Air Cargo Barriers of the 21 st Century – as viewed from Russia

1. Air Cargo Barriers of the 21st Century – as viewed from Russia Alexey A. Isaikin President Volga-Dnepr Group

2. 1995 2000 2005 From introduction of a new product to the stage of the recognition of the need to deliberate consumption. AN -124 Global customer base nowadays Reduction in the US-EU cargo traffic US-EU cargo traffic dominance High scale air and relief operation within Afghanistan and Iraq China-US and China-EU cargo traffic increase High scale humanitarian operations under the UN missions

3. AN-124-100 AN-124 From occasional usage to long-term partnerships and initiatives: AN-124 market conversion Barriers of the 90-s : • Lack of confidence in AC of Soviet manufacture (products unknown) • Shortage of Western expertise and professional managers • Crisis of the Soviet aviation industry • Lack of understanding of the outsize and heavy market capacity Average rate АN-124-100 market growth ~ 10-12% per annum while that of the Global Market ~ 6,3% Long-term contract 30%per year 3,3% - global growth 11%per year 7,7% - global growth 27%per year 9,6% - global growth Understanding of capabilities and testing the new product (ad-hoc charter operations, one-off programs) Planned consumption (long-term programs: BP, Lockheed Martinetc.)

4. An-225 L-100 An-124 An-22 IL-76 SB An-12 Market projection: transfer from long-term project-specific partnerships to the orders of specific aircraft and their use... Long-term contracts growth from 20% to 50% Civil version of C-17 (BC-17X) ? Beluga&LCF Introduction of the existing products – Russian ramp-loaded aircraft enter the market Small aircraft (up to 30 tons) family АN-124 & IL-76 families Creation of new products (by joint efforts and meeting Customers’ requests)

5. . . . 2030 Oil and Gas Heavy Industry Light Industry Airspace Aid and Relief • Reduction of the Life circle and accelerated entrance of the products to the market • Increased globalization of the world economy. • Implementation of major projects in the Third World countries, rapid industrial development of the Pacific Market • Global integration and cooperation in airspace equipment manufacture • Development of Space Projects, realization of major military equipment export contracts • Upturn of humanitarian operations,emergency response • Antiterrorist operations initiated by UNand other international organizations

6. Anticipate Customers’ expectations (jointly address the industry for new Aircraft and technologies) Year 2030 Year 2005 Global air cargo market $150 billion Global air cargo market $59 billion Transportation by main deck freighters 58,1billion/ 98,5% Transportation by ramp-loaded freighters 0,9mln / 1,5% Transportation by ramp-loaded freighters 7,2billion / 7% Ramp-loaded freighter transportation market expands with a rate exceeding the growth of the main deck freighter cargo operations market. - Creation and appearance of new AC and transportation technologies in accordance with individual requirements of the customers - Aid and military cargo transportation, - Wider use of ramp-loaded AC for the needs of industrial equipment logistics chains.

7. Thank you for your attention! Your questions are welcomed!