Aviation Brochure_Feb08(2)

Global Aviation & Transport Services

Audit.Tax.Consulting.Financial Advisory.

Global solutions forthe aviation industry.

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Contents

Global aviation and transportation 1

Services tailored to individual needs 2

Deloitte clients in the aviation industry 6

February 2008

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Global solutions for the aviation industry

An industry in transformationThe aviation industry is currently facingchallenges unlike any other industry. Inparticular, the current economic climate,legislative changes, fuel prices and financialchaos of some airlines, and increasinglycompetitive environment are heighteningthe need for a radical restructuring of theair transport industry.

The general consensus is that industryconsolidation will be inevitable. Traditionalcarriers will transform themselves from beingnational companies with internationaloperators to becoming truly globally focusedenterprises. Some experts believe, forexample, that in Europe there may be onlyfour to five major players in three to fiveyears’ time.

These trends are also being fuelled byregulatory changes, most significantly, the ambition to develop a liberalizingagreement between the European Unionand the United States, known as ‘OpenSkies’. The negotiations between the U.S.Department of Transportation and theEuropean Commission, which started inDecember 2003, came into effect in 2008and further legislative changes, not least areduction in the punitive restrictions offoreign ownership of U.S. and Europeanairlines are expected to follow.

The onset of ‘Open Skies’ is likely to lead toa fight for control of prime landing slots atthe key hub airports in both Europe and theU.S. These slots can be incredibly valuable (a pair of slots for London Heathrow wererecently sold for £30 million), and are likelyto be the key driver of consolidation in themarket as the major players seek to gaincontrol over the most lucrative routes..

These complex challenges and changes to the industry require the very best ofprofessional services providers. At Deloitte,we constantly challenge ourselves toimprove services to our clients in theaviation and transportation industries.

Meeting the needs of a global industryThe global reach of Deloitte enables us toquickly put professionals on the groundanywhere in the world to address thebusiness challenges of our clients. Our teamsare flexible and draw upon the expertise of aviation specialists. We integrate theappropriate blend of sector specificknowledge with functional expertise fromacross our international practice to provideseamless solutions to our clients. The needsof aviation and related businesses can becomplicated by the existence of corporatestructures in different domiciles.

Care needs to be exercised in assessing the implications of local laws, taxation,licensing, and regulatory issues. Our localoffices play a vital role in these matters.

In addition, we work closely with manyleading aviation consultants – includinglawyers, engineers, and aircraft appraisers– and obtain their services when needed.

Global aviationand transportation

“Our teams are flexible anddraw upon the expertiseof aviation specialists. We integrate theappropriate blend ofsector specific knowledgewith functional expertisefrom across ourinternational practice toprovide seamlesssolutions to our clients.”

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Assurance & advisoryThe success of Deloitte in providingassurance and advisory services ismaintained through the continuousdevelopment of our professionals. Ourapproach reflects the increasingly stringentdemands for accuracy and accountability.Deloitte’s assurance and advisorypractitioners seek to add value byanticipating problems and providingconstructive and realistic solutions.

Our audit involves an in-depthunderstanding of our client’s business,internal controls, and risk spectrum in orderto develop an approach that is tailored tothe client’s needs. Before making auditplanning decisions and to help in assessingrisk, we conduct diagnostics and ananalytical review. We have more than 100diagnostic tools available.

This approach helps to identify undetectedissues and increases the insight gainedduring the audit process.

Services tailored to We deliver a full range of audit and relatedservices to:

• Improve administrative and operatingcontrols;

• Provide seamless business processes,including cash flow analysis, businessplans, and budgeting;

• Advise management of evolving aviation-related accounting principles; and

• Make recommendations on revenuerecognition, contract allowances, casualtyand claims accruals, and the structure andaccounting for financing transactions.

TaxTax affects every transaction a businessundertakes and it never stands still. Our tax experts keep you up to speed onthe developments that affect your business,help you interpret their significance andintegrate tax considerations into your globalstrategy.

The Tax Service Lines include:

• Comprehensive Tax Solutions;

• Corporate Tax;

• Leasing Structures;

• European Union;

• Global Business Guides;

• Indirect Tax;

• International Assignment Services;

• International Tax;

• Mergers & Acquisitions;

• Tax Technology Solutions; and

• Transfer Pricing.

Corporate FinanceThe aviation sector faces major changes inownership and structure due to economicand regulatory influences. Our corporatefinance practice offers comprehensive,independent, and expert advice to theparties involved in such transactions, bothaviation businesses and governments andpublic sector bodies. We help clientsthrough the transaction process from theplanning stage through negotiations anddetailed implementation with advice,assistance, and project management. Our focus is on lowering the cost ofborrowings and improving shareholdervalue.

We have extensive experience in thefollowing areas:

• Independent business valuations;

• Capital raising (debt and equity);

• Stock Exchange transactions in the UnitedStates and Europe;

• Tax, accounting, and corporatestructuring issues;

• Privatization, disposals, and joint ventures;

• Investigations for investors and regulatorybodies; and

• Valuations of intangibles includinglanding slots.

Our professionals come from a multitude ofbackgrounds and relevant experienceincluding law, accounting, investmentbanking, venture capital, taxation, andgovernment.

We provide auditing services forleading players within the globalaviation industry

Air France KLMAlitaliaBoeingChina AirlinesIATAIberiaQantasSASUnited Airlines


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individual needsForensic servicesDeloitte’s forensic services practice is one ofthe most comprehensive of its kind in theworld. With authoritative and experiencedpractitioners based in North America, Asia,and Europe, we can instantly respond toclients on a truly global basis. We are at thecutting edge of forensic technology andprovide clients with unique tools unmatchedby our competition.

When political and other tensions heighten,our global business intelligence experts offeradvice on managing political and commercialrisks. Specifically, our country and politicalrisk advisory services can support airlines andairports in reviewing and advising on securityrisk management issues with special expertiseon terrorism risks.

In the unfortunate case where a client doessuffer a loss, our business insurance claimsteam will work hard to help that businessget back on its feet in the shortest possibletime and secure recovery in respect of itsinsured losses.

“Our professionals come from a multitude ofbackgrounds and relevant experience including law,accounting, investment banking, venture capital,taxation, and government.”

We offer discreet and skilled professionalservice and a hands-on approach to helpclients develop swift and innovativeresponses to a broad array of operational,financial, and strategic issues. We aim toreorganize such businesses withoutincurring adverse publicity. Deloitte hashandled some of the most significant casesin the aviation industry, including LakerAirways and Debonair Airways.

Reorganisation servicesOur reorganization professionals are adeptat handling difficult situations created by a lack of financial resources, a depressedoperating environment, organizationalturmoil, or substantial outside pressure. In many instances we are introduced tocompanies on the recommendation ofmajor creditors, banks, and lessors. Our experience means that we not onlyunderstand the financially and strategicallyimportant issues, we also understand thecritical issues concerning lessors, bankers,investors, and creditors.


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Transaction servicesDeloitte’s global transaction services practiceis recognized as a worldwide leader inproviding high-quality, comprehensive, andstrategically focused tax, accounting, andadvisory services to buyers or sellers inbusiness combinations.

Our multidisciplinary approach teamsmergers and acquisitions professionals withtechnical, industry, and geographic expertsto provide fact-based answers andindependent advice geared to maximizingthe value of a transaction.

Enterprise risk servicesAviation and related industries aredependent for survival on rapid and secureaccess to timely and accurate information.Computer systems are vulnerable to a widevariety of threats, ranging from technicalbreakdown and fraudulent tickets, tomalicious action by disgruntled employeesand terrorist attacks on installations.Management needs to have confidence inthe security of their information systems,from the boardroom to computer networks.

Our ERS practice provides a broad array ofservices that allow clients to better measureand manage risk and to enhance thereliability of systems and business processesthroughout the enterprise. We have advisedon counter-measures that are comprehensiveand appropriate to the risks, and above all,cost effective for clients to implement andmaintain.

Our services include:

• Corporate governance;

• Risk identification, measurement, andmonitoring;

• Secure e-business;

• Internal audit;

• Computer and network security reviews;and

• Development of expert systems.

Human CapitalMore than almost any other business,success in the aviation sector relies onpeople. Customers take for granted that the tangible aspects of air transportationwill be available, but expect that standardsof service will be consistently high.

We have assisted clients in ensuring theymeet customer expectations through thereview of:

• Organizational structures best able tomeet the demands of the company itselfas well as its customers;

• Appropriate reward levels and structuresfor the entire workforce, particular groupsand individual employees;

• Customer service strategies andimplementations;

• Recruitment policies and executive search;and

• Training policies and implementation.

Working with our actuarial practice, we cansupply large comprehensive HR solutions toour airline clients, including expatriate tax,structure reward systems, pensions andbenefit plans.

“Deloitte provides audit, tax, consulting, and financialadvisory services to public and private clients spanningmultiple industries. With a globally connected network of member firms in 140 countries, Deloitte brings world-class capabilities and deep local expertise to help clientssucceed wherever they operate. Deloitte’s 150,000professionals are committed to becoming the standard of excellence.

Deloitte’s professionals are unified by a collaborative culture that fosters integrity, outstanding value to marketsand clients, commitment to each other, and strength fromcultural diversity. They enjoy an environment of continuouslearning, challenging experiences, and enriching careeropportunities. Deloitte's professionals are dedicated tostrengthening corporate responsibility, building public trust, and making a positive impact in their communities.”


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AirlinesAegean Airlines*Aeroflot*Air Arabia*Air CanadaAir France-KLM*Air New Zealand*Air NostrumAir TransatAir WisconsinAlitalia*All Nippon Airways (ANA)Alma de Mexico*American AirlinesArkia Israel Airlines*Austrian AirlinesBinter Canarias*BMI*British AirwaysBrussels AirlinesCargoluxChina Airlines*China Eastern AirlinesContinental Airlines

Croatia Airlines*CSA Czech Airlines*EasyJetEl Al Israel Airlines*Far Eastern Air Transport*Gestair*Iberia Airlines*Jat Airways*Jet Airways*JetBlue AirwaysJetStar Asia*Kenya Airways*Latcharter*LufthansaLuxair*Malev Hungarian AirlinesMeridianaMesa Air Group*Mesaba Airlines*Middle East Airlines*Midwest Airlines*Monarch Airlines*MyTravel Airlines*Northwest Airlines

Olympic AirlinesOman Air*QantasRepublic Airways*Royal Air Maroc*Royal Brunei Airlines*Royal Jordanian AirlinesSAS*Saudi Arabian Airlines*Shandong Airlines*Skybus Airlines*South African Airways*Southwest AirlinesSpanair*TAP Air Portugal*Trans Mediterranean Airways*TransAsia Airways*Turkish Airlines*United Airlines*US AirwaysVietnam Airlines*Virgin Atlantic

Deloitte clientsin the aviationindustry

* Audit clients


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Airports – Europe AENA (Aeropuertos Españoles y Navegación Aérea)*Amsterdam SchipholBAABrusselsBudapest*Dresden*Duesseldorf*Hannover*Liverpool*Maastricht AachenMaltaMunich* Nuernberg*PragueRome*Sofia*Turin*Vienna

Airports – North AmericaChicago MidwayChicago O’HareGreenville Spartanburg*HalifaxLos Angeles World AirportsMassportMetropolitan Nashville*Ottawa*Port Authority NY & NJ (EWR, JFK LGA)*Tampa, Florida*Toronto*

Airports – OtherAuckland* Chubu*DelhiKansai (Osaka)*Melbourne*Seoul IncheonShanghai PudongSichuanSydney*

Related Industry Sectors Airports Council International (ACI)* Amadeus* BBA Aviation*Boeing* Civil Aviation Authority (CAA)*Embraer* Eurocontrol European Aviation GroupEuropean Aviation Safety Agency (EASA)European Commission GE Capital AviationGroundstar* HIS Co Ltd*IATA* JTB Corp*LSG Sky Chefs MenziesNational Air Traffic System, UK* NAV Canada NavtechSAS Ground ServicesSITA* TAG Aviation*

*Audit clients


Paul O’NeillDirector, Global Aviation & Transport ServicesDeloitte Touche TohmatsuStonecutter Court1 Stonecutter StreetLondon EC4A 4TRUnited Kingdom

Tel: +44 (0) 20 7303 7110Email: [email protected]

Graham PickettAudit PartnerDeloitte & Touche LLPGlobal House High StreetCrawleyRH10 1DLUnited Kingdom

Tel: +44 (0) 1293 761232Email: [email protected]

Terry KurtenbachTax PartnerDeloitte & Touche LLP555 East Wells StreetSuite 1400MilwaukeeWisconsin 53202-3824USA

Tel: +1 414 347 6160Email: [email protected]

ContactsFor further information, please visit our website on www.deloitte.com/ats or contact one of our ATS leaders below:


© Deloitte Touche Tohmatsu 2008. All rights reserved.

Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multipleindustries. With a globally connected network of member firms in 140 countries, Deloitte brings world-class capabilitiesand deep local expertise to help clients succeed wherever they operate. Deloitte's 150,000 professionals are committed tobecoming the standard of excellence.

Deloitte’s professionals are unified by a collaborative culture that fosters integrity, outstanding value to markets andclients, commitment to each other, and strength from cultural diversity. They enjoy an environment of continuouslearning, challenging experiences, and enriching career opportunities. Deloitte's professionals are dedicated tostrengthening corporate responsibility, building public trust, and making a positive impact in their communities.

Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member firms, each ofwhich is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of thelegal structure of Deloitte Touche Tohmatsu and its member firms.

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Aviation Brochure_Feb08(2)