1. Airbus A380 Peter Wenham Lessor EVP - Technical Ahead of its time? Novus Aviation Capital - Dubai

2. Introduction Short introduction Growth of travelling public What do operators need & how do they fund - Leasing – growth in popularity & types of lease A380 – how it fits today What happens tomorrow?

3. World Traffic Growth Traffic doubles approximately every 15 years

4. Rise of the middle classes Forecast from 2013 t0 2033 – forecast middle class % of population

5. Demand for Aircraft

6. Forecast deliveries

7. Changing constraints Increasing numbers of aircraft Increasing number of airports at, or close to, capacity Convenience demanded by passengers (arrival/departure times Longer routes (anything over around 10hours +) = constraint on number of rotations possible in 24 hours

8. Aviation Megacities 2013

9. Lease or buy? If the costs of leasing increase the cost of ownership, why would anyone Lease? -aircraft are expensive and eat significantly into cash reserve -aircraft are not brought into or out of a fleet quickly – with such a quick moving industry can hamper a quick response -affects the balance sheet and therefore operator value -operators have the ability to purchase at favourable rates from manufacturer then sell to Lessor at ‘market rate’ -no residual value risk at the end of life -A mix of owned/leased fleet gives maximum lift flexibility Growth of Leasing businesses

10. Lease or buy? Which one works best

11. Growth of Leasing

12. Lessors by Fleet - 2014

13. Operator Aircraft selection

14. Comparison – similar types Aircraft typeA380-800B747-8IB747-400B777-300ER MTOW-lbs1,235,000987,000870,000775,000 Tri-class seats OEM525515400370 Tr-class seats (airline av) 407-547287-464246-364 Airline average484440363316 Range with av airline seats (nm) 8,2507,9007,2008,000 ULD typeLD3LD1 LD3 Belly freight38363244 Fuel Performance USG/seat mile 0.01970.02110.0181 Aircraft Commerce – issue 79

15. A380 Operators As of December 14

16. Current Routes

17. Aviation Megacities - 2033

18. So……….. If there are so many positives………….why have A380 sales slowed so much? And what happens to it next?

19. Operator/Lessor ownership Lessor owned fleet is circa 45% of the world fleet There are no conventionally leased A380s presently One or two ‘KG’ financed and those recently ordered/deferred by Amadeo None of the big Lessors involved

20. Headwinds For the operator Point to point travel vs Megacity hubs Current fuel prices don’t help the A380 Ability to operate at minimum load factor year round or have alternative routes to deploy to For the Lessor Transition costs 2nd market options Disincentives to increase the A380 fleet

21. Classic layout of Aircraft

22. Configurations Number of seats certified (538 main deck + 315 upper deck = 853 total) Average configuration at < 500 total (484) Maximum layout to date Air France 538 This year Emirates partial fleet planning to go to 615 So far – no ‘all economy’ operators because yield on mixed class operation is more attractive on long haul operations

23. Transition challenges the upper deck is similar to reconfiguring an A330 and costs do not take into account any refurbishment of the lower deck one further difficulty – only Lufthansa, Thai, Emirates & Etihad have an all-economy lower deck and mixed configuration upper deck all remaining operators have mixed configuration upper and main decks, which adds complexity and cost

24. Transition Costs

25. Comparison with the competition

26. Airbus view of 2 nd market

27. Future operators – 2 nd market options? Legacy operators for replacement and expansion?  If this is a market – why no more recent orders? Dependent upon?  the rate of increase of the number of Megacities  the rate of increase of slot constrained airports  maintenance costs do not escalate too much LCC or ULCC for long range cheap tourist or religious travel?  rate of rise of middle classes for increased tourism  already pressure on access to religious locations

28. The ‘neo’ option Will a new engine change things? Emirates pushing for re-engined model to further reduce per seat operating costs Offering Airbus the possibility of a further very large order of 50 or more aircraft But will other operators follow and ‘up’ their orders? Will the improved economics be enough of an incentive to overcome the current slack sales situation other than for Emirates?

29. Conclusions New aircraft – rate of increase in aviation Megacities 2 nd market – rate of increase of tourist activity & possibly also religious tourism Secondary considerations fuel prices possibility of re-engine option ability to keep a control of maintenance costs absence of a large scale crisis

30. For More Information and discussion Peter Wenham Novus Aviation Capital – Dubai peter.wenham@novus.aero