Jetrader - November/December 2009 - 3

® Jetrader is a bi-monthly publication of the International Society of Transport Aircraft Trading (ISTAT). ISTAT was founded in 1983 to act as a forum and to promote improved communications among those involved in aviation and supporting industries, who operate, manufacture, maintain, sell, purchase, finance, lease, appraise, insure or otherwise engage in activities related to transport category aircraft. Jetrader is published for: International Society of Transport Aircraft Trading 401 N. Michigan Ave., Suite 2400 Chicago, IL 60611 USA Tel: 312.321.5169 Fax: 312.673.6579 www.ISTAT.org E-mail: istat@istat.org ISTAT BOARD OF DIRECTORS OFFICERS John W. Vitale President Michael Platt Immediate Past President Gregory A. May Vice President Marc Allinson Vice President/Treasurer Peter Huijbers Vice President/Secretary DIRECTORS Fred Klein Sigthor Einarsson Will Hudson Daniel J. Pietrzak Jep Thornton Mike Skinner Anthony Diaz Jay W. Hancock Joseph W. Ozimek Mark Pearman-Wright David P. Sutton from the vice president IN THIS ISSUE, ISTAT VP Gregory May is ﬁlling in for President John Vitale, who is proﬁled on p 9. John’s column will return to this space in the January/ February issue. Gregory A. May, Vice President International Society of Transport Aircraft Trading Will this Fall Be a Continuation of the Fall? It seems all the economic and ﬁnance related headlines up until the past couple of months have been bleak. However, there are now more than just whispers of an end to this “great recession.” Unfortunately, I am unable to paint a very bright near-term picture for our industry, with key indicators still pointing in the wrong direction. Unemployment remains on the rise in the U.S. and other countries; businesses are still in a cost-cutting mode; U.S. airlines have cut their capacity to levels comparable to that seen immediately following 9/11; airlines around the world are hemorrhaging red ink; and IATA has further revised its 2009 global airline loss forecast by an additional $2-$11 billion. With talk of a jobless recovery in the U.S., how long will it take for passenger demand to reverse its downward course? To date, there has not been a material pull back in new aircraft production by either Airbus or Boeing. In fact, the two manufacturers produced a record 500 aircraft between them during the ﬁrst half of 2009. Airbus did cancel plans to further increase A320 family production, with plans to keep production at a steady rate of 34 per month. Boeing has held its B737NG production steady at 31 per month. The result of this is that the deserts are quickly ﬁlling up with aircraft. UBS recently predicted a surplus of 1,400 mainline aircraft by the end of 2009. AWAS is predicting a 1,600-aircraft surplus by the end of 2010. What does all of this mean for aircraft values? Unfortunately it can only mean a continuing downturn. The next 18-24 months will prove to be a most difﬁcult time for lessors, with further downward pressure coming on top of the 25-30 percent drop in values and lease rates already experienced on popular in-production used aircraft. During the good times, everyone enjoys the various events arranged and sponsored by ISTAT. However, it is during the difﬁcult times such as now that ISTAT brings the greatest value by providing forums for the exchange of ideas, and a venue to stay in touch with the market. We encourage ISTAT members to take advantage of the informational and networking opportunities the society offers. One of the best annual events was just held—the ISTAT European Conference in Dubrovnik Croatia. Once again it proved to be an invaluable opportunity to interact with key members of our industry. The upcoming ISTAT Annual Conference in Orlando, Fla., will also be an exceptional opportunity. Additional information on the conference, the speakers, attendees and venue is available at www.ISTAT.org. We hope to see you there. ISTAT INTERNATIONAL APPRAISERS’ PROGRAM BOARD OF GOVERNORS Fred J. Klein Chairman | Senior Appraiser Robert F. Agnew Senior Appraiser Ken de Jaeger Senior Appraiser William Bath Appraiser Fellow/Administrative Director, ISTAT International Appraisers’ Program Steve Boecker Albert A. Nigro Tony Whitty ISTAT FOUNDATION David P. Sutton John W. Vitale Michael Platt Stephen T. Rimmer Marc Allinson TRUSTEES Jon Batchelor Klaus Heinemann Dana J. Lockhart Chris Partridge David Treitel Douglas Emerson Jeffrey Tenen Chairman ISTAT President ISTAT Past President Vice Chairman Vice President/Treasurer Dean Gerber Thomas W. Heimsoth Roland H. Moore, Esq. Ken Perich Warren Willits INTERNATIONAL SOCIETY OF TRANSPORT AIRCRAFT TRADING Ron Pietrzak Executive Director Ben Barclay Project Coordinator Cynthia Cortis Conference Manager Dana Henninger Member Services Tracy Schorle Marketing and Communication Services Gregory A. May, Vice President Jetrader 3

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Jetrader - November/December 2009

Table of Contents for the Digital Edition of Jetrader - November/December 2009