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Industry Insights, Fourth Quarter 2014 1 ICF International

FOURTH QUARTER 2014


Change Is In The Air… And How Can The Region’s Airlines Deal With It? ......................................................................................................... 1

Aviation Highlighted Transactions and Trends .............................. 4

Boeing 777-300ER Review .......................................................................... 7

The 787’S Role In The Changing Widebody Fleet In Latin America And The Caribbean .................................................................. 10

Prepared by ICF SH&E, Inc.

INDUSTRY INSIGHTSQUARTERLY AVIATION BRIEFING

FOURTH QUARTER 2014


Change Is In The Air… And How Can The Region’s Airlines Deal With It?

The Latin American airline industry is poised for a shake-up that will challenge the region’s established carriers, but are they prepared?

Latin America has garnered a lot of attention over the last few years, thanks to sustained traffic growth and strong financial performance by the region’s major airlines. The region’s airlines have averaged 9.9% annual traffic growth over the 2009-2013 period, second only to the Middle Eastern carriers.1 Mean-while, the region’s airline industry was profitable as a whole in CY2013 with net profits of US$400 million, led by carriers such as Copa Airlines (16.4% net margin, among the industry’s highest), Avianca (5.4%) and Aeromexico (2.7%), Volaris (2.0%).2

Several exogenous factors have conspired to create a favor-able environment for airlines, including an unprecedented boom in global commodities prices, a very large inflow of foreign direct investment into the region, low interest rates, a growing middle-class, and political and macroeconomic stability in the region’s major economies (with the exceptions of Argentina and Venezuela). The credit for the strong airline boom does not go to external factors alone: the region’s leading airlines have strong management teams that have successfully taken advantage of the favorable environment in order to grow profitably.

Despite Latin America’s very strong traffic growth, attractive airline margins, and promising outlook, the region has thus far attracted few new entrants. How-ever, this is likely to change, with a wave of low cost carriers (LCCs) about to take flight.

Latin America has – by far – the lowest LCC penetration rate among the mature air travel markets, with significant presence limited only to Mexico and Colombia (Exhibit 1).3

Exhibit 1: LCC Penetration by World Region (Intra-Region Routes Only), October 2014

0% 10% 20% 30% 40%

Latin America

Middle East

Asia

North America

Europe

9%

18%

22%

29%

37%

Note: Adjusted for VivaColombia, which does not publish its schedules in OAG.Source: ICF International analysis of OAG Schedules, October 2014

1 IATA Industry Financial Forecast, March 2014. Measured in terms of RPKs for IATA carriers from each geographic region.

2 FlightGlobal, FY20133 Although GOL is often called an LCC, ICF International does not consider it one

given its cost structure and operating model.

However, the region is poised for a change, as evidenced by recent events such as the establishment of Grupo Viva, parent of Vivaaerobus and VivaColombia, in October 2014, who has ambitions to replicate the “Viva” model in other countries in the region; and the impending launch of Salvadoran start-up VECA Airlines. These “home grown” airlines complement the increasing penetration from North American LCCs such as jetBlue, Spirit, WestJet, and most recently Southwest, which are expanding deeper into the region.


Tactical Responses Strategic Responses

Exit Market • Exit Market • Focus on other markets (e.g. long haul, or connecting pax)

Defend Market

• Reduce fares selectively

• Scheduling & codeshares

• Corporate deals & FFP

• Revenue management

• Challenge deals of LCCs with airports

• Constant promotional deals

• LCC Branded Fares

• Alliances (sometimes with LCCs)

• Simplified low-fare structure

• Re-position brand at a lower level

• Split to higher and lower sub-brands

• Reorganize operations to lower costs

• Cross-subsidize short-haul operations from long-haul (unsustainable in long term)

Attack LCCs• Expand capacity

• Lobbying and/or litigation

• Outsources service to lower cost regional feeder or franchise

• Set up own LCC

Approach Advantages Risks and Tradeoffs

Compete Directly• Least complex

• No new overhead

• Is it sustainable?

• Would it incur serious losses?

• With its higer cost structure, can your airline be competetive?

Abandon Contested Markets • Limiting losses

• Would important markets be abandoned?

• Where would the abandonment end?

• Would abandoning markets threaten 6th freedom routes?

• Could the aircraft be profitably redeployed?

• Is this a sustainable solution?

Launch In-House LCC

• Potential for competetive costs

• Test and transfer LCC practices

• Leverage your airline’s existing services

• Complex solution, difficult to implement

• Is a competetive cost structure realizable?

• Would it cannibalize your airline’s traffic or dilute fares?

• Is there brand and product confusion?

• Would it decrease your airline’s productivity and efficiency?

• Could it reduce revenue for other airline group businesses?

Launch LCC In Partnership • Simplest solution• Potential carryover of operational issues and quality from partner

• Can the partner deliver lower costs?

The challenge for Latin America’s major carriers will be to ensure that they are well positioned to respond to the new, aggressive competition. But how can they respond?

There are multiple tactical and strategic ways in which major airlines can respond to the threat of LCCs. These actions can be

Source: ICF International


Exhibit 2: Tactical and Strategic Responses to LCC Competition

Exhibit 3: Pros and Cons of Responses to the LCC Threat

grouped into three categories: (a) Exit the market, (b) Defend the market, or (c) Attack LCCs head-on. (Exhibit 2)

Each of these alternatives brings with it substantial risks and tradeoffs that must be carefully assessed before deciding on a competitive response. (Exhibit 3) For instance, choosing to compete head to head with LCCs may be the least complex


LCC: Jetstar German- wings Mango Tiger

Airways

Parent: Qantas Lufthansa SAA Singapore

1. Autonomous Entity √ √ √ √

2. Market Differentiation √ √ √ √

3. LCC Principally Non-Hub √ √

4. Coordinated Cross-Selling √ √

5. True Low-Cost Production √ √ √ √

choice, but in order for this strategy to be successful, the airline has to ask itself whether its cost structure is competitive, whether it can achieve a unit revenue advantage, how long it can sustain a loss on the route, etc. The answers to these questions may, in turn, force changes in the fare structure or fare rules, baggage policies, schedule timings, etc.

Another common legacy carrier response to encroachment from LCCs has been to start a new low cost subsidiary. However, the list of (very costly) failures far outweighs the successes, including flops such as Song (Delta), TED (United), Continental Lite (Continental), Snowflake (SAS), Buzz (KLM), and others. In fact, only a handful of low cost subsidiaries have succeeded, including Jetstar (Qantas), Germanwings (Lufthansa), Mango (SAA) and Tiger Airways (Singapore Airlines). The few “success stories” share a set of common traits regarding organizational structure (to achieve true low costs), target markets (to avoid dilution), and level of cooperation with the parent (to maximize synergies). (Exhibit 4)

Unlike major carriers in developed North American or Euro-pean markets, major carriers in Latin American continue to operate “legacy” business models, with traditional fare fences (such as round-trip only fares and advanced purchase require-ments), complimentary onboard services (meals, alcohol), free baggage allowances, limited (or no) ancillary sales, etc.

The growing penetration of LCCs into the Latin American skies is certain to force major carriers in the region to change their practices in order to remain competitive. The key is to pursue solutions that are right for each airline, and learn from the mistakes of legacy carriers in other regions that have attempted various responses, many unsuccessfully.


Exhibit 4: Indicative LCC-Subsidiary Success Factors

D. Austin HorowitzTechnical Specialist

Carlos R. OzoresPrincipal


Aviation Highlighted Transactions and Trends

Aviation M&A activity in Q2 2014 included a number of

transactions involving technology-enabled platforms aimed

at improving efficiency and monitoring aircraft carbon

emissions. Technology-related aviation transactions by both

strategic buyers and private equity firms continued in the

second quarter, following a trend from the first quarter. In this

quarter, Abu Dhabi-based Etihad Airways also gained Alitalia

as a significant new member in its sprawling global network

of equity alliances.

First, Boeing agreed to buy UK-based ETS Aviation, a solutions

provider that helps airlines monitor fuel consumption and

track carbon emissions. Although the firm’s services only cover

600 or so commercial aircraft today, that already amounts to

almost 1 million flights and demonstrates potential to expand

across the Boeing customer base.

Second, Boeing acquired the Netherlands-based software

company, AerData Group from AerCap, Development Bank

of Japan, Mitsubishi Corporation, and TES Holdings Ltd. The

company provides software solutions to airlines and leasing

companies for lease and records management, and engine

fleet planning. Third, Boeing acquired Maryland-based Ven-

tura Solutions, a hardware and software engineering firm

that focuses on signal processing issues of special value to

the intelligence community. This acquisition adds to Boeing’s

Network and Space Systems business that offers custom

solutions for government customers.

In another aviation technology deal in Q2, engineering

company Larsen & Toubro’s unit L&T Technology Services

purchased a 74% stake in Thales Software India, a subsidiary

of France-based aerospace firm Thales Group. Through this

acquisition, L&T will manage the newly formed joint venture’s

management control, operations, and delivery of services.

While retaining a 26% equity stake, Thales will assist L&T in its

efforts to develop its core business in the avionics industry.

The deal also allows Thales to use this new joint venture as

a way to implement its offset programs in India and shows

Thales’ commitment to strengthening the firm’s industrial

foothold in the country.

Strategics Flying High

Strategic investors, including Boeing, were active during the

second quarter of 2014. Boeing continued its acquisition

streak with three purchases that expand the manufacturer’s

capability to sell technical services.


A Major Addition to Etihad’s Equity Alliance

After lengthy negotiations, Etihad Airways announced a major

investment in Alitalia, the Italian national airline. Despite sev-

eral restructurings in the past decade, this transaction involves

a new investment of €1.8bn (US$2.4bn) to restructure the

carrier again. Etihad has said it will implement a new strategic

plan with new long-haul routes from Rome and Milan, will

revitalize the brand, and will expand Alitalia’s focus on Italian

tourism and trade promotion.

Etihad’s investment of €560m (US$744m) will come through

a combination of equity injections, asset purchases, and other

financing facilities and funding arrangements to restructure

the airline’s balance sheet. This is to be complemented by a

further equity investment of €300m (US$399m) from exist-

ing core Alitalia shareholders. Additionally, select financial

institutions and existing bank shareholders will provide up

to €598m (US$794m) in financial restructuring of short and

medium-term debt €300m (US$399m) of new loan facilities

from Italian financial institutions.

Private Equity in Flight

Private equity firm Warburg Pincus announced two major

transactions in Q2 2014 involving aviation and aerospace.

In the aviation sector, the firm made its first foray into the

Middle East and acquired Mercator, the technology arm of the

Emirates Group, from Dnata. By some measures, Mercator is

the fourth largest IT provider specializing in airlines. The Emir-

ates Group subsidiary will retain a minority stake in Mercator.

Mercator will continue to focus on its core portfolio of airline

and travel industry solutions, such as revenue accounting,

while seeking to expand into new adjacent markets like

shipping and safety.

The company also suggested the prospect for bolt-on acqui-

sitions to further strengthen its technology platform.


Etihad will take a 49% shareholding in Alitalia, for an invest-

ment of €387.5m (US$515m). Its total investment also includes

€112.5m (US$149m) to acquire a 75% interest in Alitalia Loyalty

Spa, which operates MilleMiglia, the airline’s frequent flier

program, and the purchase by Etihad of five pairs of slots at

London’s Heathrow Airport valued at €60m (US$80m). The

slot pairs will reportedly be leased back to Alitalia on an arm’s

length basis.

Alitalia has been looking for a savior since Air France-KLM,

which had a 25% stake in the Italian airline, opted out of a

capital raise for the beleaguered carrier last October.

Etihad said in early June that it would invest in Alitalia only

if the Italian carrier meets a list of conditions. These include

job cuts and restructuring, moves opposed by Italy’s biggest

union CGIL. Additionally, the deal still has to pass regulatory

hurdles, including European Commission agreement that the

deal does not constitute unlawful state aid, and assurance

that the transaction will not threaten Alitalia’s status as a

European airline.

This deal is Etihad’s latest addition to a long line of equity

stake purchases (see chart), and, arguably, its boldest given

the scale and complexity of the restructuring that lies ahead.

Date Airline Stake

June 2014 Alitalia 49%

May 2014 Virgin Australia 21.2%

March 2014 Aer Lingusw 4.1%

November 2013 Darwin Airlines 33.3%

April 2013 Jet Airways 24%

August 2013 Jat Airways 49%

January 2012 Air Seychelles 40%

December 2011 Air Berlin 29.2%

Etihad’s Equity Stakes (2011-2014)

• A pursuit of better operating efficiency via new

technology continues to drive M&A activity in

commercial aviation

• Boeing made three acquisitions in the

technology space, strengthening its solutions

suite and broadening its offering into new areas

including maintenance record management

• Warburg Pincus acquired a majority stake in

Dubai-based Mercator in its first major push into

the Middle East

• Etihad’s acquisitive streak continues with a

bold move to expand its equity alliance via a

major investment in Italy’s troubled national

carrier, Alitalia

Key Takeaways

Aside from Alitalia, Etihad’s largest stake so far, as measured

by percentage ownership, is in Serbia’s Jat Airways, where the

Middle Eastern carrier also holds a 49% stake. Etihad recently

increased its stakes in Aer Lingus to 4.1% from 2.9% and Virgin

Australia to 21.2% from 19.9%.

In June, Etihad denied that it was in talks to acquire an equity

investment in Malaysia Airlines. Etihad also kept its stake in Air

Berlin at 29.2% despite reports in March that it was going to

increase it to 49.9%. Etihad may have refrained from taking a

greater ownership stake in the German carrier since its equity

acquisitions, including Alitalia, have recently been scrutinized

closely by European regulators. For example, Switzerland’s

Federal Office of Civil Aviation said that Etihad’s planned pur-

chase of a third of Darwin Airlines does not abide by European

Union ownership requirements. The Swiss gave Darwin until

September 30 to change the agreement for another review.

David Mitchell Principal


Boeing 777-300ER Review

The opinion expressed here does not constitute a formal appraisal.

Boeing 777-300ER Technical Description

The Boeing 777-300ER aircraft, a member of the highly

successful 777 commercial program, is a derivative of the

777-300, and first flew in 2003, receiving U.S. and European

certification in 2004.

The Boeing 777 program was launched in 1990 with an order

from United Airlines and the initial Boeing 777-200 model

entered airline service in 1995. The 777 family, seating 301

to 368 passengers, comprises six models: the base 777-200,

777-200ER (Extended Range), a larger 777-300, two longer

range models, the 777-300ER and 777-200LR (Longer-Range),

and the Boeing 777 Freighter. The aircraft fills the size gap

between the Boeing 767 and Boeing 747. The aircraft is built

at the Boeing plant in Everett, Washington.

The Boeing 777-300ER model variant is a twin-engine, high

capacity widebody aircraft designed to replace the 747-400.

Seating 386 passengers in a typical three-class configuration

– or up to 550 in all-economy - the 777-300ER is designed

to operate on dense routes such as New York-Hong Kong,

Dubai-New York and Los Angeles-Sydney. The 777 makes

extensive use of advanced materials such as composites and

aluminum alloys to reduce weight while affording structural

integrity and corrosion resistance. The advanced flight deck

features six large flat panel displays and the digital fly-by-

wire system reduces weight and is simpler to maintain than

traditional mechanical systems. Air France placed the aircraft

into commercial service in 2004 between Paris and New York.

General Electric is a revenue and risk sharing partner in the

Boeing 777-300ER and the smaller, longer-range 777-200LR

aircraft, and is the exclusive engine supplier for both aircraft

variants with its 115,000 lb st thrust class GE90-115B.

Subsequent improvements to engine efficiency and design

changes to reduce drag and weight have increased the

range to 7,880nm. New highly tapered raked wingtip exten-

sions have been fitted to reduce take-off field length, while

Build Year 2004 2006 2008 2010 2012 2014

Current Market Value(2014 USD millions) 87.18 98.84 112.25 127.67 145.42 165.83

Indicative Lease Rates (2014 USD $ thousands/month) (Low > High) 750 850 850 950 950 1050 1050 1150 1150 1250 1250 1350

Exhibit 1: Boeing 777-300ER Values

Assumptions: Engine: GE 90-115BL MTOW (lbs): 775,000


Rutas operadas por aviones 777-300ER en América Latina y el Caribe Aerolínea

Punta-Cana Paris (via SDQ and nonstop) Air France

Santiago-Paris Air France

Lima-Paris Air France

Havana-Paris Air France

Sao Paulo-Paris Air France

Rio de Janeiro-Paris Air France

Point-a-Pitre-Paris Air France

Martinique-Paris Air France

Sao Paulo-New York American

Sao Paulo-Dallas/Ft. Worth American

Sao Paulo-Dubai Emirates

Sao Paulo-Seoul (via LAX) Korean

Sao Paulo-Singapore (via BCN) Singapore

Sao Paulo–Frankfurt TAM

Sao Paulo–London TAM

Sao Paulo–Miami TAM

Sao Paulo–Paris TAM

Buenos Aires-Istanbul (via GRU) Turkish

Sao Paulo-Istanbul Turkish

improving climb performance and fuel efficiency. Other im-

provements include a revised, semi-levered undercarriage to

further reduce take-off field length, strengthened body, wings

and empennage structures and provision for extra fuel tanks.

Boeing 777-300ER Market Overview

As of September 2014, there were 509 Boeing 777-300ER

model aircraft in commercial operation with 35 operators

across the globe with one aircraft parked. In the Latin America

region, TAM Linhas Aereas has ten 777-300ER aircraft in active

service with a further two aircraft on order. Boeing 777 family

members in regional service include four Boeing 777-200ER in

service with Aeromexico and a further four Boeing 777-200F

freighter aircraft operated by LAN Cargo.

As of October 2014, publicly advertised availability of the

777-300ER was nil, indicative of a firm market for the type.

The firm order backlog stood at a healthy 255 units as of Sep-

tember 2014, representing several years’ worth of production

at current - 8.3 per month or 100 per year - production rates.

The 777-300ER competes in the 350 to 375 seat, long haul

widebody market segment. This segment, long dominated

by the 747-400, has continued to exhibit strong demand as

operators have increasingly employed big twins such as the

777-300ER which offer compelling operating economics

versus four engined aircraft like the 747-400 and A340-600.

An additional factor in the sales success of the 777-300ER is

the lack of a true competitor in the segment – the Boeing

Source: OAG Schedules

747-400 is slowly being phased out of first tier airlines and

the Airbus A340-600 never achieved critical market mass, with

production ceasing in 2011 after 97 units had been delivered.


Even in the economic downturn of 2008-2009, values and

lease rates proved remarkably resilient with any easing more

the result of reduced interest rates rather than from easing

market demand. The type has proved particularly popular in

the buoyant Asia Pacific region and demand for the aircraft

type is expected to remain strong and potentially strengthen

with industry recovery, with only limited aircraft availability

likely over the near term.

With respect to future competition, the A350-1000 is expected

to challenge the 777-300ER once deliveries commence in

2017. This aircraft, able to fly 369 passengers up to 8,000nm,

has garnered 169 orders as of August 2014 based on current

Airbus data. The 777-300ER will also experience fraternal

competition from the 777-8X and 777-9X. These aircraft, first

offered to the market in November 2013 and planned for

entry into service in 2020, will bracket the 777-300ER in terms

of payload and range. Based on current data, the 777-8X is

expected to fly 350 passengers over 9,300nm, significantly

exceeding the 7,825 nm range of the 777-300ER. The 777-

9X will offer both greater passenger capacity and range

Angus MackayPrincipal

Stuart J. RubinPrincipal

over the 777-300ER and is projected to fly 400 passengers

about 8,200nm. All three of these aircraft will compete with

the 777-300ER but not for several years, which means the

777-300ER will be alone in its market segment over the near

term. Incremental product improvement programs and the

recent advent of 330 minute ETOPS limits further enhance

the operational flexibility and capability of the 777-300ER.

Thus market conditions for the type are expected to remain

relatively buoyant for the next three or more years until the

Airbus A350-1000 program gains traction.


The 787’S Role In The Changing Widebody Fleet In Latin America

And The Caribbean

Two Japanese carriers, All Nippon Airways and Japan Airlines, were among the first carriers to incorporate new long range fuel efficient aircraft - 787 Dreamliner - back in late 2011 and early 2012. Since then, 24 other carriers have begun flying the 787 and an additional 39 have placed orders for the aircraft. As of October 2014, 5% of global wide-body scheduled seat capacity relates to the 787 aircraft family.

Latin America and the Caribbean are home to 787 operators and the region also has 787 service by carriers from outside the region. While the seat capacity of the overall wide-body fleet operating to and from Latin America and the Caribbean has only grown on average by 1% in the last 5 years, the seat capacity share served with the 787 has increased from 0% in 2010 to 6% as of October 2014. All indications are that this share will continue to grow as more 787s are delivered.

The growth of the 787 share is related to other changes in the region’s widebody capacity. The workhorse 767 has seen a dramatic drop in its share of market capacity, from 39% to 27% - partially due to the age of the 767 fleet in the region and to the need for larger and/or longer distance aircraft which the 777 and 787 satisfied. Use of the 777 has grown significantly and has added seats to its markets. The Airbus A330 has also gained share at the expense of the 767 and the four engine A340 – growing to 23% from 18%. Meanwhile,

Source: Innovata Schedules October 2014

100%

80%

60%

40%

20%

0%

2010 2014

OTHER

787

747

343

333

777

767

39%

18%

18%

14%

9%

2%

Scheduled Widebody Seat Capacity Share by Aircraft Family in Latin America and the Caribbean

27%

26%

23%

6%

12%

6%

2%

the four engine A340 has shrunk from 14% to 12%, losing out to the 787 in some cases and the A330 in others. Finally, use of the 747 has declined slightly in share from 9% to 6%.

Five airlines are currently offering service with 787 Dream-liner aircraft within or to Latin America and the Caribbean. AeroMexico and LAN from Latin America, Arkefly, jetAirfly and Thomson Airways from Europe and Ethiopian Airlines from Africa.


One of the many advantages of the 787 is that it enables carri-ers to fly longer routes or avoid payload restrictions necessary with earlier aircraft types. One example is the market from Eu-rope to Puerto Vallarta, Mexico. Both First Choice Airways and Arkefly were flying from the U.K. and Amsterdam, respectively, to Puerto Vallarta with an intermediate stop. The longer range of the 787 permits a full capacity non-stop flight. In May 2014, Thomson Airways started non-stop service operating the 787 from London-Gatwick and Manchester to Puerto Vallarta.

The 787 aircraft is also providing the flexibility of adding more frequencies in existing long-haul markets. AeroMexico has also announced plans to deploy Boeing 787-8 equipment on Mexico City-Santiago service in January 2015 doubling the service from 3 weekly frequencies to 6 weekly frequencies (according to OAG).

However, in most cases, the 787 has served to replace older, less efficient aircraft rather than to open new routes. LAN, for example, replaced the A340 on its Santiago-Madrid route with a 787. Of the 35 routes currently flown with the 787 in the region, 27 (or 77%) are routes previously flown with 767 family aircraft.

Latin American Carriers Non-Latin American Carriers

Aeromexico:

Mexico City-London

Mexico City-Madrid

Mexico City-New York

Mexico City-Paris

Mexico City-Tokyo (via Monterrey)

LAN:

Santiago-Buenos Aires

Santiago-Frankfurt (via Madrid)

Santiago-Miami (via Cancun or Punta Cana)

Santiago-New York

Santiago-Sao Paulo

Santiago-Los Angeles (via Lima)

Santiago-Cancun

Arkefly:

Aruba-Amsterdam (nonstop and via Curacao)

Bonaire-Amsterdam (via Curacao)

Curacao-Amsterdam (nonstop via Aruba)

Ethiopian Airlines:

Sao Paulo-Addis Ababa (via Lome)

Jetairfly:

Punta Cana-Brussels (nonstop and via Santo Domingo)

Santo Domingo-Brussels (via Punta Cana)

Varadero-Brussels (via Cancun)

Thompson TUI:

Birmingham-Cancun

Birmingham-Montego Bay

East Midlands-Cancun

Glasgow-Cancun

London-Gatwick-Aruba

London-Gatwick-Cancun

London-Gatwick-Montego Bay

London-Gatwick-Puerto Plata

London-Gatwick-Puerto Vallarta

London-Gatwick-Punta Cana

Manchester-Cancun

Manchester-Montego Bay

Manchester-Puerto Plata

Manchester-Puerto Vallarta

Manchester-Punta Cana

Newcastle-Cancun

Sources: Innovata and OAG Schedules, October 2014

Note: LAN SCL-LAX service appears in November schedule

Current Served Routes in 787 in Latin America by Carrier


Deliveries

Carrier Aircraft Active Orders 2014 2015 2016 2017 2018 2019-2023

Aeromexicov 787 5 11 1 3 1 0 0 6

Avianca 787 0 15 4 3 3 2 0 3

LATAM 787 8 24 2 4 5 7 4 2

350 0 27 0 0 0 7 3 17

Avianca Brazil 350 0 10 0 0 0 3 7 0

Azul 350 0 5 0 0 0 3 2 0


Latin American Newest Wide-body (787 and 350) Active Fleet and Orders

The capacity and range of the 787 Dreamliner have resulted in increasing orders from Latin America carriers, which are keen to expand their international networks. Latin American carriers have placed orders for both the 787 and the forthcoming A350, which boasts similar fuel cost savings and providing the right size and range of aircraft for a continent that is far from some of its key markets.

The 787 Dreamliner has enabled airlines to fly longer routes that previous wide-body aircraft could not have operated, along with the appropriate seat capacity to add more flights to existing long-haul markets.

Eric TolerAnalyst

Barbara MejiaPrincipal


ICF International Aviation Expertise

For more than 50 years, ICF International (formerly ICF SH&E) has been serving the air transportation industry. ICF provides trusted aviation and aerospace ex-pertise to airlines, airports, governments, international agencies, manufacturers, and financial institutions.

ICF’s core aerospace capabilities include strategy and network planning, forecasting, operations, and logistics; revenue management; asset manage-ment and appraisals, supply chain and maintenance management, safety, and security and regulatory compliance; financial due diligence; and privatization, alliances, mergers, acquisitions, and alliances. For airports, ICF is a leader in air service development, demand forecasting, commercial planning, system and economic impact studies, sustainability, ground handling, and cargo opera-tions. In addition to aviation, ICF is a leader in the energy, environment and transportation industries, public safety and defense, health, social programs, and consumer and financial business. This breadth of expertise further enhances the wealth of knowledge and experience available to its aviation clientele.

Committed to providing expert and impartial advice, ICF is both results and value driven. By participating directly in many emerging trends, ICF’s aviation consulting group is especially well equipped to assist its clients in adapting to a rapidly changing environment.

The firm’s staff of nearly 100 professionals dedicated to aviation is based in offices in New York, Boston, Ann Arbor, London, Beijing, Singapore, and Hong Kong. ICF draws from a network of associates worldwide.

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