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effective asset management - AviTrader


									                                                                                              ISSN 1718-7966           JULY 31, 2006 / VOL. 57

 AviTrader                                                                WEEKLY AVIATION HEADLINES
   Read by thousands of aviation executives and technical decision makers every week                           

    MTU Maintenance Berlin-Brandenburg of Germany logged the largest CF34 repair contract in its history. Air Wisconsin
    Airlines Corporation will send all of its CF34-3B1 engines powering a fleet of 70 twin-engine Bombardier CRJ200 re-
    gional jets to MTU for repair and overhaul. The ten-year contract is valued at $300 million.
    Bernd Kessler, President and CEO, commercial maintenance at MTU Aero Engines, said "We're
    very excited about this long-term relationship. In Air Wisconsin, we added to our customer list a
    very successful airline that will have nothing less than our all-out support. We'll be happy to contrib-
    ute to the airline's future success. This contract assures our status as one of the leading CF34
    maintenance providers."
    CF34 family engines are among the best-selling in their class. MTU Maintenance Berlin-
    Brandenburg provides service support not only for the -3B1 variant, but also for all other popular
    versions of the General Electric engine. In the Berlin shop's engine portfolio, the CF34 is evolving
    into the single most important program. MTU expects that this key contract with Air Wisconsin will
    have a ripple effect among further potential customers.                                                                           Bernd Kessler

                             Air Wisconsin, headquartered in Appleton, Wisconsin, was founded in 1965 and is the larg-         Image: MTU
                             est independently held regional airline in the United States. The airline operates nearly 500

                             regional jet daily departures and carries over six million passengers annually for US Airways
                             operating as US Airways Express, with service to 70 cities in the U.S. and Canada.
                             MTU Maintenance Berlin-Brandenburg is an affiliate of MTU Aero Engines. The company focuses on the mainte-
                             nance of small and mid-size aircraft engines and on industrial gas turbines. It also does the final assembly of
                             most low-pressure turbines manufactured by MTU. The company plays a very special role in the TP400-D6 pro-
                             gram, the engine to power the Airbus A400M Military Airlifter. Ludwigsfelde has Europe's only production test cell
                             to conduct TP400-D6 development and acceptance test runs. Final assembly of the European TP400-D6 pro-
                             duction engines, too, will be performed exclusively at this MTU affiliate.

                             Expert Corner (see Page 5)                                NEW     INDIAN LCC
                             ONGOING CHALLENGE:                                        TAKES DELIVERY OF
                             EFFECTIVE ASSET MANAGEMENT                                FIRST AIRBUS
                             By Mark Calver
                             Chief Operating Officer                                   IndiGo, the new low-fare
                             Relaer Asia, Singapore                                    carrier headquartered in         Place your company logo
                                                                                       New Delhi, India took de-        on page #1 for just $135/
                                                                                       livery of its first A320 fam-     week. Call +1(604) 448-
                                                                                                                            0970 for details.
                                COMING SOON AT WWW.AVITRADER.COM                       ily aircraft, on July 28th,
                               BLOGGS FOR THE AVIATION PROFESSIONAL                    2006, becoming the latest
                                                                                       Airbus operator. Indigo                OTHER NEWS
                                                                                       ordered 100 A320 family
                              NORTHWEST AND STRIKING MECHANICS RE-                                                     Boeing delivers 2,000th Next
                                                                                       aircraft in June 2005. In-      Generation 737
                              SUME CONTRACT NEGOTIATIONS
                                                                                       digo will receive five more     (Page 2)
                              AMFA, the union which represents striking mechan-        aircraft this year, followed    Pratt & Whitney logs $1.5
                              ics at Northwest Airlines, confirmed that Northwest      by more in 2007. The air-       billion commercial orders
                              Airlines and AMFA have agreed to resume contract         line will receive the deliv-    (Page 4)
                              bargaining. A bargaining session is scheduled for        ery of all 100 A320 family      Boeing posts Q2 loss
                              August 15, 2006. Neither side has attached any pre-      aircraft by 2016.               (Page 8)
                              conditions. The parties have not met in contract bar-
                                                                                       Bruce Ashby, CEO, In-
                              gaining since November 2005. AMFA has been on
                                                                                       diGo stated “IndiGo is
                              strike since August 20, 2005, when the company                                                    PUBLISHER
                                                                                       built for people with things
                              imposed a contract. A spokesperson for AMFA's                                                    Peter Jorssen
                                                                                       to do, places to be and         ARYX Business Solutions Inc.
                              Bargaining Committee, said: "Our goal remains to
                                                                                       people to see, who don’t              9500 Aquila Road
                              obtain a consensual agreement. We welcome the                                                    Richmond, BC
                                                                                       want to waste time,
                              resumption of face-to-face discussions. The timing is                                         Canada V7A 3P9
                                                                                       money or energy in the
                              appropriate because, as of July, we are now the last                                      Phone: +1 (604) 448-0970
                              labor group with an unsettled contract.
AviTrader WEEKLY AVIATION HEADLINES                                                                                        2

Republic Airlines orders more Em-           200 series engines which allows the         Boeing delivers 2,000th NG737
braer 175s                                  Stage 4 Jet Nozzle modification to be
                                                                                        Boeing delivered the 2,000th Next-
                                            used on the 727’s. Marketed as the
Embraer has reached an agreement                                                        Generation 737 nearly seven years
                                            SUPERQ727-4, the Comtran modifi-
for the sale of 30 firm EMBRAER                                                         sooner than any other commercial jet
                                            cation will also include the Quiet
175 aircraft to Republic Airlines Inc.                                                  airplane model. The milestone deliv-
                                            Wing modification for the 727 to fur-
This brings to 78 firm and 75 options                                                   ery, a 737-700 to Southwest Airlines,
                                            ther enhance the performance and
the total number of E-Jets on order                                                     occurred nearly nine years after
                                            value of the modified aircraft. Doug-
for Republic. These aircraft were                                                       Southwest received the first Next-
                                            las Jaffe, CEO of Comtran Limited
originally options under the amended                                                    Generation 737. The Next- Genera-
                                            expects to certify both low-weight
and reinstated Embraer / US Airways                                                     tion 737 airplane family, which in-
                                            and high-weight versions of the
purchase agreement. With the con-                                                       cludes the 737-600, -700, -800, -900
                                            modification and anticipates that the
sent of Embraer, US Airways has                                                         and the new -900ER and -700ER,
                                            upgrade to compliance with Stage 4/
transferred to Republic its right to                                                    continues to be the company's best-
                                            Chapter 4 regulations will stimulate
purchase these aircraft. This recent                                                    selling airplane model.
                                            significant interest in the modified
announcement does not affect the 25
firm EMBRAER 190 aircraft and the
32 additional EMBRAER 190s, sub-
                                            Boeing forecasts 3,000 freighters
ject to reconfirmation, in US Airways’
                                            to be added to world freighter fleet
order book.
                                            Boeing expects that the global air
Winglets for MD80
                                            cargo market will continue its growth
Comtran Limited and Jet Engineering         patterns of the past few years, with
Limited, developers of the Stage 4          strong 20-year growth, according to
Jet Nozzle for MD80 aircraft, have          the manufacturers Current Market
announced that a development pro-           Outlook (CMO) 2006. This pattern
gram is underway to retrofit the            will lead to a doubling of the world
MD80s with winglets. Based on a             freighter fleet from 1,789 to 3,563         Image: Boeing
blended winglet design, the concep-         airplanes, both numbers slightly up
                                                                                        Earlier this year, the current airplane
tual design work is complete and            from the previous forecast. This
                                                                                        family eclipsed order totals for Clas-
prototype winglets have been dis-           growth, accounting for expected air-
                                                                                        sic 737s. As of June 30, 2006, 97
played on Comtran’s Stage 4/                plane retirements of 1,209 airplanes,
                                                                                        customers have placed orders for
Chapter 4 compliant MD80 in Farn-           will result in a total of 2,983 airplanes
                                                                                        more than 3,300 airplanes. The pro-
borough.                                    added to the freighter fleet by 2025,
                                                                                        gram has 1,365 unfilled orders with a
                                            according to the annual CMO, which
                                                                                        value of $91 billion at current list
Comtran develops quite 727                  was released earlier this month prior
                                                                                        prices. So far this year, the Next-
                                            to the Farnborough Air Show. Most
Comtran Limited, the company be-                                                        Generation 737 has won net orders
                                            of these additions - nearly 62% - will
hind the development of the Stage 4/                                                    for 399 airplanes. The order total
                                            be in the widebody category
Chapter 4 compliant Jet Nozzle for                                                      represents 78% in units of all Boeing
                                            (medium widebody plus large freight-
the MD80 series of aircraft, has ex-                                                    commercial airplane orders for the
                                            ers). Widebody freighters with a ca-
tended the application of that modifi-                                                  year.
                                            pacity of 40 tons or more will in-
cation to the Boeing 727. The 727
                                            crease in share from 50% of the cur-
modification initially will be applicable                                               DHL / ABX Air to remove twenty-
                                            rent fleet to 64% of the 2025 fleet.
to the more than 80 Super 27 Stage                                                      one aircraft from fleet
                                            Consequently, there will be an in-
3 aircraft that have been modified
                                            crease in overall average freighter         ABX Air has been notified by its larg-
under the program developed by
                                            airplane payload. These findings are        est customer, DHL, that 21 ABX air-
Valsan. That modification replaced
                                            consistent with prior years' forecasts.     craft (11 DC-9s and 10 DC-8s) will
the 727’s outer engines with JT8D-
                                            click here to download complete forecast

                                                                                                        JULY 31, 2006 / VOL. 57
AviTrader WEEKLY AVIATION HEADLINES                                                                                     3

be released from dedicated service
for DHL effective in August 2006.
ABX Air had reported in November
2004 that DHL intended to remove
26 (16 DC-9s and 10 DC-8s) of the
aircraft that ABX Air operates on
DHL's behalf by the end of 2005 un-
der terms of their aircraft, crew,
maintenance and insurance agree-
ment ("ACMI agreement"), some of            setting the loss of depreciation cash     reduction in parts count, the PW610F
which would be replaced by newer,           flow generated by the 28 removed          incorporates the latest technologies
larger, and more fuel efficient Boeing      aircraft.                                 while offering optimum value to op-
767 aircraft. Seven aircraft (three                                                   erators.
DC-9s and four DC-8s) have been             Pratt & Whitney Canada receives
removed from active service since           certification for PW610F                  Boeing 737 design enhancements
that November 2004 announcement.                                                      earn FAA certification
                                            Pratt & Whitney Canada has re-
The planned August 2006 reduction           ceived Transport Canada Type Certi-       Boeing design enhancements that
of 21 aircraft will bring to 28 the total   fication for its new PW610F engine,       increase the short-field performance
number of aircraft released from ser-       set to power the Eclipse 500 very         of the Next-Generation 737 earned
vice under the ACMI agreement               light jet (VLJ). The PW610F engine,       certification this week from the U.S.
since November 2004. During the             rated at 900 lbs. thrust is part of the   Federal Aviation Administration fol-
same period, ABX Air has added four         P&WC's new PW600 engine family,           lowing a successful four-month flight-
Boeing 767 freighter aircraft into the      which offers a step change in per-        test program. European Aviation
DHL network, with associated cash           formance, cost and durability. De-        Safety Agency certification is ex-
flow from depreciation more than off-       signed with an approximately 50%          pected to follow soon. The 737 de-

                                                                                                     JULY 31, 2006 / VOL. 57
AviTrader WEEKLY AVIATION HEADLINES                                                                                        4

sign enhancements allow operators         we also saw great customer interest               Place your company logo
to fly increased payload in and out of    in our Global Material Solutions busi-             here for just $115/week.
airports with runways less than 5,000     ness, our growing portfolio of engine               Call +1(604) 448-0970
feet long. The design enhancements        overhaul and line maintenance ser-                        for details.
include a two-position tail skid that     vice capabilities, and the Geared
enables reduced approach speeds,          Turbofan engine we’re developing for
sealed leading-edge slats that pro-       the next generation single-aisle air-
vide increased lift during takeoff, and   craft.”
increased flight spoiler deflection on
the ground that improves takeoff and      First DayJet-equipped Eclipse 500
landing performance. The short-field      VLJ lands at Oshkosh
performance changes were devel-                                                         Honda begins sale process for the
                                          DayJet and Eclipse Aviation Corpo-            new HondaJet
oped starting in 2004. The flight-test
                                          ration unveiled the first Eclipse 500
program was conducted on a new
                                          very light jet (VLJ) to be utilized in        Honda released plans to enter the
737-800 and began when the air-
                                          commercial fleet operations. Eclipse          innovative HondaJet in the growing
plane made its first flight on Jan. 24,
                                          500 serial number two, built at the           very light jet market, with the process
2006. Boeing will deliver the refur-
                                          Eclipse Aviation production facility in       of accepting sales orders expected
bished test airplane later this week to
                                          Albuquerque, New Mexico, made its             to begin in the U.S. in fall 2006. To-
the launch customer, Brazilian low-
                                          debut when it touched down at the             ward this goal, Honda will establish a
cost carrier GOL Linhas Aereas S.A.
                                          EAA's AirVenture 2006 in Oshkosh,             new U.S. company to hold FAA type
The jet is the first of 67 737-800s
                                          Wisconsin. The aircraft is the first of       certification and production certifica-
ordered by the carrier. To date 11
                                          a new breed that will be used by              tion. Honda's goal is to complete
customers have ordered the short-
                                          DayJet to launch its innovative new           type certification in about 3-4 years,
field performance package for more
                                          "Per-Seat, On-Demand" jet service.            followed by the start of production in
than 250 airplanes. In addition to
GOL, Alaska Airlines, Air Europe, Air                                                   the U.S. Honda also revealed plans
                                          TAM receives more A320s                       to form a business alliance with Piper
India, Egyptair, GE Commercial
Aviation Services (GECAS), Hapag-         TAM has received another Airbus               Aircraft, Inc. to collaborate on sales
fly, Japan Airlines, Pegasus Airlines,    aircraft A320. which will be the sev-         and service, and to explore opportu-
Sky Airlines and Turkish Airlines are     enth Airbus A320 incorporated this            nities in engineering and other areas
among some of the operators that          year into TAM's fleet, bringing the           within general and business aviation.
have ordered the design package.          total to 88 aircraft, of which 66 are         Honda and Piper will provide a new
                                          Airbus models -- 13 A319, 43 A320,            level of sales and service to meet the
Pratt & Whitney logs $1.5 billion in      and 10 A330 (two are subleased but            needs of jet customers with the goal
Commercial Engine Sales at Farn-          will be returned to the company this          of setting a higher standard for the
borough Airshow                           year). TAM expects its fleet to               quality of the ownership experience.
                                          achieve a minimum of 96 airplanes             No specific details regarding addi-
Pratt & Whitney and its partner com-                                                    tional collaboration were announced.
                                          at the end of 2006.
panies, International Aero Engines
(IAE) and Engine Alliance (EA), an-
nounced several new engine and
service agreements last week at the
Farnborough International Airshow
outside London, England. The an-
nouncements, which totaled nearly
$2.5 billion, mean nearly $1.5 billion
in new business for Pratt & Whitney
Commercial Engines, including its
share of the IAE and EA new cus-
tomer agreements. Pratt & Whitney
is a United Technologies Corp.
(NYSE:UTX) company. “The Farn-
borough International Airshow was a
huge success for Pratt & Whitney’s
Commercial Engines business,” said
Steve Finger, Pratt & Whitney presi-
dent. “The new business we an-
nounced reflects our commitment to
listen to our customers and to make
dependable engines. In addition to
the many exciting new engine deals,
                                          TAM Airbus over Rio de Janeiro   Image: AirTeamImages
                                                                                                        JULY 31, 2006 / VOL. 57
 AviTrader WEEKLY AVIATION HEADLINES                                                                                    5

By Mark Calver
Chief Operating Officer, Relaer Asia, Singapore

The aircraft leasing business has grown substantially in         ment programmes enable them to obtain the best utility
the last twenty years. ILFC is credited with developing the      and therefore return from their assets. Be warned though
first aircraft operating lease arrangement having estab-         effective asset management does not guarantee that the
lished the lease of a DC8-51 with Aeromexico in 1973.            aircraft will avoid being repossessed or, due to the cycli-
Now, there are more than 50 true aircraft lessors and            cal nature of the industry, unplaced at lease transition
approximately 10 engine lessors. Somewhere in the re-            time when the industry is in recession. However effective
gion of 26% of today’s aircraft fleet of 18,500 aircraft is      asset management does mean that the lessor is best
provided through pure operating lease arrangements.              placed to recover an asset from a weak operator and re-
The future of the aircraft operating lease industry is one       locate it with a new airline at minimum cost and downtime
of growth; industry projections predict anywhere between         exposure compared to its competitors.
17,300 and 27,500 new aircraft deliveries by 2025. It is
anticipated that the combination of speculative orders
from lessors combined with the increasing use of airline
sale and leaseback transactions will lead to some 40% of
the world’s fleet being owned by lessors.

Lessons Learned
In the early days of the operating lease industry, lessors
did not focus too much on asset management tech-
niques, essentially placing the aircraft with airlines that
were left to look after the aircraft without recourse to rou-
tine inspections and auditing by the owner. Lease agree-
ments were simple documents with minimum technical,
operational and return condition provisions; as long as
the lessee was making its lease rental payments the air-
line was essentially left alone until the time of redelivery.

During the 1980s and early 1990s, the lease industry ma-
tured and learned many lessons, these included:
◊ airworthiness certification in one jurisdiction did not nec-
                                                                 Considerations for an Effective
  essarily guarantee the issuance of a new airworthiness         Asset Management Programme
  certificate in the next lessee’s jurisdiction;
◊ airline maintenance programme differences combined             The purpose of an asset management programme is to
  with the variance in airworthiness certification require-      achieve the best possible residual value of an aircraft at
  ments created the need for expensive bridging checks           any point in the highs and lows of the aircraft ownership
  and modification inputs between leases;                        cycle. Ultimately this is achieved by understanding the
◊ accurate, well maintained aircraft historical records are      product; the market it serves and the airlines operating
  key to maximizing asset value and utility;                     the aircraft combined with establishing management sys-
◊ airlines supposedly operate to the same or similar air-        tems that monitor the use of the aircraft, maintain the
  worthiness requirements but the management systems             best utility of the asset and obtain the best return from the
  they employ vary significantly this leads to extra cost        lessee’s use of the aircraft.
  and lost rental due to extended down time during lease
  transitions;                                                   Lease Agreement—This document defines the contrac-
◊ the cyclical nature of the industry and the swings in sup-     tual relationship between the lessee and lessor, today’s
  ply and demand provide for fierce competition to either        leases are far more complex than the early versions sim-
  supply or source aircraft and associated large swings in       ply because the industry has learned many lessons in-
  investment returns.                                            cluding:
Generally speaking lessors have learned the hard way,            ◊ accurate documentation of delivery and redelivery obli-

experience has taught them that effective asset manage-            gations;

                                                                                                     JULY 31, 2006 / VOL. 57
    AviTrader WEEKLY AVIATION HEADLINES                                                    Expert Corner                  6

◊   minimising jurisdiction risks, such as lessor’s rights of      the issues may affect future utility or investor appeal are
    enforcement and aircraft recovery, eurocontrol and             key basics for managing exposure to aircraft investments.
    other third party liens;                                       This knowledge arms the asset manager with the ability
◊   insurance requirements including insured values and            to determine the best acquisition and disposal strategies
    liability coverage;                                            for particular classes of aircraft.
◊   airworthiness certification requirements including the
    impact of the airlines maintenance, modifications and          Understand the Users—Knowing who the actual or po-
    repair activities;                                             tential users of aircraft are will provide the asset manager
◊   importance of maintenance reserve or compensation              with the best possible re-marketing strategy during
    payment collection and return conditions.                      scheduled or unplanned transitions. In addition knowing
                                                                   who the buyers and sellers of aircraft are will also assist
The lease agreement is the primary document that the               the asset manager with developing the best aircraft ac-
lessor / asset manager can enforce and therefore any               quisition or disposal strategies.
aircraft inspections, lessee audits and lease management
activity should always reference the lease agreement               Lease Management—Apart from the routine lease rental
provisions.                                                        payments, lease agreements include numerous provi-
                                                                   sions that require monitoring and some form of action by
                                                                   both parties. In addition the lessor cannot solely rely on
                                                                   the marketing officer’s relationship with the airline to
                                                                   achieve the best customer relationship and return from
                                                                   the asset under lease. It is inexcusable for the lessor not
                                                                   to accomplish its own responsibilities in a timely manner
                                                                   but it is advisable that the lessor also monitors the les-
                                                                   see’s compliance with its lease obligations. Issues that
                                                                   require monitoring, adjustment and follow up could in-
                                                                   ◊ maintenance reserve billing and collection;

                                                                   ◊ routine maintenance reserve rate adjustments;

                                                                   ◊ major maintenance events subject to reserve collec-

                                                                     tions and reconciliation of assoicated claims;
                                                                   ◊ renewal of letters of credit, insurance and airworthiness

                                                                     certification; and
                                                                   ◊ the exercising of any options under the lease such as

                                                                     early termination rights.
Understand the Aircraft—A good knowledge of the air-
craft product, in particular understanding the specification       Aircraft Inspections, Valuations and Utility Assess-
issues that could improve the aircraft’s utility (i.e. make        ment—The inspection of an aircraft either at the time of
an aircraft more desirable to a new operator or buyer)             initial purchase or subsequently whilst subject to operat-
and the time lines and costs associated with effecting any         ing lease arrangements will ensure that the asset man-
changes are key to assessing aircraft value and estab-             ager determines the specific condition of the aircraft and
lishing effective lease transition planning.                       enables an accurate assessment of both aircraft value
                                                                   and utility to be completed. Apart from determining the
With new aircraft this is obtained by establishing an effi-        physical condition of the aircraft, any aircraft inspection
cient base line specification for the aircraft, with used air-     should include the full review of the following:
craft this is determined by correctly inspecting the aircraft      ◊ aircraft and historical records airworthiness status re-

and its historical maintenance, repair and modification              view and comparison with the requirements of other
records. In addition the asset manager has to consider               major jurisdictions. This will include an assessment of
future airworthiness implications, not just mandatory re-            the costs for accomplishing mandatory modifications or
quirements such as Airworthiness Directives but also pe-             rectifying records issues;
culiar jurisdiction requirements that affect airworthiness         ◊ aircraft modification status and comparison with the

certification and therefore the timeliness of aircraft transi-       typical requirements of other operators of the type, in-
tions. In the case of used aircraft this applies to the physi-       cluding an assessment of the costs for accomplishing
cal condition of the aircraft as well as the aircraft’s histori-     key modifications;
cal records.                                                       ◊ determine the maintenance status of the aircraft includ-

                                                                     ing the projection of future major events and compare
Understand the Market—Maintaining a working knowl-                   this to the sufficiency of maintenance reserve pay-
edge of aircraft utility and availability along with monitor-        ments; and
ing the industry’s status with respect to the cyclicality of       ◊ in the case of maintenance compensation leases the

supply and demand all contributes to ensuring the best               maintenance projections and maintenance compensa-
aircraft asset management strategy. Knowing which air-               tion payments should be modeled based upon the lease
craft types are preferable investments and why as well as            term and associated lease provisions. This data will

                                                                                                       JULY 31, 2006 / VOL. 57
 AviTrader WEEKLY AVIATION HEADLINES                                                     Expert Corner                  7

 then be compared with known industry costs, future              ery to the next operator, an effective asset management
 lease requirements and the credit risk of the airline.          programme allows the lessor to plan ahead and budget
                                                                 for the costs of transition work. In addition during the re-
Operator Audits and Associated Risk Assessment—                  marketing campaign the lessor has current information
Prior to commencing lease arrangements with an airline           and can accurately quantify the risks and exposures of
and at regular intervals during the lease term the asset         placing the aircraft with different customers. Effective as-
manager should complete a structured audit of the airline        set management is the foundation of efficient transition
and its maintenance, engineering and spare parts sup-            project management.
port arrangements. An audit should specifically review
the Flight Operations, Engineering, Maintenance and
Component Management departments. The interaction                Achieving Effective Asset Manage-
between these groups at all levels and the effective man-
agement of any subcontracted arrangements are key to             ment
understanding how the asset will be operated and main-
tained by the airline. This audit activity should be part of     People—As with most enterprises the asset manage-
the initial lessor credit risk assessment and be competed        ment organization is only going to be as good as the peo-
simultaneously with the financial due diligence process.         ple it employs. Whilst procedures can be written to pro-
                                                                 vide guidance to staff the end result can only be achieved
The initial audit should contribute to the lessors lease         through the use of experienced personnel who have the
negotiation strategy and will support the consideration of       requisite qualifications, industry knowledge and commer-
requested changes to lease covenants. As with all audit          cial acumen to support the provision of effective asset
work, meaningful reports providing the results of the audit      management.
and recommended actions should be completed and pro-
vided to the operator for action. Such findings should be        An individual who wishes to pursue a career in an asset
referenced to the respective lease agreement provisions          management role would typically have a mixture of skill
and should be retained for follow up at future audits and        sets. These could be gained from the following primary
any potential disputes. If a lessor / asset manager is ac-       career experiences:
complishing efficient auditing techniques the programme          ◊ several years of “hands on” aircraft maintenance and

should contribute to the airworthiness process at the air-         inspection experience;
line as well as quantifying the lessor’s risks under the         ◊ an ICAO license qualification with time spent in a certifi-

lease agreement.                                                   cation role;
                                                                 ◊ a period in an airline, MRO or manufacturer function;

Aircraft Repossession Issues—Aircraft repossession or            ◊ time spend in quality assurance.

lease agreement restructuring is a fact of life in the airline   In addition an asset manager needs effective written and
industry. The prerequisite to such activity is usually some      verbal communication skills, an understanding of how the
form of continuing payment default by the lessee; al-            technical issues affect the commercial basis of a lease
though it is also possible for poor maintenance standards        transaction and good customer service skills.
or related airworthi-
ness issues to be                                                Management & Information Systems—Efficient IT en-
acts of default. An                                              ables the asset management organisation to focus on
effective asset man-                                             managing the aircraft and effectively administering the
agement programme                                                lease agreement provisions. This will generate the best
will not only detect                                             returns from the asset as up to date information is readily
problems early but                                               available from a single source repository whilst key lease
can ensure that any                                              dates, events or provisions are monitored for enforce-
defaults do not ex-                                              ment. A single source of information ensures that repeti-
ceed the level of                                                tion is avoided, labour intensive calculations are auto-
security deposit and                                             mated and historic data is available to support decision
when any repossession action is undertaken a full recov-         making.
ery and remarketing plan is in place. Such a recovery
plan can be accurately budgeted and will minimise the
opportunity for the lessee or third party liens preventing       Conclusion
recovery. Efficient project management will maintain re-
covery costs within budget and require the minimum               The ultimate aim of an asset management programme is
down time before relocation with a new operator.                 to maintain and wherever possible enhance the value of
                                                                 aircraft or engine assets under lease management ser-
Aircraft Redelivery Issues—If an asset management                vices. Given the prevailing market conditions at the time
programme has been in place during the lease term the            of lease transition or aircraft disposal, effective asset
condition of the aircraft and the ability of the lessee to       management will contribute to the best possible utility,
comply with the lease agreement provisions will be               lease rental or sale price of the asset.
known. Whilst aircraft return conditions provide the mini-
mum condition for both redelivery and subsequent deliv-
                                                                                                     JULY 31, 2006 / VOL. 57
AviTrader WEEKLY AVIATION HEADLINES                                                                                   8

MRO & PRODUCTION                         ordination centers, strategically lo-     Airbus aircraft experience. Since its
                                         cated in Zurich, Switzerland, Hong        launch in March 2005, Airbus has
                                         Kong, China, and Teterboro, New           worked with the MRO Network mem-
                                         Jersey.                                   bers to establish performance bench-
EADS Barfield signs ATR contract                                                   marks for maintenance efficiency
                                         New Logistics Centre for Monarch          and customer satisfaction. MRO im-
EADS Barfield has started new main-
                                         Aircraft Engineering                      provement plans based on the per-
tenance contract work on the test,
                                                                                   formance benchmarking are cur-
repair and overhaul of a large variety   Monarch Aircraft Engineering Ltd
                                                                                   rently underway which will result in
of avionics, instruments and me-         (MAEL) has confirmed an investment
                                                                                   enhanced services for Airbus cus-
chanical components for ATR 42 and       into a multi-million dollar Logistics
ATR 72 regional airliners in service     Centre at its London Luton operation.
worldwide. This activity - covered by    The new facility will bring together
                                                                                   Liebherr chosen by Boeing as
a three-year contract signed with the    buyers, inspectors, stores and logis-
                                                                                   supplier for 747-8 environmental
Toulouse, France-based ATR aircraft      tics experts as well as spares stock
                                                                                   control system
manufacturer - reinforces EADS           into a single building, streamlining
Barfield's existing commitment to the    MAEL’s aircraft spares logistics op-
                                                                                   Liebherr-Aerospace Toulouse SAS,
ATR 42 and ATR 72 aircraft operat-       erations. The first phase of the pro-
                                                                                   a member of the Switzerland-based
ing in North, South and Central          ject will be completed during the third
                                                                                   Liebherr Group, and the Boeing
America, allowing the company to         quarter of 2006.
                                                                                   Company signed a memorandum of
support components for the ATR
                                                                                   understanding to supply the environ-
customer base on a global scale.         GAMECO becomes 15th member
                                                                                   mental control system for the new
                                         of Airbus MRO network
                                                                                   747-8 airplane. Liebherr's environ-
ZOOM Airlines selects KLM Engi-
                                         GAMECO, a joint venture between           mental control system will use out-
neering & Maintenance
                                         China Southern Airlines Co. Ltd. and      side air supplied by the 747-8's Gen-
ZOOM Airlines and KLM Engineering        Hutchison Whampoa from Hong               eral Electric GEnx engines to supply
& Maintenance (KLM E&M) have             Kong, has joined the Airbus MRO           the cabin. The system will condition
signed a five years exclusive con-       Network as 15th member. With its          the air, making it comfortable for pas-
tract for C-checks on the 767 fleet of   large maintenance facilities at           sengers and crew. Liebherr will de-
ZOOM Airlines. The Canadian airline      Guangzhou Baiyun International Air-       sign and manufacture the environ-
has four 767’s and will expand their     port, GAMECO provides aircraft            mental control system at its facility in
fleet to six 767’s in the coming year.   maintenance, component repair and         Toulouse, France. Group members
The estimated value of the contract      painting facilities for its Chinese and   Liebherr-Aerospace Lindenberg
is 5 million euros. The maintenance      International customers. The Airbus       GmbH and Liebherr-Elektronik
activities will be performed at the      MRO Network is designed to provide        GmbH also will participate in this
KLM E&M maintenance facilities at        customers with a worldwide choice of      project. Boeing expects the first
Schiphol. KLM has already per-           competitive, quality maintenance          hardware deliveries to begin late
formed service for the last year on      services from MRO providers with          2008.
ZOOM’s CF6-80C2 engines.

Jet Aviation adds new aircrafts to       CURRENT AIRBUS MRO NETWORK MEMBERS
managed fleet
Jet Aviation's U.S. aircraft manage-     Air Canada Technical Services
ment division recently added a vari-     Air France Industries
ety of business jets to its growing
management fleet. New long-term          Air New Zealand Engineering Services
agreements were signed with various      EADS SOGERMA Services
U.S. based companies for a total of      Guangzhou Aircraft Maintenance Engineering Company
ten new aircraft. New additions in the   Hong Kong Aircraft Engineering Company
U.S. include: a Falcon 900EX, a Ci-      Iberia Maintenance
tation III, a Citation V, a Gulfstream
III, a Gulfstream V, a Gulfstream        Lufthansa Technik AG
IVSP, a Challenger 300, a Global         Sabena Technics
Express, a Challenger 601, and two       SIA Engineering Company
Hawker 800s. Jet Aviation supports       Singapore Technologies Aerospace
corporate and individual aircraft own-   SR Technics Switzerland
ers and operators with turnkey man-
agement solutions. The company
                                         TACA Aeroman
also operates three 24-hour interna-     TAP Maintenance & Engineering
tional planning and reservations co-     TIMCO Aviation Services
                                                                                                   JULY 31, 2006 / VOL. 57
AviTrader WEEKLY AVIATION HEADLINES                                                                                        9

FINANCIAL NEWS                               Farnborough Airshow. Airbus intends        union members, the new agreement
                                             the A350 XWB aircraft family to be         should be effective on November 1,
                                             the benchmark in the medium capac-         2006. Details of the agreement will
Boeing posts net loss for second             ity long range wide-body segment.          not be released until the agreement
quarter 2006                                 The new product specification is           is ratified.
                                             complete and Airbus is currently de-
Boeing reported a second-quarter
                                             tailing the milestones for the devel-      Forward Air’s revenues up
net loss of $160 million on revenues
                                             opment and manufacturing phases.
of $15.0 billion. The loss includes the                                                 Forward Air Corporation reported
                                             A decision on the launch of the A350
previously announced charges for                                                        that operating revenue for the quar-
                                             XWB industrial programme is ex-
the global settlement with the U.S.                                                     ter ended June 30, 2006 increased
                                             pected for October 2006. The deliv-
Department of Justice and a reach-                                                      12.0% to a record $86.8 million from
                                             ery schedule will remain for entry into
forward loss provision on the interna-                                                  $77.5 million for the same quarter in
                                             service in mid 2012.
tional Airborne Early Warning& Con-                                                     2005. Income from operations was
trol program. Because of the charges                                                    $19.8 million, compared with $16.8
                                             British Airways reaches agree-
Boeing reduced its 2006 earnings                                                        million in the prior-year quarter, an
                                             ment with union to implement
per share guidance to between $2.40                                                     increase of 17.7%. As a percent of
                                             £13.2 million annual savings
and $2.55. For the year 2007, Boe-                                                      operating revenue, income from op-
ing raised its earning per share guid-       British Airways and trade unions rep-      erations improved to 22.8% from
ance by 15% to between $4.25 and             resenting the airline's 1,800 Gatwick-     21.7% for the same quarter last year.
$4.45. For the first half of 2006 Boe-       based cabin crew have reached              Net income during the period in-
ing Commercial Airplanes’ (BCA)              agreement on work practice changes         creased by $1.1 million, or 8.9%, to
revenues increased by 26% to $14.2           that will save the airline £13.2 million   $13.0 million from $12.0 million in the
billion. The commercial airplane divi-       a year. The new arrangements, en-          prior-year quarter.
sion’s operating earnings grew 65%           dorsed by staff in union ballots, were
to $1.4 billion and margins expanded         announced at British Airways' annual
                                                                                        ExcelTech reports FY2006 loss
to 10.0%.                                    general meeting in London on Mon-
                                             day July 24th. The agreement with
                                                                                        ExelTech Aerospace released its
EADS reports 1 billion euro net              the Transport and General Workers
                                                                                        financial results for the fiscal year
income for the first half of 2006            Union and Amicus brings together
                                                                                        ended March 31, 2006, posting a
                                             the two previously separate cabin
EADS’ revenues increased in the                                                         loss but also a 15% increase in reve-
                                             crew operations for longhaul and
first half of 2006 to € 19.0 billion from                                               nues. The Company reported reve-
                                             shorthaul. About 1,000 crew are em-
€ 16.0 billion in the first half of 2005.                                               nues of C$32.4 million for fiscal 2006
                                             ployed on longhaul services from
The European company reported a                                                         compared to C$28.2 million in fiscal
                                             Gatwick and 800 on shorthaul. From
net income of € 1,043 million from €                                                    2005, a 15% increase. It also re-
                                             October, a single cabin crew force
992 million in the first half of 2005.                                                  ported an operating loss (earnings
                                             will operate all Gatwick flights. The
Airbus was again the main contribu-                                                     before amortization, financial ex-
                                             deal provides for significant gains in
tor to the groups revenues and profit.                                                  penses, bad debt expenses, write
                                             productivity and staff flexibility and
EADS said that the current opera-                                                       down of intangible assets and in-
                                             reductions in employee costs.
tional priority for Airbus is the stabili-                                              come taxes) of C$2.0 million, com-
zation of the A380 programme. De-                                                       pared to operating earnings of C$1.5
                                             SWISS reaches tentative agree-
tailed reviews of the A380 pro-                                                         million in the earlier period. The net
                                             ment with pilots
gramme are currently being imple-                                                       loss for fiscal 2006 is C$2.8 million,
mented by EADS and Airbus man-               SWISS and its pilot union agreed on        compared to a net loss of C$1.7 mil-
agement. The revised A380 delivery           the basic content of a new collective      lion in fiscal 2005. In 2004, the Com-
schedule which was announced by              agreement following long and highly        pany made the strategic decision to
EADS and Airbus on 13 June re-               intensive negotiations. In the proc-       expand into the Bombardier CRJ
sulted from manufacturing issues             ess, both parties have now found a         regional jet segment of the market,
such as the definition, manufacturing        common basis which should help             building on its already dominant posi-
and installation of electrical systems       ensure the company’s further growth.       tion as a provider of turboprop MRO
and harnesses. Just recently, Singa-         The new agreement addresses                services to regional airlines in North
pore Airlines confirmed its strong           SWISS’s ongoing corporate restruc-         America. As a result, in February
commitment to the A380 and an-               turing and the intensified competitive     2005, the Company expanded ca-
nounced its intention to enlarge its         environment, and will strengthen the       pacity by almost 60% by acquiring an
existing order by another nine aircraft      company’s foundation for achieving         additional aircraft maintenance han-
plus six new options. The Airbus             sustainable growth. The new terms          gar in Quebec City. However, this
management has now finalized the             and conditions of employment for           was followed in March 2005 by the
design of the A350 XWB and pre-              SWISS’s Airbus pilot corps will now        loss of a major customer that, at the
sented this new aircraft family as well      be devised in detail by the end of         time, represented about 28% of the
as a first order commitment at the           August. Subject to its approval by         Company’s business.

                                                                                                        JULY 31, 2006 / VOL. 57
AviTrader WEEKLY AVIATION HEADLINES                                                                                     10

    Place your company logo                $8.7 million was $6.3 million lower        plier of components and integrated
   here. Call +1(604) 448-0970             than interest expense recorded in the      systems to supply oxygen systems
           for details.                    same period in the prior year, result-     for both civil and military aircraft. In
                                           ing from the retirement in January         the civil market, Draeger has well-
                                           2006 of all of B/E's $250 million of       established strengths in both chemi-
                                           senior subordinated notes due 2008.        cal and gaseous oxygen systems.
Alaska Air Group’s profit up                                                          Draeger, like B/E, is well-positioned
                                           BA sells stake in WNS                      on both Airbus and Boeing aircraft. In
Alaska Air Group reported second                                                      the military market, Draeger is the
quarter net income of $55.5 million        As part of an initial public offering by
                                                                                      prime contractor for oxygen systems
compared to $17.4 million in the sec-      WNS (HOLDINGS) Ltd on the New
                                                                                      for the Eurofighter Typhoon, as well
ond quarter of 2005. The 2006 re-          York Stock Exchange, British Air-
                                                                                      as providing maintenance and repair
sults include a restructuring charge       ways sold its 14.6 per cent share-
                                                                                      services for the German air force's
of $3.8 million ($2.4 million after tax)   holding in the company, an India
                                                                                      in-service oxygen systems.
resulting from an offer of voluntary       based business services company,
severance to Alaska's flight atten-        for net $96 million. The airline will
                                                                                      MTU raises profit forecast
dants as part of the recently ratified     report a gain on disposal of approxi-
contract. Both periods include mark-       mately £48 million in Q2 and the pro-      MTU Aero Engines Holding AG re-
to-market fuel hedge accounting            ceeds will be used to repay existing       ported in the first half year of 2006
gains and losses, and the second           gross debt which at March 31, 2006         continued growth. Sales rose 12% to
quarter of 2005 includes restructur-       amounted to £4.1 billion.                  €1,148.5 million from €1,025.7 mil-
ing charges that also impact the                                                      lion, the growth again being driven
comparability of the periods.              Lockheed Martin profit up                  mostly by commercial maintenance,
                                                                                      repair and overhaul (MRO). The
                                           Lockheed Martin Corporation re-
JetBlue returns to positive result                                                    company posted an EBITDA of €
                                           ported second quarter 2006 net
                                                                                      142.1 million compared to €102.3
JetBlue reported that operating reve-      earnings of $580 million compared to
                                                                                      million in the previous year. The
nues for the quarter totaled $612          $461 million in 2005. Net sales were
                                                                                      profit surge was especially apparent
million, representing growth of 42.4%      $10.0 billion, a 7% increase over
                                                                                      in adjusted net income, which MTU
over operating revenues of $429 mil-       second quarter 2005 sales of $9.3
                                                                                      in the first six months of the year
lion in the second quarter of 2005.        billion. Cash from operations for the
                                                                                      more than tripled, from € 17.5 million
Operating income in the quarter was        second quarter of 2006 was $1.6
                                                                                      in the first half-year 2005 to € 55.4
$47 million, resulting in a 7.7% oper-     billion. Net sales for the first six
                                                                                      million. "We successfully continued
ating margin, compared to operating        months of 2006 were $19.2 billion,
                                                                                      on our profitable growth track. Both
income of $40 million and a 9.4%           an 8% increase over the $17.8 billion
                                                                                      our OEM business and commercial
operating margin in the second quar-       recorded in the comparable 2005
                                                                                      MRO recorded EBITDA margins of
ter of 2005. Net income for the quar-      period. Net earnings for the six
                                                                                      appreciably above 10% of sales.
ter was $14 million compared with          months ended June 30, 2006 were
                                                                                      These figures permit us to raise our
second quarter 2005 net income of          $1.2 billion compared to $830 million
                                                                                      forecast for the current year," ex-
$13 million.                               in 2005. Cash from operations for
                                                                                      plained MTU CEO Udo Stark. "For
                                           the first half of 2006 was $2.8 billion.
                                                                                      the full year of 2006, we expect
B/E Aerospace profit up by 47%                                                        EBITDA to improve to €290 million.
                                           B/E Aerospace acquires German
B/E Aerospace reported for the sec-                                                   So far, the EBITDA forecast had
                                           Draeger Aerospace
ond quarter of 2006 consolidated                                                      been €270 million."
sales of $271.5 million increased          B/E Aerospace has acquired Drae-
$63.9 million or 30.8 percent over the     ger Aerospace GmbH (Draeger),              Woodward Governor board ap-
second quarter of 2005. Operating          from Cobham PLC of Dorset, Eng-            proves stock repurchase program
earnings for the second quarter of         land for approximately $80 million.
                                                                                      Woodward Governor Company re-
2006 of $35.3 million increased by         The acquisition which is an all cash
                                                                                      leased that its Board of Directors
$11.2 million or 46.5 percent as com-      purchase will be funded with cash on
                                                                                      authorized a new stock repurchase
pared to the same period last year.        hand. The transaction is expected to
                                                                                      program of $50,000,000. This new
The second quarter operating margin        be modestly accretive to earnings
                                                                                      authorization replaced the program
of 13.0 percent expanded by 140            per share in 2007, the first full year
                                                                                      previously approved by the Board in
basis points. The substantial in-          following the acquisition, and signifi-
                                                                                      January 2005 under which less than
crease in operating earnings was           cantly accretive in 2008 and beyond
                                                                                      $10,000,000 remained. Under the
driven by continued revenue and            due to strong manufacturing, re-
                                                                                      stock repurchase authorizations,
earnings growth as well as margin          search and development, sales and
                                                                                      shares may be purchased periodi-
expansion in each of B/E's Commer-         logistics synergies between the two
                                                                                      cally both in open market and private
cial Aircraft, Distribution and Busi-      organizations. With over 100 years of
                                                                                      transactions during the three-year
ness Jet segments. Interest expense        experience in the oxygen delivery
                                                                                      period ending July 2009. Shares of
for the second quarter of 2006 of          business, Draeger is a leading sup-

                                                                                                      JULY 31, 2006 / VOL. 57
AviTrader WEEKLY AVIATION HEADLINES                                                                                     11

purchased stock will be held in treas-      seat regional jets from US Airways to      were the following items before the
ury and used to satisfy company obli-       Delta Air Lines and United Airlines.       effect of income taxes: a charge of
gations in connection with employee                                                    $3.3 million relating to three leased
stock options or for other purposes         Lufthansa lifts operating profit           Boeing 737-300 aircraft the company
the Board advises in compliance with                                                   ceased using during the quarter and
                                            Lufthansa reported higher profits for
applicable law.                                                                        a non-cash mark to market derivative
                                            the first six months of 2006. The
                                                                                       loss on fuel hedges of $1.0 million.
                                            Group lifted operating profits by 44
Woodward Governor reports de-
                                            million euros to 297 million euros.
clining profit                                                                         Midwest revenues up by 34%
                                            Net profit for the term rose against
Woodward Governor released that             the break-even result in the first half    Midwest Air Group reported second
net sales for the fiscal third quarter      2005 to 85 million euros. In the first     quarter results for its Midwest Air-
were $217 million up 3% from $210           six months of 2006, the Lufthansa          lines and Skyway Airlines (dba Mid-
million for the third quarter last year.    Group generated revenues totaling          west Connect) operations.
Earnings before income taxes for the        9.6 billion euros, a year-on-year in-      Comparing second quarter 2006 to
quarter were $21.6 million compared         crease of 14.2%. Operating ex-             second quarter 2005, operating reve-
with $25.5 million for the same quar-       penses rose by 12.5% to 9.9 billion        nue increased 34.4% to $176.9 mil-
ter a year ago.                             euros but the increase remained be-        lion. Operating income improved to
                                            low the growth in revenues. Luf-           $7.5 million from an $8.2 million loss
AirNet Systems sells unit                   thansa posted a first-half operating       in the second quarter of 2005, while
                                            profit of 297 million euros, an in-        net income improved to $8.8 million
AirNet Systems has entered into a
                                            crease of 44 million euros on the          from an $8.2 million loss.
definitive agreement with Pinnacle
                                            year-earlier level. An improvement of
Air, LLC to sell its passenger charter
                                            100 million euros in the financial re-     US Airways Group posts profit
business, including the aircraft and
                                            sult lifted the Group’s net profit to 85
substantially all of the aircraft-related                                              The new US Airways Group reported
                                            million euros.
assets of Jetride, Inc., a wholly-                                                     a second quarter 2006 profit of $305
owned subsidiary, for $41 million in                                                   million compared to a net loss of $3
                                            Swiss reports profit
cash. The transaction is subject to                                                    million for the same period last year.
standard closing contingencies and          Swiss International Air Lines gener-       Results for the new US Airways
the receipt of requisite assurances         ated earnings before interest and          Group's second quarter 2006 are
from the FAA with respect to the pro-       taxes (EBIT) of CHF 98 million for         being compared to America West's
posed ownership change, and is ex-          the first half of 2006. The company        standalone results for second quarter
pected to close during the third quar-      reported a negative EBIT of CHF 9          2005 due to the former US Airways
ter 2006.                                   million for the same period last year.     Group and America West Holdings
                                            The consolidated net result for the        Corporation merger on Sept. 27,
Mesa Air Group’s result effected            first six months also showed a year-       2005. US Airways Group's second
by aircraft transition                      on-year improvement, rising from the       quarter 2006 results include $35 mil-
                                            CHF 89 million net loss of 2005 to a       lion of merger-related transition ex-
Mesa Air Group reported third quar-
                                            net profit of CHF 76 million for the       penses, which were offset in part by
ter operating revenues of $339.0
                                            current year.                              a $7 million gain from interest in-
million. Total operating revenues for
                                                                                       come earned on certain prior year
the third quarter of 2006 increased
                                            Frontier reports small profit              federal income tax refunds and an
$40.5 million, or 13.6%. Net income
                                                                                       $18 million unrealized gain related to
for the third quarter was $10.9 mil-        Frontier Airlines Holdings reported
                                                                                       the airline's fuel hedges.
lion, as compared to net income of          net income of $4.0 million for the
$17.1 million for the same period of        airline's fiscal first quarter ended
                                                                                       Raytheon revenues up by 8%
fiscal 2005. Mesa said that more            June 30, 2006 compared to a net
than $7.8 million in additional ex-         loss of $2.7 million for the same pe-      Raytheon Aircraft Company (RAC)
penses and $2.4 in reduced revenue          riod last year. Included in the net loss   had second quarter 2006 net sales of
were due to the transition of 59 50-        for the quarter ended June 30, 2005        $745 million, up 8% compared to

                                                     Provider DASH 8 and ATR Spares
                                                   Lessor / Trader PW100 Series Engines

                                                                                                      JULY 31, 2006 / VOL. 57
AviTrader WEEKLY AVIATION HEADLINES                                                                                           12

$687 million in the second quarter        connected travel agencies, corporate       vides for Iberia to distribute its full
2005, primarily due to increased new      customers and Travelport online            content through the Worldspan
aircraft deliveries. RAC recorded         agencies booking through Galileo.          global distribution system (GDS) to
operating income of $41 million com-                                                 travel agencies, travel Web sites and
pared to $33 million in the second        Air France KLM Group has signed            corporations worldwide that rely on
quarter 2005. Operating income was        an agreement with Unisys to lever-         Worldspan for travel planning and
higher due to continued improved          age their experience in risk and com-      procurement. Full content includes
operating performance and favorable       pliance management in the airline's        Iberia schedules, availability and
aircraft volume and mix.                  effort to strengthen its overall infor-    fares, including Web fares.
                                          mation security posture. Based on
Rolls-Royce sales increases 9%            the agreement, Unisys will help Air        Virgin America said that the airline
                                          France KLM fortify its Information         could save U.S. passengers $786
Rolls-Royce's reported an first half
                                          Security Maturity Program by assist-       million per year, or $88 per roundtrip,
2006 order book of £25.1 billion com-
                                          ing in the identification of information   in reduced fares once the airline be-
pared to £23.0 billion a year before.
                                          security issues such as access con-        comes certified as a new entrant in
The engine manufacturer said that
                                          trol to buildings and data and a range     the domestic airline market. Accord-
sales increased by 9% in the first half
                                          of other issues. Unisys will imple-        ing to a study conducted by the avia-
of the year to £3,390 m and that af-
                                          ment its methodology and tools dur-        tion and economic research firm The
termarket services sales represented
                                          ing a pilot program. They will also        Campbell-Hill Aviation Group Inc.,
54% of group sales. The Group con-
                                          train Air France KLM IT security staff,    the introduction of low-fare service
tinues to expect double-digit growth
                                          implement the tools, assess and            by Virgin America would reduce mar-
in aftermarket sales for the full year.
                                          analyze possible business risks, and       ket fares, increase service frequency
The profit before tax increased by
                                          evaluate responses.                        and capacity, and stimulate new pas-
22% to £324m.
                                                                                     senger traffic.
                                          West Air Sweden has leased a fur-
Other News                                ther two ATP turboprop freighters
                                          from BAE Systems Regional Air-                            PEOPLE
                                          craft. The two aircraft are currently
                                          being equipped with the Large              GATX Corporation reported that Marla C.
Air France released that Quali-audit                                                 Gottschalk was elected by the GATX Board
                                          Freight Door at the Romaero conver-        of Directors to serve as an independent direc-
begins operation as the newest
                                          sion line at Baneasa, Bucharest, Ro-       tor. The committees of the Board of Directors
IATA-accredited IOSA Audit Organi-
                                          mania and will be delivered in August      to which Ms. Gottschalk will be named have
zation. Quali-audit is an independent                                                not been determined at this time.
                                          (msn 2010) and September (msn
and wholly-owned subsidiary of Air
                                          2038). These aircraft will be de-          The Board of BAE Systems has appointed Sir
France Consulting, with principal
                                          ployed by West Air Sweden to re-           Nigel Rudd a non-executive Director of the
offices at the Charles de Gaulle Air-
                                          place two BAe 748 freighters that are      Company with effect from 10 September
port, ideally located near Paris,                                                    2006. He is currently chairman of Boots
                                          currently used on the Swedish Post
France. The IATA Operational Safety                                                  Group PLC and Pendragon plc and also
                                          Office overnight mail contract.            serves as deputy chairman of Barclays PLC.
Audit (IOSA) Program is an interna-
                                                                                     Until recently, he was chairman of Pilkington
tionally recognized and accepted
                                          DHL Global Forwarding and                  plc. He also holds a number of other public
evaluation system designed to as-                                                    appointments including chairman of the CBI’s
                                          Deutsche Lufthansa Cargo have
sess the operational management                                                      Boardroom Issues Group.
                                          signed a strategic air cargo security
and control system of an airline. With
                                          partnership agreement. The basis of        JetBlue Airways released that Martin St.
a dedicated team of central office
                                          this partnership is to develop stan-       George will join the low-fare airline effective
staff and 18 auditors from major air-                                                immediately as Vice President, Planning. Mr.
                                          dard operating procedures that sup-
lines, Quali-audit is uniquely posi-                                                 St. George will be responsible for the route
                                          port and fulfil customer and govern-       selection, analysis, and network strategy for
tioned to provide IOSA audits and
                                          mental security requirements. Such         JetBlue, and will report to David Neeleman,
related services in both English and
                                          procedures will help create a safer        JetBlue's CEO.
French. While only recently accred-
                                          environment for DHL and Lufthansa
ited by IATA, Quali-audit has one of                                                 Singapore Airlines Limited released that Mr
                                          Cargo employees who handle high-           Huang Cheng Eng, Executive Vice Presi-
the most experienced teams in the
                                          value and high-risk products. The          dent, Marketing and the Regions, Singapore
                                          partnership will make DHL a more           Airlines, will succeed Mr Fock Siew Wah as
                                          attractive forwarder for customers         Chairman and Director of its wholly-owned
Galileo International, a subsidiary                                                  subsidiary, Singapore Airlines Cargo Pte Ltd
                                          shipping high-value or sensitive           with effect from 1 August 2006.
of Travelport Inc., reported a five-
year, full content enterprise agree-                                                 Air Wisconsin Airlines appointed Vince Por-
ment with Alaska Airlines. Through                                                   taro to the position of Vice President-
                                          Iberia has signed a new three-year
the agreement, all of Alaska's pub-                                                  Customer Service. In this role, he will have
                                          participating carrier agreement with       responsibility for all customer service func-
lished fares and inventory will be
                                          global travel technology provider          tions including oversight of the contract
available to all users of the Galileo
                                          Worldspan. The agreement pro-              ground handling agreements with United
GDS system, including Galileo-                                                       Airlines and Northwest Airlines.

                                                                                                        JULY 31, 2006 / VOL. 57
                                                                                                                                                                                        July 31, 2006
AviTrader                                                    AVIATION MARKETPLACE
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Commercial Jet Aircraft
         Aircraft                         Company            Engine       MSN       Year   Availability                        Contact                          Email                          Phone
A300B4-200F               Jet2                               CF6-50        121      1980   immediately Sale             Antony Sainthill                         +44 (0)1202 597600
A319-111                  CIT Aerospace                     CFM56-5       1999      2004    1-Jan-07      Lease         Nicole Johnson                       +353 1 656 1012
A319-112                  Atlasjet Airlines                 CFM56-5       2631      2006   30-Sep-06      Wet Lease     Batuhan Karatas                           +90 212 663 20 00
A319-112                  Atlasjet Airlines                 CFM56-5       2655      2006   30-Sep-06      Wet Lease     Batuhan Karatas                           +90 212 663 20 00
A320-211                  ADC Airways                       CFM56-5        615             immediately Wet Lease        Ali Darwiche                           +961 3 76 79 78
A320-211                  CIT Aerospace                     CFM56-5       0087              1-Nov-06      Sale          Nicole Johnson                       +353 1 656 1012
A320-211                  CIT Aerospace                     CFM56-5       0088      1989    1-Nov-06      Sale          Nicole Johnson                       +353 1 656 1012
A320-211                  CIT Aerospace                     CFM56-5        24       1992    1-Apr-07      Lease         Nicole Johnson                       +353 1 656 1012
A320-214                  Atlasjet Airlines                 CFM56-5        978      1998   30-Sep-06      Wet Lease     Batuhan Karatas                           +90 212 663 20 00
A320-232                  Atlasjet Airlines                   V2500       2457      2005   30-Sep-06      Wet Lease     Batuhan Karatas                           +90 212 663 20 00
A320-232                  Atlasjet Airlines                   V2500        460      1994   30-Sep-06      Wet Lease     Batuhan Karatas                           +90 212 663 20 00
A320-232                  Atlasjet Airlines                   V2500        461      1994   30-Sep-06      Wet Lease     Batuhan Karatas                           +90 212 663 20 00
A320-232                  Atlasjet Airlines                   V2500        676      1997   30-Sep-06      Wet Lease     Batuhan Karatas                           +90 212 663 20 00
B727-100                  Wentworth & Affiliates, Inc.        JT8D        19261     1969   immediately Sale             Wendy Bierwirth                +1 (301) 869-4600
B727-200                  Wentworth & Affiliates, Inc.        JT8D        20053     1969   immediately Sale             Wendy Bierwirth                +1 (301) 869-4600
B727-200                  GA Telesis Turbine Technologies     JT8D                         immediately Sale, Lease      Pascal Picano                        +1 (954) 676 3111
B727-200                  GA Telesis Turbine Technologies     JT8D       Super 27          immediately Sale, Lease      Pascal Picano                        +1 (954) 676 3111
B727-200                  Wentworth & Affiliates, Inc.      JT8D (200)    22541     1982   immediately Sale             Wendy Bierwirth                +1 (301) 869-4600
B727-200F                 GA Telesis Turbine Technologies     JT8D       Super 27          immediately Sale, Lease      Pascal Picano                        +1 (954) 676 3111
B727-200F                 GA Telesis Turbine Technologies     JT8D                         immediately Sale, Lease      Pascal Picano                        +1 (954) 676 3111
B737-200                  Safair ( Pty) Ltd                   JT8D        21792     1980   immediately Sale, Lease      Muriel Sahd                           +27 11 928 0079
B737-200                  Safair ( Pty) Ltd                   JT8D        22584     1981   immediately Sale             Muriel Sahd                           +27 11 928 0079
B737-200                  Safair ( Pty) Ltd                   JT8D        22588     1982   immediately Sale             Muriel Sahd                           +27 11 928 0079
B737-300                  CIT Aerospace                     CFM56-3       23370     1986    1-Sep-06      Lease         Nicole Johnson                       +353 1 656 1012
B737-700                  CIT Aerospace                     CFM56-7       33015     2003    1-Mar-07      Lease         Nicole Johnson                       +353 1 656 1012
B747-400F                 Cabot Aviation                     CF6-80       25632     1993   30-Sep-09      Sale          Greg Cope                        +44 1273 831144
B747-400F                 Cabot Aviation                     CF6-80       29053     1997   30-Sep-09      Sale          Greg Cope                        +44 1273 831144
B747-200C                 GA Telesis Turbine Technologies     JT9D                         immediately Sale, Lease      Pascal Picano                        +1 (954) 676 3111
B757-200                  Atlasjet Airlines                 RB211-535     29306     2000   30-Sep-06      Wet Lease     Batuhan Karatas                           +90 212 663 20 00
B757-200                  Atlasjet Airlines                 RB211-535     29307     2000   30-Sep-06      Wet Lease     Batuhan Karatas                           +90 212 663 20 00
B757-200                  CIT Aerospace                     RB211-535     24771     1990    1-Nov-06      Lease         Nicole Johnson                       +353 1 656 1012
B757-200                  euroAtlantic airways              RB211-535     24176     1988   immediately Lease, Wet Lease Fernando Ramos                  +351-21-924-73019
B757-200                  Compañia Mexicana de Aviación      PW2000       29380     1998   immediately Lease            Manuel Toriz                  5255 5448 3096
B757-200                  Compañia Mexicana de Aviación      PW2000       29442     1998   immediately Lease            Manuel Toriz                  5255 5448 3096
B757-200                  Compañia Mexicana de Aviación      PW2000       29443     1998   immediately Lease            Manuel Toriz                  5255 5448 3096
B767-300ER                euroAtlantic airways               PW4000       24318     1989   immediately Lease, Wet Lease Fernando Ramos                   +351-21-924-7300
B767-300ER                euroAtlantic airways               PW4000       25411     1992   immediately Lease, Wet Lease Fernando Ramos                   +351-21-924-7319
B767-300ER                euroAtlantic airways               PW4000       26205     1994   immediately Lease, Wet Lease Fernando Ramos                   +351-21-924-7300
B767-300ER                euroAtlantic airways               PW4000       26208     1994   immediately Lease, Wet Lease Fernando Ramos                   +351-21-924-7319
B767-300ER                CIT Aerospace                      CF6-80       25121     1991    1-Oct-06      Lease         Nicole Johnson                       +353 1 656 1012
B767-300ER                CIT Aerospace                      CF6-80       25865     1989    1-Apr-07      Lease         Nicole Johnson                       +353 1 656 1012
B767-300ER                CIT Aerospace                      PW4000       24475     1989    1-Dec-06      Lease         Nicole Johnson                       +353 1 656 1012
BA310-322                 Gas Turbines International          JT9D         410      1986   immediately Sale, Lease      Jason Rayman                           +1 (561) 572-3333
CRJ-200ER                 Morten Beyer & Agnew               CF34-3       7179      1997   immediately Sale             Bryson Monteleone                            +1 (703) 276-3200
CRJ-200ER                 Morten Beyer & Agnew               CF34-3       7186      1997   immediately Sale             Bryson Monteleone                            +1 (703) 276-3200
CRJ-200ER                 Morten Beyer & Agnew               CF34-3       7187      1997   immediately Sale             Bryson Monteleone                            +1 (703) 276-3200
CRJ-200ER                 Morten Beyer & Agnew               CF34-3       7192      1997   immediately Sale             Bryson Monteleone                            +1 (703) 276-3200
CRJ-200ER                 Morten Beyer & Agnew               CF34-3       7211      1997   immediately Sale             Bryson Monteleone                            +1 (703) 276-3200
CRJ-200ER                 Morten Beyer & Agnew               CF34-3       7214      1998   immediately Sale             Bryson Monteleone                            +1 (703) 276-3200
CRJ-200ER                 Morten Beyer & Agnew               CF34-3       7295      1999   immediately Sale             Robert Agnew                                  +1 (703) 276-3200
CRJ-900                   Atlasjet Airlines                  CF34-8       15065     2006   30-Sep-06      Wet Lease     Batuhan Karatas                           +90 212 663 20 00
CRJ-900                   Atlasjet Airlines                  CF34-8       15066     2006   30-Sep-06      Wet Lease     Batuhan Karatas                           +90 212 663 20 00
Commercial Turboprop / Business Jets
         Aircraft                        Company             Engine       MSN       Year   Availability                        Contact                          Email                         Phone
EMB-120ER                 Compass Capital Corporation        PW118       120190 1990       immediately Sale, Lease      Ken De Jaeger             +1 (203) 610-8230
EMB-120ER                 Compass Capital Corporation        PW118       120195 1990       immediately Sale, Lease      Ken De Jaeger             +1 (203) 610-8230
EMB-120ER                 Compass Capital Corporation        PW118       120197 1990       immediately Sale, Lease      Ken De Jaeger             +1 (203) 610-8230
EMB-120ER                 Compass Capital Corporation        PW118       120199 1990       immediately Sale, Lease      Ken De Jaeger             +1 (203) 610-8230
ERJ-145MP                 Skyways Aviation                   AE3007      145362 2000        1-Nov-06      Sale, Lease   Juliet Hewitt                          441753832088
GULF 5                    Jetavia Ltd                        BR710         TBA      2002   immediately Sale             Jay Mehta                          +44 208 262 7082
L1011-500                 euroAtlantic airways              RB211-524     1240      1983   immediately Lease, Wet Lease Fernando Ramos                   +351-21-924-7319

                                                                                                    Immediate requirement for (2) 737-300 aircraft

                                                                                                 North America                                              Europe / Asia
               Aircraft and Engine Sales and Leasing                                          Irvin R. Lucas III                                          Barry McGovern
                                                                                       Office: + 561 459-5360                                     Office: + 35318457889
                                                                                         Cell: + 561 809-5853                                      Cell: + 353879679873

                                                                                                                            advertising inquiries call +1 (604) 448-0970
                                                                                                                                                                            July 31, 2006
  AviTrader                                                         AVIATION MARKETPLACE
Read by thousands of aviation executives and technical decision makers every week                                                                   
Commerical Engines

      Engine Type                      Compan y                Availability               Description            Contact                            Email                         Phone
(2)536-2                A.J. Walter                           immediately                     Sale            Becky Howard                      +44 1403 711777
(1) CF6-50C2            Jet2                                  immediately                     Sale           Dave Daughters
(1) CF6-50E2            Sunstar Aviation, Inc.                immediately                     Sale              Adolfo Diaz                       +1 (954) 727-3381
(2) CF6-80A             AeroTurbine                           immediately         Sale,   Lease, Exchange      Bob Nichols                    +1 (305) 590-2600
(1) CF6-80A2            AeroTurbine                           immediately         Sale,   Lease, Exchange      Bob Nichols                    +1 (305) 590-2600
(1) CF6-80A3            AeroTurbine                           immediately         Sale,   Lease, Exchange      Bob Nichols                    +1 (305) 590-2600
(1) CF6-80C2B6F         AeroTurbine                           immediately         Sale,   Lease, Exchange      Bob Nichols                    +1 (305) 590-2600
(1) CFM56-3B-1          GA Telesis Turbine Technologies       immediately                 Sale, Lease         Pascal Picano                       +1 (954) 676 3111
(1) CFM56-5B3/P         ELFC                                  immediately                 Sale, Lease          Mark Weller                         +353 61 363555
(2) CFM56-3B-2          GA Telesis Turbine Technologies       immediately                 Sale, Lease         Pascal Picano                       +1 (954) 676 3111
(3) CFM56-3B-2          GE Aviation Materials                 immediately         Sale,   Lease, Exchange     Richard Kruze                     +1 (513) 552-2352
(2) CFM56-3B-2          JT-Power LLC                          immediately         Sale,   Lease, Exchange     Ian McDonald                        619-873-1931
(1) CFM56-3C-1          ELFC                                  immediately                 Sale, Lease          Mark Weller                         +353 61 363555
(6) CFM56-3C-1          AeroTurbine                           immediately         Sale,   Lease, Exchange      Bob Nichols                    +1 (305) 590-2600
(1) CFM56-5C-2          AeroTurbine                           immediately         Sale,   Lease, Exchange      Bob Nichols                    +1 (305) 590-2600
(2) CFM56-5C4           ELFC                                  immediately                 Sale, Lease          Mark Weller                         +353 61 363555
(2) CT7-9B              GE Aviation Materials                 immediately         Sale,   Lease, Exchange     Richard Kruze                     +1 (513) 552-2352
(3)DART 532-7R          A.J. Walter                           immediately                     Sale            Becky Howard                      +44 1403 711777
(2) JT8D-15             GA Telesis Turbine Technologies         engines                                       Pascal Picano                       +1 (954) 676 3111
(3) JT8D-15             Aerospace Center Corp                 immediately                   Sale            Michael Levkovitz                      +1 (305) 889-2700
(2) JT8D-15             Aerostar Asset Management FZC         immediately                   Sale                Zamil Samji                                +971 6 557 3570
(1) JT8D-15             Fort Lauderdale Aerospace             immediately                   Sale               John Barker        +1 (954) 472-2888
(1) JT8D-15             GA Telesis Turbine Technologies       immediately               Sale, Lease          Abdol Moabery                      +1 (954) 676-3111
(1) JT8D-15             GA Telesis Turbine Technologies       immediately               Sale, Lease          Abdol Moabery                      +1 (954) 676-3111
(2) JT8D-15             LJH Aviation Management Services      immediately                   Sale              Harold Woody                      +1 (501) 318-1465
(1) JT8D-15             NewJet Engine Services, Inc.          immediately               Sale, Lease            Sami Joseph                            +1 (305) 254-8001
(1) JT8D-15A            BCI Aircraft Leasing                  immediately               Sale, Lease           Brad Vineyard                   +1 (630) 862-8989
JT8D-15A                Bonus Tech, Inc.                      immediately                   Sale            Kevin McCormack                            305-887-6778
(1)JT8D-17              A.J. Walter                           immediately               Sale, Lease           Becky Howard                      +44 1403 711777
(1) JT8D-217C           AeroTurbine                           immediately         Sale, Lease, Exchange        Bob Nichols                    +1 (305) 590-2600
(1) JT8D-219            AeroTurbine                           immediately         Sale, Lease, Exchange        Bob Nichols                    +1 (305) 590-2600
(1) JT8D-219            ELFC                                  immediately               Sale, Lease            Mark Weller                         +353 61 363555
(2) JT8D-219            GA Telesis Turbine Technologies       immediately               Sale, Lease           Pascal Picano                       +1 (954) 676 3111
(1) JT8D-7B             Fort Lauderdale Aerospace             immediately               Sale, Lease            John Barker        +1 (954) 472-2888
(1) JT8D-9A             BCI Aircraft Leasing                  immediately               Sale, Lease           Brad Vineyard                   +1 (630) 862-8989
(2) JT8D-9A             Fort Lauderdale Aerospace             immediately               Sale, Lease            John Barker        +1 (954) 472-2888
(1) JT9D-7J             Aerostar Asset Management FZC         immediately                   Sale                Zamil Samji                                +971 6 557 3570
(2) JT9D-7R4E1          JMV Aviation                          immediately                   Sale               Karl Rickard                         +352-061707300
(3)MK532-7R             A.J. Walter                           immediately                   Sale              Becky Howard                      +44 1403 711777
(3)MK201                A.J. Walter                           immediately                   Sale              Becky Howard                      +44 1403 711777
(1) PW119B              Asset Aerospace                       immediately                   Sale             Peter Hammond                   +49-(0)815388690
(1) PW2037              ELFC                                  immediately               Sale, Lease            Mark Weller                         +353 61 363555
(1)RB211-535E4          TES Aviation Group                    immediately         Sale, Lease, Exchange         Rod Curtis                       +44 7810 482886
(1)RB211-535E4          TES Aviation Group                      1-Oct-06          Sale, Lease, Exchange         Rod Curtis                       +44 7810 482886
(1)TPE331-3UW-304G      A.J. Walter                           immediately                   Sale              Becky Howard                      +44 1403 711777
Aircraft and Engine Parts and Components
      Description                                                             Company                           Contact                            Email                           Phone
B737-300 Parts and Components                                                 GE Aviation Materials          Richard Kruze                     +1 (513) 552-2352
CF34-3B1 HPT modules, several serial numbers                                  GE Aviation Materials          Richard Kruze                     +1 (513) 552-2352
CRJ 100/200 Material rotable-repairable - expendable.                         sage-popovich, inc.            Nick Popovich                      +1 (219) 464-8320
Substantial A300 Parts Inventory                                              Jet2                          Dave Daughters
Equipment Wanted
      Description                                                             Company                            Contact                           Email                           Phone
Large and Small comerrcial aviation engines - all models.                     GE Aviation Materials           Richard Kruze                     +1 (513) 552-2352
Engine and Aircraft parts and components packages                             GE Aviation Materials           Richard Kruze                     +1 (513) 552-2352
Regional Jets, B737, B747, B767, A310,A319, A320                              GE Aviation Materials           Richard Kruze                     +1 (513) 552-2352
Two ATR42-300 for immediate purchase. (PAX or Cargo Config)                   ARKAS                          Daniel Restrepo

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                 Sample Aircraft
            B737-300 Company A CFM56-3 SN12346 1998 immediately Sale, Lease John Doe (0)323 340676                                                                 view
                 Sample Engine
            CFM56-3C1 Company A                         SN111222              immediately Sale, Lease                   John Doe (0)323 340676                     view

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