MITMIT Airline Industry Recent Trend ICATICAT Update (October 2006)

Prof. R. John Hansman With the help of the Faculty and Students of the MIT Global Industry Study

Traffic Source: Sage Analysis courtesy Prof Ian Waitz [email protected] MITMIT ICATICAT RPK by Region

Scheduled Revenue Passenger-Kilometers by Region 1400

1200

North America 1000 Europe

800 Asia and Pacific (billion) Latin America K 600 P & Caribbean R Middle East 400 Africa

200

0 1970 1980 1990 2000 2010

Data source: ICAO, scheduled services of commercial air carriers MITMIT ICATICAT Freight Trends by Region

Freight Tonne-Kilometers by Region 60

50

North America

40 Europe

Asia and illion)

b 30 Pacific ( Latin America & Caribbean FTK 20 Middle East

Africa 10

0 1970 1980 1990 2000 2010

Data source: ICAO, scheduled services of commercial air carriers MITMIT ICATICAT U.S. Domestic RPMs

50 Billions

45

40

35

30

25

2000 2001 2002 2003 2004 2005 2006 20 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: ATA Monthly Passenger Traffic Report Data source: ATA, US member airlines, scheduled mainline service MITMIT U.S. Domestic Average ICATICAT Load Factor

85.0%

80.0%

75.0%

70.0%

65.0%

60.0%

55.0%

50.0%

45.0% 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006

Data source: ATA, US member airlines, scheduled mainline service (average of first 9 months for 2006) MITMIT U.S. Domestic ASMs and RPMs ICATICAT

700 s

n ASM s llio

i 600 B

500

400 RPMs 300

200

100

- 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006

Data source: ATA, US member airlines, scheduled mainline service (projection based on first 9 months for 2006) MITMIT ICATICAT U.S. Domestic Load Factors

90.0%

85.0%

80.0%

75.0%

70.0%

65.0%

60.0%

55.0% 2000 2001 2002 2003 2004 2005 2006

50.0% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: ATA Monthly Passenger Traffic Report Data source: ATA, US member airlines, scheduled mainline service MITMIT ICATICAT U.S. Average Domestic Yield

16.00

15.00

14.00 ) e l i m / s t 13.00 cen ( d el i

Y 12.00

11.00

10.00 2000 2001 2002 2003 2004 2005 2006

Data source: ATA Monthly Passenger Revenue Report, 7 US major airlines excluding Southwest (WN). MITMIT Spending on Air Travel Has Fallen as % of U.S. Economy ICATICATRecent Quarters’ Modest Recovery Still $28B Short of Historical Norm

1.05%

1.00% ≅ $28B 0.95% of Nominal GDP* % 0.90% e as

0.85% Historical Band er Revenu 0.80%

0.75% Passeng e

0.70% stemwid

Sy 0.65% 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

*Four-quarter rolling passenger revenue derived from government filings of U.S. passenger airlines

Sources: ATA, ATA Passenger Airline Cost Index; Bureau of Economic Analysis; U.S. Department of Transportation MITMIT Historic Yield Trend ICATICAT 1995-2006

16 Latin 15 Domestic 14

13

12

11

10 Yield (c/mile)

9 Atlantic 8 Pacific 7

6 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 July 3-Jul 4-Jul 5-Jul 6-Jul 2-Jul 2-Jan 3-Jan 4-Jan 5-Jan 6-Jan Jul-99 Jul-00 Jul-01 Jul-02 Jul-03 Jul-04 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 January

Data source: ATA Passenger Yield Report, 7 US major airlines excluding Southwest (WN). MITMIT ICATICAT Airline Profits

including +23B reorganization items $300

$(100)

2000Q1 2000Q3 2001Q1 2001Q3 2002Q1 2002Q3 2003Q1 2003Q3 2004Q1 2004Q3 2005Q1 s n $(500) io ll i m in

) $(900) s s o L ( e

m $(1,300) American o

c United In

t Delta e

N Northwest $(1,700) Continental Southwest 9/11 Attacks JetBlue America West $(2,100) Alaska ATA US Airways $(2,500) -17B Data source: Airline quarterly reports, profits and losses including reorganization items including reorganization items MITMIT Cargo Operations Remain ICATICAT Profitable

$1,600 West Coast UPS FedEx Dock Strike SARS Iraq War $1,200 9/11 Attacks

in millions $800 me o Inc t e

N $400

$0 2000Q1 2000Q3 2001Q1 2001Q3 2002Q1 2002Q3 2003Q1 2003Q3 2004Q1 2004Q3

Data source: Companies’ annual reports MITMIT Market Cap: US Majors, ICATICAT 20-October-2006

Pinnacle Delta Air Lines 0.5% 0.7% Midwest Airlines Republic Airways Frontier Airlines 0.4% 1.8% 0.8% AirTran Airways Mesa Air Northwest Airlines 2.6% 0.8% 0.2% Mesa Air Group, Inc. Alaska Airlines 0.8% 4.9% Southwest Airlines Skywest 34.4% 4.5%

Continental Airlines 8.0%

United Air Lines 9.6% JetBlue Airways 5.1%

American Airlines US Airways 15.3% 9.6%

Total Market Cap: $36.6 billion

Data source: Yahoo Finance. MITMIT Market Cap: US Majors, ICATICAT 26-May-2005

American West Airlines United Air Lines 0.9% 0.6% Midwest Airlines Republic Airways Mesa Air 0.2% 2.0% 0.9% US Airways Frontier Airlines 0.2% Pinnacle Atlantic Coast Airlines 2.1% 1.0% 0.2% Delta Air Lines Northwest Airlines Midway 2.6% 2.2% 0.0% Alaska Airlines 3.7%

AirTran Airways 4.1%

Continental Airlines 4.2%

Southwest Airlines 54.3% American Airlines 9.9%

JetBlue Airways 10.9%

Total Market Cap: $21.2 billion

Data source: Yahoo Finance. MITMIT Current Market Cap vs. RPM Share US Majors (RPMs: July 2006 / Market Cap: ICATICAT October 20th 2006)

Source: Yahoo! Finance and Bureau of Transportation Statistics US Airline Net Profit Model MITMIT Best Fit of Undamped Oscillation ICATICAT Cycle Period = 11.3 yr eFolding Time = 7.9 yr

30 s n

illio 25 B

20 Estimates from 9 airlines* for Q1 & Q2 2006 and projection** for full year 15

) 10 ($ t i f o

r 5 t P

Ne 0 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12

-5

-10 Data from ATA (www.airlines.org)

-15 Data from airline financial quarterly reports Projection -20

* American Airlines, Delta Airlines, United Airlines, Northwest, Continental, Southwest, JetBlue, America West, Alaska. ** The projection for the full year is computed as 2 times the loss for Q1 & Q2 combined MITMIT US Airline Net Profit Model ICATICAT Apparent 1 year phase advance in cycle

30 ons i l l

i 25 B

20 Estimates from 9 airlines* for Q1 & Q2 2006 and projection** for full year 15

) 10 ($ t i f o

r 5 t P

Ne 0 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12

-5

-10 Data from ATA (www.airlines.org)

-15 Data from airline financial quarterly reports Projection -20 * American Airlines, Delta Airlines, United Airlines, Northwest, Continental, Southwest, JetBlue, America West, Alaska. ** The projection for the full year is computed as 2 times the profits for Q1 & Q2 combined MITMIT Low-Cost Carrier Envy ICATICAT Emergence of LCCs

Canada (7, 1 in 2004) Europe (60, 3 in 2004) CanJet Westjet Aer Arann Baboo Fare4U Sun Express HMY Airways Zip Air 2000 Basiq Air German Wings Swedline JetsGo Airlines Canada West Air Baltic Bexx Air Germania Express ThomsonFly Tango Airlines Air Berlin BMI Baby Globespan V Bird Air Finland British European Hapag Lloyd Express Virgin Express USA (19, 4 in 2003/2004) Air Luxor Lite BudgetAir Hellas Jet VLM Airlines AirTran Spirit Airlines Air Polonia Corendon Helvetic Airways VolareWeb Allegiant Air Song Air Scotland Deutsche BA Iceland Express Windjet Vola American West Sun Country Airlines Air Southwest EasyJet Ryanair Smart Wings ATA USA 3000 Airlines Air Wales Evolavia Snalskjutsen Wizz Air Frontier Airlines Vacation Express Alpi Eagles Excel Airways SnowFlake Airlines Hop Interstate Jet Ted Azzurra Air Fairline Austria Sterling JetBlue Airways Independence Air Hi Fly Monarch Midwest Express Virgin USA Fly Me My Air Asia/Pacific (20, 8 in 2004) Pan American Fly Nordic Scand Jet Air Arabia ValuAir Southeast Airlines Air Service + Transavia Air Asia Virgin Blue Southwest Airlines Blue1 Vueling Air Deccan Air Blue Athena Air Services Air One Inter continental LCCs Blue Air Inter Sky Legend: Citilink BackpackersXpress Air Madrid Central WingsJet 2 New in 2003 / 2004 Freedom Air Jetstar Condor Dau Air LTU New in 2005 / 2006 Lion Airways Nok Air East Jet Iceland Express Meridiana One-Two-Go Pacific Blue LTU Martinair South America (3) Skymark Airlines SkyAsia Skynet Asia Airways Tiger Airways Zoom Airlines Bra Africa (2) Gol Aero Asia Bangkok Air Spring 1Time U A ir Awair Origin Pacific Kingfisher Kulula Spice Jet Jazeera Airways Source: http://www.etn.nl/lcostair.htm, airline news MITMIT Low-Cost Carrier Envy (or not) ICATICAT Emergence of LCCs

Canada (7, 1 in 2004) Europe (60, 3 in 2004) CanJet Westjet Aer Arann Baboo Fare4U Sun Express HMY Airways Zip Air 2000 Basiq Air German Wings Swedline JetsGo Airlines Canada West Air Baltic Bexx Air Germania Express ThomsonFly Tango Airlines Air Berlin BMI Baby Globespan V Bird Air Finland British European Hapag Lloyd Express Virgin Express USA (19, 4 in 2003/2004) Air Luxor Lite BudgetAir Hellas Jet VLM Airlines AirTran Spirit Airlines Air Polonia Corendon Helvetic Airways VolareWeb Allegiant Air Song Air Scotland Deutsche BA Iceland Express Windjet Vola American West Sun Country Airlines Air Southwest EasyJet Ryanair Smart Wings ATA USA 3000 Airlines Air Wales Evolavia Snalskjutsen Wizz Air Frontier Airlines Vacation Express Alpi Eagles Excel Airways SnowFlake Airlines Hop Interstate Jet Ted Azzurra Air Fairline Austria Sterling JetBlue Airways Independence Air Hi Fly Monarch Midwest Express Virgin USA Fly Me My Air Asia/Pacific (20, 8 in 2004) Pan American Fly Nordic Scand Jet Air Arabia ValuAir Southeast Airlines Air Service + Transavia Air Asia Virgin Blue Southwest Airlines Blue1 Vueling Air Deccan Air Blue Athena Air Services Air One Inter continental LCCs Blue Air Inter Sky Legend: Citilink BackpackersXpress Air Madrid Central WingsJet 2 New in 2003 / 2004 Freedom Air Jetstar Condor Dau Air LTU New in 2005 / 2006 Lion Airways Nok Air East Jet Iceland Express Meridiana One-Two-Go Pacific Blue LTU Not Operating Martinair South America (3) Skymark Airlines SkyAsia Skynet Asia Airways Tiger Airways Zoom Airlines Bra Africa (2) Gol Aero Asia Bangkok Air Spring 1Time U A ir Awair Origin Pacific Kingfisher Kulula Spice Jet Jazeera Airways Source: http://www.etn.nl/lcostair.htm, airline news MITMIT Consolidation ICATICAT America West - USAirways Merger MITMIT ICATICAT Trends in Fuel Price

Average Crude Oil and Jet Fuel Prices

$80 240¢

220¢ $70 l J e e r Jet Fuel (R) 200¢ r t F a $60 u B

180¢ e

r Crude Oil (L) l :

pe P

$50

160¢ r e ic c i e r

$40 140¢ P P a id

pot 120¢

$30 p S : e l i r

100¢ G O

$20 a ll

80¢ o ude n r

C $10 60¢

$0 40¢ 00 01 02 03 04 05 06 86 00 88 89 90 91 92 93 94 95 96 97 98 99 an- an- an- an- an- an- an- an- an- an- an- an- an- an- an- an- an- an- an- an- an- J J J J J J J J J J J J J J J J J J J J J

Data source: ATA; U.S. major, national, large regional passenger and cargo airlines; all services (last data point: 10/13/06) MITMIT Airline Profits Adjusted for ICATICAT Constant Fuel Price

40 s n Projection for full year

illio based on Q1 & Q2 2006 B 30

20 ) 10 ($ t i f o r t P 0 Ne 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12

-10

-20 US Profit (Fuel Adjusted)

US Profit Fit (Non Adjusted for fuel) Assumptions: Fuel price: 69 c/gallon -30 Adjustment made on the basis of: -difference between actual and assumed fuel price -annual fuel consumption MITMIT Fuel Efficiency Through Increased ICATICAT Load Factor

Fue l Efficie ncy 50

45 n

llo 40 a G r

e 35 p s

ile 30 M 25

20 1996 1998 2000 2002 2004 1980 1982 1984 1986 1988 1990 1992 1994

Revenue Passenge r M ile s Available Seat M ile s

Source: ATA data MITMIT ICATICAT Unit Costs for Labor and Fuel

4.50 )

ile 4.00 m t a e 3.50 s e l

b 2.95

ila 3.00 a v 2.88 a r 2.50 e p

c (

t 2.00 s o C

g 1.50 in t a r

e 1.00

Op Labor it

n 0.50 Fuel U

0.00 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 000 001 002 003 004 005 990 991 992 993 994 995 996 997 998 999 2 2 2 2 2 2 1 1 1 1 1 1 1 1 1 1 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q

Data source: ATA U.S. Airline Cost Index, 3rd Quarter 2005. MITMIT Productivity Improvements Driving Cost Relief Network Restructuring, Work Rules, Human Capital, ICATICAT Outsourcing, Technology

2,700

2,500 E

T 2,300 F r e ) p

0 2,100 0 (0 s M

S 1,900 A

1,700

1,500 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q 1Q

Source: ATA US Airline Cost Index: Major & National Passenger Carriers, Q3 2005 MITMIT Employees Full Time: ICATICAT US Network Carriers 2001-2005

US Network Carrier Employees 120,000

100,000 )

e American

m 80,000 i

T United l l u

F Delta 60,000 Northw est yees (

o Continental l p 40,000 US A irw ays m E Alaska 20,000

0 2001 2002 2003 2004 2005

Source: US DOT MITMIT Employees Full Time: ICATICAT Low Cost Carriers 2001-2005

Low-Cost Carrier Employees 35,000

30,000

) 25,000 Southw est e m i America West T l l 20,000 u

F JetBlue

15,000 AirTran yees ( o l

p ATA

m 10,000 E Frontier

5,000 Independence Air Spirit 0 2001 2002 2003 2004 2005

Source: US DOT MITMIT ICATICAT Retirement Plan Terminations

Summary of US and United Plan Terminations ($ in billions) US United Airwa Airlines ys Total Termination Liability $7.9 $16.8 Assets $2.9 $7.0 Unfunded Termination Liability $5.0 $9.8 PBGC Guaranteed Portion of Underfunding $2.9 $6.6 Value of Lost Benefits $2.1 $3.2 Lost Benefits as % of Total Term. Liability 26.58% 19.05% Delta and NWA Chap 11 filings estimated at $16B Liability

Source: Subcommittee on Aviation Hearing on Airline Pensions: Avoiding Further Collapse, also NYT http://www.house.gov/transportation/aviation/06-22-05/06-22-05memo.html MITMIT ICATICAT MITMIT ICATICAT MITMIT Comair Accident ICATICAT 27 - Aug - 2006 MITMIT USUS FlightFlight DelaysDelays ICATICAT from 1995 to 2006

National delays from 1995 to 2006

s 3.5 n io ill

M 3 National Delays 12 per. Mov. Avg. (National Delays)

2.5 ) . n i 2 m n

1.5 ays (i l e D 1

0.5

0 Jan-95 Jan-96 Jan-97 Jan-98 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06

Data source: FAA Operational Network (OPSNET) MITMIT USUS FlightFlight DelaysDelays ICATICAT from 2000 to 2006

National Delays (in minutes)

n 3.5

illio 2006 M 3 2005 2.5 2004 2003 ) n.

i 2 2002

n m 2001 i

( 1.5

s 2000 y a l

e 1 D

0.5

0

n b r r y n g p ct v c u Jul u e o Ja Fe Ma Ap Ma J A S O N De

Source: FAA OPSNET data MITMIT New Delay Cause ICATICAT TSA Power Failure’s y LGA 7/16/06 y Hawaii 10/15/06 MITMIT Aviation Remains Perceived Target ICATICAT Expanding Security Burden

NO LIQUIDS OR GELS OF ANY KIND WILL BE PERMITTED IN CARRY-ON BAGGAGE. THESE ITEMS MUST BE IN CHECKED BAGGAGE. This includes all beverages, shampoo, suntan QuickTime™ and a TIFF (Uncompressed) decompressor lotion, creams, tooth paste, are needed to see this picture. hair gel, and other items of similar consistency. Read our Permitted and Prohibited Items list for more information. MITMIT Flight Cancellations ICATICAT from 1990 to 2006

250 nds a ous

Th 200 s

n 150 o i t lla e c n

a 100 C

50 Projection based on first 6 months of 2006

0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Source: DOT, Air Travel Consumer Report, http://airconsumer.ost.dot.gov/ MITMIT ICATICAT Consumer Complaints

Note: Consumer Complaint Data 1998-2006, OPSNET Data Air Traffic Controller Staffing

ATO Hiring Forecast vs. Losses

Time to CPC (Certified Professional Controller) Terminal; 8 - 24 months Enroute: 36 - 60 Source: Air Traffic Controller Workforce Plan - 2004 MITMIT Projected % Developmental ICATICAT Controllers

From: ATCS Workforce Plan Briefing MITMIT Controller Contract ICATICAT Congressional 60 day response period ended June 5, 2006 MITMIT ICATICAT OEP and NGATS

10 Year Plan 20 Year Plan FAA Multi-Agency FAA, DOD, Commerce DHS, NASA, DOT, OSTP MITMIT ICATICAT FAA Reauthorization ‘07 y FAA Reauthorization bill: deadline Sept. 30, 2007 y Funding Modernization (NGATS) y Contributions from the general fund y The “battle” over user fees: † Airlines vs Business Aviation MITMIT Trends in Aircraft Size ICATICAT

220 Domestic

200 International e

r Total u t r 180 a p e d r 160 e s p 140 e seat

ag 120 ver A 100

80 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Data source: Form 41 Traffic data from Bureau of Transportation Statistics (includes Regional Jets and Turboprops) MITMIT ICATICAT A-380

y A380 Baseline † Shrink † Stretch † ER Variants y 555 passengers (3 class)

y 14,800km/8,000nm range

y Payload: 330,000lbs over 10,400km/5,600nm

y Rolls-Royce Trent 900 engines or GP7200 engines

•http://www.airbus.com/ MITMIT A380 First Flight ICATICAT (4/27/05)

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SELECTED A380 MILESTONE SCHEDULES1

ORIGINAL CURRENT

First flight 12/2005 4/27/2006

First delivery to Singapore Airlines (19 a/c) Early 2006 10/2007

First delivery to Emirates Airlines (43 a/c) 10/2006 8/2008

First freighter delivery (FedEx) 2008 2010

y Bad News1: † On Oct 4th Airbus announced a third delay to A380 production prompting airlines to review their orders (no cancellations yet). † CEO Christian Streiff resigned after 100 days of tenure on Oct 10th. † Cash-flow crisis at EADS puts the development of A350XWB (replacement of A330/A340) on hold. † Financial analysts are skeptical that Airbus cost-cutting program Power8 can deliver. † Lack of funds to develop the A320 replacement in the coming decade. † Differences between the proposed A350XWB and the original A350 for which Airbus has contracts. y Good News2: † Airbus Wake Vortex Steering Group found that 10 nm separation for following the A380 needs to be applied only to light aircraft, with 6 nm for heavy and 8 nm for medium-sized aircraft. (Approximately breakeven on airport seat throughput)

Data source: 1Aviation Week & Space Technology 10/09/2006, 2Air Transport World Daily News 09/292006 MITMIT A 380 Orders ICATICAT aprox 159 (17 Cargo) y Singapore Airlines (10) y Thai Airways (6) y Lufthansa (15) y Etihad Airways (4) y Emirates (43) y China Southern Airlines (5) y Air France (10) y Qantas (12) y Malaysia Airlines (6) y Virgin Atlantic (6) y International Lease Finance (10) y Delivery Delays (normal) † 9 in 2007 vs 25 plan y Kingfisher Airlines (5) y Wake Vortex Issue y Qatar Airways (2) † ICAO 10 Mile in trail requirement y Federal Express (10) y Korean Air (5)

Source: http://www.aerospace-technology.com/projects/a380/ MITMIT B-787 ICATICAT

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-300 (290-330 pax) (3000-3500 nm) -800 (210-250 pax) (8000-8500 nm)

-900 (250-290 pax) (8600-8800 nm) QuickTime™ and a TIFF (Uncompressed) decompressor are needed to see this picture. MITMIT B 787 Orders ICATICAT aprox 432 Firm, 30+ Airlines y ANA - All Nippon Airways (30) 300 (20)800 y Hainan Airlines (8) 800 y Japan Air Lines. (30) mix y LOT Polish Airlines (7) 800 y Primaris Airlines (20) 800 y First Choice UK (6) 800 y Air India (20) 800 y LCAL (6) 800 y ILFC (20) mix y Shanghai Airlines (6) 800 y Northwest Airlines (18) 800 y Blue Panorama (4) 800 y Air China (15) 800 y Royal Air Maroc (4) 800 y China Eastern (15) 800 y Vietnam Airlines (4) 800 y Air Canada (14) y Xiamen Airlines (3) 800 † - 14 787 y Air New Zealand (4) 800 y China Southern Airlines (10) 800. y Icelandair (2) 800 y Continental Airlines (10-13) 800 y Air Pacific (5) y Ethiopian Airlines (10) 800 y Kenya Airways (6) y Garuda Indonesia (10) 800 y QUANTAS (45) y Korean Air (10) 800 y Air Canada (15) y Shanghai Airlines (9) 800 y Northwest (18)

Source: http://www.zap16.com/civ%20fact/civ%20boeing%20787.htm and Boeing.com y Air India (27) MITMIT “All New” A350 ICATICAT Not your fathers A330

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250-300 Seats 7500-8800 nm Range

Source: http://www.airbus.com MITMIT Turboprops ICATICAT

ATR 72 DHC-8 Q400

ATR sales 2005/2006:

- Record 90 orders for ATR 42/72 turboprops in 2005

- Sold 46 in the Q1 2006 MITMIT Very Light Jets ICATICAT Small turbofan aircraft Aircraft characteristics* † Passengers: 4 to 8 Eclipse500 Mustang Adam700 † Acquisition price: Eclipse Aviation Cessna Adam Aircraft $m 1.4 to 3.6 † Cruise speed: 340 to 390 kts † Operating ceiling: Phenom-100 ProJet D-Jet 41,000ft to 45,000ft Embraer Avocet Aircraft Diamond Aircraft † Range: 1100 to 1750 NM † Take off field length: 2200ft to 3400ft

Epic LT HondaJet Safire26 Orders Epic Honda Safire Aircraft † Eclipse: 2300 † Adam: 75 † Mustang: 330+

Excel Sport Jet Spectrum 33 Eviation EV-20 * for twin-engine VLJs (excludes D-Jet) MITMIT Battle for New Nonstop Service ICATICAT between China and the U.S.

y The U.S. Department of y Current services: from Transportation will award one New York, Chicago and new route between China and San Francisco. the U.S. by the end of 2006. United Airlines y The U.S. Department of Continentaly Four Airlines U.S. airlines areRoute: competing Washington, Route: Newark, N.J. D.C. Worth to Beijing Transportation will award one to Shanghaifor the route: United,Seats: Northwest, 347 last route (until 2008) between Seats: 283American and Continental.Flight Time: 15 hr. China and the U.S. by the end Flight Time: 14 hr. 15 mins. of the year. y map of world and routes, list of airlines and restriction y Four U.S. airlines are competing for the route: † United, † Northwest, † Continental, Northwest Airlines American Airlines † American Route: Detroit to Route: Dallas/Ft. Shanghai Worth to Beijing Seats: 335 Seats: 247 y Contest between airlines to Flight Time: 14 hr. Flight Time: 14 hr. develop support for a particular 45 mins. 30 mins. route. Source: Detroit Free Press 10/18/2006 MITMIT ICATICAT

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