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EXHIBIT 99.10
[AIRCLAIMS LOGO]
Our Ref: 99201/MSH/kw
AerFi Group Plc. 21st January, 1999
Aviation House
Shannon
Ireland
Attention: Ms Caroline Jones
Dear Sirs,
- AERCO PORTFOLIO -
BASE VALUE AND CURRENT MARKET VALUATION
AS AT 31ST JANUARY, 1999
Further to the instructions of Ms. Caroline Jones, AerFi Group Plc, we are
pleased to be able to provide our opinion of the value of each aircraft in the
portfolio of AerCo, under Base and Current Market Value scenarios. The
aircraft, each of which is subject to a net operating lease, are as indicated
in the attached table (ref: 99201/MSH).
Our valuation is based on fleet details as provided by Ms. Jones on 30th
December 1998, providing the most recent utilisation information available in
respect of the aircraft and their respective engines, supplemented with
maintenance and specification data obtained or received on previous occasions
from Babcock and Brown, GPA Group and GE Capital Aviation Services (GECAS).
The point of valuation is 31st January, 1999.
As requested by AerFi Group Plc, we have provided our value opinions under
CURRENT MARKET and BASE VALUE scenarios. Airclaims believes it to be VERY
IMPORTANT that value definitions are understood by all parties and that such
values are always considered in conjunction with their definitions.
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Airclaims Limited
Cardinal Point, Newall Road, Heathrow Airport, London TW6 2AS
Telephone (44) 181 897 1066 Facsimile (44) 181 897 0300 Telex 934679
http://www.airclaims.co.uk
Registered Head Office as above. Registered in England No. 710284,
VAT Reg. No. 224 1906 87
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BASE VALUE (to ISTAT Definition)
The Base Value presented below is based on the definition as outlined by the
International Society of Transport Aircraft Trading (ISTAT). ISTAT's definition
of Base Value equates in principle to the previously used appraisal term, Fair
Market Value.
The ISTAT definition is as follows:
A Base Value is the Appraiser's opinion of the underlying economic value of an
aircraft in an open, unrestricted, stable market environment with a reasonable
balance of supply and demand, and assumes full consideration of its "highest
and best use".
An aircraft's Base Value is founded in the historical trend of values and in
the projection of value trends and presumes an arm's length, cash transaction
between willing, able and knowledgeable parties, acting prudently, with an
absence of duress and with a reasonable period of time available for marketing.
In this instance, the Base Value of each aircraft assumes its physical condition
is average for an aircraft of its type and age, but has been adjusted to reflect
a) the actual utilisation and given maintenance status of airframe, engines and
undercarriage where possible (the "Adjusted Base Value") and b) assuming overall
"half-life" maintenance condition.
The Base Value also assumes that each Aircraft is under a maintenance programme
of international airworthiness standards approved by a civil aviation
authority, with all airworthiness directives (ADs) and manufacturers service
bulletins (SBs) performed in compliance with air carrier rules and regulations.
CURRENT MARKET VALUE
In Airclaims' considered opinion the CURRENT MARKET VALUE represents that which
the aircraft could best achieve under current (i.e. today's) market conditions.
Under this scenario each value is intended to reflect what might be expected
from the result of an "arms length, single sale" transaction conducted in an
orderly manner (for which we consider a period of up to 12 months to come to
fruition to be reasonable) between a "willing buyer and willing seller". The
value assumes that each aircraft is free of lease or charge, and free of any
onerous restrictions in respect of its ownership and title documentation.
As part of our valuation process, we have taken into account recent market
activity covering open market, financial and lessor sales, the perceived demand
for the types, their current market acceptability and availability, and have
considered the views of informed industry sources.
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Further to the above we have also taken account of the data available to us
regarding the specification of the subject aircraft, and their accumulated
airframe hours and cycles. We have also assumed that the aircraft are in good
condition with all Airworthiness Directives (ADs) and significant Service
Bulletins (SBs) complied with.
In this instance, the Current Market Value of each aircraft assumes its
physical condition is average for an aircraft of its type and age, but has been
adjusted to reflect the actual utilisation and given maintenance status of
airframe, engines and undercarriage where possible (the "Adjusted Current
Market Value") and b) under the assumption that each aircraft is in overall
"half-life" maintenance conditions (Current Market "Half-Life" Value).
The Current Market Value also assumes that each Aircraft is under a maintenance
programme of international airworthiness standards approved by a civil aviation
authority with all airworthiness directives (ADs) and manufacturers service
bulletins (SBs) performed in compliance with air carrier rules and regulations.
Whilst the tabulated values provided under this assignment are given as single
figures, it must be borne in mind that the determination of such value involves
a multiplicity of variables, and that some variation in perceived values must
be expected due to, for example, any potential inaccuracies in the data
provided. In this case we consider that a tolerance of +/- 4% may reasonably
apply to the aforementioned calculated values.
Please note that valuations given by Airclaims are valid only as at the date of
issue. Subsequent to that date there may be alterations in the world aviation
market, or in the status and physical condition of the subject aircraft or
other general factors that may affect Airclaims' value opinion.
I trust the foregoing is satisfactory and to your requirements.
Yours sincerely,
/s/ Edward Pieniazek
----------------
Edward Pieniazek
Director, Consultancy & Information Services
Encl.
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Current Market and Base Values for AerCo Portfolio as of 31st January 1999,
expressed in Million US Dollars
Market Values Base Values
Type Engines MSN Operator YoB Hours Cycles As at MTOW (lbs) Half Life Adj. Half Life Adj.
Airbus CF6-50C2 240 Indian Airlines Feb-83 31,384 18,024 Sep-98 363,765 $8.35M $8.88M $8.70M $9.22M
A300-B4-200
Airbus A320-200 CFM56-5A1 85 Air France Oct-89 16,828 17,676 Oct-98 162,041 $26.65M $25.65M $25.81M $24.81M
Airbus A320-200 CFM56-5A3 299 Premiair Jan-92 22,553 8,112 Sep-98 166,450 $31.30M $31.36M $38.12M $30.18M
Airbus A320-200 CFM56-5A3 391 Monarch Dec-92 21,389 8,253 Sep-98 169.757 $32.60M $32.72M $31.42M $31.54M
Airlines
Airbus A320-200 CFM56-5A1 403 Canadian Jan-93 17,905 6,581 Oct-98 158,731 $32.20M $31.34M $30.99M $30.13M
Airlines
International
Airbus A320-200 V2500-A1 362 Airlines Sep-92 23,255 8,384 Sep-98 166,450 $32.20M $32.46M $31.02M $31.28M
International
Boeing 737-300 CFM56-3B1 24465 Philippine Jul-89 18,181 22,102 Oct-98 135,000 $19.73M $19.74M $19.13M $19.14M
Airlines
Boeing 737-300 CFM56-3B1 24677 Philippine Feb-90 17,106 20,641 Oct-98 135,000 $20.43M $20.97M $19.79M $20.34M
Airlines
Boeing 737-300 CFM56-3C1(23.5) 24908 Sun Express Feb-91 27,769 12,392 Oct-98 139,500 $23.30M $22.81M $22.63M $22.13M
Boeing 737-300 CFM56-3C1(22) 24909 MALEV Feb-91 19,881 11,931 Oct-98 139,500 $22.74M $21.38M $22.07M $20.70M
Boeing 737-300 CFM56-3C1(23.5) 26968 China Yannan May-92 20,174 15,556 Dec-98 139,000 $23.97M $23.27M $23.36M $22.66M
Airlines
Boeing 737-400 CFM56-3C1(23.5) 23868 British Midland Sep-88 24,756 26,812 Oct-98 143,500 $22.24M $21.53M $21.23M $22.52M
Airways
Boeing 737-400 CFM56-3C1(23.5) 23979 Pegasus Airlines Dec-88 25,184 12,242 Oct-98 143,500 $22.99M $23.36M $22.23M $22.61M
Boeing 737-400 CFM56-3C1(23.5) 24685 Futurs Apr-90 29,053 14,213 Oct-98 150,000 $24.86M $24.34M $24.26M $23.75M
Boeing 737-400 CFM56-3C1(23.5) 24904 THY - Turkish Jan-91 20,346 11,901 Aug-98 150,000 $25.37M $24.70M $24.65M $23.99M
Airlines
Boeing 737-400 CFM56-3C1(23.5) 25764 Asiana Airlines May-92 12,923 18,846 Oct-98 143,500 $25,50M $26.02M $24.76M $25.28M
Boeing 737-400 CFM56-3C1(23.5) 25765 Asiana Airlines Jan-92 12,617 18,413 Oct-98 143,500 $25.50M $25.15M $24.76M $24.41M
Boeing 737-400 CFM56-3C1(23.5) 26066 THY - Turkish May-92 18,212 9,495 Aug-98 150,000 $27.11M $26.36M $26.37M $25.63M
Airlines
Boeing 737-500 CFM56-3C1(20) 26067 Air Pacific May-92 20,903 9,770 Oct-98 133,500 $22.23M $20.75M $21.56M $20.08M
Boeing 747-200D JT9D-7Q 22496 Tower Air Aug-81 51,591 10,879 Oct-98 814,000 $23.67M $26.79M $25.83M $28.95M
Boeing 757-200 RB211-535E4 26152 Avianca Jul-92 20,103 8,129 Oct-98 255,000 $37.27M $38.39M $36.09M $37.21M
Boeing 757-200 RB211-535E4 26153 China Southwest Jul-92 14,727 8,554 Oct-98 255,000 $37.27M $39.47M $36.09M $38.28M
Airlines
Boeing 757-200 RB211-535E4 26158 Air 2000 Jan-93 23,603 7,269 Oct-98 255,000 $18.52M $39.48M $37.45M $38.41M
Boeing 767-300ER PW4060 24947 LANChile Jan-91 35,574 8,830 Oct-98 407,000 $55.87M $55.59M $57.12M $56.84M
Boeing 767-300ER PW4860 24999 Spanair Jan-91 35,122 7,801 Nov-98 407,000 $56.17M $56.38M $57.42M $57.63M
Douglas DC-8-71F CFM56-2C1 46840 LANChile Mar-69 69,717 27,234 Jul-98 325,000 $14.50M $16.17M $15.59M $17.26M
Douglas DC-8-71F CFM56-2C1 46064 Air Transport May-69 78,000 31,297 Sep-98 325,000 $14.50M $14.97M $15.59M $16.06M
International
Fokker 100 RB183 Tay 650-15 11341 TAM Brasil Jun-91 13,311 13,053 Oct-98 98,000 $13.52M $12.96M $15.19M $14.63M
Fokker 100 RB183 Tay 650-15 11342 Portugalia Jun-91 13,805 13,198 Oct-98 98,000 $13.52M $13.64M $15.19M $15.31M
Fokker 100 RB183 Tay 650-15 12350 TAM Brasil Aug-91 16,265 17,300 Oct-98 98,000 $13.62M $13.42M $15.29M $15.09M
Fokker 100 RB183 Tay 650-15 11351 TAM Brasil Sep-91 17,021 17,179 Oct-98 98,000 $13.52M $13.29M $15.19M $14.96M
MD-83 JT8D-219 49627 Spanair Feb-89 34,470 16,701 Oct-98 160,000 $17.80M $17.89M $17.34M $17.43M
MD-83 JT8D-219 49790 Spanair Aug-89 31,958 15,480 Oct-98 160,000 $18.05M $18.41M $17.59M $17.95M
MD-83 JT8D-219 49952 Far Eastern Oct-91 23,077 16,366 Oct-98 160,000 $19.87M $19.87M $19.40M $18.61M
Air Transport