AIR Issue No. 10 - April 2012 by Leah Dupuis

APRIL 2012

IN THIS ISSUE: Automated Passenger Flow Analysis - Page 2

CEO’s Message – p 1 Feature Articles – p 2 Regional Updates – p 6 Canada • United States • Europe Asia-Pacific • Latin America

Airline & Airport Traffic Updates – p 14 Aviation News – p 18 InterVISTAS News – p 23

Global Airport Trends - Page 4

CEO’S MESSAGE Welcome to the April edition of our Aviation Intelligence Report.

Gerry Bruno Group Chief Executive Officer

InterVISTAS has taken a dramatic step forward in our ability to support our clients on strategic developments in the aviation industry. We are pleased to announce that Nawal Taneja has joined us as Strategic Advisor to the Chairman of the Board of InterVISTAS. Dr. Taneja is one of the most noted aviation strategists in the world. In 2010, Airline Business magazine listed him as one of the 25 people who have had significant influence on the global airline industry during the past 25 years. He joined a distinguished group including Richard Branson, Herb Kelleher and Robert Crandall. He has authored 15 books on aviation, books which are often on the bookshelves of airline and airport CEOs. His most recent is “The passenger has gone digital and mobile: Accessing and connecting through information and technology”. His book on Simpli-flying was a great influence in the mid 2000s as airlines simplified their passenger processing and sales functions. He is an advisor to the CEOs and chairs of many of the world’s airlines, both megacarriers and start-up carriers. He has helped many organisations unlock hidden value for their customers. In his role with the InterVISTAS team, he will provide guidance to the company and its clients on emerging issues in the airline sector and tactical strategies to achieve superior performance. If you are interested in having Dr. Taneja speak to your management teams or boards of directors, or to be involved in strategy development and reviews, please contact me or Mike Tretheway.

In this month’s issue, Nigel Brownlow explains the benefits of Passenger Flow Analysis. Using anonymous Bluetooth and Wi-Fi signals from passing mobile devices, facility managers such as airport operators, airlines and tourism groups can analyse paths taken by visitors and develop better strategies to meet their customer needs. Nicole Geitebruegge provides a review of the changes and trends that have occurred at major airports over the past two decades, and the trends forecast for the next two decades. Technological developments, as well as the advent of retail space within airports, have transformed airports from simple transportation stations to fully commercial operations that respond to customer and industry needs. This is part one of a three part series on trends in aviation. A number of regional reports written by other members of our team provide insights on aviation issues and developments around the world. We hope you enjoy this month’s edition.

Page 1 April 2012

GETTING CLOSE TO THE CUSTOMER WITH AUTOMATED PASSENGER FLOW ANALYSIS Nigel Brownlow Vice President, Market Information & Revenue Management Services

The almost universal incorporation of wireless network (Wi-Fi) and Bluetooth communications into cellphones presents a set of new tools with which to better understand our customers and their behaviour as they pass through our airports, travel on our air services or visit our destinations. In this article we discuss the application of anonymous electronic mobile device tracking and its many uses within the travel and tourism industry. Cell phones equipped with Bluetooth or Wi-Fi have a unique identifier called a MAC address. If the either of these wireless functions are appropriately activated, scanners located strategically around a facility can record the MAC address and the signal strength from which it is then possible to track the movement of the device through the facility. Other technologies such as radio frequency identification (RFID) and near-field communications have proved effective and inexpensive but unlike Bluetooth and Wi-Fi they involve some form of direct passenger interaction. The advantage of Bluetooth and Wi-Fi tracking is that it is completely anonymous and non-invasive. There is no direct interaction or capture of personal data ensuring the information remains completely anonymous and protects passenger privacy. The research can be said to be non-invasive as it does not need to alter the customer’s behaviour or processing in any way. Using these technologies we can understand when a customer enters a venue such as an airport, transit and train station, or a tourist attraction and how they then pass through the site and the processes and sub-processes within it. As the device identifier is unique, we can then link multiple venues to get an even broader picture of customer behaviour. The additional understanding and information this can provide could be very insightful.

Applications for Airports Airports now have an effective tool to understand passenger behaviour and processing in real time and in aggregate. Real-time monitoring lets the airport take immediate action to address issues affecting customer satisfaction that would otherwise have implications on retail spend or future choice of airport. Aggregate information enables the airport to set service standards and monitor performance over time. Airports can work with their partners to quantifiably set and measure performance benchmarks making it possible to offer incentives based on tangible results. Retail programs can benefit from better understanding the passenger flow and the factors affecting retail visits by time of day, day of week, travel sector and even destination. Airport retailers would have advanced tools to test the response to promotions or physical facility changes.

Page 2 April 2012

As airports undertake renovations they can measure the impact on passenger flow and design signage and communications to mitigate the impact. InterVISTAS parent company NPC/DHV R&S is working in a partnership with a railway operating company in West-Europe to develop and implement Bluetooth passenger tracking on railway stations to minimize the impact of major station renovation, to maximize customer satisfaction and to increase retail performance. Currently several airports in Canada, the U.S. and Europe are actively using Bluetooth systems to better understand how well they serve their customers.

Applications for Airlines While we are unaware of airlines as yet using Bluetooth or Wi-Fi technology to collect information on passenger behaviour, the advantages of working with the airports suggests a significant opportunity that at least one major U.S. carrier is investigating. Information collected by the airports’ systems could potentially help the airlines better understand passenger behaviour, improving the scheduling of resources, the response to irregular operations or even the planning of connections. Linking data across multiple hubs in a carrier’s network, the airline could understand the effectiveness of the airports in serving their connecting passengers and offer this information as a valuable benefit to their frequent flyer customer base. Airlines can use real-time information to directly communicate via SMS messaging or email with their loyalty program passengers regarding potential processing issues, allowing the passengers to adjust their plans and behaviour appropriately.

Potential Applications for Tourism The application of communication device tracking for destination marketing organizations (DMOs) is new and yet untested but one can easily envision a cooperative program whereby the gateway airport provides the length of stay, origin and travel dates of inbound passengers. Locating Wi-Fi or Bluetooth scanners at entrances and exits to tourist attractions would let the DMOs correlate the unique addresses of visiting communication devices with passenger travel information to gain insight on the behaviours of different customer groups and then better target the information and messaging. The incremental passenger understanding can help shape the tourism strategy and the planning of future entertainment attractions. The DMOs can share the information with the entertainment attractions themselves to help these organizations better market their own facilities and serve their customer base.

Only the Beginning The use of Bluetooth signal scanning to accurately measure processing times through airports and rail stations is now a proven technology meeting industry and government requirements for privacy and security. The travel industry is, however, only beginning to identify the applications and advantages of these types of passenger flow analysis tools and the installations to date represent only the tip of the iceberg. InterVISTAS will continue to use the Aviation Intelligence Report to communicate developments in the use of automated passenger flow analysis and explore the issues and opportunities for the transportation industry.

Page 3 April 2012

GLOBAL AVIATION TRENDS:AIRPORTS Over the last century, the aviation industry has changed and developed very quickly. Many decades of technological innovations and political and regulatory developments have shaped today’s airport environment. Key developments and trends will continue to rapidly evolve and change the industry and its airports. How have airports been evolving over the last two decades? And what might be the trends in the continuously evolving airport world over the next two decades?

Airport Commercialization Nicole Geitebruegge Senior Project Manager

A gradual move towards the commercialization of airports occurred over the last two decades and this trend will continue to emerge. In many cases, commercialization goes beyond an increasing number of retail shops in the airport. Airports’ increased focus on non-aeronautical revenues, a more proactive role in marketing and the introduction of financial and quality management are indications of, and play a major role in, the commercialization of airports. The Airport City/Aerotropolis concept developed by some larger airports, mainly in Europe and Asia, is a way to involve the development of commercial and industrial activities on airport land that might benefit from the transportation links that the airport offers such as retail, logistics facilities, manufacturing, offices, hotels, and recreational facilities. Airport Cities serve various customer types, e.g. tourists, aviation supporters, and serve as venues for congressional/ logistic facilities, shopping venues or consulting services. The trend towards further airport commercialization will continue for different airport sizes. Many new airports in Asia are planned as Airport Cities to meet the needs of passengers and shippers alike. Two decades ago, only a few large airports had marketing departments; now most airports, regardless of size, have marketing departments focused on attracting passengers. The number of marketing related employees is also increasing. Airports have increasingly offered incentives as a method to attract air services and airlines such as discounting/eliminating landing or terminal fees, revenue guarantees, other route incentives or marketing support. Incentive programs will likely continue to expand and become more aggressive as additional airports adopt this practice. Airports might focus on incentives and incorporate these programs into their business models.

Airport Privatization There has been a worldwide trend to privatize airports. However, the structure and degree of airport privatization around the world varies widely. Some airports, fully or partially privatized, are price regulated, but generally the regulation of airport fees also varies. The trend towards airport privatization will continue and an increase in the number of privatized airports can be expected, particularly in Europe from debt-challenged nations such as Spain and Portugal who already have initiated moves towards more privatization. Airports that already have been privatized may see new ownership structures.

Multi-Modal Integration Airports have developed and will continue to develop multi-modal facilities. Especially, urban transit Page 4 April 2012

and rail systems have been brought into airports which enable them to expand their catchment areas. More airports around the world will integrate urban transit and rail, and existing multi-modal facilities will expand and develop facilities and services. On the air cargo side, airports are also better integrated into highway and road networks while air cargo gateway developments will continue to evolve and increase airport competition.

Growth, Emergence and Impact of Secondary Airports As major airports, especially in Europe and North America, have reached their maximum capacity and become congested, secondary airports, existing or newly developed, have been utilized. Given that (according to ICAO) global passenger traffic is expected to grow at an average annual rate of 3.5% over the next 20 years, this trend of secondary airportsâ&#x20AC;&#x2122; growth and further emergence is likely to strengthen. Low cost carriers especially make intensive use of secondary airports and create competition for many primary airports. In the upcoming decade, many of the growing or new secondary airports will need additional capital investments for terminal developments and runway extensions to meet growing demand. Bellingham International Airport is a good example competing with Vancouver International Airport and Seattle-Tacoma International Airport. The airport has experienced much higher than forecast traffic growth largely as a result of the entry of low-cost carrier Allegiant Air.

Green(er) Airports In general, airports around the world are facing increasing environmental concerns and some have started to implement environmental initiatives. For example, Denver International Airport is one of the greenest airports in the world. It actively uses renewable energy resources such as solar panels, developed the world's greenest parking lot, and uses an on-site composting system. With fuel prices and environmental concerns continuously increasing, it can be expected that alternative aviation fuel options, such as bio-fuels, will be adapted over the next decade or two. As it is likely that traditional kerosene and bio-fuels will be used in parallel for a while, airports will need to have dual fuel delivery systems to be able to provide both fuels. This in turn will have implications for terminal and apron designs. Furthermore, increasing automation at airports such as gate systems and adding automatically-closing and reflective blinds supports sustainability. In the future, increasing numbers of airports will offer greener services, use renewable energy resources and adapt alternative fuel supply systems.

Airport Technologies Many airports, some aggressively, have commenced using automated check-in systems, passport self-scan solutions, and baggage drop solutions, for example Common User Self Service (CUSS) and Common User Terminal Equipment (CUTE), which not only reduces costs but also accelerates passenger processing. It can be expected that these automated solutions will evolve further and be fully adapted on a global scale. Passenger tracking technologies, e.g. Bluetooth, have also started to be introduced at airports and it can be expected that these behavioral detection systems will even further evolve, a topic which is also discussed in this issue. Page 5 April 2012

ASIA-PACIFIC REPORT Asia-Pacific Airports Experience Largest Growth in 2011 Traffic among Top Airports

Doris Mak Director, Special Projects

Among the top 30 busiest airports, the Asia-Pacific region experienced the largest growth in passenger traffic in 2011.1 The largest year-over-year growth occurred at Shanghai Airport (26%) and Jakarta Airport (29%). Dubai Airport recorded a 15% growth in passenger traffic in 2011 compared to 2010, followed by Beijing Airport and Singapore Airport, which each experienced a 13% increase over the same period. Guangzhou Airport and Hong Kong Airport each experienced an 11% rise yearover-year. Figure 1 provides a summary of passenger traffic at the top 30 airports in 2011. According to Airports Council International (ACI), the growth in the Asia-Pacific region to 1.43 billion passengers in 2011 (+5.7% year-over-year) was mainly a result of an increase in the per capita income in the emerging markets in the region and the corresponding rise in demand for air travel.2 It is expected that Asian airports, China’s airports in particular, will continue to grow in the next 10 years. Beijing Airport is forecast to rank as the busiest airport in 2012, overtaking Atlanta International Airport. Figure 1: Passenger Traffic at Top 30 Airports, 2011 Rank

Airport Code

Total Passengers (2011)

Year-Over-Year % Change

ATL

Atlanta GA, US

89,331,622

+1.5%

PEK

Beijing, CN

73,948,113

+13.1%

ORD

Chicago IL, US

66,774,738

+4.1%

LHR

London, GB

65,884,143

-0.2%

HND

Tokyo, JP

64,211,074

+3.7%

LAX

Los Angeles, CA

59,070,127

+4.5%

CDG

Paris, FR

58,167,062

+0.5%

DFW

Dallas/Fort Worth TX, US

56,906,610

+1.6%

FRA

Frankfurt, DE

53,009,221

+4.1%

DEN

Denver CO, US

52,209,377

+4.1%

HKG

Hong Kong, HK

50,348,960

+10.5%

MAD

Madrid, ES

49,844,596

+3.0%

DXB

Dubai, AE

47,180,628

+15.4%

JFK

New York NY, US

46,514,154

+1.4%

AMS

Amsterdam, NL

45,211,749

+3.8%

CGK

Jakarta, ID

44,355,998

+19.4%

BKK

Bangkok, TH

42,784,967

+5.6%

SIN

Singapore, SG

42,038,777

+13.0%

CAN

Guangzhou, CN

40,975,673

+10.6%

City

1 Airports Council International Airport Traffic Statistics, 2011. (http://www.airports.org/cda/aci_common/display/main/aci_content07_c.jsp?zn=aci&cp=1-5-54-55_666_2__)

http://www.centreforaviation.com/analysis/asia-pacific-airports-move-up-the-ranks-in-2011-with-beijing-thisyear-to-overtake-atlanta-71801 2

Page 6 April 2012

Rank

Airport Code

Total Passengers (2011)

Year-Over-Year % Change

PVG

Shanghai, CN

40,578,621

+26.4%

IAH

Houston TX, US

40,479,569

+1.2%

LAS

Las Vegas NV, US

39,757,359

-1.8%

SFO

San Francisco CA, US

39,253,999

+5.1%

PHX

Phoenix AZ, US

38,554,215

+1.9%

CLT

Charlotte NC, US

38,254,207

+10.8%

FCO

Rome, IT

36,227,778

+7.4%

SYD

Sydney, AU

35,991,917

+7.6%

MIA

Miami FL, US

35,698,025

+5.4%

MCO

Orlando FL, US

34,877,899

+3.5%

34,721,605

+6.2%

City

30 MUC Munich, DE Source: Airports Council International

Qantas Airlines Operates Its First Biofuel Flight On 13 April 2012, Qantas Airlines operated its first biofuel flight from Sydney to Adelaide, using an Airbus A330 aircraft.3 The biofuel used to operate the flight was produced by SkyNRG, and consisted of 50% used cooking oil and 50% conventional jet fuel. The biofuel is estimated to emit 60% less greenhouse gas emissions than conventional jet fuel. This was the first Australian flight to be operated using commercial biofuel. On the same day, the Australian carrier announced that it will be conducting a feasibility study for sustainable aviation fuel in the country.4 In particular, the study will look into potential sources for sustainable aviation fuel within Australia, and assess the conditions needed to produce aviation biofuel within the country. According to a study led by the CSIRO in 2011, the production and use of sustainable aviation fuel could support as many as 12,000 jobs over the next 20 years and reduce aviation-related greenhouse gas emissions by 17%. Qantas will be receiving support and funding from the Australian Government for conducting the study, and will be corresponding with government and industry stakeholders on the next steps needed for establishing an Australian sustainable aviation industry over the next few years. The first commercial biofuel flight was operated by Virgin Atlantic in 2008, which used a mixture of coconut and nut oils with jet fuel. Several other airlines have followed suit with their own biofuel test flights, including Lufthansa, British Airways, Etihad, KLM, Porter, United and Alaska Airlines, to name a few. IATA has set a goal to neutralize aviation carbon growth by 2020 and to reduce total emissions by 50% by 2050 vs 2005 levels5. IATA states that fuel efficiency has improved 16% between 2001 and 2008.

Blachly, L. “Qantas performs first Australian biofuel flight”. Air Transport World. (http://atwonline.com/ecoaviation/article/qantas-performs-first-australian-biofuel-flight-0417) 3

Qantas Media Releases. “Qantas to Operate Biofuel Flight”. (http://www.qantas.com.au/travel/airlines/mediareleases/mar-2012/5382/global/en) 4

A Global Approach to Reducing Aviation Emissions. IATA. (http://www.iata.org/SiteCollectionDocuments/ Documents/Global_Approach_Reducing_Emissions_251109web.pdf

Page 7 April 2012

CANADA REPORT With the Economic Action Plan 2012 -2013 (aka the Federal Budget) released and the Strategic Review ended, official Ottawa is getting back to business, with internal resources redeployed to active files. The aviation sector is seeing lots of activity with a forum on airport leakage, the Auditor General’s Spring 2012 Report, and publication of the most recent Regulations Amending the Aviation Security Regulations (Identity Screening and Aerodrome Security).

The Economic Action Plan 2012 -2013 Debra Ward Executive Consultant

With no draconian measures announced, and a generally pro-business, pro-trade agenda, the Economic Action Plan 2012-13 was deemed both a relief and an anticlimax by Canadians. However, the budget and staff cuts are still very much in play, with “planned savings” announced for, among others, Transport Canada, Canada Border Services Agency (CBSA), Canadian Air Transport Security Authority (CATSA) and the Canadian Tourism Commission (CTC). Cuts will begin with relatively minor budget reductions in this fiscal year, and increase to their maximums by fiscal 2014/15. Although the government is on record saying that spending reductions will not impact service delivery, significant job cuts have already been announced, with CBSA reported to be losing 1,137 of its workforce of 13,000. On the economic side, while there was little direct reference to the aviation sector in the budget, a number of the government’s announced initiatives should have an indirect but overall positive effect, including:  

 

Intensifying Canada’s pursuit of new and deeper international trade and investment relationships, including updating the Government’s Global Commerce Strategy. Implementing the Action Plan on Perimeter Security and Economic Competitiveness and the Action Plan on Regulatory Cooperation, which will facilitate trade and investment flows with the United States. Providing support to Canadian businesses through tariff and tax measures, along with the extended provision of domestic financing by Export Development Canada. Increasing travellers’ exemptions to simplify existing rules and facilitate border processes for Canadians bringing goods home from abroad.

Canadian Airport Council (CAC) holds one-day forum to address issue of airport leakage The phenomenon of growing numbers of Canadians flocking to US airports to get cheaper airfares came under scrutiny at the CAC’s one-day forum, One of Our Airports Is Missing. This was the first time that airports, air carriers and other industry stakeholders came together in a public event to examine this problem. Discussions identified areas of concern and focussed on the fundamental questions around why airline ticket prices are frequently higher in Canada than the U.S., and what can be done to make us more competitive. Speakers were drawn from the airport, airline and business communities. InterVISTAS Executive Vice President John Weatherill reviewed the impact of potential U.S. route expansions, and Fred Lazar, Associate Professor at the Schulich School of Business with Gerry Bruno, InterVISTAS Group CEO, closed the day’s discussion with ideas for a way forward. Both the private and public sectors were in attendance and included the Honourable Dennis Dawson, Chair of the Senate Committee on Transportation and Communications. The committee is scheduled to release its preliminary aviation issues report, which will focus on airports, in May. Page 8 April 2012

CAC President Daniel Gooch saw the event as an important step forward, “Our forum on cross border shopping of air travel generated a great deal of interest. We all know somebody who has done it, and so it resonates with the public. Our next challenge is to translate this public attention into a serious conversation with the government about Canada’s fiscal approach to aviation. We need to ensure the system is set-up to succeed in the coming years.”

Transport Canada, CBSA Subjects of Auditor General’s Scrutiny The Auditor General’s Spring Report included sections on both Civil Aviation, Transport Canada and the CBSA. In broad terms, the issues dealt with areas of monitoring, oversight, reporting and interdepartmental communications and cooperation. As is customary, both Transport Canada and CBSA responses and planned actions were included in the AG’s public report. The Auditor General’s Report on Civil Aviation Safety dealt with how Transport Canada manages risk associated with civil aviation oversight under the Safety Management System (SMS) regulatory framework in which a company proactively manages risk, rather than simply responding to regulatory requirements. It concluded that while Transport Canada’s framework was suitable, it found significant weaknesses in oversight, surveillance, identifying the number of inspectors and engineers needed to oversee civil aviation safety, and the need to implement an adequate quality assurance program. Transport Canada responded with plans to address all of the issues identified, with most slated for 2012. While the CBSA audit did not deal specifically with aviation, the report called for greater cooperation between CBSA and agencies such as Transport Canada, Health Canada and Canada Food Inspection Agency. The increased robustness of targeting consumer imports, including the aviation sector, is expected to improve the integrity of the Canadian border to service level standards CBSA will implement and monitor.

2012 Canadian Aviation Security Regulations Released The Canadian Aviation Security Regulations, 2012 the most recent set of phased-in regulations, were released on March 28th, 2012, and deal with identity screening and aerodrome security. Canadian airports are required to provide adequate facilities for CATSA and its contractors to screen nonpassengers for explosives at access points throughout the airport. The new regulation recognizes the increases in non-passenger volume and changes in technology have increased that the amount of space required for this function since this regulation was implemented in 2004. Also included in this set of regulations is the authority for CATSA to verify passengers’ identities in the event of a heightened security environment.

Page 9 April 2012

EUROPE REPORT European Commission Releases Updated List of Airlines Banned within the European Union The European Commission on 3 April 2012 released the 19th update of the list of airlines banned from operating within the European Union due to safety reasons.6 According to the Air Safety Committee, comprised of representatives from the 27 EU Member States, Croatia, Iceland, Switzerland and the European Aviation Safety Agency (EASA), these air carriers operate below the aviation safety standards in Europe and are not safe to operate in European airspace.

Ian Kincaid Vice President, Economic Analysis

As a result of accidents and unsatisfactory ramp checks at EU airports, Conviasa was added to the list of carriers subject to an operating ban. The Venezuelan air carrier offered a service between Caracas and Madrid twice a week.7 Other airlines added to the list include Jet Congo Airways (the Democratic Republic of Congo), Punto Azul (Equatorial Guinea), Surya Air (Indonesia) Mauritania Airlines (Mauritania) and AirAsia Philippines (Philippines). Airlines that have ceased operations were removed, and are no longer included in the updated list. In addition, consultations with Libyan authorities led to the enforcement of strong safety measures to all air carriers licensed in Libya. With the implementation of these measures, the European Commission and Air Safety Committee have decided not to include Libyan air carriers in the updated list, but to prohibit them from flying into the EU until November 2012.

European Union and Israel Finalize Comprehensive Aviation Agreement On 22 March 2012, the European Union and Israel finalized a comprehensive aviation agreement that allows all EU and Israel carriers to operate direct flights anywhere between the EU and Israel.8 Negotiations between the two parties have been ongoing over the last three years. Implementation of the agreement will occur progressively over five years (from 2013 to 2018), with fully open skies and no restrictions expected by the summer of 2017. Scheduled direct passenger flight connections are currently offered between Israel and sixteen EU Member States: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, France, Germany, Greece, Hungary, Italy, Latvia, The Netherlands, Poland, Romania, Spain and the United Kingdom. Nearly 7 million air passengers travelled between the EU and Israel in 2010, 13% more than the number of passengers in 2009, and it is expected that the agreement will increase tourism volumes in both directions.

Europa Press Releases. “The European Commission updates the European safety list of airlines subject to an operating ban”. (http://europa.eu/rapid/pressReleasesAction.do?reference=IP/12/342&format=HTML&aged=0&language=EN&g uiLanguage=en) 6

Wallis, D. “EU bans Venezuelan carrier Conviasa over safety.” Reuters. (http://www.reuters.com/article/2012/04/03/venezuela-europe-airline-idUSL2E8F3DI720120403) 7

Europa Press Releases. “EU–Israel aviation agreement: Israel joins Europe in aviation”. (http://europa.eu/rapid/pressReleasesAction.do?reference=IP/12/307&format=HTML&aged=0&language=EN&g uiLanguage=en) 8

Page 10 April 2012

LATIN AMERICA REPORT AviancaTaca Net Income Tripled in 2011 AviancaTaca Holding’s net income increased from USD 33 million in 2010 to USD 109 million in 2011. AviancaTaca Holding is the parent company of AVIANCA, TACA, Aerogal, and Tampa Cargo airlines, which operate with bases in Colombia, Costa Rica, Ecuador, El Salvador, Guatemala, Honduras, Nicaragua, and Peru.

Kenneth Currie Executive Vice President

AviancaTaca’s results were driven by a 24.6% increase in full-year operating revenue over the USD 3.8 billion recorded in 2010. EBITDAR increased 11.5% in 2011 to USD 739 million. AviancaTaca has approved a profit distribution of USD 24.1 million to holders of common and preferred stock, subject to shareholder approval. AviancaTaca’s positive results have been facilitated by an economic environment in Latin America that is growing, successfully attracting investment and investor confidence, and offering a more stable operating environment than in the past. AviancaTaca has also been an active participant in Latin American airline consolidation, which has expanded the reach and broadened the portfolio of the airline. Intra Latin America Seat Capacity by Airline Prior to recent consolidation, Latin America 100% was home to many small airlines without Other Airlines economies of scale or scope to compete 90% 20.3% with large regional airlines. The Latin VivaAerobus American market is now well covered by Volaris 80% 1.2% four large local carriers including 2.1% 3.4% Interjet AviancaTaca Holdings, COPA Holdings, 4.1% 70% Grupo Aeromexico, and LATAM Airlines 4.8% Copa 5.3% Group, all of which belong to a global airline 60% Azul alliance. While other smaller airlines 10.4% remain, they focus on niche routes, or are 50% Aeromexico low-cost carriers. 10.2% AviancaTaca

40%

Bolivian Airline Update Passenger traffic on state-owned Boliviana de Aviación (“BOA”) has increased rapidly, while private carrier AeroSur temporarily suspended operations due to a tax dispute with the Bolivian Government.

30%

LAN 17.6%

TAM 20% 10% 0%

Gol 20.6%

Source: OAG Schedules, January 2012.

BOA increased 30.5% in 2011 to 966,400 enplanements. The airline has a 49% share of the Bolivian market, and anticipates growth of 12% in 2012. BOA presently offers service within Bolivia, as well as to Buenos Aires and São Paulo. Over the course of 2012, BOA plans to add service to Caracas, Havana, Lima, Panama City, and an unidentified destination in the United States. AeroSur suspended all of its flights March 31 following a dispute over taxes it owed to the Bolivian Government. The airline resumed all but one of its flights by April 6th. The flight from Santa Cruz to Madrid remained suspended when it was unable to extend the lease of its Boeing 747-400, but AeroSur has acquired another B747-400 that will allow the resumption of service on the route in the latter half of April. AeroSur is meeting with the Government of Bolivia to develop a revised operating plan to strengthen its domestic and international services in the future. Page 11 April 2012

UNITED STATES REPORT Obama Nominates Interim FAA Chief Huerta for Full Term President Obama has nominated Interim Federal Aviation Administration (FAA) chief Michael Huerta to serve a full five-year term as head of the agency. The nomination will require Senate confirmation, which is not yet scheduled. Huerta assumed the position of Acting Administrator of the FAA in December after President Obama's previous aviation chief Randy Babbitt resigned following an arrest for drunk driving in Virginia.

Steve Martin Senior Vice President

Huerta had earlier served as an assistant FAA administrator under Babbitt. His background is not in aviation; rather, he comes from a technology company. He had also earlier served as commissioner of New York City's Department of Ports, International Trade and Commerce in the 1980s and was executive director of the Port of San Francisco from 1989 to 1993. He had also served in the U.S. Department of Transportation under former President Clinton and had been managing director of the 2002 Olympic Winter Games in Salt Lake City. Republican presidential candidate Mitt Romney was the CEO of those games.

TSA Expedited Passenger Screening Program to Expand The U.S. Transportation Security Administration (TSA) announced that it will expand its expedited passenger screening program from the existing seven pilot locations to 28 airports. The program, dubbed “Pre™,” allows certain passengers that provide TSA with additional background information on themselves to move through pre-flight security screening more quickly. The expedited screening program will grow to include all three major airports in the New York City area, the three in the Washington, D.C., area and others including Boston, Chicago, Orlando, Philadelphia, Charlotte, Seattle, New Orleans, Phoenix, San Francisco and Denver. In February 2012, Secretary Napolitano and TSA Administrator Pistole announced the goal to have TSA Pre™ rolled out and operating at 35 of the busiest domestic airports by the end of 2012. Under Pre™, certain premium frequent flyers and others enrolled in the U.S. Customs and Border Protection’s (CBP) Trusted Traveler programs (including Global Entry, SENTRI, and NEXUS -- for U.S. citizens only) may no longer have to take off their shoes, pull laptops from cases and remove belts and coats when passing through security. According to CBP, there are 1.3 million enrolees in the four trusted traveler programs; 940,600 in Global Entry now that NEXUS and SENTRI enrolees are included. Last month, CBP published a final rule on Global Entry, in which the program is being expanded to permit children under the age of 14 to participate, allowing more families to enjoy the benefits of the program. TSA pre-screens TSA Pre™ passengers each time they fly through participating airports. If the indicator embedded in their boarding pass reflects eligibility for expedited screening, the passenger is able to use the Pre™ lane. As always, TSA will continue to incorporate random and unpredictable security measures throughout the security process. At no point are TSA Pre™ travelers guaranteed expedited screening. TSA has recently expanded the TSA Pre™ population to include active duty U.S. Armed Forces members with a Common Access Card traveling out of Reagan Washington National Airport. TSA is working with United Airlines, US Airways, JetBlue, Hawaiian Airlines, and Alaska Airlines to expand both the number of participating airlines and the number of airports where expedited screening through TSA Pre™ is provided.

Page 12 April 2012

Streamlining the Process for Inbound International Passengers To further expedite the screening process, CBP currently operates 14 international aviation preclearance locations. Each of these locations has been or is scheduled to be evaluated by TSA to confirm that preclearance airports are performing checkpoint screening procedures of passengers and accessible property comparable to those of domestic airports and are providing an equivalent level of protection. All precleared flights arriving from the 14 preclearance airports are permitted to deplane passengers directly into the sterile area of U.S. airports. Connecting passengers’ checked baggage intended for connecting domestic flights must still be screened by TSA upon arrival in the U.S., until the screening technology and protocols at the preclearance airports are comparable to TSA domestic checked baggage requirements. In addition, under the Beyond the Borders initiative, in accordance with a joint declaration signed by President Obama and Canadian Prime Minister Stephen Harper, TSA has been working with Transport Canada towards mutual recognition of the two countries’ checked baggage screening systems. Canada’s eight preclearance airports (Calgary, Edmonton, Halifax, Montreal, Ottawa, Toronto, Vancouver, and Winnipeg) have initiated the process to deploy TSA-certified explosives detection system (EDS) equipment as the primary checked baggage screening equipment. The deployment of TSA-certified EDS partnered with comparable implementation of TSA policies and procedures will make it unnecessary to rescreen checked bags from these Canadian airports when the passengers connect in the United States to other flights.

Page 13 April 2012

AIRLINE TRAFFIC – NORTH AMERICA North American Carriers Release Traffic Figures for February 2012 Porter Airlines once again showed the strongest growth on its relatively small traffic and capacity figures, with a 52% increase in passengers and a 37% increase in seats. Despite the carrier’s strong growth, Porter’s system load factor remains the lowest of the three, at 56%, though this figure grew five points year over year. WestJet topped the list in February, with a load factor of 83% In the United States, both JetBlue and American Eagle were the top performers in February, with strong traffic and capacity results. JetBlue increased its traffic 17% and its capacity 16%, while American Eagle jumped 19% and 14% respectively. JetBlue topped the list with a load system factor of 81%. American Airlines and Delta trimmed their seat capacities 5% and 2% respectively. Southwest’s and United’s capacity growth outpaced their traffic growth slightly, resulting in a 1.7 point decline in load factor for Southwest and 1.4 point decline for United, while the other U.S. airlines have all shown improved figures. North American Carrier Traffic

Traffic (RPMs – millions)

Airline

Capacity (ASMs – millions)

Load Factor

CANADA 3,971 6.5%

5,169 5.3%

76.8% 0.9 pts

1,499 9.9%

1,811 10.9%

82.7% 0.9 pts

61.9 51.7%

110.4 36.8%

56.1% 5.5 pts

UNITED STATES

Notes:

Source:

2,445 17.4%

3,004 15.5%

81.4% 1.3 pts

719 18.9%

1,024 14.0%

70.2% 2.9 pts

14,213 3.4%

19,054 5.4%

74.6% 1.4pts

9,148 6.0%

12,070 4.7%

75.8% 1.0 pts

12,989 2.6%

16,895 1.7%

76.9% 3.2 pts

4,493 7.8%

5,771 5.6%

77.9% 1.6 pts

7,236 3.9%

9,616 6.2%

75.2% 1.7 pts

1. Consolidated results for United Continental Holdings. 2. Results are for mainline operations which include US Airways Express flights operated by wholly owned subsidiaries PSA Airlines and Piedmont Airlines. 3. Results are combined traffic results for Southwest Airlines and AirTran. Carrier traffic reports.

Page 14 March 2012

AIRLINE TRAFFIC – EUROPE European Airlines Release Traffic Figures for February 2012 Positive results for all three airline groups this month. The International Airlines Group (IAG) which operates British Airways and Iberia, posted positive results on the strength of increases on its strongest route sectors (North America, Latin America/Caribbean, Africa/Middle East/SE Asia) while its weaker sectors (Domestic UK, Europe, Asia-Pacific) showed declines. European Carrier Traffic

Airline

Traffic (RPKs – millions)

Capacity (ASKs – millions)

Load Factor

15,842 6.2%

19,673 2.5%

80.5% 2.8 pts

13,287 2.6%

18,518 2.1%

71.8% 0.5 pts

11,995 3.7%

16,289 2.5%

73.6% 0.8 pts

Notes:

1. Includes Martinair. 2. Includes Lufthansa Passenger Airlines, SWISS, Austrian Airlines, British Midland, and Germanwings. 3. Includes British Airways and Iberia

AIRLINE TRAFFIC – ASIA PACIFIC Asia-Pacific Airlines Release Traffic Figures for February 2012 Qantas showed the strongest results in February, with traffic up 9% and capacity up nearly 10%. Cathay Pacific showed strong capacity growth of 9% but passenger traffic did not keep pace, resulting in a 2.8-point drop in load factor. Japan Airlines posted positive results this month, after several months of decreases in both RPKs and ASKs. Asia-Pacific Carrier Traffic

Airline

Traffic (RPKs – millions)

Capacity (ASKs – millions)

Load Factor

8,729 9.4%

11,243 9.8%

77.6% 0.2pts

7,679 2.4%

9,971 3.8%

76.1% 1.0 pts

4,431 1.7%

6,389 1.3%

69.3% 0.2 pts

7,723 4.9%

10,362 8.8%

74.5% 2.8 pts

Notes:

1. Includes Qantas Domestic, QantasLink, Jetstar Domestic, Qantas International, Jetstar International, and Jetstar Asia. 2. Includes Cathay Pacific and Dragonair.

Source:

Carrier traffic reports

Page 15 April 2012

2012

2011

Summary of Total Year-Over-Year Passenger Traffic Performance at Selected Canadian Airports March 1st Quarter April May June 2nd Quarter July August September 3rd Quarter October November December 4th Quarter Full Year January February

Toronto

Vancouver

Montréal

Calgary

Edmonton

Ottawa

Winnipeg

Halifax

Victoria

Kelowna

Saskatoon

Regina

+5.0% +5.5% +6.1% +5.3% +4.6% +5.3% +6.1% +4.9% +5.4% +5.5% +2.0% +3.1% +2.0% +2.3% +4.7% +5.2% N/A

+0.5% +0.1% +0.5% +1.5% +1.1% +1.1% +1.8% +3.3% +2.8% +2.7% +0.0% +1.9% +3.9% +2.0% +1.5% +5.6% +6.9%

+5.9% +6.5% +6.9% +5.6% +5.8% +6.1% +7.4% +4.9% +5.4% +5.9% +2.6% +3.0% +2.0% +7.4% +2.5% -0.3% +4.9%

-0.8% 0.0% +2.2% +1.8% +0.8% +1.6% +1.2% +3.2% +2.1% +2.2% +0.3% -0.6% +1.7% +0.5% +1.1% +5.6% +8.0%

+1.7% +0.9% +3.1% +2.5% +1.8% +2.5% +4.0% +3.3% +4.1% +3.8% +5.8% +5.4% +4.2% +5.1% +3.1% +8.7% +10.1%

+0.1% +2.1% +2.7% +1.8% +0.2% +1.5% +4.9% +2.6% +6.7% +4.7% +4.7% +7.3% +4.4% +5.5% +3.4% +7.8% +9.4%

-2.6% -2.5% -1.4% -2.4% -0.6% -1.4% +1.5% +4.6% +1.9% +2.7% +2.8% +4.3% +3.8% +3.6% +0.6% +8.3% +9.9%

+1.4% +5.4% +3.4% +0.3% +1.1% +1.6% +0.7% +0.3% +1.7% +0.8% +1.6% +4.7% +2.9% +2.9% +2.5% +3.1% +0.9%

-5.6% -1.2% -5.5% -1.4% -3.4% -3.4% +1.3% +1.4% -2.9% 0.0% -0.4% 0.0% +2.3% +0.6% -1.0% -0.7% +4.2%

-3.0% -0.2% -3.1% -1.6% +1.7% -1.0% -0.1% -2.5% +2.7% -0.2% +1.7% -0.2% +1.0% +0.9% -0.1% +1.5% +6.8%

+4.7% +0.4% -0.6% +0.9% +0.7% +0.4% +4.3% +1.4% +5.2% +3.6% +7.2% +7.0% +3.4% +5.8% +2.5% +7.1% +8.4%

+5.2% +3.8% +6.2% +3.7% -2.1% +2.6% -1.7% -3.3% +4.2% -0.4% -0.9% +3.1% +2.3% +1.5% +1.9% +2.2% +5.3%

Source: Individual airports’ traffic reports. Note: Subject to revision.

Page 16 April 2012

Summary of Total Year-Over-Year Passenger Traffic Performance at Selected U.S. & International Airports

2012

2011

United States

March 1st Quarter April May June 2nd Quarter July August September 3rd Quarter October November December 4th Quarter Full Year January February

Atlanta

Chicago

+4.0% +2.5% +2.2% +7.5% +4.6% +4.8% +5.6% +5.3% +3.2% +4.8% +2.4% +3.1% +1.2% +2.2% +3.6% +7.1% +7.6%

+0.4% -0.8% -0.3% -0.6% +1.6% +0.3% -1.3% -0.6% +0.2% -0.6% -0.9% -1.9% +2.0% -0.3% -0.4% +1.0% +11.3%

Los Angeles +2.9% +2.7% +7.3% +10.5% +6.0% +7.9% +6.7% +5.1% +6.1% +6.0% +2.7% +3.7% -0.4% +2.0% +4.6% +5.4% +8.2%

International

Dallas

Denver

+1.2% +1.2% -0.9% +0.6% +3.3% +1.1% +3.8% +2.9% +4.9% +3.9% +0.9% +0.7% -1.6% 0.0% +1.6% +0.4% +9.7%

+1.2% +3.0% +1.1% +3.8% +1.5% +2.1% +0.8% +2.3% +0.6% +1.3% -2.4% +1.6% +2.1% +0.3% +1.7% -0.6% N/A

New York JFK +5.1% +3.5% +8.2% +6.5% +1.6% +5.2% +3.0% -3.6% +2.6% +0.6% -0.2% -1.3% +3.7% +1.1% +2.5% +7.2% +12.5%

London Heathrow +2.3% +2.5% +31.5% +11.6% +6.3% +15.3% +2.5% +0.7% +1.4% +1.5% -1.3% -0.5% +14.7% +3.8% +5.5% +2.3% +3.8%

Paris CDG +0.1% +2.7% +26.9% +1.8% +3.2% +9.3% +4.0% +1.1% +4.7% +3.2% +1.3% +2.2% +9.0% +4.0% +4.8% +3.3% +3.6%

Frankfurt

Beijing

-0.9% +3.7% +31.2% +5.8% +4.9% +12.3% +5.2% +2.5% +4.3% +4.0% +2.5% +4.3% +12.2% +5.9% +6.5% +5.5% +0.7%

+5.3% +7.6% +10.6% +7.9% +6.7% +8.4% +3.7% +5.4% +6.7% +5.3% +3.8% +7.2% +2.7% +4.5% +6.4% +5.0% +8.2%

Tokyo Narita -28.9% -16.0% -37.7% -28.4% -24.3% -30.0% -18.4% -12.5% -15.0% -15.3% -13.8% -5.9% +0.4% -6.8% -17.1% +1.4% +3.8%

Mexico City -2.2% -2.1% +6.1% +7.7% +3.0% +5.6% +4.5% +7.0% +29.1% +11.7% +19.6% +20.7% +23.4% +21.3% +9.3% +22.5% +24.0%

Source: Individual airports’ traffic reports. Note: Subject to revision.

Page 17 April 2012

AVIATION NEWS CANADA UPDATE

AIR CANADA CANCELS FLIGHTS DUE TO ILLEGAL JOB ACTION

HALIFAX STANFIELD INTERNATIONAL AIRPORT REPORTS GROWTH IN CARGO Halifax International Airport Authority reported 2.8% growth in cargo traffic at the Halifax Stanfield International Airport in 2011 compared to 2010. With two of the airport’s major cargo carriers (Cargojet and FedEx) switching to larger aircraft for their services and additional cargo flights by Icelandair Cargo introduced in 2011, cargo traffic at the airport increased to 29,263 metric tonnes. The airport authority expects cargo traffic to increase by 7% in 2012. WESTJET REACHES ANOTHER NEW SINGLE-DAY RECORD With 54,254 passengers flying on WestJet’s network on 5 April 2012, the carrier reached another new record for the most number of passengers flown in a day. The carrier set their previous record in 26 February 2012, with 52,992 passengers. The increase in traffic is due to an increase in travel in celebration of the Easter long weekend. CANADA FINALIZES NEW AIR TRANSPORT AGREEMENTS WITH AMERICAS The Government of Canada finalized new air transport agreements with several countries in the Americas on 13 April 2012, including Colombia, Honduras, Nicaragua, Curaçao, and Sint Maarten. The agreement with Columbia enables carriers to combine passenger and cargo services between the two countries with select third-countries, and permits code-sharing. The agreement with the other nations are Open-Skies type agreements, which removes the limit to the frequency of services, aircraft type, and number of carriers permitted to operate services. Through the provision of increased frequency of services and number of destinations, the agreements are expected to support economic growth in Canada and the Americas. Page 18 April 2012

On 13 April 2012, an illegal job action held by Air Canada’s pilots caused the carrier to cancel approximately 75 flights. Only domestic and transborder flights were affected, mostly services to and from Toronto. The Canada Industrial Relations Board (CIRB) declared that the strike was illegal, requiring the carrier’s pilots to return to work. Air Canada resumed its regular schedule the following day. PORTER AIRLINES OPERATES FIRST COMMERCIAL BIOFUEL FLIGHT IN CANADA Porter Airlines operated the first biofuel flight in Canada on 17 April 2012 using a Bombardier Q400 turboprop. One of the aircraft’s engines was powered by biofuel, while the other was powered by Jet A1 fuel. The service was from Billy Bishop Toronto City Airport to Ottawa International Airport. The biofuel was derived from oilseed crops, and was certified according to the American Society for Testing and Materials (ASTM)’s new standards.

UNITED STATES UPDATE UPS PURCHASES TNT EXPRESS On 19 March 2012, the United Parcel Service (UPS) purchased TNT Express, a Dutch express distribution provider, for nearly US$7 billion. The acquisition will make UPS the largest parcel delivery company in Europe, overtaking DHL. By gaining access to TNT’s network in Asian and Latin American markets, UPS’ global revenue will increase to over US$60 billion, with a total of 477,000 employees.

JOHN WAYNE AIRPORT ANNOUNCES FIRST INTERNATIONAL FLIGHTS TO MEXICO John Wayne Airport announced that the first international flights to Mexico from Orange County, California will commence on 3 June 2012. The international service will be operated by AirTran Airways on a daily basis to/from Mexico City and Cabo San Lucas. John Wayne Airport currently offers nonstop services to 20 destinations in the U.S. and Canada. UNITED CONTINENTAL APPOINTS JOHN RAINEY AS CHIEF FINANCIAL OFFICER On 16 April 2012, United Continental Holdings announced that John Rainey has been appointed as Executive Vice President and Chief Financial Officer. He will oversee all financial operations of the holding company and its subsidiaries. Mr. Rainey most recently served as Senior Vice President of Financial Planning and Analysis for United Airlines, and has also served in the same position for Continental Airlines. AMERICAN AIRLINES INTRODUCES NEW SERVICE BETWEEN MIAMI AND SEATTLE American Airlines announced that it will be introducing a new service between Miami International Airport and Seattle-Tacoma International Airport on 14 June 2012. The new service will be offered daily using a Boeing 757200 aircraft. Earlier this year, American Airlines also added new services to Barcelona and Manaus, Brazil from Miami. SOUTHWEST SIGNS JOINT CONTRACT WITH AMADEUS IT GROUP On 19 April 2012, Southwest Airlines reported that it has signed a joint contract with Amadeus IT Group as part of the carrier’s plan to launch an international service. Southwest Airlines will be using Amadeus’ Altea reservations solution to support the carrier’s new service. Southwest Airlines intends to launch its first international service in 2014. Page 19 April 2012

EUROPE UPDATE LOGISTICS COMPANIES FINED BY EU FOR PRICE FIXING On 28 March 2012, the European Union (EU) fined 13 logistics companies for fixing international air cargo rates on major routes between Europe and the U.S., China and Hong Kong over five years. Among the air forwarders that operated the cartels are Kuehne + Nagel, Panalpina, UPS, UTi Worldwide, DSV Air and Sea, Nippon Express (China), Kintetsu World Express and Hellmann Worldwide Logistics. The fine imposed by the EU for the price-fixing schemes amounted to a total of US$255 million. AMSTERDAM SCHIPOL AIRPORT INCREASES AIRPORT CHARGES Effective 1 April 2012, Amsterdam Schipol Airport will be increasing its airport charges by 2%. The airport came to this decision following weeks of discussions between the airport and airlines. Initially, the proposed the airport charges were to rise by 4%, but have changed to 2%. AIR TRAFFIC AT BAA AIRPORTS INCREASE IN MARCH 2012 On 11 April 2012, BAA announced that the total air traffic at the airports they operate increased in March 2012 compared to March 2011. The combined traffic at BAA’s airports increased by 4% yearover-year, with 8.6 million passengers travelling through the airports. The airports owned and operated by BAA include London Heathrow, London Stansted, Southampton Airport, Edinburgh Airport, Glasgow Airport and Aberdeen Airport.

AUSTRIAN AIRLINES TRANSFERS FLIGHT OPERATIONS TO SUBSIDIARY On 19 April 2012, Austrian Airlines finalised a plan to transfer the carrier’s flight operations to its subsidiary company, Tyrolean Airways. Through this restructuring, the carrier will be saving over US$290 million, and hopes the program will bring it back into profit. The transfer of operations will commence 1 July 2012. Austrian Airlines’ services will not be affected by the restructuring programme.

PHUKET AIRPORT OPENS AFTER TSUNAMI WARNING LIFTED

LUFTHANSA SELLS BRITISH MIDLAND TO INTERNATIONAL AIRLINES GROUP

On 16 April 2012, Auckland Airport and Garuda Indonesia signed a memorandum of understanding (MOU), which commits the two parties to re-opening vital air links between New Zealand and Indonesia. According to the MOU, Auckland Airport will be the first destination of Garuda’s services to New Zealand. The new air links are expected to facilitate trade and tourism between the two countries, and support the Free Trade Agreement signed by New Zealand and Indonesia in 2011.

Lufthansa Airlines completed the sale of British Midland (Ltd.) (BMI) to the International Airlines Group (IAG) on 19 April 2012. The gross price of the purchase amounted to over US$270 million. The net price after adjustments and final transfer of the purchase will be announced at the end of the second quarter of 2012.

ASIA-PACIFIC UPDATE NEW HONG KONG AIRPORT EXECUTIVE DIRECTOR, AIRPORT OPERATIONS APPOINTED On 19 March 2012, Airport Authority Hong Kong announced that Mr. C K Ng has been appointed as the new Executive Director, Airport Operations, effective immediately. Mr. Ng has previously served the airport authority as the Deputy Director, Airport Operations, and has more than 27 years of experience in airport management. EVA AIR TO BECOME NEWEST STAR ALLIANCE MEMBER On 29 March 2012, Star Alliance announced that Eva Air will be joining the group as its newest member. Eva Air will be the eighth member carrier from the Asia-Pacific region, strengthening the alliance’s presence in the area. The integration process will be completed by mid-2013. Page 20 April 2012

Phuket Airport in Thailand re-opened on 11 April 2012, after a tsunami warning had been lifted. The tsunami warning was released after an earthquake occurred off the coast of Indonesia. During the warning, flights were diverted to Krabi Airport. AUCKLAND AIRPORT AND GARUDA INDONESIA SIGN MEMORANDUM OF UNDERSTANDING

CATHAY PACIFIC EXPANDS CARGO SERVICES TO INDIA On 17 April 2012, Cathay Pacific announced that it will be expanding its cargo services to India. The carrier will be introducing a new freighter service to Hyderabad that will be offered twice-weekly. Cathay Pacific will also be increasing the frequency of its cargo service to Bengaluru to thrice-weekly from twice-weekly, in response to the rise in demand. These new services are both scheduled to begin on 17 May 2012.

LATIN AMERICA UPDATE EMBRAER AND BOEING SIGN PACT The two aircraft manufacturers signed an aviation pact to work cooperatively in several areas, including safety, manufacturing productivity and operational efficiency.

LAN-TAM MERGER APPROVED The Chilean Supreme court has approved the proposed merger between TAM Airlines and LAN Airlines, to form the LATAM Airlines Group. LATAM, however, must meet fourteen conditions imposed by the TDLC prior to the merger. AEROMEXICO ADDS TWO 787-8S TO LEASE ORDER Aeromexico is adding two more 787-8 aircraft to its lease agreement with International Lease Finance Corp (ILFC). The carrier has already leased three such aircraft from the ILFC, part of its expansion plan to add 20 aircraft to its international fleet. THIRD PARTY MAINTENANCE CENTER APPROVED FOR GOL LINHAS AEREAS Brazil’s National Civil Aviation Agency (ANAC) has approved GOL’s maintenance center for services for Boeing 737-300, -700 and -800 aircraft. The center, located at Tancredo Neves International Airport, underwent an upgrade in 2010 to increase the facility’s capacity to 120 aircraft annually.

MIDDLE EAST / AFRICA UPDATE ROYAL JORDANIAN CEO TO STEP DOWN President and CEO of Royal Jordanian Airlines, Hussein Dabbas, has announced he will step down from his post on 1 June 2012 ETIHAD ADDS NAIROBI TO ROUTE NETWORK The airline began service in the first week of April using a two-class A320 aircraft. Etihad had previously only flown cargo flights to Nairobi. Etihad also plans to begin non-stop service to Lagos in July.

Page 21 April 2012

EGYPT AIR CONSIDERS FLEET REPLACEMENTS The carrier is reviewing a plan to acquire Boeing 787 and Airbus A350 aircraft to replace its current Boeing 777 and Airbus A350 planes between 2020-2025. Egypt Air is also considering replacing its older A320s with A320neo aircraft.

OTHER NEWS TRAVEL CHANNEL RELEASES LIST OF MOST ICONIC AIRPORTS The Travel Channel released a list of the 10 most iconic airports around the world. Included in the list were Marrakech-Menara Airport in Morocco, Incheon International Airport in South Korea, Barajas Airport in Spain, King Abdul-Aziz International Airport in Saudi Arabia, Kansai International Airport in Japan, Lyon-Saint Exupéry in France, Changi Airport in Singapore, Wellington Airport in New Zealand, Carraso International Airport in Uruguay and Winnipeg International Airport in Canada. These airports were chosen based on the effect that the design and layout of these airport terminals have on the entire passenger experience. AIRBUS FORECASTS INCREASE IN DEMAND FOR AIRCRAFT BY CHILEAN AIRLINES According to research released by Airbus on 29 March 2012, Chilean carriers will need to order 164 new passenger aircraft over the next two decades. In particular, carriers will need to order aircraft with at least 100 seats in order to meet the air traffic demand of the country. Domestic traffic is growing by 83%, while international traffic is rising by nearly 80%. The predicted aircraft orders amount to $US19.8 billion in market value.

BOEING DELIVERS 137 AIRCRAFT IN 1ST QUARTER 2012 On 5 April 2012, Boeing announced that a total of 137 commercial aircraft were delivered in the first quarter of 2012. The majority of the deliveries (99 aircraft) consisted of 737 Next Generation aircraft. Other aircraft types delivered by the U.S.-based manufacturing company in the same period includes 747 (6 aircraft), 767 (7 aircraft), 777 (20 aircraft) and 787 (5 aircraft). BOMBARDIER OPENS ENGINEERING SERVICE OFFICE IN BANGALORE, INDIA On 17 April 2012, Bombardier held the official inauguration of the company’s new Engineering Service Office in Bangalore, India. There are currently 20 employees based out of the new office, and approximately 50 aerospace engineers are expected to be employed at the location by the end of 2013. Bombardier began operations out of its new office in December 2011, prior to the official inauguration.

Page 22 April 2012

INTERVISTAS NEWS The InterVISTAS Group continues to be active in delivering a diverse range of consulting projects around the world. Some of the new projects we are working on are listed below:

Comox Valley Airport 

Renewed contract to support air service development efforts, air fare study, and provide strategic support.

U.S. Transportation Research Board 

Completed study to review the possibility and security impacts of eliminating baggage recheck to streamline the connection process for international passengers

Zagreb Airport International Company 

Act as transaction advisor to ZAIC on its recently won concession contract for construction of a new terminal at Zagreb Airport.

Vancouver Convention Centre 

Provide sustainability advisory services and benchmarking.

City of El Paso 

Selected as the Air Service Development consultant.

Vital Economy 

Provide high-level economic and land use planning for ten potential highway improvements in Central Illinois.

Prince Rupert Port Authority 

Completed two studies that assessed the current economic impact and measured the value of export trade.

Page 23 April 2012

INTERVISTAS NEWS – CONT’D InterVISTAS Recent and Upcoming Speaking Engagements Hans Mohrmann, Executive Vice President  2nd International Forum - Airport Development Russia & CIS: Moscow – March 27 - 29, 2012. Mr. Mohrmann will present during Session One: Managing Modern Airport Operations: Challenges, Planning & Development. Kenneth Currie, Executive Vice President 

8th Annual National System Planning Symposium in Galveston, Texas – May 21, 2012.

Mr. Currie will present The Impact Airline Mergers, Consolidation and Bankruptcies have on Airports and their Surrounding Communities

InterVISTAS Staff Announcements Dr. Nawal Taneja Joins InterVISTAS Consulting as Strategic Advisor Dr. Taneja has advised major and small airlines throughout the world in the areas of strategic and tactical planning. His experience includes the presidency of a small airline that provided scheduled and charter service with jet aircraft. Dr. Taneja is a prolific author on aviation issues, with over 15 titles. We welcome him to our team.

Page 24 April 2012

InterVISTASâ&#x20AC;&#x2122; Aviation Intelligence Report is a collection of information gathered from public sources, such as press releases, media articles, etc., information from confidential sources, and items heard on the street. Thus, some of the information is speculative and may not materialise. To provide comments/feedback on the InterVISTASâ&#x20AC;&#x2122; Aviation Intelligence Report, please contact Paul Ouimet at paul.ouimet@intervistas.com or 1-604-717-1800. To subscribe, please send an email to subscribe@InterVISTAS.com To unsubscribe, please send an email to unsubscribe@InterVISTAS.com