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ANNUAL REPORT 2011

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DISCOVERING OUR POTENTIAL

Potential - Aircraft Leasing Business

Aircraft Leasing Business
A Leading Player in the Growing Aircraft Leasing Market

Today, some 20,000 commercial aircraft traverse the world's skies, of which a little over 30% are procured using operating leases. The aircraft leasing market is expected to grow consistently in the future. As Japan's leading aircraft leasing company, MC Aviation Partners Inc. (MCAP), a wholly owned subsidiary established by MC, owns a fleet of about 80 aircraft and manages this asset portfolio to generate a stable income stream. Expansion plans for this business imply that aircraft leasing is set to become an earnings pillar for the Industrial Finance, Logistics & Development Group, based on a successful asset management business model in which physical assets are underpinned by expertise accumulated in aviation industries.

Dynamic Business Development Operating from Bases in Three Key Regions

Commercial Jet Aircraft Fleet: Operating Lease Share (thousand aircrafts) (%)
Commercial Jet Aircraft Fleet: Operating Lease Share
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Number of Owned Aircraft Basis by Region
Number of Owned Aircraft Basis by Region
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The future projected annual growth rate for the global air transportation market is 5% over the long term. Forecasts show this market doubling in size over the next 20 years, driven by the high rates of economic growth in the developing world. Growth prospects for the aircraft leasing business are good because airlines are concerned with up-front capital investment and a flexibility in managing fleets.

Since entering the aircraft leasing sector in 1984, MC has been developing this business by building up its own fleet and using operating leases, accumulating expertise in aviation industries and expanding its international network. In 2008, MC established MCAP, to integrate aircraft leasing operations with related services such as asset management, marketing and technical support.

MCAP operates globally using bases located in three regions: MCAP is headquartered in Tokyo, with MC Aviation Partners Americas Inc. based in Los Angeles and MCAP Europe Limited operating from Dublin. The MCAP fleet of some 100 aircraft includes about 80 owned and a further 20 planes that MCAP manages under contract. Total aircraft leasing assets amount to approximately US$2.7 billion, which makes MCAP the top firm in its field in Japan and number 13 globally. Going forward, based on the close relationships that MC has developed with airlines and aircraft manufacturers in Japan and overseas, MCAP aims to enter the global top 10 in the sector by accumulating blue-chip assets targeting higher returns on invested capital, and will continue to tap into the strong growth in demand for air transportation worldwide.

[From the Business Frontline]

MC Aviation Partners Americas is a core MC firm involved in the management of aircraft leasing business assets. We comprise marketing personnel, aircraft engineers and many other professionals such as lawyers. We are working hard together to manage the existing asset base and to develop new projects so that we can grow MC's aircraft leasing business further.


Management team of MC Aviation Partners Americas.
Far-left: Shigeru Kizawa

MC Aviation Partners Americas Inc. VP, Administration
Shigeru Kizawa

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