BOMBARDIER BUSINESS AIRCRAFT

Corporate ProductivityCase Study

April 2009

Marketing

>>>> 2

Executive Summary» In today's environment it is critical to have the right

tools to demonstrate the contribution of business aviation to corporations

» Existing public tools lack the capability to perform in-depth analyses of a flight department’s operations

» Bombardier Business Aircraft has developed the capability to extract time and costs savings associated with the use of business jets across an extended period of time

» Drawing from the expertise of Bombardier’s own Commercial Aircraft Division, the Business Aircraft Customer Analysis Group can assist customers demonstrate the value of their operations

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Case Study on Business Aviation» The case study analysis outlines the potential benefits of

aircraft ownership. It outlines an organization’s travel patterns in comparison to commercial aviation

» About the company:

– Headquarters in Tulsa, OK

– Multiple Business locations & Interests

• Company sites

• Key Customers, Suppliers & Partners

• Located across USA, Canada and Mexico

– Operates a Challenger 300 • Flying 700 flight hours per year

• Average of 2.5 business trips per week

• Business trips across North America

– Short and long-range missions

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Confidential

Flight Analysis

Challenger 300 is used to:» Connect Corporate

Headquarters to satellite offices

» Reach remote locations not extensively serviced by airlines (e.g. Alaska)

* At an average of 2.5 business trips per week, or 5 flights per week

Most frequent destinations:

Ratio of 5:1 = New York, Los Angeles, Miami, Boston, Washington, Toronto

Ratio of 3:1 = Seattle, Las Vegas, Houston, Montreal

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Confidential

EfficiencyBusiness Aircraft

Single hub: Tulsa / Direct flights: 100%

Multiple hubs: Tulsa, Denver, Chicago, Dallas, Houston, Atlanta, etc. / Direct flights: 11%

Average travel time: 2 hr 41 min Average travel time: 6 hr 01 min

Commercial Flights

Company A would suffer significant inefficiencies by flying commercial

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83%

6% 11%

Direct Flights

1 Connection

2 Connections

Commercial flight connections decrease efficiency & flexibility

Commercial flights increase travel time & decrease 1-day business trips

** Assuming a 14-hour-day. Commercial aircraft “one-day mission” average travel time (each way): 4 hrs 53 min

Business aircraft enable 1-day business trips 100% of the time, increase time on-site, and allow for multiple

destinations within the same day

Business aircraft 1-day trip: 8 hrs 38 min on-site*Commercial flights 1-day trip: 4 hrs 14 min on-site**

* Assuming a 14-hour-day. Business jet “one-day mission” average travel time (each way): 2 hrs 41 min

Flexibility

59%

6%

35%1-day business

trip2-day business

trip

3-day business trip

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Time Savings

Savings: 20% of management time

Scenario A) Management tool: top 10 management flying

Assumptions: 50 working hrs/week, 6 passengers per trip.

Commercial aircraft travel time

Business aircraft travel timeRegular working hours

Annual business aircraft travel time: 707 hrs

Annual commercial aircraft travel time: 1,587 hrsTime Saving = 880 hrs per traveler

Business aircraft scenarios and time savings

4,242

9,522

21,758

16,478

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

26,000

28,000

Business Aircraft CommercialAircraft

Man

agem

ent H

ours

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Time Savings

Assumptions: Pool of 100 employees sharing the corporate jet, 40 working hrs/week, 8 passengers per trip.

Savings: 176 more working weeks, or 3 employees per year

Annual business aircraft travel time: 707 hrs

Annual commercial aircraft travel time: 1,587 hrsTime Saving = 880 hrs per traveler

Business aircraft scenarios and time savingsScenario B) Project-optimization tool: pool of 100 staff

Commercial aircraft travel time

Business aircraft travel time

5,656

12,696

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000St

aff H

ours

>>>> 9

Confidential

Costs Efficiencies

Business vs. Commercial Aircraft Costs

In addition to cost advantages, business aircraft can generate additional opportunities and revenues, with 20% more management time or 176 more staff working-weeks

* Business aircraft assumptions: Total cost = direct and fixed operating costs (using Conklin & de Decker 2008 Vol.II assumptions) + 50% of employees travel time** Commercial aircraft assumptions: Total cost = tickets + hotels + extra meals + 100% of employees travel time

*** Operating costs do not take into account aircraft acquisition and depreciation. Commercial tickets were economy class purchased 3 days prior to departure (from www.expedia.com). Flat rate of 250$/hr per employee, hotel charge of 150$ per night per employee, meal charge of 50$ per employee per additional day on-site

$2,597,640

$2,964,591$2,780,762

$4,335,155

$3,251,366

$2,167,577

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

$4,500,000

$5,000,000

4 6 8

Number of Travelers per Business Trip

Ann

ual C

osts

($)

Business AircraftCommercial Aircraft

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Confidential

Indirect Benefits

These benefits, although harder to quantify, bring significant added value to business aircraft users

$$$

Well being

Time

Commercial Aircraft

Business Aircraft

Prod

uctiv

ity G

ain

(reference level)

(new level)

Work efficiency (real work environment, meeting capability)

Less time between arrival airport and true final destination (time saving not considered in this study)

Increased flight schedule flexibility

Greater availability (commercial flights could be sold out)

No lost luggage

Greater comfort for less fatigue

Morale of travelers (more time home with family)

Etc..

>>>> 11Confidential

Back-up and Methodology

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Confidential

Methodology

» Commercial flights were economy class tickets purchased 3 days in advance using www.expedia.com

» Roundtrip price was selected, and divided equally for the inbound and outbound legs

» A total of 60 minutes was added to each commercial flight for security check-points and baggage pick-up

» For overnights missions, an extra 200$ (hotel:150$, meals:50$) was added per traveler per day

» Average total cost of 250$/hr per employee. 50% of business jet traveling time was credited as working hours from a cost point of view, but not from a direct travel time point of view (time on-site was privileged instead)

» Challenger 300 routes studies were performed using airways distance, 85% Boeing annual winds, typical BOW, M0.80 cruise speed and NBAA IFR 200 nm reserves. Costs were derived using Conklin & de Decker 2008 Vol.II assumptions, and the appropriate average mission length and annual utilization

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Confidential

Statistics

General:» Period covered: 6 months

» Number of missions (roundtrips) during period: 66

» Number of missions (roundtrips) per week: 2.53

Commercial aircraft:» Total commercial flight time (min) 47,611 min

» Total commercial flight time (hrs) 794 hrs

» Average commercial trip time (min) 361 min

» Average commercial trip time (hrs) 6.01 hrs

» Average "one-day mission" travel time (min) 293 min

» Average "one-day mission" travel time (hrs) 4.89 hrs

» One-day business trip 23

» Two-day business trip 39

» Three-day business trip 4

Business aircraft:» Total Challenger 300 block time (min) 21,211 min

» Total Challenger 300 block time (hrs) 354 hrs

» Average Challenger 300 block time (min) 161 min

» Average Challenger 300 block time (hrs) 2.68 hrs

» Average Challenger 300 ESAD (nm) 1,085 nm

» One-day business trip 66

» Direct flights 132

» Annual utilization (hrs) 707

» CL300 Hourly Cost (4 pax)* 3,174 $/hr

» CL300 Hourly Cost (6 pax)* 3,183 $/hr

» CL300 Hourly Cost (8 pax)* 3,193 $/hr

* Excluding acquisition cost and depreciation

>>>> 14

Confidential

Commercial vs. Business Aircraft Travel Time

0

100

200

300

400

500

600

0 50 100 150 200 250 300

Business Aircraft Travel Time (min)

Com

mer

cial

Air

craf

t Tra

vel T

ime

(min

)

Commercial direct flights

Commercial 1 connection

Commercial 2 connections

Ratio 1:1

BOMBARDIER BUSINESS AIRCRAFT

Corporate ProductivityCase Study

April 2009

Marketing