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					                                              NEWSWATCH
                                                                              21st May 2010
                                                                           Volume 10; Issue 19



In this Issue:
                                  Emirates Group marks record profit
                                         increase in 2009-10
 • Emirates Group
  marks record              The Emirates Group has posted a record profit increase of
  profit increase           248 per cent, an outstanding result in a year fraught with
  in 2009-10                worldwide market instability and economic uncertainty.

 • Boeing still             The 2009-10 Annual Report of the Emirates Group was
  bullish on jet            released in Dubai at a news conference hosted by His
  demand                    Highness Sheikh Ahmed bin Saeed Al Maktoum, Chairman and
                            Chief Executive, Emirates Airline and Group. In a difficult
 • BA posts record          year the Group’s net profits increased 248 per cent to €867
  loss as revenue
                            million (US$ 1.1 billion) for the financial year ended 31
  plummets
                            March 2010.
 • Lufthansa                Group revenue remained stable at €9.8 billion (US$ 12.4
  receives first            billion), reflecting lower passenger and cargo yields offset by
  A380
  superjumbo                increased traffic. The Group profit margin improved to 9.1
                            per cent from 2.6 per cent a year earlier. The Group’s cash
 • MIT “Double              balance grew to €2.7 billion (US$ 3.4 billion) at the end of
  Bubble” Plane             March.
  Uses 70% Less
  Fuel                      This excellent result arrived after €733 million (US$ 931
                            million) of investments mainly in new aircraft, other
 • XAIC to set up           aircraft-related equipment and dedicated lounges. Emirates
  airline in Anhui          Airline’s revenues remained stable at €9.2 billion ($US 11.8
                            billion), an increase of 0.4 per cent from the previous year.
 • IBA Group News
                            Airline profits of €759 million (US$ 964 million) marked an
                            increase of 416 per cent over 2008-09’s profits of €147
                            million (US$ 187 million).
                            Emirates’ operating costs in total decreased by 2.7 per cent
                            compared with the previous year. This results in a significant
                            unit cost improvement of 16.6 per cent and an impressive
                            productivity gain per employee.
                            In 2009-10, the airline’s passenger fleet expanded with the
     IBA Group Ltd.         delivery of 15 new aircraft, four Airbus A380s, 10 Boeing
       IBA House            777-300ERs and one Boeing 777 freighter. At the end of the
     7 The Crescent
   Leatherhead, Surrey      financial year, Emirates’ fleet reached 142 aircraft including
        KT22 8DY
     United Kingdom         four freighters.
 Tel: +44 (0) 1372 224488   During the year, the airline launched passenger services to
 Fax: +44 (0) 1372 224489
    www.ibagroup.com        three new destinations – Durban, Luanda and Tokyo – and
                            increased frequencies onto existing routes in high-demand
                            markets.




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                                             NEWSWATCH
                                                                       21st May 2010
                                                                     Volume 10; Issue 19


Emirates continued to enhance its products in the air and on the
ground investing €61.4 million (US$ 78 million) in upgrading cabin
interiors and the award winning in-flight entertainment system in
a number of aircraft. As of 31 March 2010, the Group and its
subsidiaries employed 50,000 staff, representing 150 different
nationalities.
Source: independent.com.mt - 17th May 2010




          Boeing still bullish on jet demand
 Boeing Co. executives remain upbeat about global demand for
 airplanes as well as progress on their 787 jet. “I think we’ve      IBA’s Comment:
 only scratched the surface in what we can achieve,” said Jim        The Increase in
 McNerney, Boeing CEO, during an investor’s conference on
                                                                     737 production
 Thursday.
                                                                     to 34 shipsets a
 In the short term, McNerney sees a better outlook for                month offers
 commercial airplanes sales than what the company saw last
                                                                          some
 year. In the long term, the chief executive also expects better
 international sales of Boeing’s defense products.                 encouragement.
                                                                   However, Boeing
 Of the 787: “We have not flown as many hours as we had
 hoped to fly ... but flights are more efficient,” said Jim             has a real
 Albaugh, president of commercial airplanes.                          challenge in
                                                                        garnering
 Each of Boeing’s flight-test airplanes needs to fly about 90
 hours per month in order for Boeing to obtain FAA certification      resources for
 and deliver the aircraft later this year. Last month, each          787 and 747-8
 aircraft flew an average of 112 hours.
                                                                   launch customer
 The company has completed many of the flight tests that               deliveries”
 would reveal whether the 787 had major problems, said Pat
                                                                       – Jonathan
 Shanahan, vice president of commercial airplanes.
 “Aerodynamically, this plane is stable,” he said.                      McDonald

 Boeing expects to put the fifth 787-8 flight-test airplane,
 equipped with GE engines, in the air within next few weeks,
 Shanahan said. The company also plans to have firm
 configuration of the 787-9 design in June.




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                                        NEWSWATCH
                                                                       21st May 2010
                                                                    Volume 10; Issue 19

 Boeing announced last year that it would establish a second
 787 production line in South Carolina. Ultimately, the
 company intends for the second line to be “self- sufficient,”
 McNerney said.
                                                                      “Boeing will
 Flight testing isn’t going as smoothly on the 747-8 Freighter       keep in mind
 program as on the 787, Albaugh said. But the company still has
 a plan in place to deliver the first freighter by the end of the   what competitor
 year. To do so, Boeing is adding a fourth flight-test aircraft,    Airbus is doing
 though it initially had planned to use only three.
                                                                    on its competing
 For the 737 and 777, Boeing is still looking at the long-term        aircraft, the
 future of both programs to decide whether the aircraft need          A320 and its
 to be replaced with all new aircraft or simply need
 enhancements. Boeing will keep in mind what competitor               new A350”
 Airbus is doing on its competing aircraft, the A320 and its new
 A350.

 The company has said it will increase production of both the
 777 and 737.
Source: heraldnet.com – 21st May 2010




    BA posts record loss as revenue plummets                         “Returning the
British Airways today reported a pre-tax loss of £531 million for     business to
the 12 months to the end of March and a £1 billion decline in
revenue over the year.                                                profitability

The losses were 32% worse than the previous year when BA lost           requires
£401 million. However costs also fell by £987 million and             permanent
operating loss for the year was £231 million, only 5% worse than
                                                                     change across
the £220 loss for the previous 12 months.
Chief executive Willie Walsh said: "To be in the midst of the the company and
biggest economic downturn in 60 years and produce the same it's disappointing
operating figure as last year shows that the hard work that has  that our cabin
been put into steering our business through the recession.
                                                                crew union fails
"Returning the business to profitability requires permanent
change across the company and it's disappointing that our cabin   to recognise
crew union fails to recognise that."                                  that."
He said the current financial year could not have had a worse



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                                          NEWSWATCH
                                                                        21st May 2010
                                                                     Volume 10; Issue 19

start because of the ash cloud crisis. "This added to the
aviation industry's current financial woes while highlighting its
crucial contribution to the economy," Walsh added.
BA chairman Martin Broughton called on the government to
reconsider plans to increase Air Passenger Duty and use the
aviation industry as a "convenient source of public sector
funding through increased taxes".
"We have a larger, and increasing, tax burden than other
transport sectors," he said.
Broughton added that BA would not be paying a dividend.
Source: ttlive.com – 21st May 2010 day.




   Lufthansa receives first A380 superjumbo
German airline Lufthansa on Wednesday celebrated the
handover of its first “superjumbo” A380 jetliner, which
manufacturer Airbus hopes will revolutionise long-distance air
                                                                     IBA’s Comment:
travel.
                                                                        “FRA is an
The massive double-decker plane was to leave the Airbus
factory in Hamburg and fly to Lufthansa’s main hub in Frankfurt       impressive but
am Main. There it will be christened with the city’s name by            congested
Mayor Petra Roth.
                                                                       airport. The
The A380 will replace the Boeing 747-400 as Lufthansa’s
flagship in June, when the airline will start regular service from   A380 should go
Frankfurt to Japan. Routes to Johannesburg and Beijing will            some way to
also feature the new big bird once Airbus delivers another
                                                                      relieving this
three aircraft.
Lufthansa’s version of the A380 will have a capacity for 526         and cementing
passengers, 420 in economy on the lower deck, as well as 98          its hub position”
business and eight first class seats on the upper deck.
                                                                        -Jonathan
The German airline has decided not to install a shower or
                                                                        McDonald
cocktail bar in its A380s like a few of its competitors, opting
instead for elegant design and attention to detail. Whereas
economy passengers will have a bit more legroom and more
ergonomic seating, first class travellers will be pampered with
a seat that transforms into a two-metre long bed.



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                                         NEWSWATCH
                                                                          21st May 2010
                                                                       Volume 10; Issue 19


“We’ve been told by our guests that they sleep better onboard
than in a hotel,” said Lufthansa product manager Christian
Körfgen, referring to test flights. “The crew has often had to
wake guests up for landing.”
A roundtrip first class ticket offering this luxury will, of course,
have its price – up to €12,000 – but passengers willing to pay for
them will receive Lufthansa pyjamas.
“That’s not any more expensive than before,” said Lufthansa
spokesman Michael Lamberty.
However, the superjumbo’s first passengers won’t have to pay
anything – before this Lufthansa’s new A380 heads off to Japan,
it will take the German national football team to the World
Cup in South Africa on June 6.
Source: thelocal.de - 19th May 2010




    MIT “Double Bubble” Plane Uses 70% Less
                     Fuel
Air travel is often hailed as the safest form of travel, and there
is something to be said for getting where you need to go in a          “The number of
hurry. Of course, to cruise six miles or more above the Earth
                                                                        flights in the
going hundreds of miles per hour requires high octane jet fuel.
Lots and lots of it. A Boeing 747-8 can carry up to 64,000              world is set to
gallons of jet fuel and, depending on how fast it flies, can burn       double in the
through over three-thousand gallons of fuel per hour.
                                                                          next few
No matter what you say about efficiency-per-passenger, that is
a whole lotta jet fuel. Everybody knows it, including NASA,              decades, so
which enlisted six research teams to design a more efficient            reducing fuel
aircraft.
                                                                       consumption is
A team led by researchers at MIT came up with a plane they
                                                                       going to be ever
call the “double bubble” that is supposed to reduce fuel
consumption by 70%.                                                    more important”
The NASA initiative, called N+3, gave grants to six teams to
design different, more fuel-efficient planes for future air
travel. The number of flights in the world is set to double in
the next few decades, so reducing fuel consumption is going to
be ever more important. Plus, using less fuel will undoubtedly




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                                        NEWSWATCH
                                                                        21st May 2010
                                                                     Volume 10; Issue 19

save consumers money, and, of course, there will be fewer
emissions. While some teams worked on supersonic planes, MIT
(the only university team) and three other groups worked on
subsonic planes.
It is worth noting that today’s aircraft are far more fuel
                                                                    IBA’s Comment:
efficiency than their older cousins. It’s simple economics: jet
fuel is not cheap, so naturally you want a plane that uses as         “Looking into
little as possible. But planes still pretty much look like planes. the future, these
The MIT plane looks familiar-yet-different. The designers
                                                                     design changes
essentially took two airplane fuselages and fused them
together. They also moved the engines from the wings to the          look great but
rear of the plane, where the engines can take in slower-moving how relevant are
air in the wake of the fuselage, which uses less fuel for the
                                                                        they? At
same amount of thrust.
The double bubble plane is designed to replaced the 737 for present, Boeing
domestic flights, but MIT designed a plane for international          and Airbus are
flights too (above). The wide hybrid wing aircraft eliminates
                                                                     still deliberating
the need for a tail by having a wide nose that provides plenty
of uplift. The wing and double bubble wouldn’t be ready before        over the A320
2035, but some of the double bubble design could be                      and 737
integrated into current aircraft and save up to 50% more fuel
almost overnight.                                                    Replacements ”

There are drawbacks to the design, like a 10% lower overall             – Jonathan
speed, and increased engine stress at the rear of the plane. But        McDonald
would you mind an extra hour of flying if it meant your tickets
cost a whole lot less?
Source: gas2.org - 20th May 2010




              XAIC to set up airline in Anhui
Xi'an Aircraft International Corporation (XAIC), a State-owned
enterprise in Xi'an, China, plans to establish an airline in Anhui
Province for aviation transportation and operation of the most
recently approved Xinzhou 600 aircraft, according to reports
Wednesday.
"Currently, we are in talks with the related department in
Anhui Province to jointly carry out the operation of Xinzhou




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                                                  NEWSWATCH
                                                                  21st May 2010
                                                                Volume 10; Issue 19

series," disclosed Jiang Jianjun, general manager of XAIC.
Once set up, the airline company will be the second air cargo    “Once set up,
company owned by Aviation Industry Corporation of China
                                                                  the airline
(AVIC).
                                                                company will be
Reports said previously that XAIC has contacted Anhui Lianhua
Aviation Management Corporation and signed a preliminary        the second air
cooperative framework for the possible establishment, but       cargo company
nothing had been confirmed.                                        owned by
Civil Aviation Authority of China (CAAC), on Tuesday, passed Aviation Industry
model certification to the domestic civil aircraft - Xinzhou 600, Corporation of
developed independently by XAIC.
                                                                  China (AVIC)”
XAIC will initially provide two Xinzhou 600 aircraft to the Civil
Aviation Flight University of China in June with a list price of
16.5 million yuan ($2.41 million) each.
Source: business.globaltimes.cn - 19th May 2010




                                                  Page 7
                                                                   NEWSWATCH
                                                                                                                  21st May 2010
                                                                                                              Volume 10; Issue 19


                                                 IBA Group News
    Press Releases & Presentations can be viewed in the News & Views section of our website, www.ibagroup.com

Conference Dates
21st May – Embraer Appraiser’s Conference, Washington – Alice Gondry is attending

EMB 145MP
IBA is pleased to offer for medium or long term dry lease one EASA Compliant EMB 145 MP aircraft. For further
details, please contact owen.geach@ibagroup.com

IBA Aircraft for Sale
2002 Embraer Legacy - MSN: 145505, Total time: 2281, Cycles: 1484 – US$12.5m.
Please contact Mark Wooller for further details at mark.wooller@ibagroup.com or call: +44 (0) 1372 224488


                                  Publications – 2010 Editions
                         Please contact marketing@ibagroup.com for more information.
Aircraft Values Book                Published in February & August 2010                                         £650 per year
Lease Rate Digest                   Published in February & August 2010                                         £375 per year
Engine Values Book                        Published in May 2010                                                £650 per year
Maintenance Cost Journal                    Published Quarterly                                                 £175 per year


                          Phil Seymour’s Notes on the Week
I have been a little late catching up with the news and its impact upon aviation – for example the Conservative/Lib
Dem coalition appears to knock any Heathrow expansion on the head. Actually, its not just Heathrow but the
Stansted and Gatwick expansions also become more unlikely. So - the dawn of a new era in the UK with politicians
from the left and right of the political spectrum joining forces for the common good (?).

I have therefore decided to also become more considerate towards those I may see as competitors. For example,
both Arsenal and Spurs (great footballing rivals in North London), have both qualified for the Champions League next
season by finishing third and fourth respectively. I therefore wish Spurs all the best for next season. In a similar vein
I hear Willie Walsh is taking the Union leaders for a beer tonight to celebrate only losing 530 million pounds.

Phil.seymour@ibagroup.com
                   “Newswatch” is a free weekly round-up collated by IBA Group Ltd.
                   Go to our website to find the last year editions of Newswatch archived.
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The items in this document do not necessarily represent the opinion of IBA, and is intended to be for information purposes only.
 Therefore, IBA assumes no responsibility or legal liability for any action taken, or not taken, by the addressee, or by any other
                                  party, with regard to the information and views contained.
  As a leading independent aviation consultancy, IBA Group Ltd. offers technical advice, commercial business
                         solutions & asset valuations for our worldwide client base.
                                     Compiled & Edited by Alice Gondry & David Rushe
                                                     www.ibagroup.com
                                      Tel: +44 (0)1372 224488 Fax: +44 (0)1372 224489




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