Mitigating Lease Return Costs and Challenges

WHO WE ARE Delta TechOps, we are: The third largest MRO in the world A $4 billion production center for Delta Air Lines, employing 10,000 people A fully integrated global maintenance organization with Atlanta-based main operation Supported by the largest & most experienced non-union TechOps workforce worldwide Continually improving operational efficiency utilizing 200+ Engineers 86 years of experience We see the big picture and the smallest details TITLE OF PRESENTATION 11/23/2018

Lease Return Costs and Challenges Regulatory Transferability The major aviation bodies, FAA and EASA, have established extensive regulations beyond the minimum standards set by ICAO. Those regulations are often followed or copied by other states. However, other states can interpret the regulations differently or add other regulations. Registration Design Approval Airworthiness Certification Continued Additional Operational/ Airspace/ Security/ Other Requirements Operational Transferability Managing the challenges that arise because the lessor and the lessee look at the lease from different perspectives: Maintaining Asset Value, Repairs, Records, Insurance, Payments and Securities throughout the lifecycle of the asset. Background Pre-Delivery Delivery Operations Re- Delivery Illustrations from IATA “Guidance Material and Best Practices for Aircraft Leases” 11/23/2018

Lease Return Approach Lessor and Operator agree on joint maintenance management program Lessor takes lead of program Lessor selects maintenance provider throughout the aircraft or engine lifecycle – across different operators Maintenance provider manages all maintenance requirements Maintenance provider facilitates lease transition from operator to operator Benefits Continued time operation = no checks required at transition time Maintenance Reserves will be less contentious Back-ground Pre-Delivery Delivery Oper-ations Re- Delivery 11/23/2018

Complete Lease Services Delta TechOps approach: Complete Lease Service Complete maintenance service provided by Delta TechOps to Lessor that leverages industry-leading operational and maintenance experience to enhance the long-term value of lease assets Delta TechOps acts as single source for all maintenance requirements Delta TechOps can comply with all Lessor requirements, OEM qualification, but also PMA and DER based on Lessors financial asset valuation models Advantages of Complete Lease Service Maintenance Management Simplicity Single Provider of Complete Aircraft or Engine Maintenance Services Enhanced Maintenance Cost Predictability Superior on-wing performance and reliability Minimized long-term engine maintenance cost Back-ground Pre-Delivery Delivery Oper-ations Re- Delivery 11/23/2018

Questions Is there value in a non-traditional lease delivery and return structure? Is covering an aircraft, maintenance and engineering, from delivery until retirement really a viable option? Is it really important to keep serialized parts installed on original aircraft? What is same age and configuration? Can costs really be saved by putting aircraft CFS programs? Is transferring aircraft between different regions in the world really a major factor? From China to USA an issue? Is residual value really an important factor? How is it quantified? Appraisers? 11/23/2018