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General AviationFinancial and Legal Session

Todd Hattaway – Hawker Beechcraft

9 Feb 2012

Headlines / Focus

• RBI Clears Airline Debt Recast Plan– Posted: Sun, Sep 19 2010. 12:02 PM IST (LiveMint.com)

• RBI Gives Banks Clearances for Restructuring Aviation Loans

– Published 30 Aug 2010 CNBC-TV18 (Moneycontrol.com)

• Govt Set to Allow 49% Foreign Stake in Domestic Airlines.

– Published 18 Jan 2012 (Times of India)

• Indian Airline Industry Expected to Suffer Huge Debt Burden

– Published 15 Jan 2012 (HindustanTimes)

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Headlines / Focus - cont.

• India Corporate Jets Face Tax Evasion Probe– 10 January 2012 (AINALERTS)

• No. of private jets, chartered flights soars– The soaring number of chartered planes and private jets are now

jostling with commercial flights for the attention of aviation experts and airport operators

– Posted: 24 May 2011 (Times of India)

• Rs 10,030 crore plan to link India with choppers

– Posted Jan 22, 2012 (Times of India)

• India’s Business Aviation Sector to be worth USD12 Billion by 2020

– Posted February 2011 (Airline Leader via data from CAPA)

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Custom Builds on “What” Deposit?

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Really – this is a process..

• Air Transport Directorate– Issuance of NSOP or Private

Operators Permit– Approval of Import– Security Clearances (BOD)– Flight Clearances ---- etc…..

• Remitting Funds for Acquisition

• The “4” Stages of Importing• Renewal of an NSOP permit• Inducting an aircraft by an

existing operator…• Endorsement of aircraft• Deletion of an aircraft

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Hit, Miss or Surpass Projections?

India Helicopter Growth Projection (Budget Passage)

India Business & General Aviation Growth Projections

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Typical Financial Products

Depending on the specific details of your purchase, aircraft type and intended use, you may want to consider several different financial products. Every product will result in different costs and structures and it is important to understand and consider all alternatives.

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Preliminary Information Needed

Financing Best for You

Beneficial Owner

Repayment Capacity

Aircraft

• Nationality• Tax status/residency • Estimated net worth (if individual)• If SPC to act as financed party,

country of • Source of debt service and

operational cost

• For corporations: financial statements, preferably audited, preferably 3 years

• For individuals: proof of sufficient cash flow

• Guarantees/collaterals• Location of assets

• Financing product you desire (loan, lease, sale-lease-back)

• Amount of the aircraft cost to be financed

• Currency you prefer• Amount of advance• Term period desired

• Country of registry• Principal location/base & country• Preferred operator information• Geographical area of operations• Expected use (personal vs.

corporate / NSOP or Private)

All lending institutions and banks will require similar information.

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Export Credit Agency (ECA) Financing

The Export - Import Bank of the United States offers financing support to non-US buyers

of the entire line of Hawker Beechcraft aircraft

What Ex-Im Can Offer

Ex-Im Bank provides guaranteed and sometimes direct loans between five and ten years (based

on their determination of your credit worthiness) For all Hawker Beechcraft aircraft, Ex-Im Bank may finance up to no more than 85 percent of the U.S. content

Although the majority of our manufacturing is done in the US, parts of our aircraft are manufactured in the United Kingdom and Canada as well, which Ex-Im will not finance (see Page 11). If desired, it is possible to syndicate financing with other Export Credit Agencies (ECA’s) to finance the non-U.S. content of your new Hawker Beechcraft aircraft, although it is important to note this will delay and complicate the process

Ex-Im Bank financing is not currently available to individuals, only to corporationsEx-Im works with your local banks to administer financing in almost all cases, unless the loan is direct

Proof of Credit Worthiness is Critical to ApprovalEx-Im Bank’s typical asset-based financing structure typically used in commercial aircraft is used infrequently in Ex-Im’s support of “small” general aviation aircraft, the category under which Hawker Beechcraft products fall. Thus, the decision on financing transactions is based upon the credit worthiness of the purchaser or guarantor and determines not only whether the transaction will be approved, but also the costs of financing. In some circumstances, Ex-Im Bank may require a first priority mortgage on the aircraft to secure the financing.

Ex-Im will assess an exposure fee based on each transaction. This exposure fee will reflect Ex-Im Bank’s assessment of the creditworthiness of the borrower and/or guarantor and the risks presented by the transaction, beginning at 3 percent. If you are located in a country that has signed, ratified and implemented the Cape Town Convention, the exposure fee will be reduced by one-third

If you are unable to show sufficient credit worthiness to Ex-Im, you will be denied financing. It is your responsibility to present sufficient transparency and proof of your ability to repay Ex-Im’s loan

Do the questions get addressed?

• Airport “surcharges” on top of normal operating costs?

• Could customs duties be creating an unsafe environment?

• Fixed Based Operations – is wing stacking safe or is this the result of a parking policy gone crazy?

• Do we ask ourselves if these are regulations to improve or is this more about - “Tit for Tat”?

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“UP” time equals “GROWTH”

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Thank You