Jetrader - July/August 2008 - (Page 11)

A330-200F with its lower trip costs and similar range to a B747-400F at full payload provides the ability to operate with more frequencies and maintain higher yields. The A330-200F also ﬁlls a void created in the regional markets such as between the U.S. and South America and the Middle East to Asia, with the grounding of DC1030Fs and B747-200Fs. J: How do you think a likely U.S. economic recession will affect the leasing industry in general and speciﬁcally freighter leasing? RA: Certainly the downturn is present in the U.S., which has a residual impact on Europe and Asia, as well. In the U.S., from a leasing perspective, there hasn’t been a high demand on the passenger side for orders from the manufacturers, and available wide-body aircraft for lease are scarce. Out of this recession could come a softness in the narrowbody side of Airbus and Boeing, which could open up opportunities for U.S. airlines to pick up some delivery slots cancelled by others. With regard to the leasing of freighters, there will be a need for more fuel efﬁcient aircraft. With the migration of so much of the production from the U.S. and Europe to Asia over the past 10 years, no one thought about fuel and its impact on the cost to get the product back to the consumer. This could well be the start of a migration of production closer to the consumer. The effect will be signiﬁcant, with respect to the availability of airplanes on the freight side. With the exception of the major integrators and mega freight carriers, there hasn’t been a large order for new airplanes, and with a ﬂeet of older converted passenger aircraft, demand for fuelefﬁcient aircraft will be high. J: What differentiates Intrepid Aviation from other leasing companies also offering the A330 freighter? RA: First of all Intrepid has always focused on the freight side of the business, but in the history of the company with 52 airplanes, only one was a freighter when we bought it; the rest were passenger planes that have subsequently been converted to freight airplanes. From the beginning, the people involved in Intrepid have been freight-centric people. We have chosen in the past to focus on used airplanes that we viewed as being good candidates for freighters in the future, buying airplanes that were subject to passenger leases, taking those off lease arranging to have them converted and then placing them with cargo operators. Among the various partners in Intrepid, we have helped convert more than 100 planes, DC8s, DC10s, 727s, A310s, A300s, among others. J: What is the planned makeup and size of Intrepid’s leasing ﬂeet within the next 10-15 years? RA: Currently we have the 20 A330Fs on order, and we bought three A300-600s on a sales-lease back to Korean Airlines with two more A300-600 freighters under negotiation. We are looking at further opportunities in used B767-300ERs, A330 and A340 passenger aircraft, with the intent to ﬁnd good airplanes with life left and are at least competitively efﬁcient. We are also in discussions to acquire additional new freighters, as well. J: In your opinion, how can cargo operators today best address the issue of rising fuel costs? RA: Most will try to rationalize their ﬂeets with the disposal of the DC10-30Fs, DC8s, DC9s, B747-200Fs and 727-200Fs. They need to go after the most efﬁcient aircraft for the operation, as is already done on the passenger side with multiple aircraft types to optimize lift to load. Having the biggest plane is not always the best. J: Does a new A350 Freighter or a 787 Freighter make sense? If yes, why and when? RA: As to timing—we don’t see either being available before 2018, as the freight side of Boeing and Airbus will not be the tail that wags the dog. The need for a new generation freighter will be there but the need for the equipment will be left to the high-yield operators of the world. Certainly, both planes have competitive beneﬁts and the cost-per-pound will be vastly superior to that which exists today. J: Everyone has anxiety today about the credit crunch going on in our debt markets. How do you see this situation impacting Intrepid and others in the market in their ability to access capital for your customer deliveries and/or any conversions going forward? RA: Certainly credit availability has become a major issue. We were fortunate to close our predelivery-payment credit facility last December. The management team at intrepid knows how to deal with our product, and having freightercentric people and sophisticated partners will assist us greatly in meeting the market. We are Jetrader 11

Table of Contents Feed for the Digital Edition of Jetrader - July/August 2008

Jetrader - July/August 2008 A Message from the President Contents Calendar/News Q&A: Ron K. Anderson Challenges Facing the Very Light Jet An Up Close and Personal Analysis of Indian Aviation Inflation and the Upside Case for Aircraft Investors Aircraft Charts Aircraft Appraisals From the ISTAT Foundation Aviation History

Jetrader - July/August 2008

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