Full Adjusted Appraisal On One Boeing 737-528 Aircraft, Serial Number 27426, Registration Number FAP 356Conducted By: ACI Aviation Consulting Date: July 18, 2007 Table of Contents REPORT PURPOSE ............................................................................................................................ 4 EXECUTIVE SUMMARY .................................................................................................................... 5 APPRAISAL ....................................................................................................................................... 8 Airline Industry Overview and Market Analysis............................................................ 9 The Post 9-11 Market...................................................................................................... 9 The Future..................................................................................................................... 13 The Manufacturer: Boeing........................................................................................... 14 The Boeing 737 Aircraft ............................................................................................... 15 The Boeing 737-500 Current Market............................................................................ 16 Aircraft Half-time Values ............................................................................................. 19 Value Adjustments........................................................................................................ 20 Value Adjustments From Half-time.............................................................................. 21 AIRCRAFT TECHNICAL SPECIFICATIONS ....................................................................................... 22 General.......................................................................................................................... 22 Operator Information .................................................................................................... 23 Aircraft Delivery........................................................................................................... 23 Aircraft Maintenance Program Summary..................................................................... 24 COMPONENT STATUS..................................................................................................................... 25 Engines.......................................................................................................................... 25 Landing Gear ................................................................................................................ 25 Auxiliary Power Unit.................................................................................................... 26 History of Major Airframe Damage ............................................................................. 26 Interior Configuration Data........................................................................................... 26 Additional ..................................................................................................................... 27 Deferred Maintenance Items......................................................................................... 27 Airworthiness Directives .............................................................................................. 28 Airframe.................................................................................................................... 28 Engine ....................................................................................................................... 28 Avionics Inventory........................................................................................................ 29 AIRCRAFT INSPECTION REPORT .................................................................................................... 32 General Aircraft Comments.......................................................................................... 32 Fuselage ........................................................................................................................ 32 Wings ............................................................................................................................ 32 Landing Gear ................................................................................................................ 33 ProInversion 2 of 43 Boeing 737-528 S/N 27426 Engines.......................................................................................................................... 34 Cockpit.......................................................................................................................... 35 Passenger Compartment................................................................................................ 37 Galleys .......................................................................................................................... 38 Lavatories...................................................................................................................... 39 Cargo/Baggage Compartments ..................................................................................... 40 Accessory and Equipment Bays.................................................................................... 41 STATEMENT OF INDEPENDENCE .................................................................................................... 42 METHODOLOGY ............................................................................................................................. 42 APPENDIX ...................................................................................................................................... 43 ProInversion 3 of 43 Boeing 737-528 S/N 27426 REPORT PURPOSE The purpose of this report is to set forth ACI Aviation Consulting’s (ACI) opinion of the current market adjusted value on one (1) Boeing 737528 aircraft, serial number 27426, registration number FAP 536 (the “Aircraft”). The Aircraft, serial number 27426, is currently being operated by the Peruvian Government, which is headquartered in Lima, Peru. The Aircraft is used for Presidential transport. This aircraft appraisal report has been conducted using industry recognized appraisal procedures and is primarily based upon aircraft data as supplied by the current operator (the Peruvian Government), market research conducted by ACI, an aircraft physical condition inspection, and a maintenance records audit. ACI conducted an aircraft physical inspection and records audit between July 8-10, 2007 at the Peruvian Air Force facility where the aircraft is maintained and parked. This report represents the opinion of ACI and is advisory only in nature. By accepting this report, the client agrees to hold ACI harmless for actions taken or not taken, based upon the conclusions and findings expressed in this report. ProInversion 4 of 43 Boeing 737-528 S/N 27426 The presidential suite has four (4) single executive seats around a folding table and a three (3) place divan. The Aircraft is currently operated by the Peruvian Air Force as an “Air Force One” for the official transportation of the President. as presented and obtained. ACI is not certifying the accuracy of the presented data. 2007 and the APU and engines were run on July 10. To conduct this assignment. 2007. Peru. Overall the aircraft was found to be in excellent physical condition. contain no material misstatements or gross errors. is currently being operated by the Peruvian Government. In conducting its assignments. ACI has relied upon specific data requested and obtained from the operator. ACI is conducting an audit of the data to determine proper content and compliance with standard industry practice. The Aircraft is used for Presidential transport. There are twelve (12) first class seats aft of the presidential suite in mid-cabin and fortytwo (42) economy class seats in the aft cabin. this assignment is not intended to substantiate airworthiness or compliance with mandated regulations. Specifics concerning the physical inspection are fully covered within the Aircraft Inspection section of this report. which is headquartered in Lima. This aircraft was noted to have a total of one (1) deferred maintenance item. Further details on this item can be found within the The aircraft is currently configured to accommodate sixty one (61) passengers in three classes. These techniques require ACI to conduct an audit and obtain reasonable assurance that the documents. Peru at Air Force Group 8. The aircraft was inspected on July 9. serial number 27426 and registration number FAP 356 (the “Aircraft”). Further.EXECUTIVE SUMMARY Full Adjusted Appraisal On One (1) Boeing 737-528 Aircraft Serial Number 27426 and Registration Number FAP 356 At the request of ProInversion. physical condition inspection and maintenance records audit on one (1) Boeing 737-528 aircraft. ACI Aviation Consulting (ACI) has been retained to conduct a full aircraft appraisal. serial number 27426. The Aircraft was physically inspected while parked at its normal hanger location in Lima. Overall the maintenance records audit and physical condition inspection 5 of 43 Boeing 737-528 S/N 27426 ProInversion . ACI uses standard aviation auditing techniques that have been developed over the past two decades. The Aircraft. rather. As of July 8. Structural modifications are currently being developed to correct negative loading margins under emergency and flight gust loads by PATS.7 hours and 2. engine serial number 858238 had accumulated a total of 3. As of July 8 2007. The FAA form 8130. as well as all modifications performed on the aircraft are in English. including the airframe and engine logs.000 feet. maintenance and overhaul documents. and right main landing gear were overhauled by Goodrich Landing System Services in Florida on Boeing 737-528 S/N 27426 . The first life limited component. a recent Airworthiness Directive (AD) 2006-1518 and a service bulletin (SA25NE-28SB-007_B) require the system to be deactivated.7 hours and 2.062 cycles. as well as the headings in various status reports. 1995. the Compressor Rear Air Seal. ACI was told that the process to have one issued by the Peruvian DGAC has been started. the Compressor Rear Air Seal. The first life limited component. ACI did not review the modification package. The following are provided in no particular order. is due for replacement in 12.7 flight hours and 2. there were several discrepancies that were noted by ACI. left main landing gear. However. 2007. certifying the interior installation.062 cycles. The inspection.went well however. engine serial number 858237 had accumulated a total of 3.938 cycles since new.” An interior modification to its present VIP / head-of-state configuration ProInversion 6 of 43 was performed by Associated Air Center of Dallas. Only a complete review of all documentation could determine compliance.884. the records provided by Proinversion showed that the aircraft had accumulated 3. Some of the documentation is written in Spanish.938 cycles since new. is due for replacement in 12. there is no Certificate of Airworthiness issued to this aircraft because it is operated by the Peruvian Air Force. which increases the fuel capacity by 1.884. was reviewed by ACI. Although the aircraft has been modified with the installation of a PATS auxiliary fuel tank system. Both engines are original to the aircraft and have been on wing since delivery. As of July 8. however ACI believes the modification details (engineering data and material certifications) would be available at Associated Air Center.884. The Aircraft Flight Manual and the Flight Crew Operations Manual state that the aircraft is capable of a “Maximum Takeoff and Landing Altitude of 14. ACI considers this to be very low accumulated time and cycles for a twelve year old aircraft. The nose landing gear. 2007. Texas on November 28.938 cycles since new. Currently the auxiliary fuel tank is not operational. Currently.000 gallons per STC SA725NE. ACI believes a LLP trace could be conducted but this comprehensive records review was not within the scope of this assignment. Low market availability. a “C” check every 730 days. ProInversion 7 of 43 Boeing 737-528 S/N 27426 . VIP equipped aircraft is also very strong. The next “1A” Check is currently due now. All of the landing gear currently have 90% time remaining until overhaul. an “8A” check every 485 days. As previously stated. a “4A” Check every 240 days.July 21. 2006 based on calendar requirements. The airframe is currently being maintained on a Boeing approved Low Utilization Maintenance Program (LUMP) which requires the following inspections: an “1A” Check 60 days. a “2A” Check every 120 days. the next “C” check is due in 422 days. is $18. the landing gear were overhauled by Goodrich Landing Services on July 21. In conversations with the operator they indicate that the SI is being deferred to the next “C” check which is due in 422 days. 2016. The current market for large. the current market adjusted value of the subject aircraft. engines. the next “2A” Check is due in 61 days. however the life limited component (LLP) tracking is incomplete at present. favorable operating economics and increasing demand have placed a premium on this aircraft type. Accordingly.48mm. and landing gear accounted for a positive value adjustment of $1.33mm. The next overhaul will be required on July 21. The landing gear back to birth (BTB) traceability is currently incomplete. Specifics concerning the appraisal and current market information are contained in this appraisal. 2006 and certified with an FAA form 8130. serial number 27426. CPCP at 6 years and a Structural Inspection (SI) at 12 years. the next “4A” Check is due in 181 days. At present the 12 year Structural Inspection (SI) is due now. Complete information on the aircraft physical inspection and the maintenance records audit are covered within this report. the next “8A” Check is due in 183 days. The “C” Check. The current market for the Boeing 737-528 passenger aircraft is very good. APPRAISAL ProInversion 8 of 43 Boeing 737-528 S/N 27426 . airlines had placed large aircraft orders and were looking forward to continued profits.S. well underway by the second half of 2001. The major U. postderegulation.S. economic slump of 1990-1991. overall demand had contracted by as much as 20 to 30 percent. and a return to overall profitability. coupled with the invasion of Kuwait. The attacks were directly responsible for the temporary grounding of the entire U.S. and a focus on tightly controlling costs. Higher fuel costs. increasing passenger demand. turned into a much deeper downturn as a result of the terrorist attacks on 9/11/01. much of that revenue did not return. the airline industry experienced a period of strong growth. Demand for air travel declined in early 2001 and lower second quarter results from many ProInversion 9 of 43 Boeing 737-528 S/N 27426 .S. airlines suffered operating losses of approximately $7. The terrorist acts committed in the United States on September 11. but as corporations sought to control costs in the weakening economy. From 1990 through 1992. 2001. and a slowdown of the world economy in late 2000 through the middle of 2001 hit the airlines hard. by some estimates. From late 1994 until early 2000. up to and including 1989.Airline Industry Overview and Market Analysis Historical Perspective of the major U. The major U. airline industry with the consequent loss of revenue. record earnings. demand for the highly-profitable business travel decreased.S. In fact.2 billion due to flat passenger demand. particularly in the airline industry. Airlines immediately During the years. caused an industry-wide recession. airlines were further evidence of an industry in recession. Not only was leisure travel slowing. 2001 further weakened an already declining U. The U.S. These airlines experienced record operating income in 1988 and 1989. the major U. contentious labor negotiations. however the aviation industry had begun to see a cyclical downturn. In spite of a massive government bailout which allowed several airlines to survive in the months after the crisis. economy.S. followed by the reorganization of several airlines and consolidation within the industry. airlines enjoyed steady growth. The Post 9-11 Market What began as a normal cyclical downturn. the industry experienced a recovery as a result of a rebounding economy. Prior to September 11. in some cases by as much as 30 percent. and others put many aircraft onto an already glutted market. Boeing and Airbus did their best to manage their dramatically revised delivery schedules but were clearly impacted by the downturn. older 747s and B727s series. Those airlines are led by Southwest and.S.200 $ (2. Unable to predict when demand would return and. While the manufacturers remained marginally profitable.600) Southwest $ 241 $ 442 $ 313 Northwest $ (798) $ 248 $ (891) Continental $ (451) $ 38 $ (363) US Airways $ (1. as well as some increasingly desperate operating lessors. Midway. United. by the end of 2001 that total rose to 1. This situation caused a decline in the market value of almost all commercial aircraft.reacted by directly reducing capacity. Sabena. 1 Boeing. numerous airlines deferred or cancelled new aircraft orders. in an attempt to conserve capital.461* $ (611) Source: The Airlines (20070110) **Merged with America West 2005 Net Income $ (861) $ (3. Jet Information Services. major carrier net losses for those years: US Major Carrier Financials (In Millions of USD) 2002 2003 2004 Airlines Net Net Net Income Income Income American $ (3. parked older aircraft. The 737 “Classics”. Year End 2001 In addition to the excess capacity and fare wars. The following chart depicts the U. a 100% increase1. US Airways.272) $ (773) $ (5. along with other older technology jets such as the DC-9.884 units. This quick reduction in capacity caused an immediate imbalance between aircraft supply and demand. necessitating massive layoffs and substantial reductions in aircraft production rates. L1011. laid off employees. and Jet Blue.176) $ 548 $ (2. The bankruptcies at Swissair. airlines have faced skyrocketing fuel costs.646) $ 1.228) $ (761) Delta $ (1. the airlines continued to suffer substantial operating losses in the years 2002 to 2005. The wave of bankruptcies that followed 9-11 only made matters worse. Only the airlines with hedged fuel prices have been somewhat sheltered. The reduction in demand left both manufacturers in a precarious situation.511) $ (1. to a lesser degree: Alaska. were among the hardest hit in the initial months following 9/11. pushed hard to replace older aircraft in the world’s operational fleet with newer aircraft types now left without a home. The price of jet fuel has effectively doubled since 9-11.800) $ (1. in an attempt to meet the reduced passenger demand. As many experts believe the ProInversion 10 of 43 Boeing 737-528 S/N 27426 .600) $ (205) $ -(537)** * Includes special items from 2003 restructuring. Prior to 9-11 the total number of jet aircraft in storage was 912.800) $ (21. curtailed flying and reduced station activity.200) United $ 3. While both airlines appear ready to make a run at solid future profits. advanced aerodynamics and efficient flight planning have become essential to all airlines. As one could imagine. Global Business June 20. Traditionally. Thus far. given the disadvantage of higher operating costs as compared to airlines that operate in. It is ACI’s opinion that American or Continental will not hesitate to resort to bankruptcy should it be in their best interest to do so. Both carriers made significant inroads with sweeping cost reduction plans and fleet rationalization programs aimed at rightsizing their network systems. less economical aircraft over the long term. ACI does not see any reverse in this trend and believes it may accelerate given the current global political environment. Fuel burn rates. ACI anticipates additional negative pressure on older. or have been through. insurance and fuel. Passenger to freighter aircraft conversions are also driven by economics. For most airlines fuel is now at the top of the expense category. the price of fuel is of substantial concern for all airlines. the largest operational costs for an airline were (in no particular order): maintenance. crew. bankruptcy. engine/aircraft fuel burn rates. 2005. At best. the freighter fleet requirements will absorb only a small percentage of the excess passenger aircraft oversupply. it is not clear if they can make those profits on a consistent basis. Traditional economic factors leading to the retirement of some aircraft types included maintenance and new generation system improvements. Additional market consideration and discussion should also be directed towards the demand for freighter services. The first economic condition is the proposed acquisition price of the passenger aircraft which must be low enough to accommodate the additional Boeing 737-528 S/N 27426 Time. ProInversion 11 of 43 . According to both Boeing and Airbus.hedging strategy employed by these airlines will become less of a factor later this decade (2009) when their fuel hedges run out and oil remains above $50 per barrel. among new production aircraft to be paramount. This may be one solution to the current excess overcapacity but by no means an answer. more efficient engines and airfoils. Ever increasing attention is now paid to fuel conservation.2 ACI views aircraft economics. Now fuel burn rates are at the top of the list and are becoming primary considerations in the design and development of newer. American Airlines and Continental Airlines have both been able 2 to hold off bankruptcy. this demand has been historically met by (1) the manufacture of freighter aircraft by the prime manufacturers and (2) the freighter conversions of existing passenger aircraft. Traditionally. and in particular. the supply of freighter aircraft will be met primarily by the conversion of existing passenger aircraft. 6 and 7. Additionally. 4 Source: FAA 2005-2006 Forecast. United Airlines and US Airways. maximum take-off weight. the demand for transportation services experienced a strong recovery although profits for all of the airlines were not achieved. During 2004. commercial RPMs exceeded pre 9-11 levels.capital investment required to modify the aircraft. they have tended to grow quickly over brief periods and not steadily over sustained periods. in 2004 air carriers achieved an all time high load factor of 75. airline economics and government control. as these markets develop. Eastern Europe. ACI suspects that the periods of growth are limited by infrastructure.S. commercial air carrier system revenue passenger miles (RPMs) and passenger enplanements grew by 10. Historically. Several U. airlines have recently exited bankruptcy and the demand for transportation services has significantly recovered.7 percent. airlines remained strong.2 percent. emerging markets in South America. and installed engine type.S.S. as aircraft values decline and stay low. On the bright side of the supply and demand equation. This situation is not likely to slow down anytime soon. aviation industry.4 According to the FAA. Accordingly. Since 2004 the airline industry has significantly rebounded. Additional considerations regarding passenger to freighter conversions include. American Trans Air. commercial air carrier system capacity (Domestic and International) grew by 7 percent in 2004 and commercial aircraft flights experienced a net gain of 3. the former Soviet Union and Asia (in particular India and China) have been quick to absorb newer aircraft variants and some older aircraft types as they become available. the result of long-delayed de-regulation. five U. 3 In that same year. 5 ACI believes that this milestone was the turning point for the U. capital.2 percent respectively. Hawaiian. System Source: FAA 2005-2006 forecast.S. This alone will not be a solution to excess passenger aircraft capacity but in ACI’s opinion it must be a consideration in any value analysis.S. U. By the end of 2004. have the potential to become large consumers of new and used aircraft alike. there may be some additional aircraft absorption by the freighter industry. what is not clear is the ability of these markets to continue their current rate of growth. passenger demand on U. In 2004 the U. 3 ProInversion 12 of 43 Boeing 737-528 S/N 27426 . These markets. main line carriers were operating under Chapter 11 bankruptcy protection and several others appeared to be on the brink. but are not limited to: aircraft age.S. However. Airlines included Aloha Airlines. In 2005. 5 Source: FAA 2005-2006 Forecast. As a comparison. airline industry will record an aggregate $4.6 2005 saw continued growth within the regional and Low Cost Carriers’ (LCCs) sector with the domestic market share of these operators growing another 2. The LCC market presence has forced the legacy carriers to cut costs and prices in markets served by both.200) $ 52 $ (2. airlines in 2005 because of the high price of oil and falling yields.200) Northwest $ (1.9 percent in passenger travel and a 6. profitability eluded most U. According to the FAA.2 percent to 45 percent of the total U. 2006 was overall a much better year for the US majors.RPMs and enplanements grew at 8 and 7. these carriers represented only a 30 percent market share in 2000. These factors have been tough for the legacy carriers to navigate in an extremely competitive market.7 Over the long run. the biggest hurdle for commercial aviation may be the price of oil. In spite of all this good news. Boeing expects an annual average increase of 4.1 percent respectively.000) $ (6.S. The exceptions were Delta and United.1 percent 6 Source: FAA 2006-2017 Forecast 7 Speednews January 2007.300 $ 119 $ 190* $ (61) $ 25** US Airways $ 64 $ 305 $ (78) $ 12 $ 303 Source: The Airlines (20070703) NOTE: All Net Income values are in millions of US dollars and include * After-tax net income ** Emergence from reorganization for 11 months ending Dec.S. The following chart represents the U. 31.100) $ (285) $ (1.S.100) $ (2.1 percent. market share. Majors’ financial performance in 2006: US Major Carrier Financials 2006 Net Income (In Millions of USD) Airlines 2006 2006 2006 3rd 2006 2006 1st Qtr 2nd Qtr Qtr 4th Qtr Year End American $ (92) $ 291 $ 15 $ 17 $ 231 Continental $ (66) $ 198 $ 237 $ (26) $ 343 Delta $ (2. ProInversion 13 of 43 Boeing 737-528 S/N 27426 . the FAA expects significant market growth in aviation with only small gains in the short term.00 billion profit in 2007.200) $ (7) $ 301 Southwest $ 61 $ 333 $ 48 $ 57 $ 499 United $ 2.S. The system wide load factors increased to an all time high of 77. 2006 The Future The Air Transportation Association (ATA) is forecasting that the U. higher speeds and modern manufacturing techniques. The 787 Dreamliner aircraft. Boeing announced plans in 2004 to develop the 787 Dreamliner. Washington. the Boeing Company began as the brainchild of William Boeing. Over the next 9 decades. 8 9 Currently. The Boeing Commercial Airplane Company is headquartered in Renton. Boeing.000 airframes in service. a change in the world geopolitical situation (a larger or expansion of the current Gulf war or the start of another conflict in the Middle East) or a significant increase in the price of oil. who had already made his fortune in trading forest land. The Manufacturer: Boeing Founded in Seattle. To counter Airbus’s strong family of aircraft. which is well on its Boeing 2006 Current Market Outlook. and the wide-body 747. Washington. The dominant force in commercial aircraft for the past 50+ years. and is responsible for the development and production of the company’s family of commercial airliners. the above forecasts may not accurately reflect aviation industry growth and expansion. Washington.500 by 2025. the company is comprised of four major business segments: Integrated Defense Systems. the company built itself into the world’s largest aerospace corporation. This strategy is in contrast to its major competitor. Boeing Phantom Works and Boeing Capital Corporation. 767. Airbus Industries. 787 and 777 in Everett. In addition. Airbus also believes the world fleet of commercial jet aircraft will grow from 17. will place an emphasis on efficiency. Washington in 1916.8 percent and freighter traffic growth at 6. and Boeing Business Jet (a derivative of the 737) in Renton.0 percent between 2006 and 2025. Boeing aircraft comprise approximately 75 percent of the world fleet with nearly 13.153 (in 2005) to approximately 33. a fifth segment (the Shared Services Group) provides common shared services for the overall organization. ProInversion 14 of 43 Boeing 737-528 S/N 27426 .increase in freight carried by air over the next 20 years. Airbus Global Market Forecast 2006 – 2025. the Boeing Commercial Airplane Group. with plans for at least three variants. The company currently produces its narrow-body 737NG.9 Although ACI generally concurs with the above forecasts.8 Airbus forecasts annual world passenger traffic growth rates of 4. should there be another aviation terrorist attack. used his substantial resources to learn to fly and design aircraft for a fledgling aviation industry. manufacturing techniques which take advantage of lighter weight composites. This number surpassed the previous Boeing record set in 2005 of 1. state-of-the art.002 net orders. The last 737-500 was produced in July 26. it has the greatest range. 1999. The subject aircraft has a maximum take-off weight of 134. The first Boeing 787 flight is scheduled in late 2007 with entry into service projected in 2008.62 billion dollars. The Boeing 787 is truly an innovative aircraft.engine narrow body aircraft powered by the CFM56-3 series engines. March 2. The Boeing 737 Aircraft The Boeing 737 is a twin. 1990. 1990. In 2005 Boeing’s revenues were $53. The Boeing 737-500 has a maximum gross take-off weight of between 115. Boeing recorded a record year in 2006 with 1. Soon thereafter. The 737-500 received its FAA certification on February 12. As of July 2007 a total of 677 Boeing 787 aircraft have been ordered. ProInversion The first Boeing 737 was delivered to Lufthansa in December of 1967 (a Boeing 737-100). In 2006 Boeing’s revenue was $61. Although the 737-500 is the shortest of the 737 Classic series.53 billion dollars. more efficient engines. advanced systems and aerodynamic improvements. The Boeing 737-500 has a shorter fuselage when compared to the 737-300 and 737-400. The Boeing 737 family of aircraft (all of 737 series aircraft) is the most successful commercial jet aircraft type in history. The aircraft is being manufactured using new. This high take-off weight favors value. however the aircraft is generally configured for approximately 100 to 122 passengers depending upon class and layout.000 pounds. The Boeing 737 family represents nearly 25 percent of the world’s active commercial jet fleet. 15 of 43 Boeing 737-528 S/N 27426 . The Boeing 737500 is capable of accommodating up to a maximum of 132 passengers. ACI considers this number of orders to be significant considering the 787 hasn’t even taken its first flight. Since a slowdown immediately following 9-11 Boeing has made a complete turnaround.500 to 136.000 pounds. the aircraft entered service with Southwest Airlines.044 commercial jet net orders from 76 customers.way to delivering the giant A380 with seating of up to 555 passengers. 700NG. ACI believes that this operator concentration may be a slight weakness for the Boeing 737-500 aircraft market. Even at 10 available aircraft the market will remain very strong. however this production number is significant. Although there are approximately 65 operators. faster and more efficiently than their predecessors. ACI considers this to be a very tight market and favorable when considering value. the Boeing 737 aircraft family has a common pilot type rating. -900NG) is the primary competitor to the Airbus A320 family. ACI views this number to be low when compared to other aircraft in the Boeing 737 family. -800NG. less than 1% of the Boeing 737-500 world fleet. -500. -400. These aircraft are more modern and have the capability to fly further. the Boeing 737-600. Another problem facing the Boeing 737-500 is the introduction of the New Generation (NG) of the Boeing 737s. Low availability and high current demand favor this aircraft type. however the NG aircraft are very tough to source in the current market and are very expensive compared to the earlier 737 variants. the pilots can operate all 737 family aircraft types. the Boeing 737-500 is not as favored due to the low number of seats compared to 737-300 and -400 as well as 10 Over the next six months ACI is aware of up to ten (10) additional 737-500 aircraft that will enter the market. -700. 191 aircraft are operated by only 7 carriers. There are approximately 65 operators. -600NG.The Boeing 737 is favored by operators throughout the world for its maintainability and excellent operational performance. ProInversion 16 of 43 Boeing 737-528 S/N 27426 . When compared within its family. A total of 389 Boeing 737-500s have been produced. At present there is only one (1) Boeing 737-500 that is currently available for sale. The Boeing 737-500 series of aircraft currently has 65 operators. ACI considers this operator base to be diverse and will tend to favor value. Like the Airbus A320 family. of the Boeing 737-500 aircraft.10 When considering the current availability as a percentage. This aircraft type (the Boeing 737-300. The Boeing 737-500 Current Market At present the current market for the Boeing 737-500 is very good. the Boeing 737 world fleet is expected to grow significantly over the next decade. This common pilot type rating allows pilots to train in a 737 flight simulator and. -800 and -900. once trained. With backorders. This is a consideration for this appraisal. can participate in this very strong market environment.50mm asking price. the heavy jet category has benefited from the growth of multinational business interests who require immediate and reliable transportation ProInversion worldwide. the Airbus ACJ (Airbus 318) and the Gulfstream G550. This is down from nearly 4 percent one year ago and a high of nearly 8 percent in early 200311. The current market for large. ACI believes that the current market strength favors the subject aircraft. it is highly recommended that 11 JPMorgan Global Equity Research. purpose-built business aircraft. with a modern airframe with proven lineage. 17 of 43 Boeing 737-528 S/N 27426 . These above three unique circumstances are all positive factors for value assuming a purchaser is sought that can immediately use and operate the aircraft in its current configuration. Further. These aircraft were 1997 and 1998 vintage with typical airline utilization and were at approximate half-time maintenance status.50mm to $4. That is. Should a purchaser seek the aircraft for traditional passenger use. if the potential purchaser requires the payload.00mm each. ACI conducted current research to determine current asking prices and recent sales of Boeing 737-500s.00mm if conducted today to similar specifications. As listed in Airfax a 1990 vintage 737-500 with approximately 40. In ACI’s opinion. they noted favorable changes in pricing for used aircraft in this class. a VIP/head-ofstate conversion would cost approximately $3. (2) is in excellent condition and (3) is in VIP/head-of-state configuration. Business Jet Monthly publication for July 2007. 09 July 07.2 percent of the active fleet. the Boeing 737-500 is truly a niche market aircraft. In its. Several unique. VIP equipped aircraft is very strong.the 737-700. While much of this analysis centers on traditional. Dominated by aircraft such as the Boeing BBJ (a 737-700/800 derivative). Business Jet Monthly. it can be assumed that the 737-500. This situation also favors the subject aircraft.000 hours and 32. -800 and -900.900 cycles is currently being advertised for sale at $11. ACI is also aware of 5 Boeing 737-500 aircraft that were recently sold out of the Continental Airlines fleet at $14. US investment bank JPMorgan observes that the used heavy jet inventory (available aircraft) was down to 3. passenger and performance characteristics of this aircraft with a low acquisition price. In ACI’s opinion. they would typically discount the aircraft value due to its current configuration. positive circumstances surround this particular aircraft in the fact that it has (1) very low hours and cycles.00mm to $15. Aerospace and Defense. Therefore. 30mm ACI must caution the reader that the industry guide books are a reference point for passenger configured half-time aircraft. 12 This publication is known as the Airliner Price Guide or (APG) and is owned and published by Brasie. This valuation assumes the aircraft is sold and marketed to a VIP/Head-Of-State end user. The establishment of a half-time value is considered to be the first step in conducting an adjusted appraisal. Inc dba. ACI has established the current half-time value for the subject Boeing 737-522 serial number 27426. ACI Aviation Consulting. the aircraft low hours and cycles. Accordingly. For the purposes of this report. Other factors regarding this aircraft were considered.92mm Avitas: US$11. and the factory installed and delivered Electronic Flight Instrumentation System (EFIS) cockpit. these values are used as a reference point only. These factors include but were not limited to: the maximum gross take-off weight (MTOW). ProInversion 18 of 43 Boeing 737-528 S/N 27426 .this aircraft be marketed and sold to a VIP/Head-Of-State end user. The industry guide book values for a 1995 vintage passenger aircraft are as follows: APG12: US$10. These values are found on the following page. The aircraft does not currently have a Certificate of Airworthiness. The above value is expressed in millions of U. 6. 2007 Boeing 737-528 27426 1995 Executive/Pax CFM56-3C1 Pro-1075A 2. The above value assumes VIP/Head-Of-State configuration.938 total cycles.15 Notes and Assumptions: 1. 3.885 total flight hours and 2. 5. 7. The aircraft is valued on a "highest and best use" basis. 4.50% 2007 Half-Time Value $17. The aircraft is in excellent physical condition and all mintenance records are available. The aircraft has 3.AIRCRAFT HALF-TIME VALUES Customer: Date: Aircraft Type: Serial Number: Construction Year: Configuration: Engine Type: Appraisal Reference Number: Inflation Rate: Current Market Half-Time Value ProInversion July 17. ProInversion 19 of 43 Boeing 737-528 S/N 27426 .S. dollars and assumes a half-time maintenance condition. ACI has physically inspected this aircraft. 2. the Structural Inspection.Value Adjustments Once the half-time values are determined. engines (overhaul and life limited parts) and landing gear. These maintenance value adjustments are calculated from halftime. ACI applies maintenance value adjustments (up or down) to the airframe (C and Structural Inspection). ProInversion 20 of 43 Boeing 737-528 S/N 27426 . Value adjustments to this aircraft included the “C” check. These maintenance value adjustments are necessary to accurately reflect the adjusted value of the subject aircraft. the engines and the landing gear. The following page reflects the maintenance value adjustments. 02 ($0.09 $1.65 $1. (4) The Structural Inspection has not been accomplished. (2) Engine TBO is based upon on a 12.58 $0.18 $1.09 $0.000 average on-wing hang time and do not reflect hard-time limits.000 Hours Various Various 12. 1995 27426 FAP 356 CFM56-3C-1 July 17.VALUE ADJUSTMENTS FROM HALF-TIME Aircraft Type: Date Of Manufacture: Aircraft Serial Number: Registration Number: Engines: Date: Current Half-Time Value: Appraisal Number: Component Action 1C Check Structural Inspection SI Nose Gear Left Main Landing Gear Right Main Landing Gear Engine #1 Disk Stack Engine #2 Disk Stack Engine #1 S/N Engine #2 S/N TBO 732 Days 12 Years 22. ProInversion 21 of 43 Boeing 737-528 S/N 27426 .000 Hours 26.09 $0.00 $1.000 Hours 12.33 Adjusted Value $18.65 $1.64 $0.04 $0. (3) Disk stack cost based on 2007 GE pricing.18 $0.04 $0.04 $0.115 8.32) $0.000 Hours Cost $0.58 $0.30 $0.000 Hours 26.15 Total Adjustment $1.00 Remaining 422 Days 0 Years 9 Years 9 Years 9 Years Various Various 8.15 PRO-1075Adj % Remaining 1/2 Life Delta Value Adjustment 58% 0% 90% 90% 90% 85% 85% 68% 68% 8% 50% 40% 40% 40% 35% 35% 18% 18% Total $ $0.48 NOTES: (1) Values Expressed In Millions Of Dollars. 2007 $17.115 Boeing 737-528 July 10.33 Adjusted Current Market Value Half-Time Value $17. 1 in Executive Suite.500 Lbs / 46.493 Kgs 134.000 Lbs / 60. 1 Aft Boeing 737-500 27426 June 1995 United States FAP 356 2739 CFM56-3C1 ProInversion 22 of 43 Boeing 737-528 S/N 27426 .000 Lbs / 60.000 Lbs / 49.895 Kgs 102.AIRCRAFT TECHNICAL SPECIFICATIONS General Aircraft Manufacturer Aircraft Type Serial Number Date of Manufacture Country of Registration Registration Number Line Number Engine Type Operating Weights Maximum Take-off Weight Maximum Landing Weight Maximum Zero Fuel Weight Maximum Taxi Weight 134.781 Kgs 110.781 Kgs Interior Configuration Current Configuration Number and Location Of Galleys Number and Location of Lavatories Executive / VIP/ Passenger (61 seats) 2 Forward & 3 aft 1 Forward. Peru International Aircraft Delivery Date Operator June 1.Operator Information Current Operator Average Daily Utilization Type Of Operation Operators Main Base Operating Environment Peruvian Air Force 0. 1995 Peruvian Air Force ProInversion 23 of 43 Boeing 737-528 S/N 27426 .66 Cycles Presidential Aircraft Lima.88 Hours / 0. 2007 September 5.7 2.Aircraft Maintenance Program Summary Data Effective Date: July 8. 2007 May 5. 2007 Total Aircraft Hours Total Aircraft Cycles 3. ProInversion 24 of 43 Boeing 737-528 S/N 27426 . 2007 May 5. 2006 Not Yet Accomplished Next Due In 0 Days 61 Days 181 Days 183 Days 422 Days Currently Due Note: Aircraft is on Low Utilization Maintenance Program (LUMP). 2006 August 30.000 Hours or 12 Years Current Status of Intermediate and Heavy Maintenance Visits Maintenance Visit “1A” Check “2A” Check “4A” Check “8A” Check “C” Check Structural Inspection SI Last Accomplished May 5.938 Airframe Maintenance Program Summary Maintenance Check “1A” Check “2A” Check “4A” Check “8A” Check “C” Check Structural Inspection SI Interval 60 Days 120 Days 240 Days 480 Days 730 Days 10.884. 2007 Hour / Cycles SLSV 3.650 3. 2016 Right MLG MCO5466P2739 10 Years July 21.650 Day Life Remaining 90% 90% T5450P2739 MCO5465P2739 July 21.885 / 2.885 / 2.938 3.938 3. 2007 Position and Location Nose Left MLG Interval Between Overhaul 10 Years 10 Years Serial Number Next Due Day Life Limit 3.062 12.062 3.650 90% ProInversion 25 of 43 Boeing 737-528 S/N 27426 .938 Current Location #1 Position #2 Position Serial Number 858237 858238 TT/TC Limit Item Compressor Rear Air Seal Compressor Rear Air Seal Cycles Remaining 12.COMPONENT STATUS Engines Engine Type: CFM56-3C1 Data Effective Date: July 8.885 / 2.938 Note: The engines have not been removed since installation. 2016 July 21.885 / 2. 2016 3. Landing Gear Data Effective Date: July 8. 1 Aft 4 in Flight Deck / 2 FA Forward / 2 FA Aft August 26. 2007 Date of Installation November 28. 2005 Cycles Remaining N/A Serial Number SP-E952471 TSO/CSO 162 / 214 On-Condition? Yes History of Major Airframe Damage: No: . 2006 White Upper / Gray Lower with Blue Stripes at Window Belt Line & Red Stripes on Aft Vertical Stabilizer Aircraft Paint Scheme ProInversion 26 of 43 Boeing 737-528 S/N 27426 . X Yes: _____ Interior Configuration Data Total Number of Passenger Seats Class Breakout Number and Location of Galleys Number and Location of Lavatories Number of Crew Seats Aircraft Last Weighed Date 61 4+3 Executive / 12 Business / 42 Coach 2 Forward and 3 Aft 1 Forward.Auxiliary Power Unit Model: T-62T-47C1 Data Effective Date: July 8. 1 in Executive Suite. Hydraulic pump switch. Stage III Noise Compliant Reduced Vertical Separation Minimums (RVSM) Able Obtain Organizational Chart LOPA Drawing Supplied N/A No Yes Yes Yes No N/A Yes Deferred Maintenance Items Total Number of deferred maintenance items? Do the deferred maintenance items exceed US $25.Additional Cargo Loading System FAR 121 Compliant TCAS Windshear FAR part 36.000? One (1) . awaiting parts to correct No ProInversion 27 of 43 Boeing 737-528 S/N 27426 . 2007 Engines Repetitive Overdue Issued and not yet due Not Addressed N/A N/A AD 2002-13-03 AD 97-08-01 AD 2006-26-01 issued and not on status list ProInversion 28 of 43 Boeing 737-528 S/N 27426 .Airworthiness Directives Airframe Data Effective Date: July 8. 2007 Airframe Repetitive Overdue Issued and not yet due Not Addressed AD 99-21-15 AD 2003-26-01 AD 2005-20-39 AD 2000-07-06 AD 2002-01-01 AD 2004-19-10 AD 2004-22-05 AD 2005-23-17 AD 2006-18-11 23 AD’s AD 2006-26-13 AD 2007-03-03 AD 2007-07-02 AD 2007-10-12 AD 2007-03-07 AD 2007-11-07 Engine Data Effective Date: July 8. Avionics Inventory Nomenclature E1-1 Rack Air Data Computer 1 Auto Throttle Stall Warning Computer (2 ea) Tape Reproducer Cabin Temp Controller Pressure Controller Air Data Computer 2 E1-2 Rack Flight Mgmt Computer Digital Analog Adapter (2 ea) IRS Transfer Relay (2 ea) Engine Vibration Monitor E1-3 Rack ACARS Flight Control Computer A Yaw Damper A IFAU Flight Control Computer B E2-1 Rack VHF Comm (3 ea) Selcal Decoder Remote Elex PA Amplifier Quick Access Recorder E2-2 Rack DME (2 ea) Flight Data Acquisition Unit Transponder Mode S Manufacture Honeywell Smiths Boeing Mitsushita Garrett Ham Standard Honeywell Model HG48E1 Part Number 4061100-90 755-CUE-2-4 65-52822-7 RD-AX7670 548376-6 763810-4 4061100-90 CPC22-1 HG48E1 Smiths Honeywell Vibro-meter 2907C1 EVM-250 176200-0101 DG1035AB01 No Data Plates Visible 241-250-0001212 Empty Honeywell Honeywell Boeing Honeywell SP-300 SP-300 4051600-194 4084042-911 65-52820-2 4051600-194 Collins Team Avtech Collins Empty RTA-83B 94VRY 436D-2B 064-50002-0101 SC2253AD0 10-62909-12 622-4096-001 Collins SFIM Collins DME-700 TPR-720 622-4540-122 ED44B409 622-7878-201 Continued… ProInversion 29 of 43 Boeing 737-528 S/N 27426 . Nomenclature E2-3 Rack HF Comm EFIS (2 ea) E2-4 Rack Marker Beacon ADF (2) GPWS Transponder Mode S Radar Altimeter (2) E3-1 Rack Battery Charger Static Inverter Transformer Rectifiers (2 ea) E3-2 Rack Flap Slat Position Switches Misc Solid State Switching Unite Overheat Detector Break Temp Monitor Engine Accessory Unit Air-Conditioning Accessory Unit Anti Skid Controller Auto Speed Brake E3-3 Rack Window Heat Control Units (3 ea) Transformer Rectifier Engine Fire Warning Controller APU Control Unit E3-4 Rack VHF NAV (2) TCAS Manufacture Collins Collins Collins Collins Allied Signal Collins Thomson-CSF Model HFS-700 EFIP-701E 51Z-4 51Y-7 TPR-720 ETR530-A Part Number 622-5272-120 622-9436-101 522-2996-011 777-1492-005 965-0976-003-105-105 622-7878-201 9599-607-1493 Eldec Avionic Inst Oeco Corp 4-254-04 1-002-0102-1000 080-20325-01 Boeing Boeing Fenwal Lewis Boeing Boeing Crane Boeing 65-52807-73 65-52806-361 10-62187-1 3100031 65-73606 65-52810-75 42719 65-84209-21 Kioto Oeco Corp Walter Kidde APIC 10-61-8334 080-20325-01 472622 171256-100A T-62T-47C1 Collins Honeywell 51RV-5B 822-0761-006 066-50000-2220 Continued… ProInversion 30 of 43 Boeing 737-528 S/N 27426 . Division Multiplex System Manufacture Honeywell Collins Hamilton Standard Model Part Number HG1050AE09 WRT-701X AVZ-122 622-5132-109 948F458-5 Sirius Technologies Sony Philips Sony Sony Bose Sirius Technologies Sirius Technologies FD201CV-LP SLV-R1000 736K ST-S211 TA-F605ES Acoustimass AMS FD151CV-LP AS-23-0220 Sirius Technologies Matsushita BE Avionics RD-AV 30001-31 FD932AVA-4 171757-03 ProInversion 31 of 43 Boeing 737-528 S/N 27426 . Low Profile LCD (1 ea) Display. Retractable LCD Main Cabin Audio/Video LCD Screens Multi-media Disk Players (5 ea) Video System Control Unit Freq.Nomenclature E3-5 Rack IRU (2 ea) Nose E & E Weather Radar RT Flight Deck Generator Control Unit (4 ea) Stateroom Audio/Video LCD Screen VHS Hi-Fi Cassette Recorder CD DVD/CD Audio Digital Tuner Amplifier Speaker System Display. leaks. The only abnormal item (cosmetic) was that ProInversion 32 of 43 Boeing 737-528 S/N 27426 . paint condition. Close visual inspection and documentation review revealed no damage or previous repairs. sealed and intact. security and overall appearance. All panel edges were properly aligned. the nose radome paint does not match the fuselage. damage. The upper aircraft fuselage is painted white and the lower fuselage is painted gray with three blue stripes along the window belt line coming to a point aft of the flight deck windows and red stripes on the aft vertical stabilizer Wings The wings were checked for general condition. security and overall appearance. corrosion. damage. Fuselage The fuselage was checked for general condition. The inspection is not intended to verify or certify airworthiness rather it is intended to assess current condition The fuselage was found to be clean. leaks. doublers. corrosion. recently painted and in excellent condition.AIRCRAFT INSPECTION REPORT On One Boeing 737-500 Aircraft Registration Number Serial Number General Aircraft Comments Overall the aircraft was noted to be in excellent condition. The inspection is not intended to verify or certify airworthiness rather it is intended to assess current condition. doublers. The lower skin surfaces were clean with no fluid leaks or corrosion. paint condition. corrosion. Cosmetically. operational interference. All painted surface areas were in excellent condition. All leading edge slats. door hinges.The upper wing surfaces were visually inspected through the installed over wing emergency exits. The landing gear had been properly lubricated and appeared to have been adequately maintained. flaps and spoilers were free from structural defects and obvious mechanical damage. were in excellent condition and free of any defects or other damage. trailing edge flaps and spoilers were fully deployed affording an opportunity to inspect their corresponding actuators and control mechanisms. The wing skins ProInversion 33 of 43 Boeing 737-528 S/N 27426 . The upper surfaces of the ailerons. damage. security and overall appearance. as well as free of binding. properly lubricated and in excellent working condition. Landing Gear The landing gear were checked for general condition. leaks. and The lower wing skins were thoroughly inspected and found free of blending and repairs. These areas were checked for obvious existing repairs and other significant damage. The internal and external surfaces of the gear doors were free of delamination and major repairs. The general overall condition of the landing gear and wheel wells was excellent. and actuating mechanisms were in good condition. the landing gears were in above normal appearance. paint condition. These were found to be secure. The nose gear and main gear flying doors. aileron tabs. The inspection is not intended to verify or certify airworthiness rather it is intended to assess current condition. One repair was noted on the left #1 leading edge device and one on the right #5 leading edge device. Both repairs were found within the aircraft documents. the routing and security of support hydraulic lines and cables. The door hinges showed no wear and were free from excessive side play. The surface skin areas. swivels. part number 2611513. The left and right main landing gear wheel wells were inspected. were clean and in very good serviceable condition. leaks.excessive wear. secured and in good condition. and other secondary structural components were in good condition and free of obvious defects and damage. missing equipment and damage. Nose Tire Data: The installed nose landing gear data plate identifies the part number as 6546200-8 and the serial number as T5450P2739. The installed #1 engine serial number is 858237 and the installed #2 engine serial number is 858238. and abnormal wear. Both engines are the original delivery engines and have not been removed from wing or had a shop visit. actuators. repairs. were very clean and the corrosion inhibiting compounds were applied in adequate quantities. The QEC was inspected for general condition and found to be satisfactory. 26 ply tires. Fluid lines and electrical wiring bundles were properly routed. The landing gear drag links. The inspection is not intended to verify or certify airworthiness rather it is intended to assess current condition. as required. Engines The engines were checked for general condition.75-15 and 12 ply rated. as was in the main landing gear wheel wells. Main Wheel Data: The main landing gear manufacturer’s data plates identify the left gear part number as 65-46100-79 and serial number MCO5465P2739 and the right gear part number is 65-46100-79 and serial number MCO5466P2739. The nose tires were manufactured by Goodyear and were 27x7. ProInversion 34 of 43 Boeing 737-528 S/N 27426 . The main gear is equipped with Goodyear Flightleader 40x14. The nose and main landing gear shock struts and visible portions of the piston assemblies were free from corrosion and well protected with paint or chrome plating. there were no observed damage. The Bendix brakes.5-19. In aggregate. Lubrication on all moving parts was found to be adequate. windscreen condition. impact ProInversion 35 of 43 Boeing 737-528 S/N 27426 . No Minimum Equipment List (MEL) placards were noted that would denote inoperative equipment on any equipment or system in the cockpit. The inspection is not intended to verify or certify airworthiness rather it is intended to assess current condition. Circuit breakers that were deactivated with a tie wrap were the HF1 DC. exhaust. PH Captain Power. side cowls. The pylons were in excellent condition and free of external repairs. Additionally the AUX FUEL tank breakers were pulled however not deactivated as required by the Service Bulletin and Airworthiness Directive. Both engine exhausts were free of external repair patches. nose cowl. Printer and XFER and CMPTR on the FMCS. drains. The general overall structural condition of the flight deck was excellent. and pylon fairings were in excellent condition with no repairs or other damage observed. security and overall appearance. The flight deck instruments.exhaust areas were clean with no signs of overheating. The inlet acoustical treatment and abraidable lining was in very good condition and free of delamination and showed no evidence of damage or repairs. serviceable and legible. The flight deck layout and configuration. thrust reversers. Cockpit The cockpit was checked for general condition. tailpipe. The nacelle cowls. thrust reversers. oil leakage. are considered standard for a B737-528.The engine installations were inspected with the cowling completely open. damage or metal deposits. The inspection included the engine inlet. floor covering condition. inoperative or missing equipment. No significant structural defects or damages were noted. seat condition. as well as the instrumentation. panel condition. and pylons. The engine turbine . and associated placards were in excellent condition. controls. instrument panels. damage. cracks. communications. The forward. The belts and harnesses possessed the proper Type Standard Order (“TSO-C22f”) tags on each. co-pilot and one observer on the left aft bulkhead of the flight deck and an additional jump seat position which folds out in front of the flight deck door. The aircraft is also equipped with life rafts and vests for ETOPS overwater operations.The flight deck windshields and windows were in good condition. The flight deck door was the original delivery door and not the reinforced variety which are currently required in most commercial application. The covers were clean and in newly installed condition. or repairs noted. navigation.853c and FAR Part 121. The flight deck seating accommodates the pilot. ProInversion 36 of 43 Boeing 737-528 S/N 27426 . sliding. The flight deck seats appeared to be structurally sound with no defects. The aircraft is equipped with the standard EFIS flight instrumentation. scratches. The windshields were free of any delamination. The flight deck sidewall panels and overhead panels were in good condition. and side windows were free of crazing. evidence of internal arcing. The seats possessed the necessary fire blocking identification tags as required by FAR 25. the aircraft is equipped with the system requirements to operate RVSM flights. The flight deck was painted in the standard light brown and tan color. damage. Additionally. The floor was free of repairs with no soft spots and the floor paint was in new condition. and general exterior deterioration. and auto flight control systems for the model type. however it is not certified for these operations. and other damage. The seat belt and shoulder harness were free of damage and operated properly. floor integrity. It is located aft of the R1 door along the right side of the cabin extending aft to just forward of the wing. damage. cabinets and drop-leaf table are finished in an exotic wood laminate while the overhead panels are finished in ultra-suede. and Philips components. rotate. The sidewalls.Passenger Compartment The passenger compartment was checked for general condition. a plastic center isle ProInversion 37 of 43 Boeing 737-528 S/N 27426 . and Sirius Technologies. The walkway between the executive suite and the left cabin sidewall features a low sideboard cabinet of the same wood laminate. range of motion and a three place divan at the aft of the suite. seat condition. carpet condition. The cabinet contains the life rafts and emergency equipment for overwater operations. ceiling and sidewall panel condition. entertainment and security equipment. The primary feature of this passenger compartment is the Associated Air Center custom designed executive suite. Air to ground communication is provided with an Icarus satellite phone. When the aircraft is parked. The suite has take-off and landing seating for seven passengers. and slide in 360 degree The floor is carpeted in a plush beige carpet that appeared to be clean and in very good condition. Two fold down bench seats along the interior wall provide additional seating. however they cannot be occupied during take-off and landing. The suite has a dedicated stereo/DVD/VCR system with Sony. Four individual executive seats that recline. low profile LCD display with Bose Acoustimass speakers. The inspection is not intended to verify or certify airworthiness rather it is intended to assess current condition. and overall appearance. window condition. The inspection is not intended to verify or certify The coach cabin is equipped to accommodate forty-two passengers in a standard BE Aerospace manufactured three by three seat configuration. two at the forward L1 door and two at the aft L2 door. The burgundy cloth covers were clean and in very good condition. The first class cabin just aft of the executive suite. Cabin entertainment is provided via a five unit DVD/multi-channel audio system and viewed on one fixed and two retractable overhead LCD monitors. ProInversion 38 of 43 Boeing 737-528 S/N 27426 . cleanliness. damage. with the exception of the first seats which had in arm tables. Emergency isle path lighting is incorporated on the left side of the center isle. Four flight attendants have seating at two locations. The overhead baggage bins that run the length of the main cabin and along the right side of the executive suite were found to be in excellent condition with no defects noted. All doors functioned as required with no binding. feature twelve BE Aerospace leather covered seats arranged in a standard two by two configuration. The seat structures were in good condition with all controls functioning properly. The emergency equipment. panel condition. and opened and closed easily.runner is rolled out to protect the carpet from being soiled. inoperative or missing equipment. properly stowed and secure. The blue leather covers were clean and in very good condition. that was located throughout the cabin was in good condition with current inspection stickers. Each seat featured audio controls. leaks. countertops and cabinet condition. fixed and portable. The seat structures were in good condition with all controls functioning properly. security and overall appearance. The flight attendant stations were in excellent condition with all controls and emergency equipment present and in working order. Each seat featured audio plug and controls. in arm tables. and foot rests. Galleys The galleys were checked for general condition. as well as a standard fold-down table in front of each seat. security. The galley features two storage cabinets and one trash compartment as well as working counter surfaces and two seethrough windows into the passenger cabin. Two galley units are located at the forward and aft of the R1 door. floor integrity. two storage cabinets. The cabin is equipped with 5 galley units manufactured by Albert Muhlenberg. The aircraft is equipped with three lavatories. and two storage cabinets. The G6 galley is located forward of the L1 door at the aft of the cabin. It can accommodate two large and one ProInversion 39 of 43 Boeing 737-528 S/N 27426 . Lavatories The lavatories were checked for general condition. a water heater. The G4 galley located aft of the R2 door can accommodate one small rolling cart as well as three boxes. countertops. panel condition. odor. All of the galleys were very clean and in excellent physical and cosmetic condition. The inspection is not intended to verify or certify airworthiness rather it is intended to assess current condition. It also features two Rumbold ovens. The G3 galley located forward of the R2 door can accommodate two large rolling carts as well as one box. cabinet condition. cleanliness. leaks. OHG. a trash compartment and a coat closet. The G1 galley located forward of the R1 door can accommodate two small rolling carts. a water heater. three boxes. and overall appearance. It also features one Rumbold oven. small rolling cart as well as three boxes. and features three storage cabinets and a trash compartment. one forward of the R1 The G2 galley located aft of the R1 door can accommodate two large and one small rolling cart as well as two boxes. one each at the forward L2 and R2 doors and one at the aft R2 door. inoperative or missing equipment. and three storage cabinets.airworthiness rather it is intended to assess current condition. damage. The third lavatory is located in the forward executive suite. The counter tops were made of solid surfacing and the sink and fixtures were plated in a gold finish. Rumbold. doors and vanity were in excellent condition. mirrors and side wall panels were clean. vanities.door. with no repair patches on the sidewall or overhead panels. were manufactured by L. The lavatory is custom made by Associated Air Center. security. and one in the executive suite. The panel edges were taped as required for fire containment purposes. and overall appearance.A. The compartments were clean. The two cabin lavatories. The wood laminate sidewalls. clean and highly polished. Cargo/Baggage Compartments The lower cargo compartments were checked for general condition. The manually operated doors both have locks installed for security. All required placards were present and in very good condition. ProInversion The aircraft is equipped with two cargo compartments in the forward and aft lower fuselage. sidewall and ceiling panel condition. The ample cabinets and wardrobe provide a space for hanging clothing and storing accessories. cleanliness. The required Boeing 737-528 S/N 27426 40 of 43 . and found to be in excellent condition. The sinks. defect and odor free. LTD. one aft of the L1 door. damage. which are standard aircraft type. The inspection is not intended to verify or certify airworthiness rather it is intended to assess current condition. leaks. The main electrical and equipment (E&E) bay was inspected for damage and irregularities. The primary structure was free of defects and damage. The forward door airstair stowage and motor mechanism was secure. damage. The installed avionics. electrical controls. control cables.cargo loading placards and associated restraints were in good working condition. Some of the insulation blankets were slightly torn due to removal and installation during checks. All antennas. ProInversion 41 of 43 Boeing 737-528 S/N 27426 . cleanliness. The aft cargo has a reduced capacity due to the installation of the two PATS auxiliary fuel tanks. There was no evidence of leaking lavatory fluids and the area was relatively dust free which is unusually good for this compartment. probes. The inspection is not intended to verify or certify airworthiness rather it is intended to assess current condition. and equipment were in very good condition. clean and in proper working order. Accessory and Equipment Bays The accessory bays were checked for general condition. security and overall appearance. and panels in this area were in good condition and properly sealed. ACI also considers a multitude of other industry factors such as: aircraft economics. Further. By accepting this report. ACI assumes no responsibility or legal liability for actions taken or not taken by the client or any other party with regard to the subject aircraft values. ACI further states. Signed. The categorization of assets allows ACI to determine value based upon comparisons of other assets that fall into the same category. ACI places an asset into a specific category based upon asset mission capability and revenue potential. It is not unreasonable to assume a similar value for assets having similar mission and revenue profiles. and manufacturer reputation. its engines. ACI uses as its primary determinant. reliability data. The transaction values are extracted from numerous public and private sources.STATEMENT OF INDEPENDENCE This report represents the opinion of ACI Aviation Consulting (ACI) and is advisory only. and major components. that it has no present or contemplated future interest in or association with. current and reported transaction prices. In the absence of reliable transaction data. population. model popularity. These value adjustments are calculated from the half-time value. Quentin Brasie Chairman & CEO ACI Aviation Consulting ProInversion 42 of 43 Boeing 737-528 S/N 27426 . METHODOLOGY When conducting its assessments of current aircraft value. the client agrees that ACI shall bear no responsibility or legal liability regarding this report. Once ACI has determined the current half-time value. This report is subject to additional information that may be developed or provided at the request of the client. the subject aircraft. ACI hereby states that this report has been independently prepared and fairly represents ACI’s opinion of the aircraft value set forth herein. operator base. adjustments may be required to accurately reflect the maintenance status of the aircraft. this report is prepared for the exclusive use of the client and shall not be provided to other parties without the client’s consent. APPENDIX ProInversion 43 of 43 Boeing 737-528 S/N 27426 .