Structured Products Research September 7, 2005

Commercial ABS Mark Heberle

mark.heberle@wachovia.com
(704) 383-1936

Chris van Heerden

chris.vanheerden@wachovia.com
(704) 715-8321

North American Fleet Handbook

Executive Summary Contents Page

Executive Summary 1
Although the year started under State of the Region 2
dark clouds of uncertainty—United Composition of
and US Airways in bankruptcy and the Fleet 4
at risk of liquidating—the North Lease Rates and
American aircraft fleet has Values Trend Up 4
persevered so far without shock. Air Types under Stress 5
travel demand has been breaking American Airlines 7
new records, while financial distress Continental Airlines 8
at airlines has constrained their Delta Air Lines 9
ability to add new aircraft. The Northwest Airlines 10
number of aircraft in storage has United Airlines 11
continued to decline and firm US Airways 14
demand around the world has Air Canada 15
meant that lease rates made America West 16
significant gains. Independence Air 16
Southwest Airlines 16
If only all the news was good news.
Significant uncertainties still loom,
including potential bankruptcy
filings at other legacy carriers, and
the risk of a macro economic
slowdown. These risks have been further exacerbated by Hurricane Katrina and its
effects on fuel prices and the broader economy.
The North American Fleet Handbook is an overview of the recent climate in the North
American aircraft market as well as the fleets and recent aircraft transactions of
major airlines. On page 11, we look back at the United Airlines bankruptcy in an
attempt to get closure on the topic.

Please see the disclosure appendix of this publication for certification and disclosure information
This report is available on WachoviaResearch.com and on Bloomberg WSPR
 North American Fleet Handbook
September 7, 2005 STRUCTURED PRODUCTS RESEARCH

State of the Region

Macro fundamentals for the North American aircraft market have been solid: aircraft
values and lease rates are getting a boost from healthy GDP growth and
unprecedented levels of passenger traffic. The 66.9 million revenue passenger miles
traveled in July was the highest monthly level achieved in U.S. history while GDP
expanded 3.6% year over year at June 30, 2005. Discounted air fares have been a
significant demand driver.

Exhibit 1: Yearly U.S. Passenger Air Traffic (revenue passenger miles)

The 66.9 million
680
revenue passenger
miles traveled in the 660
U.S. in July is the
640
highest on book.
620

600
million

580

560

540

520

500
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Source: Air Transportation Association.

At the same time, new aircraft deliveries have been contained (Exhibit 2). By
necessity, airlines have had to use capacity more efficiently, leading to the highest
utilization levels ever seen in the U.S. when systemwide load factors reached 85% in
July (Exhibit 3, page 3). To serve rocketing demand with limited new capacity
coming on line, North American airline planes in storage have continued to decline
(Exhibit 4, page 3).

Exhibit 2: Aircraft Deliveries to North American Airlines

Fifty-six percent of
80
2005YTD deliveries
have been RJs. 70

60

50

40

30

20

10

0
8/01
10/01
12/01
2/02
4/02
6/02
8/02
10/02
12/02
2/03
4/03
6/03
8/03
10/03
12/03
2/04
4/04
6/04
8/04
10/04
12/04
2/05
4/05
6/05

Source: Airclaims CASE database.

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September 7, 2005 STRUCTURED PRODUCTS RESEARCH

Exhibit 3: Load Factors—New Levels of Efficiency

With limited new
90%
capacity being
2000 2003 2004 2005 added, airlines are
85%
maximizing asset use.
80%

75%

70%

65%

60%

55%
Jan. Feb. March April May June July Aug. Sept. Oct. Nov. Dec.

Source: Air Transportation Association.

Exhibit 4: North American Airline Jets in Storage Decline

Few in-production
700 types are in storage.

600

500

400

300

200

100

0
8/02

10/02

12/02

2/03

4/03

6/03

8/03

10/03

12/03

2/04

4/04

6/04

8/04

10/04

12/04

2/05

4/05

6/05

8/05

Source: Airclaims CASE database.

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September 7, 2005 STRUCTURED PRODUCTS RESEARCH

Composition of the Fleet

The North American fleet is slimming. In-service widebodies have stayed flat over
the past 15 years, whereas the number of narrowbodies has gained 23% and regional
jets (RJs) expanded more than tenfold. Turboprops have declined by 37%.

Exhibit 5: Trends in the North American Fleet Composition

The number of 4,000
narrowbodies and
RJs has increased 3,500
significantly over
3,000
the past 15 years.
2,500

2,000

1,500

1,000

500

0
1990 1995 2000 2005
Widebodies Narrowbodies RJ Turboprop

Source: Airclaims CASE database and Wachovia Securities.

Lease Rates and Values Trend Up

Lease rates have registered significant gains in the course of the past year for
in-production types (Exhibit 6, page 5). The biggest gains have been made by long-
range widebodies. In particular, the 767-300ER has registered a 45% improvement in
one year, as the mid-vintage monthly rental went to $387,000 from $266,000.

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Exhibit 6: Lease Rates Upward Bound

June 2005 Double-digit gains
Monthly 3-Mo. 6-Mo. 12-Mo. have been the rule
Type Lease Rate Change Change Change
rather than the
Narrowbodies A310-300 $183,929 0% 0% 13% exception for
A320-200 $220,556 0% 8% 20% in-production types.
A321-100 $200,556 0% 8% 8%
B737-300 $139,375 7% 12% 18%
B737-400 $148,750 0% 3% 12%
B737-500 $125,455 0% 0% 14%
B737-700 $253,889 4% 12% 23%
B737-800 $305,556 0% 7% 18%

Widebodies A330-200 $600,000 0% 8% 24%

A340-300 $628,571 4% 12% 27%
B747-400 $647,500 0% 0% 20%
B747-400F $855,000 0% 4% 4%
B767-200ER $196,667 0% 0% 13%
B767-200ER $196,667 0% 0% 13%
B767-300ER $386,750 12% 33% 45%

Out of Production B737-200A $25,500 0% 2% 2%

B757-200 $154,348 3% 3% 10%
B757-200PF/SF $257,778 0% 15% 15%
DC-10-30 $70,000 0% 0% 0%
DC-9-30 $15,000 -25% -25% -25%
Fokker 100 $69,000 0% 0% 1%
MD-11F $455,000 0% 12% 12%
MD-82 $48,471 0% -15% -15%
MD-83 $69,313 0% -13% -13%
Note: Lease rates and comparisons are average across all vintages.
Source: Airclaims and Wachovia Securities.

Types under Stress

MD-80s have
Lease rates have slipped mainly for those aircraft types at or near the end of their
underperformed.
useful lives. This includes DC-9-30s, which were produced from 1966 to 1981, as well
as 737-200s and 767-200s. MD-80s are a notable exception, as this type has seen
declines even for late 1990s production models. For example, a 1998 MD-83 went
from $110,000 in June 2004 to $90,000 a year later.

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Exhibit 7: Major Fleets as of August 2005

In Service Stored Current Total On Order Grand Total Average Age

American Airlines 708 36 744 56 800 12

Delta Air Lines 487 44 531 55 586 12
Southwest Airlines 436 1 437 74 511 8
Northwest Airlines 430 52 482 50 532 19
United Airlines 409 28 437 42 479 11
Continental Airlines 340 26 366 53 419 9
US Airways 267 12 279 52 331 11
Air Canada 199 25 224 60 284 11
3,276 224 3,500 442 3,942
Source: Airclaims CASE database.

Major North American airlines have continued to trim their fleets, with total in-
service aircraft declining to 3,276 in August 2005 from 3,370 a year earlier. So far in
2005, the biggest changes have been at United Airlines, which has phased out 37
active aircraft, and US Airways, which has eliminated 13 aircraft. On the other hand,
Southwest continues to expand, adding 20 planes in eight months.

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American Airlines

American Airlines booked net income of $58 million in Q2 2005 as price increases
offset higher fuel cost. Changes in the fleet are focused on outgoing aircraft, as there
were no new deliveries in 2004, none scheduled for 2005 and only two 777s coming
in 2006. So far in 2005, a leased MD-83 has been returned and seven 767-200s and
two 767-200ERs were sold out of storage. The two sold 767-200ERs went to cargo
conversions and the one remaining in storage is scheduled for sale and conversion
in 2007.

Exhibit 8: American Airlines Fleet

Variant In Service Stored Current Total On Order Grand Total Option Average Age

Airbus A300 600R (GE) 34 - 34 - 34 - 15

Boeing (McDonnell-Douglas) MD-80 82 (MDC) 241 26 267 - 267 - 18
Boeing (McDonnell-Douglas) MD-80 83 (MDC) 89 1 90 - 90 - 11
Boeing (McDonnell-Douglas) MD-80 83 (SAIC) 5 - 5 - 5 - 12
Boeing 737 (NG) 600/700/800 0 - - - 0 376
Boeing 737 (NG) 800 77 - 77 47 124 - 5
Boeing 757 200 (P&W) 19 - 19 - 19 - 7
Boeing 757 200 (RR) 124 - 124 - 124 - 10
Boeing 767 200 (GE) 0 2 2 - 2 - 21
Boeing 767 200ER (GE) 16 1 17 - 17 - 18
Boeing 767 300ER (GE) 58 - 58 - 58 - 11
Boeing 777 200ER (RR) 45 - 45 9 54 - 4
Fokker 100 0 6 6 - 6 - 13
708 36 744 56 800 376 12
As of Aug. 11, 2005.
Source: Airclaims CASE database.

Exhibit 9: American Airlines Regional Service Providers

The majority of
American Airlines’
RegionsAir Trans States regional service is
Executive
1% Airlines provided by wholly
9%
Airlines owned subsidiaries,
11% American Eagle and
Chautauqua Executive Airlines,
Airlines which fly 86% of the
4%
352 active regional
aircraft. Feeder lift is
American also provided by inde-
Eagle Airlines
75%
pendents RegionsAir,
Trans States Airlines
and Chautauqua.
Source: Airclaims CASE database.

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Continental Airlines

Continental registered net income of $100 million for Q2 2005 as the airline benefited
from fuller planes and higher yields. Continental took delivery of a 737-800 in July,
and six more are scheduled for the remainder of 2005. Also in the year, eight leased
ex-ATA 757s are scheduled to be integrated beginning in Q3. The airline has retired
its last two MD-82s with 24 MD-80s remaining in storage. Continental has placed a
firm order for 10 787 aircraft with delivery starting in 2009.

Exhibit 10: Continental Airlines Fleet

Variant In Service Stored CurrentTotal On Order Grand Total Option Average Age

Boeing (McDonnell-Douglas) DC-10 30 - 1 1 - 1 - 27

Boeing (McDonnell-Douglas) MD-80 81 - 1 1 - 1 - 24
Boeing (McDonnell-Douglas) MD-80 82 (MDC) - 20 20 - 20 - 19
Boeing (McDonnell-Douglas) MD-80 83 (MDC) - 3 3 - 3 - 18
Boeing 737 (CFMI) 300 51 - 51 - 51 - 18
Boeing 737 (CFMI) 500 63 - 63 - 63 - 9
Boeing 737 (NG) 700 31 - 31 15 46 23 6
Boeing 737 (NG) 700 Winglets 5 - 5 - 5 - 6
Boeing 737 (NG) 800 50 - 50 28 78 6 5
Boeing 737 (NG) 800 Winglets 34 - 34 - 34 - 2
Boeing 737 (NG) 900 12 - 12 3 15 - 3
Boeing 757 200 (RR) 37 - 37 - 37 - 8
Boeing 757 200 Winglets (RR) 4 - 4 - 4 - 10
Boeing 757 300 (RR) 9 1 10 - 10 - 2
Boeing 767 200ER (GE) 10 - 10 - 10 - 4
Boeing 767 400ER (GE) 16 - 16 - 16 - 3
Boeing 777 200ER (GE) 18 - 18 2 20 - 5
Boeing 787 -8 (Engines Unannounced) - - - 10 10 -
340 26 366 53 419 34 9
As of Aug. 11, 2005.
Source: Airclaims CASE database.

Exhibit 11: Continental Airlines Regional Service Providers

Continental has
Gulfstream been divesting its
International SkyWest ownership in
Commutair Airlines
Airlines ExpressJet, its
7% 2%
9%
largest regional
Colgan Air
5%
service provider,
to fund its retire-
ment plan. The
active regional
fleet totals 333 air-
craft. All RJ flying
ExpressJet (259 Embraer air-
Airlines craft) is done by
77% ExpressJet, while
other partners
Source: Airclaims CASE database.
operate a variety
of turboprops.

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Delta Air Lines

Delta reported a $383 million net loss for the June 2005 quarter as the carrier missed
out on the yield gains experienced by competitors. Liquidity relief from the sale of
Atlantic Southeast Airlines may be less meaningful in the light of a $625 million
holdback on a new credit card processing agreement and high early pilot retirement
numbers.

We believe recent changes give some insight to Delta’s long-term fleet strategy.
Specifically, 737-200s are at the top of the list for elimination as seven have been
moved out of service thus far in 2005. These planes, which are mostly leased and
average 20 years in age, are still powered by dated JT8D engines. Also on the way
out are 737-300s when leases expire—five of these, all GE managed, expire in 2005
and these will transition back to the lessor. The 767-200s at 22 years average age and
only 13 in active service are another candidate for elimination, and one was retired
from service in Q2. These three types alone highlight 79 aircraft for elimination,
while replacement lift would be difficult to finance. This leads us to conclude that
Delta’s MD-88s, which make up a quarter of the airline’s fleet, are not in any near-
term danger.

Exhibit 12: Delta Air Lines Fleet

Variant In Service Stored CurrentTotal On Order Grand Total Option Average Age

Boeing (McDonnell-Douglas) MD-11 Passenger (P&W) - 3 3 - 3 - 13

Boeing (McDonnell-Douglas) MD-80 88 120 - 120 - 120 - 15
Boeing (McDonnell-Douglas) MD-90 30 16 - 16 - 16 - 9
Boeing 737 (CFMI) 300 23 2 25 - 25 - 18
Boeing 737 (JT8D) 200 Adv. (Stage 3 Hushkits) 43 7 50 - 50 - 20
Boeing 737 (NG) 800 71 - 71 50 121 60 4
Boeing 757 200 (P&W) 85 - 85 - 85 - 16
Boeing 767 200 (GE) 13 2 15 - 15 - 22
Boeing 767 300 (GE) 24 - 24 - 24 - 16
Boeing 767 300 (P&W) 4 - 4 - 4 - 9
Boeing 767 300ER (GE) 28 - 28 - 28 16 7
Boeing 767 300ER (P&W) 31 - 31 - 31 - 10
Boeing 767 400ER (GE) 21 - 21 - 21 22 4
Boeing 777 200ER (RR) 8 - 8 5 13 25 5
Fairchild/Dornier 328JET - 30 30 - 30 - 4
487 44 531 55 586 123 12
As of Aug. 11, 2005.
Source: Airclaims CASE database.

Exhibit 13: Delta Air Lines Regional Service Providers

Regional service to Delta
has been provided by
SkyWest Atlantic wholly owned subsidiaries,
Airlines Southeast Atlantic Southeast Airlines
18% Airlines
34%
and Comair along with
independents Chautauqua
and SkyWest. In August
2005, Delta announced the
sale of Atlantic Southeast
Comair
Airlines to SkyWest.
Chautauqua
39% Airlines Republic Airlines will also
9% join the group, operating 12
ERJ-170s when these are
Source: Airclaims CASE database. delivered.

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Northwest Airlines

Northwest Airlines had a rough Q2, reporting a net loss of $217 million as an 11.3%
gain in operating revenue did not keep pace with 15.5% higher operating expenses.
An older fleet makes Northwest more vulnerable to high fuel prices.

Thus far in 2005, Northwest has taken delivery of four A319s and two A330-320s
with two A320s still to be delivered. The airline has announced plans to reduce its
active DC-9 fleet by 30, eight of which will be permanent retirements. Also in Q2,
Northwest announced an order for 18 787s with a delivery window opening in 2008.

Exhibit 14: Northwest Airlines Fleet

Variant In Service Stored Current Total On Order Grand Total Option Average Age

Airbus A319 110 (CFM) 73 1 74 7 81 23 3

Airbus A320 210 (CFM) 78 - 78 2 80 16 10
Airbus A330 220 (P&W) 7 - 7 5 12 - 1
Airbus A330 320 (P&W) 10 - 10 18 28 - 1
Boeing (McDonnell-Douglas) DC-10 30 15 3 18 - 18 - 28
Boeing (McDonnell-Douglas) DC-10 30ER 4 - 4 - 4 - 19
Boeing (McDonnell-Douglas) DC-9 14 (Stage 3 Hushkits) - 7 7 - 7 - 39
Boeing (McDonnell-Douglas) DC-9 15 (Stage 3 Hushkits) - 1 1 - 1 - 38
Boeing (McDonnell-Douglas) DC-9 31 (Stage 3 Hushkits) 54 11 65 - 65 - 36
Boeing (McDonnell-Douglas) DC-9 32 (Stage 3 Hushkits) 43 1 44 - 44 - 35
Boeing (McDonnell-Douglas) DC-9 41 (Stage 3 Hushkits) 12 - 12 - 12 - 36
Boeing (McDonnell-Douglas) DC-9 51 (Stage 3 Hushkits) 33 1 34 - 34 - 27
Boeing 727 200 Adv (Stage 3 Hushkits) - 9 9 - 9 - 27
Boeing 747 200B (P&W) 5 11 16 - 16 - 24
Boeing 747 200F (P&W) 1 - 1 - 1 - 26
Boeing 747 200F (SCD) (P&W) 9 - 9 - 9 - 24
Boeing 747 200SF (P&W) 3 - 3 - 3 - 19
Boeing 747 300 Combi (P&W) - 2 2 - 2 - 22
Boeing 747 400 (P&W) 16 - 16 - 16 - 11
Boeing 757 200 (P&W) 51 5 56 - 56 - 14
Boeing 757 300 (P&W) 16 - 16 - 16 - 2
Boeing 787 -8 (Engines Unannounced) - - - - 0 34
Boeing 787 -8 (RR) - - - 18 18 16
Bombardier (Canadair) CRJ Regional Jet 440 - - - - 0 9
430 52 482 50 532 98 19
As of Aug. 11, 2005.
Source: Airclaims CASE database.

Exhibit 15: Northwest Airlines Regional Service Providers

Regional service for
Northwest is provided by
Mesaba
Pinnacle and Mesaba. A
Airlines former Northwest
42% subsidiary, Pinnacle was
spun off in November
2003. Pinnacle operates
139 CRJs and Mesaba
operates 35 Avro RJs and
Pinnacle 67 turboprops.
Airlines
58%

Source: Airclaims CASE database.

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United Airlines

United appears likely to pass its three-year anniversary in debtor rehab before
potentially emerging in early 2006. Once the world’s second-largest airline, United
has reorganized without creating a shock to aircraft values and lease rates that
would have come from large-scale aircraft rejections. In evaluating risk to assets
from airline bankruptcies, the United case provides a few pointers:
ƒ The airline’s fleet decisions were not influenced by type as much as by cost
savings on each aircraft. As a result, the only types completely eliminated from
the active fleet were 767-200s and 767-200ERMs, a total of 18 planes.
ƒ Planes that were treated more harshly (737-300s and 737-500s) were gradually
taken out of United’s fleet from early 2003 through 2005. The fleet restructuring
process has been slowed by the airline’s strategic planning process and
negotiations with a diverse group of creditors, dampening the potential shock of
a large number of planes looking for new homes at once.
ƒ By negotiating as a group, EETC and PTC holders were able to use desirable
assets as negotiating leverage defending a large pool of aircraft. For example,
when creditors repossessed four 767s out of the 1993A PTC and 1993C PTC,
United was forced to cancel its Chicago to Buenos Aires service—the airline was
dependent on long-range widebodies for higher-yielding international service.
When United filed for bankruptcy in December 2002, it operated 567 aircraft, 463 of
which were financed through leases or mortgages and 95 that were owned outright
and subsequently pledged to DIP lenders. Of the 463 financed aircraft, 158 were
funded through public debt, including pass-through certificates and EETC
transactions. This group of debt holders negotiated jointly as the public debt holders.

Within 60 days of its bankruptcy filing, United agreed to perform on 51 of the public
debt aircraft, operating the remaining 124 unprotected under Section 1110(c). In
February 2004, the airline and the public debt holders agreed to a restructuring
agreement covering all the aircraft, under which some aircraft were rejected, but
when the ATSB refused an exit loan guaranty, United decided not to perform on this
settlement. When negotiations broke off in November 2004, trustees for three
transactions (JETS 1995-A, 1993A PTC and 1993C PTC) terminated adequate
protection stipulations and demanded the return of 14 aircraft. Initially, the court
interfered with creditors’ access to collateral, but finally allowed creditors to exercise
their Section 1110 rights in May 2005. By this time, United had already rejected six of
the 14 aircraft. Four more were repossessed (767s out of the 1993 deals), and four
were bought by the airline (767s out of the 1995 deal).

Going into the summer of 2005, creditors stepped up the pressure on United, aided
by a court ruling approving repossession, an improving aircraft market and a desire
to reduce credit exposure to United. Better market values for the aircraft lowered
loan-to-value ratios in the transactions and made repossession a credible threat.

In July 2005, creditors demanded return of a further 15 aircraft (eight 747s and seven
767s from eight transactions). One of these 747s was subsequently repossessed by
the creditors. Negotiations have led the public debt group and United to revise

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termsheets for all the deals (except for the 1997-1 deal, which the airline will buy).
These could be finalized in a Sept. 27, 2005, hearing.

Exhibit 16: United Airlines Current Fleet

Variant In Service Stored Current Total On Order Grand Total Average Age

Airbus A319 130 (IAE) 55 - 55 23 78 5

Airbus A320 230 (IAE) 50 - 50 19 69 9
Boeing 737 (CFMI) 300 64 2 66 - 66 16
Boeing 737 (CFMI) 500 29 2 31 - 31 13
Boeing 737 (JT8D) 200 Adv. (Stage 3 Hushkits) - 2 2 - 2 27
Boeing 747 400 (P&W) 31 4 35 - 35 10
Boeing 757 200 (P&W) 97 - 97 - 97 13
Boeing 767 200 (P&W) - 7 7 - 7 22
Boeing 767 200ERM (P&W) - 6 6 - 6 23
Boeing 767 300ER (P&W) 31 5 36 - 36 10
Boeing 777 200 (P&W) 19 - 19 - 19 8
Boeing 777 200ER (P&W) 33 - 33 - 33 6
409 28 437 42 479 11
As of Aug. 11, 2005.
Source: Airclaims CASE database.

Exhibit 17: United Airlines Fleet at Bankruptcy Filing (Dec. 9, 2002)

Variant In Service Stored Current Total On Order Grand Total

Airbus A319 130 (IAE) 55 - 55 23 78

Airbus A320 230 (IAE) 98 - 98 19 117
Boeing (McDonnell-Douglas) DC-10 30 - 1 1 - 1
Boeing (McDonnell-Douglas) DC-10 30F (M) - 1 1 - 1
Boeing 727 200 Adv. (Stage 3 Hushkits) - 50 50 - 50
Boeing 737 (CFMI) 300 101 - 101 - 101
Boeing 737 (CFMI) 500 57 - 57 - 57
Boeing 737 (JT8D) 200 Adv. (Stage 3 Hushkits) - 21 21 - 21
Boeing 747 400 (P&W) 34 5 39 - 39
Boeing 757 200 (P&W) 97 - 97 - 97
Boeing 767 200 (P&W) 10 - 10 - 10
Boeing 767 200ERM (P&W) 8 - 8 - 8
Boeing 767 300ER (P&W) 37 - 37 - 37
Boeing 777 200 (P&W) 22 - 22 - 22
Boeing 777 200ER (P&W) 38 - 38 1 39
557 78 635 43 678
Source: Airclaims CASE database.

A few observations on fleet changes between Exhibits 16 and 17:

ƒ Forty-seven of the A320s moved out of United’s mainline fleet went to Ted, the
airline’s low-cost subsidiary.
ƒ Two aircraft types were eliminated en masse, but these (50 727-200s and 19 737-
200s) were already in storage at Chapter 11 filing and had served an average of
24 years.
ƒ The largest reductions out of United’s active fleet were 35 737-300s and 26 737-
500s. These did not have an adverse effect on values or lease rates because of
strong worldwide demand for narrowbodies and the gradual pace of the
restructuring process.

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ƒ Out of the JETS deals (JETS 1994-A, JETS 1995-A and JETS 1995-B), United
generally retained long-range widebodies that fit its new emphasis on
international flights, while all the narrowbodies were rejected and many
subsequently sold.
ƒ In the other EETC transactions, debt holders renegotiated lease rates to keep
planes with United, with some exceptions. Five 777-200ERs out of three deals
(UAL 2000-1, UAL 2000-2 and UAL 2001-1) and an A320 were taken out of the
United fleet and put on operating lease.

Exhibit 18: United Airlines Regional Service Providers

United’s feeder service is
provided by six independent
Trans States
Airlines
regional airlines operating
Air Wisconsin
5% 23% 365 aircraft under the United
Express livery. SkyWest
Chautauqua
Airlines
operates 39% of the regional
7% fleet or 141 CRJs and Embraer
turboprops. Air Wisconsin is
SkyWest GoJet the second-largest regional
Airlines 1%
39%
Shuttle America Great Lakes but is in process of
5% Airlines
Mesa Airlines
9% transitioning its aircraft out of
11%
United to serve a merged
US Airways–America West
Source: Airclaims CASE database.
entity.

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US Airways

Despite a net loss of $62 million, US Airways’ Q2 2005 results showed significant
progress made on the cost side as CASM decreased 5.3% amid high fuel prices.

US Airways’ fleet planning has been a function of an agreement with GE, its largest
creditor. On the fleet side, GE agreed to the early return of 10 leased A319s and 15
737s, while leasing 31 RJs to the airline. Not all of these aircraft have been returned
yet. Otherwise, US Airways’ fleet has remained intact.

Exhibit 19: US Airways Fleet

Variant In Service Stored Current Total On Order Grand Total LoI Option Average Age

Airbus A319 110 (CFM) 60 1 61 - 61 - - 5

Airbus A320 210 (CFM) 24 - 24 6 30 - - 5
Airbus A321 210 (CFM) 28 - 28 13 41 - - 3
Airbus A330 220 (P&W) - - - 10 10 - -
Airbus A330 320 (P&W) 9 - 9 - 9 1 - 4
Airbus A350 800 (GE) - - - - 0 20 -
Boeing 737 (CFMI) 300 62 6 68 - 68 - - 18
Boeing 737 (CFMI) 400 43 2 45 - 45 - - 15
Boeing 757 200 (RR) 31 - 31 - 31 - - 14
Boeing 767 200ER (GE) 10 - 10 - 10 - - 16
Bombardier (Canadair) CRJ Regional Jet 200LR - - - - 0 45 50
Bombardier (Canadair) CRJ700 Regional Jet 701ER - - - 23 23 45 50
Embraer 170 LR - - - - 0 - 45
Embraer ERJ-145 LR - - - - 0 - 140
Fokker 100 - 3 3 - 3 - - 13
267 12 279 52 331 111 285 11
As of Aug. 11, 2005.
Source: Airclaims CASE database.

Exhibit 20: US Airways Regional Service Providers

US Airways’ feeder
service is provided
Chautauqua by eight companies
Trans States Airlines
Airlines Air Midwest that fly 303 aircraft.
7% 11%
PSA Airlines 6%
16% Three are wholly
Colgan Air owned subsidiaries
9%
(MidAtlantic, Pied-
mont and PSA).
Together, these
subsidiaries fly 48%
Piedmont of the regional
Airlines MidAtlantic Mesa Airlines
23% Airways 20% aircraft.
8%

Source: Airclaims CASE database.

14
North American Fleet Handbook
September 7, 2005 STRUCTURED PRODUCTS RESEARCH

Air Canada

ACE Aviation June quarter net income totaled $138 million as revenue gained 11%,
while per seat cost remained flat in a challenging environment.

In Q2, Air Canada ordered 32 777 and 787 aircraft, then canceled the order after
failing to reach a cost-cutting agreement with its pilots’ union.

Exhibit 21: Air Canada Fleet

Variant In Service Stored Current Total On Order Grand Total Optionage Age

Airbus A319 110 (CFM) 48 - 48 - 48 - 6

Airbus A320 210 (CFM) 48 - 48 - 48 - 12
Airbus A321 210 (CFM) 10 - 10 - 10 - 3
Airbus A330 340 (RR) 8 - 8 - 8 - 4
Airbus A340 310 (CFM) 10 - 10 - 10 - 8
Airbus A340 540 (RR) 2 - 2 - 2 - 2
Airbus A340 640 (RR) - - - 3 3 -
Boeing (McDonnell-Douglas) DC-9 32 (Stage 3 Hushkits) - 12 12 - 12 - 34
Boeing (McDonnell-Douglas) MD-11 Freighter (M) (GE) 1 - 1 - 1 - 14
Boeing (McDonnell-Douglas) MD-11 Freighter (M) (P&W) 2 - 2 - 2 - 12
Boeing 737 (JT8D) 200 Adv. (Stage 3 Hushkits) - 2 2 - 2 - 23
Boeing 747 200B Combi (P&W) - 3 3 - 3 - 28
Boeing 767 200 (P&W) 3 6 9 - 9 - 22
Boeing 767 200EM (P&W) 3 2 5 - 5 - 21
Boeing 767 200ER (P&W) 7 - 7 - 7 - 16
Boeing 767 300ER (GE) 22 - 22 - 22 - 12
Boeing 767 300ER (P&W) 10 - 10 - 10 - 11
Bombardier (Canadair) CRJ 100ER 22 - 22 - 22 - 9
Bombardier (Canadair) CRJ 200ER - - - - 0 15
Bombardier (Canadair) CRJ700 705LR - - - - 0 45
Embraer 175 LR 3 - 3 12 15 - 0
Embraer 190 LR - - - 45 45 -
199 25 224 60 284 60 11
As of Aug. 11, 2005.
Source: Airclaims CASE database.

15
 North American Fleet Handbook
September 7, 2005 STRUCTURED PRODUCTS RESEARCH

America West

America West generated $13.9 million in net income on 2.7% higher capacity and a four-point
increase in load factor, but overall cost was 20% higher. Three new additions were made to the fleet
during Q2, all five-year operating leases on Airbus narrowbodies. The airline also monetized an
A320 and two engines through sale-leaseback transactions. The last 737-200 was phased out of
operation in Q1.

Exhibit 22: America West Fleet

Variant In Service Stored Current Total On Order Grand Total Option Average Age

Airbus A318 120 (P&W) - - - 15 15 16

Airbus A319 130 (IAE) 34 - 34 8 42 - 4
Airbus A320 230 (IAE) 59 - 59 10 69 - 8
Boeing 737 (CFMI) 300 37 - 37 - 37 - 17
Boeing 757 200 (RR) 13 - 13 - 13 - 18
143 0 143 33 176 16 10
As of Aug. 11, 2005.
Source: Airclaims CASE database.

Independence Air

Independence Air reported a $98.5 million loss for Q2 2005 and ended with $19.4 million in cash.
With regard to fleet planning, Independence agreed to the early termination on 24 leased CRJs from
GE with the potential for the withdrawal of an additional eight CRJs by GE if certain financial
milestones are not met. Further deliveries of A319s have been pushed back with new dates yet to
be determined.

Exhibit 23: Independence Air Fleet

Variant In Service Stored Current Total On Order rand Total Option Average Age

Bombardier (Canadair) CRJ Regional Jet 200ER 72 2 74 - 74 - 4

Airbus A319 130 (IAE) 12 - 12 16 28 49 0
BAE SYSTEMS (Jetstream) Jetstream 41 - 30 30 - 30 - 10
Fairchild/Dornier 328JET - 3 3 - 3 - 3
84 35 119 16 135 49 5
As of Aug. 11, 2005.
Source: Airclaims CASE database.

Southwest Airlines

Southwest continues to be profitable, reporting net income of $159 million in Q2 2005. Fleet
expansion continues at an aggressive pace, with the 25 737-700 deliveries through August 2005 to be
followed by nine more during the rest of the year. In 2006, an additional 34 737s are scheduled for
delivery and 25 in 2007. The only retirements in 2005 were the last five 737-200s that were phased out
of service earlier in the year.

Exhibit 24: Southwest Airlines Fleet

Variant In Service Stored Current Total On Order Grand Total Option Average Age

Boeing 737 (CFMI) 300 194 - 194 - 194 - 14

Boeing 737 (CFMI) 500 25 - 25 - 25 - 14
Boeing 737 (NG) 700 Winglets 217 1 218 74 292 34 3
436 1 437 74 511 34 8
As of Aug. 11, 2005.
Source: Airclaims CASE database.

16
North American Fleet Handbook
September 7, 2005 STRUCTURED PRODUCTS RESEARCH

DISCLOSURE APPENDIX
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SECURITIES: NOT FDIC-INSURED ● NOT BANK-GUARANTEED ● MAY LOSE VALUE

17
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Structured Products Research (704) 374-4784
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