1. Uncertain Times for an Uneasy Industry It is the best of times, …the worst of times… ABA Forum on Air & Space Law January 28, 2009

2. Uncertain Times Demand Destruction –GDP slide, opt-out and modal shift to Business/GA Energy Sensitivity –Price volatility, availability, policy, need for allocations Environmental Issues –Proactive leader, yet a lightning rod for criticism Productivity/Social Issues –All time high, not high enough; lack of trust Pricing Power –Traction, dependent on industry capacity constraint

3. Uneasy Industry Volatility – to manage, or not? Customer targeting – populist, or niche? Suppliers – Keep your friends close… Product Attributes – full or self-service? Regulatory – multilateralism, consolidation Alliances – ATI/JVs all around! then what? Business Processes – core, slim or ASP? Virtual Airline – Holy Grail.. or too frail?

4. Darkest Before the Dawn 1990s/2000s business cycle hangovers Creeping global recession Credit market seizure and toxic remainder Obsolescent fleets, slow liquidation New technology disappointments

5. Glimmer on the Horizon Expanding, insatiable demand for air travel –Emerging economies, logistics, aspirational Policy introspection and intertwinement –Energy, environmental, transportation, economic Technology/efficiency investment –Energy supply, aircraft/propulsion efficiency Rationalized national and global networks But…new costs/taxes too: ATM, ETS, etc.

6. Uncertainty Rules So, what else is new? Durable trust between the parties would go a long way to resolve internal issues How to break through? What stimulus? EU-US interest talks may be a blueprint –Or recent actions drive the wedge in deeper