Aircraft Financing Risks and Methods

Aspects of Aircraft Leasing and Financing (LAW 2015) – London City Airport, UK
0© 2015 1BlueHorizon Group - www.1bluehorizon.com All rights reserved1BHG | Aeropodium Conference LAW London 26.06.15
‘JOIN THE DEBATE’
RISK MANAGEMENT FOR AIRLINES
FINANCIAL RISKS: FASTEN YOUR SEATBELTS
June 2015
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We generate 1Blu eHorizon® out of the Rough... www.1bluehorizon.com

‘Air transportation is a fast growing
sector of most emerging economy…’
‘The global air traffic is expected to
double every 15 years…’
D i l e m m a s
O 2014 marked the hundredth year of regular scheduled airline operations. In the last century,
we will have served over 65 billion passengers and opened up new forms of family
connections, friendship and business…
O The air transport industry supports 58.1 million jobs and US$2.4 trillion in global gross
domestic product (GDP) according to a recent study…
O Of the 58.1 million jobs, 8.7 million are within the sector itself, working for airlines, at airports,
in air traffic management organizations and for the makers of aircraft and engines...
O international tourists travelling by air, over 35 million tourism jobs rely on air transport...
O Based on current rates of aviation growth, the industry is set to support 103 million jobs and
$5.8 trillion in GDP in 20 years, while security and risk management top the list of challenge…
TODAY AIM IS TO ENHANCE OUR KNOWLEDGE
Financial Risks and how to mitigate it within the Airline Industry…
Source: © 1BlueHorizon Group Research & Analysis 2015

Source: © 1BlueHorizon Group Research & Analysis 2015
STATE OF THE AEROSPACE INDUSTRY
O The future of the aerospace industry appears bright and will be characterized by strong aircraft
demand for the foreseeable future...
O The worldwide commercial passenger and cargo aircraft fleet, as well as the annual number of
passengers, are forecast to double over the next two decades…
O Over the next 20 years passenger and freight traffic are expected to grow at an average annual
growth rate of 4.6 % and 4.4 % respectively, contributing to increases in aircraft production…
Airbus & Boeing’ Global Market Forecast for 2015- 2034 projects a demand for approximately
35,000 new passenger and freighter aircraft at a value of around US$ 4.9 trillion…
O The need for improvements in fuel burning, lower maintenance costs, and reduced noise and
emissions will drive aircraft manufacturers to optimize further aircraft design solutions,… and
convince operators to purchase those new aircraft with an option for the aircraft retirement. As per
today Corporate Social Responsibility, civil aircraft graveyard are not anymore an option…
O Current orders for new aircraft are at unprecedented levels, driven by the replacement of ageing
fleets in North America, demand for fuel efficient aircraft and market growth in the emerging
markets. Airbus Group and Boeing had a combined order book of over 12,400 aircraft at of the end
of 2015, which represents an estimated nine years of current annual production…
O In any case, increased demand for air travel requires not only additional aircraft and infrastructure
investment to support the operation of those aircraft, including airport expansions and efficiency-
based improvements to air traffic control (ATC). This leads to increased demand from the
aerospace industry for financing with associated risks…

Source: 1BlueHorizon Group | Research & Analysis 2015
FORECASTING THE AVIATION MARKET
As any economist will tell you, forecasting is difficult especially if it is about the future.
With both the air traffic cycle and the financial cycle experiencing a very strong “high”, the technology cycle could be a
potential risk factor for many investors and/or financiers with the imminent generation-change virtually across the entire
spectrum of commercial jets. In the regional jet market, the CRJ’s, ERJ’s and E-Jets will be replaced by a new generation of
MRJ’s, E2’s and CSeries aircraft. In the mainstream single aisle segment, the current A320 and 737 will be replaced by their
more efficient successors, the NEO and MAX. In the twin aisle segment, both the 787 and A350-900 are alternatives to the 767,
A330 and 777-200, with the A330NEO not too far behind. Although still a few years away, the A350-1000 and 777X for the
majority of operators seem excellent alternatives for the 777-300ER and even for the big twin-aisle “quads”, such as the 747
and A380.
 As any economist will tell you, forecasting is difficult especially if it is about the
future... 1BHG® generally looks at three different “macro” level cycles plus a
“micro” cycle to analyze transactions, as well as the state of the air-finance
market :
1. The first macro cycle we look at is the state of the air transport market (IATA traffic reports, macro-
economic indicators as well as relevant cost-indicators, such as the price of jet-fuel);
2. The second macro cycle is what we call the technology cycle. For how long will the aircraft to be financed or
invested in meet the highest operational standards, such as fuel efficiency, environmental impact or a
payload-range performance that is in line with today’s airline requirements?
3. The third macro cycle that is often overlooked is the financial cycle. What is the cost of capital, interest rates
and how balanced are demand and supply of different sources of liquidity;
4. The fourth cycle, the “micro”-level aircraft maintenance cycle, is extremely relevant for individual deals,
especially involving mid-life aircraft or part-out projects.

 Under a direct purchase arrangement the airline purchases the plane direct from the
manufacturer or vendor, using a secured mortgage loan or structured finance lease.
The amount of the advance for the aircraft can vary up to 90% depending on the airline
and its available capital. These loans are generally structured with a term up to 12
years with mortgage style amortization and either fixed or floating interest rates. It’s
quite common for several lenders to work in a syndicate to provide larger loan
packages.
 There are several advantages and disadvantages with direct purchase of an aircraft,
they include:
Main Advantages:
 Airline builds up equity in the aircraft as it pays down the mortgage or finance lease
 The airline is the owner of the aircraft and so can modify it to its own exact requirements
 As the owner of the aircraft the airline is able to gain significant taxation benefits in most countries
Main Disadvantages:
 The is subject to residual value risk at the end of the term
 Less flexible method of ownership when compared to an operating lease
 Heavily weighs down a company’s balance sheet which may affect other banking covenants
Source: 1BlueHorizon Group | Research
FINANCING THROUGH DIRECT PURCHASE…
Obviously, the most common methods of financing the purchase of an aircraft are
through Direct Purchase or through an Operating Lease

 When acquiring an aircraft on an operating lease the airline signs a contract which allows it use of
the aircraft for a specified period, for a set specified payment. This payment is known the 'rental'.
Payment of this rental grants the airline the use of the aircraft, not the ownership. The entity that
leases the aircraft to the airline is the owner of the unit retains title to it after purchasing it from the
manufacturer. Leases are usually put in place for shorter terms than a finance contract, generally
3-7 years for narrow body aircraft and possibly longer for wide body units. At the end of the lease
the airline simply returns the aircraft to the owner or can make an offer to purchase it (also lease
purchase agreement).
 In most cases the airline will be required to provide 3 months rental as a security deposit, which is
returned to the airline once the lease is complete, provided the aircraft is returned in proper order.
Monthly rental costs vary depending on market demand for aircraft though average approximately
1% of the new purchase cost of the unit.
Main Advantages:
 Reduction in initial capital requirements
 Residual value risk is eliminated as it stays with the owner of the aircraft
 The liability stays off balance sheet, having less impact of banking restrictions
Main Disadvantages:
 All equity built up in the unit is retained by the Lessee owner
 Generally smaller tax advantages are available
 Owner of the aircraft may impose onerous restrictions on its use
… OR FINANCING THROUGH AN OPERATING LEASE
Obviously, the most common methods of financing the purchase of an aircraft are
through Direct Purchase or through an Operating Lease (Cont’d)

 The general requirements to finance an aircraft include your companies last 3 years
accountant prepared financials, evidence of capital and detailed business profile. If
you’re attempting to start an airline the most important item you require is a fully
detailed business plan and corresponding financial model. Without this you’re business
won’t get off the ground.
 As with any major financial decision the choice to lease or finance an aircraft should be
made with the help of your professional accounting adviser. Once you've decided on the
best option for your business situation contact an experienced, competent aircraft
finance broker that can assist you further.
Financiers will not only focus as mentioned above fully detailed business
plan and corresponding financial model, they will conduct a full Risk
Management Assessment of the airline (new venture or not) with a
particular attention on the financial risks…
What are we talking about? – ‘Fasten your seatbelts…’
RISK MANAGEMENT ASSESSMENT - WHAT FOR?
For sure, it is too late to consider Risk management when you require aircraft
funding, finance for airline start-up or airline expansion

 Islamic finance is broadly perceived as a way of managing money by taking into account Islamic
religious requirements – Namely the Shariah. Shariah generally refers to the laws derived from
the Qur’an and the Sunnah and provides guidance to Muslims in the way that they conduct
themselves in their daily lives.
 One of the most important tenets of Islamic finance is the prohibition of ’riba’, which in simple
terms, means ‘extra’ or ‘excess’. This prohibition against excesses has been interpreted by
Islamic scholars to mean a prohibition against the charging or receipt of any interest. As a result,
interest is banned in all types of Islamic transactions.
 Islamic Aircraft Financing in Practice – The Ijarah
 An Ijarah refers to an arrangement where the owner/lessor enters into an
agreement to transfer the right to use a certain asset to another person in
consideration for prescribed rental payments. An Ijarah contract is
equivalent to a conventional lease agreement and is therefore a popular
choice in Islamic aircraft financing.
 Some of the basic principles in an Ijarah contract are, amongst others, that
the asset has to be of valuable use, that all risk of ownership is borne by the
lessor and all liabilities arising from the use of the asset is borne by the
lessee.
Source: © 1BlueHorizon Group Research & Analysis
ABOUT ISLAMIC AIRCRAFT FINANCING
Before to talk about Risks, a quick appendix for people involved in the Middle East
with Islamic Aircraft Financing

3. SPV 1 will then enter into
an Ijarah arrangement with the airline in
which SPV 1 will execute a lease agreement
with the airline to lease back the aircraft to
the airline and the airline will pay lease
rentals to SPV 1. The lease rentals will be
equivalent to the principal and interest on
the ‘loan’ obtained by the airline from Islamic
financiers to purchase the aircraft.
4. In order to finance the purchase of the
beneficial interest in the aircraft, SPV 1 can
enter into a Mudharabah arrangement with
another special purpose vehicle ("SPV 2").
Under the Mudharabah arrangement, SPV 1
and SPV 2 can agree to share the profits
derived from the purchase and leaseback of
the aircraft at certain agreed ratios.
Essentially, the profits to be shared will be
the “interest” portion of the “loan” extended
to the airline from the Islamic financiers to
purchase the aircraft.
5. SPV 2 will then enter into an investment
agency agreement with the Islamic
financiers wherein the Islamic financiers will
appoint SPV 2 as the investment agent in
the Mudharabah arrangement.
SPV 1 SPV 2
Islamic
Financiers
Mudharabah
Arrangement
Dividends
Investment
Agency
Agreement
Dividends
Airline
Manufacturer
Lease rentals
Sell That illustration of the aircraft transaction may be
described as follows:
1. The airline will normally enter into a sale and
purchase agreement with the manufacturer for the
purchase of a new aircraft at an agreed purchase
price (the "Purchase Price").
2. The airline will then enter into a lessor purchase
agreement with a special purpose vehicle for the
purposes of the financing structure (‘SPV 1’).
Under such lessor purchase agreement, the airline
will transfer the beneficial interest in the aircraft to
SPV 1 for an amount which is equivalent to the
Purchase Price.
Source: © 1BlueHorizon Group Research
ABOUT ISLAMIC AIRCRAFT FINANCING
Shariah principles are the cornerstone of Islamic finance practices and
using Islamic finance techniques for aircraft is a natural move

 Business Risk
 Financial Risk
– market risk
– credit risk
– liquidity risk
 Operational Risk
 Legal Risk
RISK IS THE POTENTIAL OF LOSING VALUE
As per it definition, Risk is the potential of losing something of value, weighed
against the potential to gain something of value

 Airlines are doing everything to reduce costs
 Some of the risks stem from complex industry structure
 Necessary to reduce the risk
 Much of this risk, however, could be identified and managed
 Effective strategies, adopted by other sectors
 In general, the financial markets do not trust airlines
RISK MANAGEMENT IN THE AIRLINE INDUSTRY
Risk management in the airline: Good or Bad risk management is NOT the same as
profits and losses

 Aviation encompasses a full spectrum of risk factors:
International airline is exposed
general entrepreneurial risks and
industry-specific risks.
 Key areas of exposure are
capacity and utilization risks,
strategy-related risks,
political risks,
operational risks,
procurement risks,
labor agreement risks,
financial and treasury management risks.
Four categories:
- Hazard,
- Strategic,
- Financial, and
- Operational
RISK MANAGEMENT IN THE AIRLINE INDUSTRY
For the last decade, failure to manage the risks within the airline industry resulted in
the evaporation of $46 billion US$ in shareholder value

EXTERNALLY VERSUS INTERNALLY DRIVEN RISK
Two main category of Risks: those Externally driven and those Internally

 Hazard events safety, liability, and war were the least
 Strategic and financial risks were much more prevalent
Strategic Financial Operational Hazard
49% 22% 18% 11%
STRATEGIC RISKS ARE BUSINESS CHOICES
Strategic risks are defined by business choices

 This is an overall approach to reduce the risk impact severity and/or
probability of occurrence. It could affect a number of risks and include,
for example, increasing staffing or reducing scope. Identify actions and
steps needed to implement the mitigation strategy.
 attracts customers in good times and in bad because it is simple
operationally and, therefore, cost effective…
 use of secondary airports insulates from competitive pressure…
 low debt levels make the company less vulnerable to interest rate
fluctuations…
 profit sharing and fun culture reduce
the chance of labor difficulties…
HIGH-LEVEL MITIGATION STRATEGY
Many risks can be lessened through the selection of the business design, Southwest
Airlines has designed a business to overcome major risks

 Financial risks involve:
 the management of capital and cash
 including exogenous factors
 affect the predictability of revenue and cash
 Financial solutions may include the design
of financial transactions:
 structured finance
 derivatives
 insurance
 contingent financing
 debt equity offerings
UNDERSTANDING FINANCIAL RISKS
Airlines are continuing to develop risk management strategies, but a better
understanding of the financial implications of a crisis is necessary

 Operational risks arise from the more tactical aspects:
 crew scheduling,
 accounting and information systems,
 e-commerce activities.
 Operational risks can be mitigated through organizational
solutions:
 process redesign
 organization structural changes
 improved communication
 contingency planning
 performance measurement and reward systems
 capital allocation and pricing
UNDERSTANDING OPERATIONAL RISKS
Kay Operational Risks have also to be very carefully considered even they are not
inherent in financial, systematic or market-wide risk

 Mitigating strategic risk:
 Lufthansa’s diversification in 1994 by creating four companies (subsidiaries)
 Lufthansa Technique
 Lufthansa Cargo
 Lufthansa Service
 Lufthansa Systems.
 Revenue growth has been highest 70 percent in 1996
 Not all of the divisions have been successful.
 Swissair known as a ‘flying bank’ due to its financial stability pursued a
similar strategy but they couldn't succeed (October 2001).
RISKS MITIGATION THROUGH DIVERSIFICATION
To mitigate Risks, in the nineties the airlines explore diversification into non-flying
businesses - successful for a period of time

 During the 2001 crisis following the September 11 attacks:
 low-cost airline Ryanair an order for 100 Boeing 737s with 50 options,
during a time when most airlines are deferring orders
 They were able to negotiate a low unit price.
 During the Asian financial crisis:
 Singapore Airlines upgrades to their onboard product, for entrenching
their leadership position during the later economic upturn.
RISKS MITIGATION THROUGH CASH MANAGEMENT
To mitigate Risks, some other airlines have contained strategic risk through
aggressive cash management

Source: BMI Freight Transport Report 2015, 1BlueHorizon Group Analysis
RISKS MITIGATION BY HEDGING JET FUEL
One of the main concern is to mitigate Risks related to jet fuel by hedging it, the
largest portion of airlines’ operating expenses
85
80
114
128127
80
85
90
95
100
105
110
115
120
125
130
2010 2011 2012 2013 2014 2015 2016
119
92
Jet Fuel Price
?
 Three main components - aircraft ownership, fuel and
maintenance - account for more than half of an airline’s
operating expenses. While they are not entirely controllable,
it is essential to factor them in the risk management...
 Airlines have tried to pass on fuel price increases to
consumers, but unless all airlines do this simultaneously,
those that did it were at a competitive disadvantage
 To minimize the impact of fuel price increases, airlines may
cancel low-capacity routes, consolidate routes, and use one-
engine taxiing at airports.
 Proactively, most airlines engage in financial hedging to
protect against fuel cost increases, and may buy newer
planes and engines that are more fuel-efficient for a
particular type of service.
 Fuel consumption of aircraft varies widely: an Airbus 319
that carries 122 may burn 758 gallons of fuel per hour, while
a Boeing 747-400 that carries 369 may burn 3,500 gallons
per hour. Because of high fuel costs, newer planes and
engines have been designed to be as efficient as possible
for a particular type of service.
 However, jet fuel prices are expected to stabilize for the
coming at around USD 85/bbl and will thus relieve further
airlines from increasing cost pressures (low oil prices are
good news for airlines!)

Source: © 1BlueHorizon Group | Operating Costs Framework 2015, *Research on Norwegian Air Shuttle ASA, trading as Norwegian, the third largest low-cost carrier in Europe
Labour
Fuel
Aircraft Ownership
Aircraft Maintenance
Other
30.3 %
31.6 %
21.7 %
9.5 %
6.9 %
‘Modern aircraft are somewhat more fuel efficient,
but they still suck jet fuel like a Hoover sucks dirt…’
O As per 1BlueHorizon Group Analysis, the cost of flying a
B787-9 Dreamliner from New York to London is roughly
$90,000 one way. That includes Fuel, Crew,
Maintenance, Navigation and Landing fees, Ground
Handling and Ownership or Lease costs — but not
sales, marketing, distribution, back office, other
overheads or profit margin. Taxes and non-fuel charges
are passed directly to the passenger.
O If that aircraft had 354 seats like the B787-9 and typical
load factors — a measure of how full planes are — for
low-cost airlines, a year-round average one-way airfare,
including passenger ancillaries such as food and drink,
would need to be about $340-$380 to earn a margin of
about 4 per cent.
O Seat mile costs, another standard industry measure, on
the smaller B787-8 are slightly higher, requiring an
estimate of about 5 per cent more revenue.
O The Dreamliners each bring a 20 to 30 per cent fuel cost
saving — close to $10m a year each — but the planes
need to be put to work for up to 18 hours a day to make
the operation viable.
O With Norwegian pricing its transatlantic airfares out of
London at around $450 return, compared with the $750 -
$950 offered by rivals, the scale of its low-cost ambition
is so daring many doubt it can pull it off.
O Norwegian’s LCLH strategy to target the tourist market!
Norwegian* making the Routes pay…
OTHER RISKS MITIGATION TO CONSIDER
It appear useful to keep in mind the pie chart that illustrates the operating costs of
an aircraft or running an airline along an illustrative example

 There is a natural balance in the foreign currency risk
 Foreign currency sensitivity:
 The sensitivity of any currency* against 10 % change in USD (similar for
EURO and British Pound Sterling) exchange rates
 Negative amount demonstrates the such currency in the net profit for the
year
RISKS MITIGATION WITH CURRENCY EXCHANGE
The other one is to mitigate Risks related to the changes in the exchange rate and
interest rate due to its operations based on USD$

 While many airlines were able to maintain profits in the face of
price increases, more aggressive strategies could have been
used to further improve results.
 There is a large third-party market dedicated to the effort:
 including banks
 credit specialists
 derivative markets and others
 Hedging is a common way to manage the financial risk:
 no airline input is more volatile than fuel
 hedging is not a core competency, and
 as long as competitors are not hedged, it will be a level playing field
 When fuel prices rise dramatically, airlines cannot pass all of the
cost on to their customers
RISKS MITIGATION BUT STILL VULNERABLE
Even Techniques to mitigate financial risks are the most advanced, if such
tools are not further leveraged, earnings will continue to be vulnerable

 In the new arrangement, a guarantor ‘insures’ the refunds to the
bank, which then releases the cash in the escrow account
Customers Bank
Escrow
Account
Guarantor Airline
Credit card
payments
Refunds
Payments
Refunds
Guarantor provides financial
guarantee to the bank
Airline receives from the
escrow account, a lump
sum equal to the guarantee
amount
Funds released as
customers use tickets
RISKS MITIGATION INVOLVING GUARANTEES
One of the other well established technique for financial risk management involves
guarantees for credit card transactions

 60% could have been avoided using the types of approaches
discussed above.
 15% could have been mitigated through traditional means such
as insurance or financial derivatives.
 20% events could have been mitigated by more consistent and
in-depth customer analysis, combined with scenario planning and
game theory exercises.
 5% of the events could have been mitigated through improved
merger integration planning and improved execution.
Source: © 1BlueHorizon Group Research & Analysis,
RISK MANAGEMENT TRENDS
Over a broad risk events analyzed over a period of fifteen years (2000 – 2015), four
main risk management trends emerged

 The risk of interest of companies has two sources:
 The sensitiveness of assets and the sensitiveness of debts to the
interests.
 If the companies want to protect themselves on natural ways from the risk
of interests,
 positive correlation with the changes of interest should prefer the
floating interest debt and
 negative correlation with the changes of interests should prefer the
fixed interest debt.
 Distribution of foreign money on the revenues and the expenses are care
about:
 If the cost is low, a part of financing can be done on EURO beside
dominant money US Dollar in aircraft market
 Well managed currency provide positive contribution with the matching
distribution of revenues and expenses in the future cash flows.
RISK MANAGEMENT VERSUS CRISIS MANAGEMENT
Risk management is an ongoing process, not a one-time event and over the long-
term, the only alternative to it is crisis management

 Airline management manages the risks through their decisions
and applications:
 A formally specified risk management model is still not enough
implemented in particular in Africa, Middle East and Asia
 Corporate risk management model have been aimed there
 Enterprise Risk Management (ERM) also comprise financial,
strategic risks which will give many advantage to any airline:
 With formation of ERM it’s planning to
 identify risk appetite
 risk strategy and create risk transparency
 to create a strong risk organization, to inculcate sharing risk culture
and effective risk processes
ENTERPRISE RISK MANAGEMENT (ERM)
A formally specified risk management should be available not only for new
established airlines but also for legacy carriers and business aviation

THANK YOU
LEONARD FAVRE
Partner, Group Managing Director
1BlueHorizon Group
P.O. Box 34154 M +971 50 6164007 (U.A.E.)
Abu Dhabi M +41 79 2080256 (Switzerland)
United Arab Emirates leof007
leo@1bluehorizon.com
www.1bluehorizon.com
Abu Dhabi | Bern | London | Montreal | Moscow
Any clarifications or questions regarding this document should be addressed to:
RISK MANAGEMENT IS KEY TO FACE FINANCIERS
Talking about Financial Risk Management helps also to understand why financiers
are initially always skeptical to consider new airline venture…
Aviation financing is a hot topic and likely to remain so over the coming years, as the demand for
financing deliveries of new aircraft peaks at a time when long term financing becomes unattractive
for some of the incumbent banks. There are a number of headwinds in the aircraft finance market
which may make these orders more difficult to finance, and potentially, more expensive.
Conversely, in tough economic times and a low interest rate environment attractive yields
are harder to find. Investors are looking for hard assets with good returns.

PERSONAL NOTES
© 1BlueHorizon Group®. All rights reserved.
Without the prior written consent of 1BlueHorizon Group®, it is not permitted to modify this document or create derivative works. High quality global airline industry insight requires
investment. Please do not cut & paste the document. Email info@1bluehorizon.com to get / buy additional rights.
The information contained in this document has not been independently verified. It does not purport to be all-inclusive or to contain all the information that a prospective investor in
securities of the Company may desire or require in deciding whether or not to offer to purchase such securities, or any type of legal transaction.
The information and opinions contained in this presentation and any other are material discussed verbally are provided as at the date of this presentation and are subject to
verification, completion and change without notice.
In giving this presentation, neither the Company nor its advisers and/or agents undertakes any obligation to provide the recipient with access to any additional information or to update
this presentation or any additional information or to correct any inaccuracies in any such information which may become apparent.


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1BHG® - 1BLUEHORIZON GROUP
GENERATING THRUST TO PROPEL YOUR BUSINESS FURTHER...
January 2014
We generate 1B l u e Horizon ® out of the Rough... www.1bluehorizon.com
P R O P R I E TA R Y I N F O R M AT I O N
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A s s e t M a n a g e m e n t | M a n a g e m e n t C o n s u l t i n g | I n t e r i m M a n a g e m e n t
A b u D h a b i | B e r n | L o n d o n | M a d r i d | M o n t r e a l | P a r i s
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Source: © 1BlueHorizon Group | Corporate profile
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established in 2007 as a network of International aviation professionals, providing objective, independent,
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Management
Management
ConsultingThe Management Consulting
(MC) Practice is our ability to strike
a rapport working side by side with
you and quickly understanding what
you need when the margin of error
is thin… Providing a highly targeted
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The Interim Management (IM)
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VALUE GENERATION…

We work with clients who face major strategic
discontinuities and risks to transform their
business models. This transformation can take
many different forms, such as a major
repositioning of the customer value
proposition, a move to a simpler, lower-cost
operating model, or a fundamental change in
the relationship with suppliers… mastering the
changes required for short+long term success.
1BlueHorizon Group® main focus is on the airline / aerospace industry, but not only…
BUSINESS TRANSFORMATION
1BHG® provides an array of capabilities to
support investment decision making, backed
by deep expertise across diverse industry
sectors. Our services include conducting
industry market scans; designing acquisition
and divestiture strategies; developing robust,
analytically driven due diligence; assisting
with transaction negotiations...
MERGERS & ACQUISITIONS
1BHG® has developed a holistic approach to
ensure companies capture the full value of
transactions. This approach includes effective
alignment and culture change, improving
operations management and performance,
customer retention, supplier/vendor
integration, and intelligent rationalization,
backed by detailed, step-by-step
implementation support...
POST-MERGERS INTEGRATION
With more than a decade of experience in
strategic, operational, and financial
restructuring, 1BHG® offers a complete
management solution and "one-stop-shop"
approach to turning around companies. We act
as a coordinator for restructuring processes,
as an objective expert and a neutral third party
who provides quantitatively supported advice
to address the interests of management...
RESTRUCTURING
As corporate strategy consulting firms, 1BHG®
helps enterprises develop, build, and operate
strong businesses that deliver sustained
shareholder value growth. We look at strategy
from the "outside in" finding strategic insight
through a robust understanding of current and
future customer priorities. We harness thought
leadership in the key areas below to deliver
breakthrough recommendations to clients...
GROWTH STRATEGY
Attempts to improve performance are often
incomplete and result in hard-won but
ultimately unsustainable shifts in performance.
1BHG® takes a holistic perspective that
recognizes and leverages the
interconnectedness of your business design
(starting with your assets, activities and
organization) to deliver fundamental,
sustainable improvement...
PERFORMANCE IMPROVEMENT
Effective marketing campaigns drive revenue,
profit, and brand value. But the marketing
landscape is becoming increasingly complex,
with rapidly evolving customer needs and
digital competencies are now essential to win
but are risky to outsource. Businesses need
new strategies to reach their target
audiences...
MARKETING
Capacity-constrained industries, with high
fixed costs and low marginal costs, require
different techniques to maximize the value
from their products and services. Should you
discount the flight seat today or hope for a
higher price tomorrow? Revenue or yield
management uses analysis of demand and
price sensitivity for different market segments
to make optimal pricing decisions…
REVENUE MANAGEMENT
HIGHLIGHT ON CORE CAPABILITIES - WHAT WE DO
Source: © 1BlueHorizon Group | What we do

Flydubai - CEO Mr. Ghaith Al GhaithGulf Air - Ex CEO Samer Majali
H.E. Mohamed Hamad bin Azzan Al
Mazrouei, Under Secretary of the Court of the
Ruler's Representative in the WR (U.A.E.)
Nesma Airlines (First domestic airline in KSA),
Mr. Faisal S. Alturki, CEO
His Highness Sheikh Ahmed Bin Saeed Al
Maktoum, President of the Dubai Civil Aviation
Authority, Chairman of Dubai Airports, Chairman &
Chief Executive of Emirates Airline & Group
Note: A list of qualifications is made available separately
1BHG® IS PROUD TO HAVE THEM SATISFIED
1BlueHorizon Group® success is vested in our clients’ successes in various fields of
the Aviation industry: Airliners, Airports, Aerospace, Authorities and Family Offices
Minister Justin Kalumba Mwana-Ngongo - Ministry
of Transport and Channels of Communication,
Democratic Republic in Congo

“1BlueHorizon Group is the
only consulting firm that
works successfully on all
levels: Board level, middle
management,
implementation"
“1BHG senior personnel
come in with strong
views but integrate
perfectly in our teams"
“1BHG has
convinced us
through it's excellent
industry- and
technology
expertise"
"The 1BHG team
knows perfectly well
how to push the
necessary change"
“1BHG guys are implementation -
oriented and their cooperation
with my people is very good "
“1BHG Practice has
very qualified people
who really know a lot
about our industry"
"In each project step, we
could clearly identify
1BHG's added value and
improve the overall
bottom line"
THE ONLY WAY TO DO GREAT WORK IS TO LOVE WHAT WE DO…
A MILE OF RUNWAY WILL TAKE YOU ANYWHERE
NO ONE HAS EVER COLLIDED WITH THE SKY
Note: A list of qualifications is made available separately
TESTIMONIALS – WHAT CUSTOMERS THINK

Aircraft Financing Risks and Methods

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