The document provides an agenda and information for an aircraft engine and fleet planning executive program. Key points from the document include: - The agenda covers topics like fleet planning overview, aircraft engine overview, the growth of the commercial aviation industry, trends in leasing versus owning aircraft, aging aircraft values, maintenance costs, and multidisciplinary functions involved in fleet planning. - The commercial aviation industry is growing steadily, with narrowbody aircraft maintaining the majority at around 60% of fleets. - There is an increasing trend of leasing aircraft, projected to be over 50% of fleets by 2020, compared to less than 1% in the 1970s. - Maintenance costs are a major operating expense

1. Aircraft Engine & Fleet Planning
Embry Riddle Executive Program
Daytona Beach, FL - February 28, 2012
Dr. Hooman Rezaei
IAEA Founder & President
@IAEA1, : International Aircraft Engine Association
www.turbineengine.org

2. www.turbineengine.org2
Feb 28, Thursday Second Day Lecture Topics
8:45-9:00 Coffee
9:00-10:30 Aircraft Engine and Fleet Planning Fleet Planning Overview
10:30-10:45 Coffee Break
10:45-12:15 Aircraft Engine and Fleet Planning Aircraft Engine Overview
AGENDA

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Fleet Planning

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Commercial Aviation Growing Steadily
A380
777
737
A320
EJet
2.7  3.5
7  8.3
3.5  10
38  42
40  42
8.7  9.2
Production rate
(’12  ’14)
787
CRJ 2.5  2.5
Traffic growth (Trillion RPKs)
5.4%
CAGR
‘10 ’14F ’20F
Highest production ramp rates in 3 decades … inconsistent with demand growth
9.3%
CAGR
Boeing and Airbus are increasing rates to ~40 / month. That means: 40 x 2 (Airbus & Boeing) x 11.5 mth. / yr. = 920 / yr. or ~1,000 including the other new
single aisles.1,000 x 5 years = 5,000 / 10 yrs. = 10,000 / 20 yrs. = 20,000 aircraft.

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Narrowbody
60%
Narrowbody
57%
2012
20,840 Aircraft
2022
29,955 Aircraft
Regional
17%
Regional
19%
Widebody
23%
Widebody
24%
10 Year Projection
3.7%
CAGR
Narrowbody Aircraft Models Maintain Majority
Source Data: TeamSAI

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Lease vs. Own
Increasing Trend of Leasing – Forecast 50%+ by 2020
1970
3,722 Aircraft
17 Leased
(.5%)
1980
6,037 Aircraft
100 Leased
(1.7%)
1990
9,160 Aircraft
1,343 Leased
(14.7%)
2000
15,032 Aircraft
3,715 Leased
(24.7%)
2012
21,741 Aircraft
7,943 Leased
(36.5%)
Source: Boeing

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Source Boeing.com
Global Point To Point
B777-200LR: 300 Passenger – 9400 NM – 19 Hour Flight

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Source Airbus.com
Extensive Regional Coverage
A321: 185 Passenger – 3200 NM

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Aircraft Age & Value
5 10 15 20 25 30 Year
Lessor’s
AVG 12.7
Worldwide
AVG 15.3
0
100%
Theoretical
End of Life Solution Preparation
Aircraft Value = Engines’ Value
B737-900ER @ $30M FMV Oldest (2007)
CFM56-7B27 @ $6.4M Half Life
Ratio (2 Engines) = 2.3,
LLP = $2.3M, Overhaul Cost = $2.1M
MTBO = 16,000, FH:FC = 2.0
B747- 400 @ $11.5M FMV Oldest (1989)
PW4056 @ $4.1M Half Life
Ratio (4 Engines) = 0.7
LLP = $4.7M, Overhaul Cost = $3.4M
MTBO = 16,500, FH:FC = 6.6
B767-300ER @ $9.5M FMV Oldest (1986)
CF6-80C2B6F @ $4.5M Half Life
Ratio (2 Engines) = 1.05
LLP = $4.9M, Overhaul Cost = $2.6M
MTBO = 16,500, FH:FC = 6.0
Source: IBA

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Maintenance Costs Breakdown
~11%
$8.7 $9.9 $11.9
$22.4
$27.7
$31.6
$9.5
$11.3
$13.4
$8.9
$10.6
$11.5
2012 2017 2022
HMV & Mod Engines Component Line
Global MRO Forecast Total Value in $B
CAGR
3.7%
CAGR
2.8%
$49.5B industry will grow to $68.4B over 10-year forecast period
–2012 up 5.7% from 2011
–2022 is down from the 2021 forecast due to the lower average fleet age
Engine remains the largest segment with the highest growth rate
– Component to grow as fast as engines MRO in the latter half of the forecast
Source Data: TeamSAI
$49.5
$59.5
$68.4

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Fuel Cost Impact
Retiring Older Asset, Inducting Newer Fleet & Technologies
0
20
40
60
80
100
120
0
5
10
15
20
25
30
35 2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
%OperatingCost
Source: IATA Economics

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Multidisciplinary Function
CEO’s
STRATEGIC VISION
FINANCE
ENGINEERING
OPERATIONS
STRATEGIC
PLANNING
FLEET PLANNING
AIRCRAFT
ACQUISITION

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Aircraft Engine Industry

14. World Regions
Africa 2,045 4%
Asia Pacific 6,634 15%
China 3,599 8%
Eastern Europe 2,115 5%
India 770 2%
South America 2,965 7%
Middle East 2,456 5%
North America 14,951 33%
Western Europe 9,728 21%
Total (2012) 45,263
Total (2022) 62,544 +38%
OEMs 2012 2022
CFMI 16,658 26,951
GE Aviation 9,860 13,085
Rolls Royce 6,134 7,775
Pratt & Whitney 7,441 7,638
IAE 4,118 5,405
EA = GE + P&W 120 824
Power Jet 8 592
Honeywell 924 276
ACAE - TBD
CFMI Fleet Largest Share of 37% , +15
RR’s Fleet Overtake P&W’s Fleet by 2022
Source Fleet Data: Ascend
An Industry With 150,000+ Professionals
www.turbineengine.org14
Commercial Engine Industry Overview

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Fuel Consumption #1 Cost
SFC: The weight flow rate of fuel required
to produce a unit of power or thrust

16. Fan Size Trend
FAN DIA , Nacelle DIA , Engine Weight , Landing Gear
FOD , Transportation Cost , Maintenance Cost
www.turbineengine.org16

17. Geared Fan Performance
www.turbineengine.org17
Fan Diameter High Bypass RatioLow Bypass Ratio
High
Low
Noise
Fuel Burn
Geared
Direct Drive
Direct Drive:
Larger Fan → Lager LPT → Heavier Engine
Geared:
Larger Fan → Smaller LPT → Lighter Engine

18. Gearbox on LEAP’s Architecture?Open Rotor?
www.turbineengine.org18
Fan Drive System

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Airline Shop OEM Shop Independent
LHT
5A/5B/5C/7
Snecma
all models
GA Telesis
5B/5C
SR
Technics
5B/5C/7
TAP
3/5B/5C
Iberia
5A/5B/5C
GE Strothers
all models
Air France/KLM
3/5A/5B/5C/7
China
Airlines
5B/5C/7
GE Wales
all models
NEC
3/5B/7
MTU
Zhuhai
3/5B/7
Alitalia
5B
Kelly
5A/5B/5C
GE Celma
3/5A/5B/5C
AeroThrust
3/7
American
7
CEES
3
Delta
Tech Ops
3/7
GE
Malaysia
3
GMF
3
IAI
3/7
IHI
3/5A
LTAI
3/7
MTU
Hannover
3/7
JTS
3
Snecma
Morocco
3/7
Snecma
Sichuan
5B/7
STA
3/7
TEC
3/5C/7
Timco
3
United
3
Ameco
3
Snecma
Brussels
3
ANA
5A
PIA
3
GE Varig
3
Avio
3
Olympic
5C
KAL
7
JAT
3
SAMES
3/7
MTU Vancouver
3
7000+ GTF and LEAP Sold – Non Available For 3rd Party
PBH Coverage – Source TEAMSAI
CFMI: ~35% Installed
Trent: ~90% Installed
V2500: ~43% Installed
V2500: ~ 80% Future Deliveries
PW/China Eastern
3/5B/7
X
Standard Aero
7
Kelly
3/7
JALCO
3
$22B+ Global MRO Market → OEMRO

20. Success Story: GE90 Implementation
Result: Fundamentally Different Fleet Management
www.turbineengine.org20
Operation: Fan-Propulsor Architecture

21. Engineering: Modular Management
Challenge: Tracking time/cycles/config on each module
www.turbineengine.org21

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High T4 & Fan DIA CMC & TiAl

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Engine Fleet Management Goals
1. Optimize Engine Maintenance Cost (MC)
2. Improve Engine Fleet Reliability
3. Decrease Aircraft Indirect Operating Cost (AC IOC)
4. Decrease Fleet Fuel Consumption

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Operator’s Mission
• Help achieve the EFM goals, the operator’s mission
is to:
a) Improve the engine reliability
b) Decrease the engine operating and repair
costs
• To increase the engine reliability, it is required to:
a) Increase the level of engine performance
b) Decrease the number of delays &
cancellations (D&C)
c) Decrease the number of operational events
• Decrease the engine operating and repair
costs, it is required to decrease the:
a) Shop visit rate (SVR)
b) Shop visit cost (SVC)
c) Line & base maintenance cost
d) Number of operational discrepancies
(OD)
• In-flight shutdown (IFSD)
• Aircraft turn back (ATB)
• Aborted takeoff (ATO)
• Flight diverted (FLT-DIV)

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Engine Related Variable Cost Drivers
Maintenance Cost per Engine Flight Hour (MC/EFH)
• 4% of total operating cost
• Equation: MC/EFH = SVR X SVC + L&B Cost
– SVR = Shop Visit Rate
• 43% of all engine shop visits are planned
• 57% of all engine shop visits are unplanned, which
is used as one measurement of engine reliability
– SVC = Shop Visit Cost
• Includes partial and full engine refurbishment.
• Costs vary from $ 0.5 to 1.5 million.
• Varies with engine type and workscope plan
– L&B Cost = Cost to perform on-wing maintenance.
Aircraft Indirect Operating Cost (AC IOC)
• 10% of total operating cost (1% of total from the engines)
• Equation: AC IOC = OD + D&C + OTHER
– OD: Operational Discrepancies, each one costs
approximately $150,000
• IFSD: Event requires the engine to be shutdown
• ATB: Event requiring aircraft return to the airport after takeoff
• ATO: Event stopping takeoff before aircraft lifts off the runway
• FLT-DIV: Event re-routing the aircraft to a different location
from its destination
- D&C = Delays and cancellations
• Events are classified under schedule interruptions (SI)
• Delay is considered if it lasts over 15 minutes.
- OTHER = Discrepancies
• There are other discrepancies; however, they have minor
impacts on the AC IOC and engine reliability.
Fuel Cost (FC)
• 11% of total operating cost
• Equation: FC = AIRCRAFT + ENGINE
– Aircraft rigging and trimming (performance retention)
– Aircraft operations (optimum flight path)
– Engine deterioration
– Engine route structure (cycle to hour ratios)

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Engine Related Variable Cost Drivers
AC IOC
(10%)
= + +OD D&C OTHER
PARTIAL/FULL REFURBISHMENT
($ 0.5 – 5.0 MILLION)
$25,000
AIRCRAFT
RELATED
IFSD ($150,000)
OTHER
FUEL
(11%)
= AIRCRAFT + ENGINE
DETERIORATION
ROUTE STRUCTURE
PERFORMANCE
OPERATIONS
PLANNED (43%)
UNPLANNED (57%)
MC/EFH
(4%)
= SVR SVCx + L&B MAINT COST
< 6% OF TOTAL MC

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Engine Shop Visit Rate Impact
0.1024
0.00
0.02
0.04
0.06
0.08
0.10
0.12
0 5 10 15 20 25 30 35 40 45
NUMBER OF MONTHS
BASICSHOPVISITSPER1,000HOURS
TARGET LEVEL 0.0973 5%
.1024
1000
x $1,200,000 = $123
=
.0973
1000
x $1,200,000 = $117
 MC
FLEET YEAR
= = 6 x 40 x 4,000 = $960,000
x SVC =
MC
EFH
=
SVR
1000
EFH
= $6
DMC
x # ENG. x
HOURS
YEAREFH
DMC

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Shop Visit Impact on Engine MC
SVR x SVC = MC x EFH/YR MC/YR
SVR
PER
1,000 HRS
AVERAGE
COST PER
SV ($)
MC/
EFH
($/HR)
X = X
EFH/YR
(HRS)
MC/ENG
PER YR
($)
SV TOTAL
100%
SV 0.1024 $1,200,000 $ 122.90 4,000 $ 491,520
SV OIL SYSTEM
5.0 %
SV
0.0051 $1,200,000 $ 6.14 4,000 $ 24,576
SV
IMPACT
ON
MC/ENG

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Operational Discrepancy IOC Impact
0.0052
0.000
0.002
0.004
0.006
0.008
0.010
0.012
0.014
0.016
0 5 10 15 20 25 30 35 40 45
NUMBER OF MONTHS
OPERATIONALDISCREPANCY(x1,000HOURS)
x
# OD’s
YEAR
=
0.0045
1,000
4,000 = 0.018
# OD’s
EFH
x
EFH
YEAR
=
OD PROBABILITY COST
YEAR
= = 0.018 x $150,000 = $2,700
# OD’s
YEAR OD
OD COST
x
RISK COST PER ENGINE
PER YEAR
( # OD’s per EFH ) * ( OD COST ) = ( 0.0045 / 1,000 ) * ( $150,000 ) = $ 0.68 / EFH
TARGET LEVEL 13%0.0045

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Majority Future Fleet Lessors Owned
Fuel Consumption, Noise, Emission and $/Flight Hour
EIS Part Out
$Z
TSN = 0 Hr TSN = X Hr
SV1
$Y1
SV2
$Y2
SV3
$Y3
$/Flight Hour =
$𝑌1+$𝑌2+$𝑌3
𝑋
Fleet Planning & Cost of Ownership

31. Dr. Hooman Rezaei has more than 15 years of experience in Aviation industry and is
currently Managing Director at Oasis Aviation Consulting providing total aircraft engine
management services globally. Prior to Oasis Aviation Consulting, he worked in
positions spanning from military advanced R&D to global sales of aftermarket services
at Pratt & Whitney. He led major Power-By-Hour aircraft engine maintenance services
P&Ls, developed $1bn+ CFM56 MRO sales plan and closed a major PBH services
contract in the Middle East region.
Hooman is the founder of the International Aircraft Engine Association with more than
7400 members globally integrating the aircraft engine industry on a global ecommerce
platform. Through IAEA, he has developed and offers a front to back engineering and
business review executive program on aircraft engines.
Hooman has completed his Ph.D. in Turbomachinery at Michigan State University and is
an author of several technical papers in this field. He holds a MS Degree in Management
with Finance Concentration from Rensselaer Polytechnic Institute.
Contact:
P.O. Box 4405
Irvine, CA 92616, USA
Mobile: +1 (860) 992-2452
Email: hooman.rezaei@turbineengine.org
www.turbineengine.org31
About Instructor

32. THANK YOU!
International Aircraft Engine Association
P.O. Box 4405
Irvine, CA 92616
USA
Email: info@turbineengine.org
Telephone: +1 (310) 266-5514
@IAEA1
International Aircraft Engine Association
www.turbineengine.org32