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Freighter Solutions for China Bigger is Not Always Better

Freighter Solutions for China Bigger is Not Always Better. Ron Anderson Chief Executive Officer - Intrepid Aviation March 26, 2008. Intrepid Aviation. A leasing company with a focus on new medium widebody freighters and freighter conversions of suitable passenger medium widebodies

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Freighter Solutions for China Bigger is Not Always Better

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  1. Freighter Solutions for ChinaBigger is Not Always Better Ron Anderson Chief Executive Officer - Intrepid Aviation March 26, 2008

  2. Intrepid Aviation • A leasing company with a focus on new medium widebody freighters and freighter conversions of suitable passenger medium widebodies • Over 40 passenger aircraft converted to freighters • Over 100 sales and leasing transactions

  3. Intrepid Aviation • Offering A330 freighters for lease • Sale-leaseback of passenger aircraft • Freight conversions of passenger aircraft

  4. Global Air FreightMarket Trends • Rising fuel prices • US economic downturn • Increasing competition • Integrators • Pressure from surface transport • Passenger belly capacity • Overcapacity in certain markets • Traditional market categories are blurring • Express freight carriers moving into general freight • General freight carriers moving into express freight • Hybrid freight (a mixture of both) is more common

  5. Freighter Market Trends • Limited used passenger widebodies available for freighter conversions until 2012 or later • New widebody freighters are sold out until 2012 • Fuel prices will mandate earlier retirement of inefficient aircraft • Costs for conversions from passenger to freighter configuration are rapidly increasing

  6. Chinese Air Freight Market Trends • Imbalanced traffic from Europe and North America • Growing regional traffic • Intra-China growth of 10.8% • Inter-regional growth of 8.6% • Overcapacity in Large Widebodies • Competition for market share Data per Boeing World Air Cargo Forecast 2006-2007

  7. Medium Widebody Freighters A Proven Answer to the Challenges

  8. Medium Widebodies Have Become The Most Popular Data per Boeing World Air Cargo Forecast 2006-2007

  9. Growth of the Medium Widebody Combating imbalanced traffic Developing new and direct markets Increasing operating efficiencies Reducing risk Matching lift to load

  10. Growth of the Medium Widebody Higher frequencies Increase yield Increase market share Decrease trip cost Increase profit!

  11. The A330 is a Unique, New Medium Widebody Freighter

  12. The A330 Freighter Offers New Capabilities and Efficiencies The first mid-size freighterwith long haul range Twin engine economics Modern, fuel efficient engines New aircraft reliability Environmentally friendly

  13. The A330 offers the Range of a 747-400 Source: Airbus

  14. The A330 Enhances Revenue With Broader Regional Services More payload inmore markets Extend beyond the A300/DC-10or 767 India Australia Middle East Range ModePayload Mode Source: Airbus

  15. Enhance Profit WithBetter Service Higher frequencies More reliability More direct routes Higher average yield Supplement Large Widebody frequencies

  16. More Profitable In An Imbalanced Market • Freight movements are two way. • What is the profitability from the total of the front haul AND the back haul? • Assume all airplanes are full on the front haul. • The A330 is more profitable on a round trip basis when the back haul is less than 65 tonnes. Yield: 35 cents per RTK front haul 15 cents per RTK back haul Intrepid Analysis

  17. More Profitable Over A Broad Range of Payload • The larger airplane is more profitable when market demand closely matches the airplane’s capabilities. • The smaller airplane is more profitable over a broad range of market demand. IntrepidAnalysis

  18. More Profitable Over A Broad Range of Payload • The same story holds true for both new twins • The smaller airplane is more profitable over a broad range of market demand. IntrepidAnalysis

  19. The A330-200F Is Uniquely Suited For China • Twin engineeconomics • New aircraft technology &reliability • A320/A330/A340pilot pool • More profitable in more circumstances!

  20. Intrepid Aviation • Focused on freighters • Experienced with conversions • We welcome conversation • On aircraft • On freight markets • On how we can help

  21. Please See Us At OurDisplay Stand Ron AndersonChief Executive Officer Gerry AubreyChief Leasing Officer Liwen HuangSr. VP Business Development Asia Nancy WangBusiness DevelopmentChina Worldwide Relationships – Industry Professionals – Medium Widebody Focus – Freight Expertise www.intrepidaviation.com

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