Air Transportation System Modelling WorkshopHamburg, 2015

Searching the appropriate network for the new class of commercial passenger aircraft

2

Frigate Ecojet is the new short-to-medium haul super

widebody aircraft

Super wide body aircraft, is being developed by start-up Russian airframe manufacturer, has three aisle design and optimized for medium haul operations.

Frigate Ecojet Boeing 777-200

Passenger load 302 305

Range, km 3 500 9130

Cargo (number of LD3 in lower hold)

20 32

Cruise Mach 0,82 0,84

MTOW, kg 128 000 247 200

OEW, kg 72 600 143 830

Maximum payload, kg 30 000 35 000

3

Searching the appropriate network for Frigate Ecojet: general

approach

All city pairs with 5 800 km distance in between with NB and/or WB service

Trunk routes within 5 800 km radius

Trunk routes with airports ready to land Frigate Ecojet (runway length and strength)

Линии целевого сегментаW

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Core potential clients list

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Results1. City pairs 2. Airports 3. Carriers

4

Short to medium haul realm is huge

Number of OW routes – 31 670Number of airports – 1 899Maximum distance – 5 800 kmCapacity – more than 120 seats per flight

5

Room to breathe for Frigate Ecojet, though, is considerably

smaller

1788

11661382

308 27096

94

72

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11229

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АТР СвА ЕВР БлВ ЛтА АФР

Количество линий

Прочие линии, на которых оперируют авиакомпании региона

Линии, на которых доминируют авиакомпании регионаИсточник: МАЦ

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АТР СвА ЕВР БлВ ЛтА АФР

Количество авиакомпаний

Прочие авиакомпании

Авиакомпании, способные поставить "Фрегат Экоджет" хотя бы на одной своей линии Источник: МАЦ

Only 270 out of 356 air carriers could deploy

Frigate Ecojet on at least one route

of its network

Number Share, %

Carriers Airports Routes Routes Flights Seats ASK

All one way routes 434 1 899 31 670 100 100 100 100

Trunk routes only (480 spdew)

362 882 5 784 18,3 69,8 71,1 65,5

Trunk routes with runway length > 2 400 m

357 710 5 075 16,0 62,0 63,8 60,9

Trunk routes with appropriate runway PCN

356 676 4 984 15,7 61,2 63,1 60,6

6

Can the range extension help Frigate Ecojet?

3500 км

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5800 км

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АТР СвА ЕВР БлВ ЛтА АФР Мир

Прот

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Доля работы на линиях до заданной дальности

100% перевозок

95% перевозок

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85% перевозок

80% перевозок

75% перевозок

70% перевозок

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30% перевозок

Источник: МАЦ

Moving Frigate’s optimal range from 3 500 to 5 800 km could bring only 4% of additional flights and 19% extra RPK.Current range is in 85 percentile in terms of RPK

7

Potential network: market perspective

Routes group # 1. Widebodies is being used on the routes. Probability of substitution current fleet with Frigate Ecojet is high..

Routes group # 2. Only narrow body aircraft is being used on the routes. However on each route there is at least one carrier with 4 flights a day or with 480 spdew. Probability of substitution current fleet with Frigate Ecojet is moderate.

Routes group # 3. Only narrow body aircraft is being used on the routes with no big player (4 flights a day or 480 spdew). Probability of substitution current fleet with Frigate Ecojet is low.

8

Potential network: slots, seasonality and rivalry perspective

3%

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1000-2000 2000-3000 3000-4000 4000-5000 5000-6000 6000-7000 7000-8000 8000-9000 9000-10000Интервалы индекса HHI

Сезонная крупная линия (потенциальный заказчик пока отсутствует)Сезонная крупная линия (есть потенциальный заказчик)Круглогодичная крупная линия (потенциальный заказчик пока отсутствует)Круглогодичная крупная линия (есть потенциальный заказчик) Источник: МАЦ

Есть доминирующая

авиакомпания

75%

14%

4%

7% Всего

268191

912863

862

48

33

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0-3500 км 3500-4500 км 4500-5800 км 0-5800 км

Интервалы дальности

Сезонная крупная линия (потенциальный заказчик пока отсутствует)

Сезонная крупная линия (есть потенциальный заказчик)

Круглогодичная крупная линия (потенциальный заказчик пока отсутствует)

Круглогодичная крупная линия (есть потенциальный заказчик) Источник: МАЦ

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Рейсы Кресла ККМ

Все остальные линии

Линии Группы 3 (Прочие)

Линии Группы 3 (Через слотируемые АП)

Линии Группы 2 (Прочие)

Линии Группы 2 (Через слотируемые АП)

Линии Группы 1 (Прочие)

Линии Группы 1 (Через слотируемые АП) Источник: МАЦ

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Доля транзитных пассажиров, %

Среднее взвешенное

значение доли транзитных пассажиров 26%

Транзитные линии!

Источник: МАЦ

827 connecting traffic routes

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0 1 2 3 4 5 6 7+Длительность пребывания, сутки

Первый

Бизнес

Эконом

Доля первого и бизнес классов

Источник: МАЦ

Бизнес линии?

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Доля пассажиров первого и бизнес классов, %

Среднее взвешенное

значение доли пассажиров первого и бизнес класса 7%

Бизнес линии!Бизнеслинии?

255 routes

62 routes

317 business traffic routes

List of main world resorts

519 leisure traffic routes

9

Potential network: passenger mix perspective

Factors considered:Share of first & business class passengersLength of stayShare of connecting passengers on routeMain leisure destination

10

Potential clients selection process

0,0 0,5 1,0

Orient Thai AirlinesThai Lion Mentari Co. Ltd

Scoot Private LimitedToumai Air Tchad

Cathay Pacific AirwaysVanilla Air Inc

Tway Air Co. LtdJapan Airlines

Air DoSingapore Airlines

Star Flyer Inc.Jeju Air Company

Skynet Asia Airways Co. LtdThai Airways

Hong Kong AirlinesDobrolet LLC

Global JetJetstar Asia Airways

Malindo AirEmirates

Valuair Ltd.EASTAR JET Co. Ltd.

Tiger Airways AustraliaAirAsia Inc.

All Nippon AirwaysChina Airlines

Sky Asia Company Limited dba Nok AirMandala Airlines

Jetstar JapanSkymark Airlines

EVA AirJetstar Pacific Airlines

Mango AirlinesGrand China Air Company

Hong Kong Express AirwaysGolden Myanmar Airlines Public Co., Ltd

Qantas AirwaysMahan Airlines

Comair Ltd.Malaysia Airlines

Atlasjet AirlinesVirgin Australia

Onur Air Tasimacilik A.SAir China

Peach Aviation LimitedAir EuropaDragonair

Thai AirAsiaVietJet Air

Asiana AirlinesAir Canada

Arkia Israeli Airlines LtdBritish AirwaysVirgin America

Korean Air LinesPhilippine Airlines

SpiceJetTiger Airways

AirAsia X Sdn. Bhd.Jin Air Company

Virgin Atlantic AirwaysJuneyao Airlines Co. Ltd.

Sri Lankan AirlinesIndonesia AirAsia

Interglobe Aviation Ltd. dba IndigoGaruda Indonesia

City Airways Company LimitedPT. Wings Abadi Airlines

Shanghai AirlinesAir Pacific Ltd. t a Fiji Airways

PT. Batik Air IndonesiaAir India

Santa Barbara AirlinesLufthansa

AeromexicoTransAsia Airways Corporation

Go Airlines (India) LtdChongqing Airlines Co. Ltd.

M S Airblue (PVT) LtdAir France

National Air Services dba FlynasJet Lite (India)

Jetstar AirwaysKLM

Vietnam AirlinesCitilink Indonesia

Kuwait AirwaysMyanmar Airways International Company Ltd.

Hainan AirlinesBangkok Airways

China Southern AirlinesJet Airways (India)

South African AirwaysIberia

CEBU Pacific AirAlitalia

Saudia (Saudi Arabian Airlines)AirAsia Berhad dba AirAsia

Spring Airlines Limited CorporationChina Eastern Airlines

Источник: МАЦ

High probability0,0 0,5 1,0

Nepal Airlines CorporationTibet Airlines Corporation Limited

Jazeera AirwaysMiddle East Airlines

El AlTurkish Airlines

Biman Bangladesh Airlines LimitedFlydubai

SWISSLion Airlines

InterJetAir Macau Company Limited

Estelar LatinoAmerica C.A.MN Airlines LLC dba Sun Country Airlines

China United AirlinesAvianca Brazil

EgyptairWestjet

Shenzhen AirlinesPakistan International Airlines

United AirlinesCanguilla FIRST

Sichuan AirlinesPAL Express Airphil Express

Air Indus (Pvt.) Ltd.Air New Zealand

Kenya AirwaysKunming Airlines

Shaheen Air InternationalScandinavian Airlines System

Air MauritiusDana Airlines Limited

COPADelta Air Lines

Austrian AirlinesZest Airways

Chengdu AirlinesChina West Air

Brussels Airlines N.V.US Airways

American AirlinesPeruvian Air Line S.A.

Sky Airline S.A.Japan Transocean Air

Canguilla SECONDAeroflot

Vueling AirlinesSATA International Servicios Et. Trans Aereos, S.A

Alaska AirlinesJetBlue AirwaysRoyal Jordanian

FinnairQatar Airways

Lan AirlinesTAP PortugalSpirit Airlines

Monarch AirlinesAegean Airlines

Air TransatAigle Azur

Hawaiian AirlinesSriwijaya Air

Tigerair PhilippinesSudan Airways Co. Ltd.

Nile AirAir Berlin

Aer LingusAirTran Airways

VIM Airlines, Russian FederationNIKI Luftfahrt GmbH

Sunwing AirlinesXiamen Airlines

Okay Airways Company LimitedAvianca

Ruili AirlinesAzerbaijan Hava Yollary

Aeroenlaces Nacionales S.A. de C.V. dba …Merpati Nusantara Airlines

Etihad AirwaysLibyan Airlines

Norwegian Air Shuttle A.SCJSC Airline 400 dba Redwings

Lucky Air Company LtdTAM

S7 AirlinesPegasus Hava Tasimaciligi

Beijing Capital Airlines Co LtdTianJin Airlines Co. Ltd

Equatorial Congo Airlines (ECanadanguillaR)Lan Ecuador

LOT Polish AirlinesConcesionaria Vuela Compania de SA de Cape …

Transavia FranceCzech Airlines

Aero Contractors Company Nigeria Ltd.Boliviana de Aviacion (BoA)

SunExpressShandong Airlines

Arik AirBusiness Air Co, Ltd

Источник: МАЦ

Medium probability0,0 0,5 1,0

Trans Air Congo (TAC)GermanwingsVivaColombia

Frontier AirlinesGulf Air

Aeropostal Alas de Venezuela C.A.Iraqi Airways

Tunis AirTarom

Tame Linea Aerea Del EcuadorGol Transportes Aereos

easyJetMeridiana fly S.p.A.

Iran AirSilkair

Afriqiyah AirwaysUkraine International Airlines

Transaero AirlinesSouthwest Airlines

Rossiya Airlines Open Joint Stock CompanyEthiopian Airlines

Cyprus AirwaysCaribbean Airlines

Iran Air ToursTACA

Transportes Aereos Del MercosurCambodia Angkor Air Ltd

Air India Express aka Air India Charters LimitedAir Algerie

Thomas Cook Airlines U.K. LimitedAserca Airlines, C.A.

Ural AirlinesAircompany Atlasjet Ukraine Limited

CondorRoyal Air Maroc

IcelandairUzbekistan Airways

Air BusanAir One

Yamal AirlinesThomson Airways Limited

Jetairfly TUI Airlines BelgiumAerolineas Galapagos S.A. Aerogal

Air AstanaJet2 Channel Express

Joint Stock Company Aircompany YakutiaTUIfly

Mandarin Airlines Ltd.Uni Airways Corporation

Blue Panorama Airlines S.p.AOman Air (SAngolaG)

RyanairTransavia Airlines

Air KyrgyzstanCameroon Airlines Corporation dba Camair Co

UTair Aviation Joint Stock CompanyRutas Aereas, C.A. dba RUTACanada

Hebei Airlines Co. LtdCroatia Airlines

Air SerbiaRoyal Brunei Airlines

Air Manas Air Company LLCAvior Airlines C.A

Air BalticBahamasair Holdings, Limited

Air ArabiaAerolineas Argentinas

Wizz AirAllegiant Air

TAAN Linhas Aereas de Angola

Источник: МАЦ

Low probability

Asia-Pacific33%

NA30%

Europe26%

ME3%

LA6%

Africa2%

World region distribution

737NG 38%

A320Family45%

757 4%

767 1% 36A330 2% 777 2% 737 Сlassic

737NG

DC9

A320Family

757

A310

767

787

A330

777

747

A380

Distribution by the aircraft family

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Average FH per cycle with current operator

10548 Aircraft74,5% of total fleet

FH/FC distribution

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Age, years

All types NB WB

Fleet age distribution

10 500 aircraft

11

Core clients fleet mix

Narrow body

Widebody

Frigate Ecojet

•«Equal number of flights»

•«Equal ASK»

•«2 flights into 1»•«Equal number of

flights»

Searching the representative carrier: scenarios

13

Searching representative airline: criteria and results

Criteria:

• Carriers operational models have to be different in order to match with diversity of substitution scenarios.

• Carriers have to represent all target world regions. Since the Asian market is projected to be core market for the aircraft, Asian airlines have to be presented in all substitution scenarios.

• Current fleet has to encompass all mainline types in both class, narrow and wide body aircraft.

• For each substitution scenario only option has to be chosen: either pair of big and small airlines operating on typical network, or the just one average size carrier

Choice:

China Eastern (MU): carrier from the target world region with A330 in fleet with average FH/FC rate and aircraft age Saudi Arabian Airlines (SV): carrier with least average FH/FC rate for fleet of Boeing 777Shanghai Airlines (FM): second tier carrier with narrowbody fleet on fast growing markets Delta Airlines (DL): narrowbody, 757 included, fleet operates on developed high frequency market with substantial infrastructure constrainsAir India (AI): medium sized, non Asian carrier with narrow body fleet on the target network with high frequencies.

14

Frigate Ecojet performance on carrier’s network

Targeted networkFleet mixHistoric passenger’s flowRevenueTraffic volatility

Growth potential (natural growth, connecting and switching passengers)

Segment flow analysisFare analysis

CASM analysis for current fleetFrigate CASM comparison

Different scenario analysis ( equal flights, “2 flights for 1”, equal ASK)Same profit analysis: LF sensitivity, fare sensitivityFeasibility analysis

Frigate Ecojet fleet requiredFinancial effect of substitution of the current types with Frigate Ecojet

15

Short haul jumbo: modest potential in current market

environment

Frigate Ecojet outperforms current widebodies on short and medium haul routes. Under any scenario, Frigate couldbring an extra profit to carrier.

Frigate Ecojet is better even then the most popular “regional” widebody Airbus A330-300. On typical network it has12,5 – 14,1 % lower operating cost. Over the Boeing 777, Frigate has almost 15% performance surplus.

Frigate Ecojet, despite the CASK advantage over the current narrow body models, too risky for typical networkcarrier. Small airlines, probably, have no ability to attract additional passengers to fill Frigate with usual load factor.Behemoth carriers could jeopardies their traffic numbers because of reduced frequency or ASK inequality .

However, large airlines are the primary target for Frigate marketing due to flexibility of their operations, fleet andnetworks.

Factors yet to be considered:Turnaround time Incumbents pricing powerSales strategyCurrent types lease rateProduct supportFinancing options (EFA)Political factors

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2010 2011 2012 2013 2014

Pax

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A330-300 747-400 777-200 777-300

Age

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16

Saudi Arabian Airlines: prove the concept?

Thank you