Would a change in interest rates affect Ascend by Cirium’s Base Lease Rate forecast?

When we initially created our Base Lease Rate forecasts in the year 2000, our historical analysis of
Market Lease Rate trends in the 1990s indicated a relationship between interest rates and lease
rentals. It is plausible that interest rates should affect lease rates because, all else being equal, lessors
will seek to pass on the higher cost of capital to lessees.

However, demand and supply change over time, and credit spreads tend to increase during
recessions, offsetting the fall in interest rates. Our analysis of Market Lease Rate trends over the last
two decades shows that the relationship between interest rates and lease rentals has been
disconnected since the early 2000s. We have observed rising lease rates in an environment where
the interest rate was low or falling, and we have also seen lease rates falling in an environment where
interest rates were going up.

In our opinion, the main driver of Market Lease Rates is supply and demand of aircraft available for
lease in the market, which is supported by our historical data, and in our view, supply and demand
fluctuation completely trumps the weak effect of interest rates. For this reason, we do not incorporate
in our lease rate forecasts any assumptions about future interest rates or changes in interest rates.