The Aviation Quandary Developing an Aviation Economy The Future of Aviation Industry… in Estonia Jonas Butautis, CEO

Why This Topic? Quandary [kwon-duh-ree, -dree] A state of perplexity or uncertainty, especially as to what to do. (dictionary.com) What is Estonia’s ‘aviation identity’? Impact of Aviation on national GDP; Why Care? Features of ‘Aviation Countries’; What Works? Roadmap to Finding Identity; Ideas for Action.

Defining Aviation Airlines Ground Services Financial Services FSCs, LCCs, Charter, Cargo, mixed business models Ground Services Airports, Ground Handling, Retail, Catering, Ticketing, Cargo Services, MROs, Navigation, Regulators, etc. Financial Services Leasing Companies, Aviation Assets Investment Vehicles Aviation is a complex Organic Business Ecosystem with a number of inter-related players

Impact of Aviation on GDP Global $ 2.4 trillion aviation Global economic impact (direct and indirect) 3.4% of Global GDP is supported by aviation On average, aviation jobs are 3.6 x more productive than other jobs National Example. Singapore SG$ 8.7 billion direct contribution to national GDP, 3% 58k aviation related jobs National Example. Ireland € 4.1 billion direct contribution to national GDP, 2.6% 54k aviation related jobs, 2.8%, 40% premium salaries If Estonia had a per capita-scaled Aviation industry comparable to Ireland, aviation relation businesses could contribute € 1,2b or 7% of Estonian GDP

What Works (I of II) Political Focus Legislation Aviation is a ‘war’ of nations (Turkey, UAE, Singapore, Ireland, UK, etc.). Country-wide Strategy and political will for execution is needed Legislation Corporate tax rates, allowed interest deductibles, double taxation treaties, VAT exemptions, asset depreciation rules, custom clearance procedures, expat employees income tax reductions, etc. Supply of Skilled and Certified People Academies and vocational schools working hand in hand with business to supply thousands of skilled employees. Technical skills are crucial, more than the need for higher education

What Works (Ii) Financial Infrastructure Banks and funds open to finance aviation projects. Aviation know-how present among financial analysts. National Regulation and Aircraft Registry Local CAA as business oriented, service organization. Flexibility, speed, professionalism, security, cost efficiency. Support of Home Airline to Drive the Industry Singapore Airlines, Turkish Airlines, Qatar, Emirates, Etihad, etc. Other Government-backed Benefits Local or national government financing Hangars Free Economic Zones Investment support programs for Greenfield Investors Targeted Country Promotion to Aviation Community

Roadmap to FINDING Estonian Aviation Identity Political Will Clear Country Positioning and Aviation Strategy Formulated with ownership of execution Review of Aviation-Centred Legislation Corporate tax rates, allowed interest deductibles, double taxation treaties, VAT exemptions, asset depreciation rules, custom clearance procedures, expat employees income tax reductions, etc. Positioning Estonia for Aviation Investors Approaching OEMs, MROs, manufacturers, support services, leasing companies, other asset owners Fighting for every Aviation Project Step by step, create an aviation cluster

Ideas to Consider Maintenance, Repair, and Overhaul (MRO) Airframe Heavy Maintenance, Painting Facilities, Engine Overhaul Shops, Component Repair Shops, etc. OEM Manufacturing OEM owned and run production or assembly facilities Promotion of Aircraft Register Preparing legislation and resources to promote Estonian aircraft register Promoting Aircraft Financing Industry Special incentives for aircraft financing organizations settling in Estonia With the right focus, Aviation has opportunity to become the core driver for Estonia’s GDP growth

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