Aircraft Leasing Procedure * Sources of Finance *Aircraft Financing Environment *Operating Lease *Lesser Landscape *World Lease Fleet *Traditional Leasing Companies *Banks in Aviation *Direct loan Structure *Secured Loan *Finance lease structure *Ex-Im Bank of US *Boeing *A/C Finance infrastructure

1. Aircraft Leasing Procedure
By Tayyaba Umer
BS Aviation Management –
Tayyabaumar001@gmail.com

2. Sources of Finances
 Short Term Finances
 Long Term Finances
Lease
 Long term finance
Types of Lease
 Operating lease
 Financial lease

3. Aircraft Financing
Environment
3
Satisfactory Cautionary Major ConcernG Y R ChangeY/G
Capital Providers 2003 2004 2005 2006 2007 2008
1Q
Lessors R/Y Y G G G G
Commercial Banks R/Y G G G G G/Y
Public Debt / Capital
Markets
R R R/Y Y G/Y/G G/Y
Export Credit Agencies G G G G G G
Private Equity / Hedge
Funds
G G G G G G/Y
Tax Equity R R Y Y G G
Airframe and Engine
Manufacturers
R R/Y G G G G
New Sources of Funding G G

4. s leasede fleet id airlin
World Airline Fleet: 1970 to 2008
1970
3,811 Aircraft
1980
6,397 Aircraft
1990
9,775 Aircraft
57 Leased
(1.5%)
2000
15,859 Aircraft
2008
21,375 Aircraft
% of worl
208 Leased
(3%)
1,658 Leased
(17%)
3,826 Leased
(24%)
6,628 Leased
(31%)
Airclaims through 06/14/08
31% of world airline fleet is leased31
Operating Leases Are Playing a Larger Role
4

5. Lessor Landscape
5
Traditional New
GENESIS LEASE
limited
terra firma
AIRCASTLE
Diverse lessor ba esDiverse lessor base

6. World Lessor Fleet
6
BOC
BCC
Macquarie
BBAM
AerCap
RBS
Other (123
lessors)
ILFC
CIT
GECAS
ACG AWAS/
Macquarie
BBAM
AerCap
RBS
ACG
AWAS/
Pegasus
BOC
BCC
Other (123
lessors)
ILFC
GECAS
CIT
$160B value
33% of World’s Fleet Value
Source: Airclaims Jun ‘08. Includes all in-service/stored western built jets operated by airlines and managed by operating lessors. Generic Market Value as of Dec ‘07
6,628-units
Pegasus

7. Traditional leasing companies
7
 Ownership by large parent company and diversified
product base
 Well-known in market place
 Usually large and varied portfolio
 Multiple funding sources within and outside company
Parent companies ma e exp d to other risk factorsosey bParent companies may be exposed to other risk factors

8. Banks
8
 Combination of new and existing entrants to the market
 Invest in aircraft portfolio for diversification and
opportunity
 Conservative in deal structure
 Some regional focus
Close y monitoring the econom c environmentilClosely monitoring the economic environment

9. Typical Direct Loan Structure
9
Lender ManufacturerAirline
Guarantee
Guarantor
(Optional)
Loan 70 - 85%
Mortgage as
Security
Purchase Price
Title to Aircraft
15 to 30% Balance of Funds
 Same Lender (if 100% Financed)
 Subordinated Lender
 Equity Investor
 Airline

10. Finance Leases Offer Greater
Protection to Lenders Than a
Direct Secured Loan
 Off-shore Special
Purpose Corporation
(SPC) owns the asset
 SPC can be owned by
the airline, the lenders,
or a charitable trust
 If not owned by lenders,
pledge of shares of SPC
and a first mortgage is
granted to lenders
 Ownership of aircraft
transfer to airline at
maturity
10
Direct Loan or
Finance Lease?

11. Typical Finance Lease
Structure
11
Lender ManufacturerLessor
Guarantor
(Optional)
Airline
(Lessee)
Loan 70 - 85%
Mortgage/pledge
as Security
Lease
Guarantee
Purchase Price
Title to Aircraft
15 to 30% Balance of Funds
 Same Lender (if 100% Finance)
 Subordinated Lender
 Equity Investor
 Airline Downpayments

12.  Loan guarantees for up to the lesser of 85% of net price
or U.S. content
 12-year repayment term, fixed or floating interest rate
 Structured as a cross-border finance lease
 Security requirements may include sovereign guarantee
 Interest rate based on market conditions
 Minimum exposure fee of 3%, can be financed over the term
 All Export Credit agencies are governed by Aircraft Sector
Understanding (ASU) agreements to maintain equal terms
and conditions
Export-Import Bank of the
United States
12

13. Ex-Im Bank Finance Lease
Structure
13
Aircraft PriceAircraft Title
85% Guaranteed Loan
Loan Payments
15% Cash
Payment or
Sub Debt
Guarantee
Boeing
Lender
Ex-Im Bank
SPC
Airline
Guarantor
(Optional)
Guarantee
Lease RentalsFinance Lease

14. Ex-Im Bank is a Significant Financier of
Boeing Aircraft
0%
10%
20%
30%
40%
50%
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008E
Ex-Im % of Boeing Exports Ex-Im % of Boeing Deliveries
80% of backlog s E m eligiblex-Ii80% of backlog is Ex-Im eligible
14

15. Evolving Global A/C Finance
Infrastructure
15
Cape Town Treaty
Environmental
Regulation
OECD
European
Aviation
Safety
Agency
EUROCONTROLIASB
AWG – the voice of our industry
BANK FOR
INTERNATIONAL
SETTLEMENTS