In its annual industry forecast produced in the 1st quarter, TeamSAIprojected 2008 total global spend of $45.1 billion. 2009 spend wasexpected to reach $46.8 billion. The announced reductions in airlineoperations reduce the 2009 forecast to $45.5 billion, $1.3 billion belowthe original forecast for the year.

David A. Marcontell, TeamSAI's Executive Vice-President, reported that "the2009 reduction in outlook is driven by over 500 older, less fuel efficientcommercial jets being parked during the year, the majority involving NorthAmerican operators. While the global spend is still expected to nominallyincrease from 2008, due to continued growth in Europe, Asia, and LatinAmerica, the major impact will be felt in the North American market whichwill see a decline from $16.6 billion in 2008 to $15.9 billion in 2009."

North America accounts for $1.0 billion of the $1.3 billion reduction for2009. Most of the announced capacity reductions will occur following thepeak summer season.

The announced parking of aircraft, along with aircraft parked due to someairlines going out of business, is expected to ground over 250 of theclassic Boeing 737 aircraft, 110 of the DC-8, -9, MD-80 and MD-90 familyand 50 CRJ-100/-200 aircraft. The balance of the aircraft to be parked issmaller quantities of older, less fuel efficient aircraft. Enginespowering the parked aircraft include the CFM56-3, various JT8D models andCF34-3 engines.

TeamSAI's President & CEO, Christopher Doan, added, "As the aviationindustry makes significant adjustments to deal with the prolonged high oilprices, particularly in North America and to a lesser degree in Europe, theripple effects radiate out to the suppliers and almost certainly to themanufacturers before we see any sign of equilibrium. Interestingly, thereare a couple of counterbalancing forces at work. With the weak dollarrelative to currencies in Europe and Asia, North American labor rates arebecoming more attractive alternatives... and for those operatorsconsidering sending work to Europe or Asia, the cost advantage may have allbut disappeared when factoring in higher transportation costs due to fuelincrease. These factors are clear levers of new opportunity for thosefocused on new opportunities in the midst of current crisis."

TeamSAI is a Denver-based practice of strategic & tactical management andoperations consulting, serving all aspects of the aviation communityincluding airlines, airports, manufacturers, MROs, and corporate/fractionaloperations. TeamSAI also produces the annual World MRO Forecast, and is apartner with McGraw-Hill's Aviation Week Group in their new MRO Prospectorweb based market development tool for the MRO industry.

TeamSAI, providing better direction through Strategy, Action & Insight.

Additional information about TeamSAI is available at www.teamsai.com.