1. EATS 2007 Maintenance Conference Aviation Maintenance Market Outlook Berlin October 17, 2007 071017 © 2007. All rights reserved. VZM Management Services bv www.vzm.net

2. 071017-2 © 2007. All rights reserved. VZM Management Services www.vzm.net Commercial Maintenance Market Outlook Industry-wide optimism is back... The industry will show overall profit in 2007 More profits expected in 2008 -10 -5 0 5 200420062008 source : IATA Net profits development North America Europe Asia Net profits ($ billion) World Airline financial results Results ($ billion) -20 -10 0 10 20 19911995199920032007 source : ICAO/IATA/VZM Operating Result Net Result

3. 071017-3 © 2007. All rights reserved. VZM Management Services www.vzm.net Commercial Maintenance Market Outlook … although new challenges and pressures … Annual growth 0% 2% 4% 1998200020022004 2006 2008 World annual growth Airlines fuel burden 0% 10% 20% 30% 20002002200420062008 source: IATA % operating costs ? Overall yield trend 75 100 20002002200420062008 source: IATA/VZM Yield index actual adjusted Slowdown after 2007/2008? Yields tapering off Increasing fuel burdens Cost pressures & further consolidation

4. 071017-4 © 2007. All rights reserved. VZM Management Services www.vzm.net Commercial Maintenance Market Outlook Jet orders number of aircraft 0 1,000 2,000 200020022004 2006 source: Speednews RJ large RJ small WB NB Fleet deliveries vs profitability Index fleet deliveries Net results (US$ b) 60 100 140 19891993199720012005 -15 -10 -5 0 5 10 20 Jet deliveries Net results … while order levels are high High aircraft orders Gradual shift larger aircraft Overcapacity threat Entry of new aircraft types

5. 071017-5 © 2007. All rights reserved. VZM Management Services www.vzm.net Commercial Maintenance Market Outlook Global warming an inconvenient truth … and opportunity Worldwide CO 2 emission (year 2000) 0% 50% 100% Air Road Int'l shipping Non-road land source : EDGAR Transportation emissions 0% 25% 50% 75% 100% Transport (19.2%) Energy Generation Industry Residential, commercial Land use Fossil Fuel Retrieval Aviation small contribution Still affects airline industry Less fuel – less emission Opportunities & threat for MRO

6. 071017-6 © 2007. All rights reserved. VZM Management Services www.vzm.net Commercial Maintenance Market Outlook In a prosperous growing and profitable MRO market... Market volume index 100 120 200020022004200620082010 MRO market size Euro exchange rates 80 100 120 140 160 20002002200420062008 Index exchange rate USD CNY SGD source : Speednews Deliveries Mainliner Jets Number a/c 0 500 1,000 199520002005 WB NB Millennium fleet driver growth Engine maintenance fastest US Dollar mixed effect Most MROs profitable

7. 071017-7 © 2007. All rights reserved. VZM Management Services www.vzm.net Commercial Maintenance Market Outlook … each airline and MRO has its own strategy … Typical airline outsource strategies Very-small & start-ups Large – MRO history Small multiple types Large – small fleet type Small single type Medium multiple types Medium single type Large - no MRO EngineeringLMBMEngines/Comp outsourced mix strategy Base Maintenance Engine Maint.Component Maint. Component Management Engine Management Line Maint. -10% 0% 10% 20% Margin Potential margin per segment Engineering Services Total Service Packages Airline size & history drives outsource strategy MROs: focus & scale, driving M&As

8. 071017-8 © 2007. All rights reserved. VZM Management Services www.vzm.net Commercial Maintenance Market Outlook … taking into account arising shortages … labor costs up insufficient capacity move to lower labor rate countries Strategies for labor shortages improve efficiencies improved productivity reduced capacity needs optimal solution per maintenance task optimum task scheduling based on utilization and maintenance history dynamic packaging per maintenance occasion process improvement Labor Shortages Strategies Spares & capacity shortages Labor shortages visible How far east is solution for Europe?

9. 071017-9 © 2007. All rights reserved. VZM Management Services www.vzm.net Commercial Maintenance Market Outlook... and continues to work on improvements … Price Quoted price No invoice surprises Turn time Quoted turn time Reliability Comprehensiveness “Slot” availability Quality Trouble free operation “Best in Class” MTBRs Responsiveness Salary costs Productivity Project/process control Workscope Material cost control Project/process control Productivity Commitment personnel Craftsmanship Engineering capabilities Shop repair capabilities Material logistics control Facilities/equipment Project/process control Commitment personnel Craftsmanship Customer focus Low cost Good Fast Safe

10. 071017-10 © 2007. All rights reserved. VZM Management Services www.vzm.net Commercial Maintenance Market Outlook … creating opportunities for training services Growth markets New technologies Contribute MRO improvements Basic training Outsourcing training?

11. 071017-11 © 2007. All rights reserved. VZM Management Services www.vzm.net Commercial Maintenance Market Outlook

12. 071017-12 © 2007. All rights reserved. VZM Management Services www.vzm.net Commercial Maintenance Market Outlook Who is VZM Management Services? Started in December 1996 –US office since 2003 VZM Management Team’s experience –Airline and MRO executive management –Organization redesign to meet business goals –Management of change and structure for profitable growth –Business development, JV/mergers/acquisitions and integration Worldwide customer base –Airlines –Maintenance Organizations –OEMs VZM Management Services P.O. Box 410 2300 AK Leiden The Netherlands Homepage: www.vzm.net Phone+31-252-222 123 Fax+31-252-216 851 E-mailinfo@vzm.net VZM Management Services 5840 Bent Pine Drive Vero Beach, FL 32967 USA Homepage: www.vzm.net Phone(772) 562 0592 Fax(772) 562 0592 E-mailinfo@vzm.net Provides change leadership support to enhance business results