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Aircraft Asset Assessment

August 3, 2009

Market Presence. In terms of historical values of the MD11, initially the outlook appeared promising, resulting more from the overall perceptions regarding widebodies rather than a judgment concerning the actual type. However, nearly 90 percent of the fleet of nearly 200 MD11s, are now in a freighter role. The switch to the freighter role is more a consequence of on-going problems as a passenger aircraft than exceptional demand as a freighter though this dynamic has seemingly changed during the course of this decade. Values of passenger aircraft had, for at least a decade experienced a significant decline due to the availability of more versatile products and family groupings before experiencing a revival in the period 2005-2007 as a result of demand from the cargo sector. As the market for freighters has evaporated and operators seek more efficient twins, the values of the few remaining MD11s in passenger service have withered.

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