S-70i Variable Direct Operating Cost

Project Status
Conklin and deDecker (C&D) update

June 10, 2017

SIKORSKY PROPRIETARY INFORMATION

C&D and their role in industry
Mission:

Conklin & deDecker enables general aviation industry to make more informed
decisions when dealing with purchase, operation and deposition of aircraft by
furnishing objective and impartial information. (1)

Importance to Sikorsky:

Customers use C&D data to compare our

cost versus our competitors

C&D obtains data from operators, manufacturers, maintenance facilities, dealers

and brokers. We put every aircraft on the same set of operating conditions and
assumptions so as to have a reliable set of relative operating costs.

1. Source C&D website: https://www.conklindd.com/Default.aspx

C&D report for S-70A

SIKORSKY PROPRIETARY INFORMATION 2
Elements of Direct Operating Cost (DOC)
Commercial
Total DOC
DOC Elements

Depreciation
Crew
Commercial
Fixed Hangar DMC Elements
Fixed
Cost MMH
Scheduled/unscheduled
Cost maintenance

Insurance Repair Repair Price

Overhaul Price
Price
POL
Unit Price
Variable
Cost DMC
Unscheduled removals
Life limits
Removal Overhaul intervals
Variable
Rate
Cost
DMC = Direct Maintenance Cost
POL = Petroleum, Oil and
Lubricants

DMC Math
SIKORSKY PROPRIETARY INFORMATION 3
How do we calculate DOC?
S-70i baseline configuration
Inputs:

• R&M rates are observed metrics as reported to US ARMY in 2016

• Retirement/Overhaul intervals: Tech Manual June 2015
• Repairability: based on SM&R codes
• Scrap rates: actuals based on CCAD SM&R = source, maintenance and recoverability code s
• Unit/repair price based on SAP or escalation from Army OSMIS data OSMIS = US Army Operating and Support Management Information System

Outputs:

Unscheduled Scheduled
DMC is derived using bottom-up approach
SIKORSKY PROPRIETARY INFORMATION 4
S-70i vDOC vs. our competitors in C&D
S-70i is competitive in its weight class vs. competition
Variable DOC (less misc expenses) ($/FH) MGW =
34.3K LBs
$4,500
MGW = MGW = MGW = MGW = MGW = MGW = $4,089.23
22K LBs 22K LBs 18.9K LBs 14.1K LBs 18.9K LBs 24.2 LBs
$4,000

$3,500

$3,000 $2,859.52
$2,767.26
$2,556.51 $2,556.00
$2,428.01
$2,500

$2,000 $1,894.03

$1,500

$1,000

$500

$-
S-70A/C S-70i *New* H215L1 AW139 AW189 H225 AW101

Variable Direct Operating Cost (DOC) ~ or Variable Cost~ includes:

• Fuel
• Direct Maintenance Cost (DMC):
• Labor
• Parts w/ 15% margin applied
• Engine restoration
• Major periodic maintenance
• Miscellaneous expenses (landing, crew expenses, catering, etc)
SIKORSKY PROPRIETARY INFORMATION 5
S-70i (new) vs S-70A/C (C&D)
Variable DOC ($/FH)
$3,000 S-70i vs. S-70A/C

$2,500 $675.54 • Lower labor

hours (lower
$635.11 MMH/FH)
$2,000
$621.20

$1,500
$392.97 • Lower engine
$550.00 costs
$500.00
$1,000
$430.71 • Higher parts
$569.28
$500 costs, but lower
$561.80 major periodic
$311.60
$- maintenance
S-70A/C (published) S-70i (longer inspection
Labor Parts Airframe/Engine/Avionics intervals)
Engine Restoration Major Periodic Maintenance
Fuel

MMH = maintenance man hours

FH = Flight Hour

SIKORSKY PROPRIETARY INFORMATION 6

Aircraft Price
C&D vs Indicative
30
27.931
26
25

20 S-70i
20 18.36 18
S-70A/C
Price ($M)

15.25 15
15
13
11 10.5
10

0
H215 H225 AW189/149 AW139 S-70

C&D Utility Indicative

Baseline Aircraft Price

LOCKHEED MARTIN PROPRIETARY INFORMATION 7

 Next Steps
• Provide 70i data to C&D for Aircraft Cost
Evaluator (ACE) for next publication Oct 2017
(yields the Aircraft Cost Summary)
 vDOC (summary)
 Fuel burn
 Block speed data
 Aircraft specs (AC dimensions, weight, payload)
 Performance data (range, rate of climb, speed, ceiling)
Aircraft price TBD

• Evaluate C&D’s Life Cycle Cost (LCC) model

and part data requested for potential
submission (2017-18 publication)

• Evaluate the Aircraft Performance Comparator

(APC) module and assess value of tool (2017-
2018 publication)

• Implement C&D updates as standard work

SIKORSKY PROPRIETARY INFORMATION 8
S-70i (new) vs S-70A/C C&D
Variable DOC

S-70A/C S-70i
Costs (published) Comments

Variable Costs
Fuel Lbs./Hr. $ 675.54 $ 635.11 Per Raffi/pilots' office: 120 kts, 17,000 lb GW, 2000PA and ISA (15°C) = About 925 LBS/HR.translates to $552.27/hr
Fuel Additives n/a $ - $ -
Lubricants n/a $ 20.27 $ 19.05 3% of Fuel
Maintenance:
Labor MMH/FLT Hr. $ 561.80 $ 311.60 $76/hr, 4.1 mmh/ft hr (sched and unsched)
Parts Airframe/Engine/Avionics $/FLT Hr. $ 430.71 $ 569.28 includes replenishment, depot repair and on-aircraft repair (SAC model)
Engine Restoration $/FLT Hr. $ 550.00 $ 500.00 estimate provided by GE 04/2017
APU Allowance $/FLT Hr. $ - $ -
Major Periodic Maintenance $/FLT Hr. $ 621.20 $ 392.97 includes retirement and overhaul
Miscellaneous Expenses: n/a
Landing/Parking n/a $ 27.20 do not include
Crew Expenses (accommodations, transportationn/a and meals) $ 49.57 do not include
Supplies/Catering (passenger related supplies) n/a $ 9.00 do not include
Carbon Offset n/a $ - $ - do not include
Other n/a $ - $ - use C&D estimates
Total Variable Cost per Hour $ 2,945.29 $ 2,428.01
Variable cost per hour, less misc expenses $ 2,859.52 $ 2,428.01

SIKORSKY PROPRIETARY INFORMATION 10

 S-70A/C vs S-70i VDOC Cost differences ($/FH)
Labor Engine Restoration
$600.00 $560.00
$550.00
$500.00
$540.00

$400.00 $250.20 $530.00

$50
$520.00
$300.00
$510.00

$200.00 $500.00
$490.00
$100.00
$480.00

$- $470.00
S-70A/C (published) S-70i S-70A/C (published) S-70i

Parts Airframe/Engine/Avionics
Major Periodic Maintenance
$600.00
$700.00

$500.00 ($138.57) $600.00

$400.00 $500.00
$228.23
$300.00 $400.00

$300.00
$200.00
$200.00
$100.00
$100.00
$-
S-70A/C (published) S-70i $-
S-70A/C (published) S-70i

SIKORSKY PROPRIETARY INFORMATION 11

Methodolgy

 The data is based upon the 70i baseline utility

configuration and DOC historical repair pricing
w/escalation, fuel cost, parts consumption (across the
60M/70i fleet), maintenance, etc.

SIKORSKY PROPRIETARY INFORMATION 12

ESTIMATED VARIABLE COSTS - Per Hour (Published C&D V17.1) (New **To Be Added to C&D**) Comments
Aircraft S-70A/C S-70i
Type of Operation Corporate Utility
Fuel 675.54 635.11C&D requested
Fuel Additives 0 0part data to perform
their own
Lubricants 20.27 calculations
Maintenance Labor 561.8 311.6
Parts Airframe/Engine/Avionics 430.71 586.65
Engine Restoration 550 500
Thrust Reverser Allowance 0
Propeller Allowance 0
APU Allowance 0
Major Periodic Maintenance 621.2 395.73
Miscellaneous Expenses - Landing/Parking 27.2
􀂇 Crew Expenses 49.57
􀂇 Supplies/Catering 9
􀂇 Carbon Offset 0
􀂇 Other 0
Total Variable Cost per Hour 2945.29
Total Variable Cost per Nautical Mile 23.38
Average Speed-Kts. 50-NM trip 126

SIKORSKY PROPRIETARY INFORMATION 13

 (Published C&D V17.1) (New **To Be Added to C&D**) Comments
Aircraft S-70A/C S-70i
Type of Operation Corporate Utility
Cabin-Height (FT) 4.50 4.52
Width 7.00 7.00
Length 12.60 12.58
Cabin Volume (CU-FT) 399.00 396.00
Cabin Door Height (FT) 4.50 4.52
Width 5.75 7.00
Baggage -Internal (CU-FT) 0.00
External 20
Typical Crew/Passenger Seating 2/9 2/2/11

Weight-Max Take-Off (LBS) 22,000 22,000

Maximum Landing 0

Basic Operating 12,345 11,600 Empty weight?

Usable Fuel 2,412

Payload-Full Fuel (LBS) 7,243

Maximum 9,655 9000?

Certified/IFR Restricted/Restricted
Price - New (Corporate) / 1,000 13,000
Pre Owned Range / 1,000
Years Produced 1988-1998

SIKORSKY PROPRIETARY INFORMATION 14

PERFORMANCE COMPARISON (Published C&D V17.1) (New **To Be Added to C&D**) Comments
Aircraft S-70A/C S-70i
Type of Operation Corporate Utility
Range-NBAA IFR Reserve (NM)
Seats Full 0
Ferry Range 0
Range-30 Minute Reserve (NM)
Seats Full 270
Ferry Range 270
Balanced Field Length (FT) 0
Landing Field Length - FAR 91 0
Landing Field Length - FAR 121 0
Landing Field Length - FAR 135 0
Rate of Climb (FT/MIN) 2,200 2,020
One Engine Out 400
Cruise Speed-Maximum (KTAS) 149 160
Normal 0
Long Range 132
Stall Speed (IAS) 0
Ceiling - Certified MTOW (FT) 0
Service 13,200 15,000
Service OEI 3,700 6,780
Hover IGE (Helicopter Only) 9,000 10,270
Hover OGE (Helicopter Only) 4,300 6,200

SIKORSKY PROPRIETARY INFORMATION 15