 E- 10/1 Funding requirements in USD billion in today s list prices (Airbus/Boeing/Bombardier) 1.8 Next gen Current gen B A0 B8 A80 A B A0 CSeries CRJ91 DHC- 8 Source: Ascend as of September 1, 1; Airbus/Boeing/Bombar dier websites with most recent price list 8

10 Timeline for Financing Requirements in the Middle East Funding requirements by build year in USD billion and commitment type On Order On Option Letter Of Intent Unknown Source: Ascend as of September 1, 1; Airbus/Boeing/Bombar dier websites with most recent price list 10

11 Aircraft Funding Requirements in Global Perspective Funding requirements in USD billion in today s list prices (Airbus/Boeing/Bombardier) % 8% Airbus next gen 9% % 9% % 1% 1% % % Airbus current gen 10% 8% 8% Boeing next gen % % % 1% % % % Boeing current gen Bombardier next gen Bombardier current gen % 1% % % 1% 8% % 8% 1% 1% 1% 10% 1% 1% Asia Pacific Europe North America Middle East Unannounced Africa Latin America Source: Ascend as of September 1, 1; Airbus/Boeing/Bombar dier websites with most recent price list 9

12 Middle Eastern Carriers Face Certain Challenges Total funding requirements much larger than just aircraft orders (USD billion) Global competition for passengers intensifying > 9 81 In addition: Air Traffic Control systems Crew housing Hotels International equity investments Road- side infrastructure Start- up costs Asian FSCs European FSCs Middle Eastern Carriers 9 WB Long- Haul LCCs ,09 WB 9 1 WB 1 1 Indian LCCs Aircraft Airports New pilots Source: Ascend as of September 1, 1; Airbus/Boeing/Bombar dier websites with most recent price list; PwC: Connectivity and growth Issues and challenges for airport investment ; Boeing: Pilot & Technician Outlook Notes: Cost per new pilot assumed at $00k per head. Boeing forecasts demand for 8,000 additional pilots in the Middle East from 1- ; we pro- rated the cash outlays by the breakdown of the fleet backlog 11 WB = wide body backlog NB = narrow body backlog 08 NB

executive summary The global commercial aircraft fleet in service is expected to increase by 80% to 45,600 aircraft in 2033 including 37,900

executive summary The global commercial aircraft fleet in service is expected to increase by 80% to 45,600 aircraft in 2033 including 37,900 executive summary The 2014 Flightglobal Fleet Forecast estimates that 36,820 new commercial jet and turboprop aircraft will be delivered into passenger and freighter airline service between 2014 and 2033.