AerCap Holdings N.V. Aengus Kelly, CEO January 2017 Industry - PowerPoint PPT Presentation

AerCap Holdings N.V. Aengus Kelly, CEO January 2017

Industry Update

Looking Back PASSENGER TRAFFIC GROWTH ADDITIONAL CAPITAL Air traffic growth in 2016 New entrants attracted by remained robust, short-haul at 5.6% stable return profile of and long-haul at 6.4% 1 asset class TOP 2016 DEVELOPMENTS CHINA SLOWING GDP GROWTH WIDEBODY CONCERNS 2016 looked a lot like Unaffected by slower than expected Concerns about OEM production 2015 with a backdrop of growth, passenger traffic in China levels and overcapacity with reduced low fuel prices, strong grew steadily at 11.2% in 2016 1 run rates for 777 and A380 traffic growth and an overall profitable year for the industry HIGHER AIRLINE PROFITABILITY LESSOR CONSOLIDATION? Highest airline profitability in the Increased M&A activity industry’s history with $36 billion of within the leasing net profit expected in 2016 2 community IATA Passenger Analysis – RPK % traffic growth for January – November 2016 (1) IATA December 2016 (2) 3 3 4

Looking Ahead FINANCING ENVIRONMENT HEALTHY DEMAND FOR AIRCRAFT Strong airline profitability and GDP growth Availability of financing remains forecasts bode well for aircraft demand robust with receptive Capital despite some deferral announcements Markets 2017 OUTLOOK: STABLE GROWTH FURTHER M&A ACTIVITY GEOPOLITICAL LANDSCAPE The market expected to An evolving situation – Consolidation and emergence carry on with stable of new investors drawn too early to assess impact growth, driven by the by return profile eighth year in a row of aggregate airline profitability RISING INTEREST RATES U.S. DOLLAR STRENGTH Appreciation of U.S. Dollar – Rising interest rates expected to impact lease an area of focus for some rates and debt costs emerging economies 3 4 4

Global Trends Robust industry performance translating into strong aircraft demand • Airline industry profits reached 5.1 % 4.0 B $35.6 billion in 2016 and are forecasted at $29.8 billion in 2017 • Airlines’ profitability expected to continue 2017 World Traffic RPK 2017 Total Passengers to drive capacity increases Growth From 3.8 B in 2016 • The demand stimulus from lower oil prices From 5.9 % in 2016 will taper off in 2017, slowing traffic growth to 5.1% (from 5.9% in 2016) 30 B 8 • North America: 2.5% and Latin America: 4.0% • Europe: 4.0% , Middle East: 9.0% , Years of Industry 2017 Total Net Profit and Africa: 4.5% From $36 B in 2016 Profitability • Asia Pacific: 7.0% IATA December 2016 – Actual or estimate for 2016 and forecast for 2017 for system-wide global commercial airlines 3 5 4

Air Travel Resilience Air travel remains resilient in an unpredictable world Air Traffic Growth 1 (RPKs, billion per month) Peak oil Financial China, Euro Russian $147/bbl crisis crisis, Zika Brazil Brexit crisis MERS Ebola ISIS Turkey 650 600 550 Average 5.5 % 500 growth 450 400 SEASONALLY ADJUSTED 350 ACTS OF TERROR 300 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 IATA Air Passenger Analysis, total passenger market (1) 3 6 4

Middle Class Is Growing and Flying Middle Class to move from 2.8 billion to 4.8 billion in 20 years Middle Class (millions of people) 1 History Forecast 4,830 5,000 3,776 4,000 Emerging Countries 2,792 3,528 3,000 2,602 1,867 2,000 1,738 1,297 911 455 441 Developing Countries 310 1,000 206 130 66 848 864 861 Mature Countries 826 776 0 1995e 2 2005 2015 2025 2035 5.7 6.5 7.2 8.1 8.8 World population (billion) % of world population 23% 29% 38% 46% 55% Oxford Economics, Airbus; Households with yearly income between $20,000 and $150,000 at PPP in constant 2015 prices (1) (2) Estimate split for 1995 by region 3 7 4

Emerging Middle Class The world’s emerging Middle Class lives in Asia Pacific World Population Distribution (2016) 1 • 140+ cities with over 1 million inhabitants CHINA • 2,765 total aircraft in operation 1.38 billion • 530 total aircraft on order • 50+ cities with over 1 million inhabitants INDIA • 480 total aircraft in operation 1.33 billion • 696 total aircraft on order • 50+ cities with over 1 million inhabitants U.S. • 5,937 total aircraft in operation 324 million • 1,648 total aircraft on order United Nations, Department of Economic and Social Affairs, Population Division; Ascend Fleet Database (1) 3 8 4

Airlines Need Over 39,600 New Aircraft Airlines and lessors are expected to receive 5 new aircraft every day for the next 20 years Global Commercial Aircraft Fleet 1 ~ 3.5 % Growth North Annual America 45,240 Growth Replacement 21% Stay in service Latin 22,730 Asia America Pacific 8% 39,620 38% 22,510 NEW AIRCRAFT Middle 16,890 East 22,510 8% Africa 3% 5,620 C.I.S. Europe 2015 2035 3% 19% Boeing Current Market Outlook 2016 (includes regional jets) (1) 3 9 4

China / India Interconnectivity Interconnectivity between China and India is underserved In Total Less Than 6 Flights per Day Joining 2.7 Billion People Between China and India International City Pairs Daily Flights New York - London 31 Dublin - London 43 Paris - Berlin 11 Los Angeles – Mexico City 11 Hong Kong – Taipei 40 Jakarta - Singapore 39 Kuala Lumpur - Jakarta 22 Source: SRS Analyzer based on full year 2016 flights 3 10 4

China / India Interconnectivity Interconnectivity between China and India is underserved In Total Less Than 6 Flights per Day Joining 2.7 Billion People Between China and India International City Pairs Daily Flights China to India City Pairs Daily Flights New York - London 31 Shanghai - Mumbai 0 Dublin - London 43 Beijing - Delhi < 1 Paris - Berlin 11 Beijing - Mumbai < 1 Los Angeles – Mexico City 11 Shanghai - Delhi 2 Hong Kong – Taipei 40 Kunming - Kolkata 1 Jakarta - Singapore 39 Guangzhou - Delhi 2 Kuala Lumpur - Jakarta 22 Source: SRS Analyzer based on full year 2016 flights 3 10 4

AerCap Update

Where is the Aircraft Market? AerCap leased, purchased and sold 1,112 aircraft since July 2014 1 104 255 753 183 570 LEASED LEASED SOLD LEASED PURCHASED 800 312 55 49 1,112 AIRCRAFT TRANSACTIONS PURCHASED PURCHASED WIDEBODY NARROWBODY 175 80 SOLD SOLD (1) No. of transactions from July 1, 2014 to December 31, 2016 (includes owned and managed aircraft) 3 12 4

Lease Transactions AerCap executed 753 lease transactions for new and used aircraft since July 2014 1 202 New Aircraft Leases 551 Used Aircraft Leases Type # of Aircraft Type # of Aircraft Airbus A320 Family 105 Airbus A320 Family 244 Airbus A350 14 Airbus A330 59 Boeing 737 Family Boeing 737 Family 37 158 Boeing 787 33 Boeing 767 22 Embraer E190/195-E2 13 Boeing 777 39 Other Narrowbody 13 Other Widebody 16 (1) No. of transactions from July 1, 2014 to December 31, 2016 (includes owned and managed aircraft) 3 13 4

Aircraft Purchases and Sales AerCap purchased 104 new aircraft and sold 255 aircraft since July 2014 1 104 New Aircraft Purchases 255 Aircraft Sales Type # of Aircraft Type # of Aircraft Airbus A320 Family 83 Airbus A320 Family 21 Airbus A330 27 Airbus A330 1 Boeing 737 Family 66 Airbus A350 10 Boeing 757 21 Boeing 737 Family 34 Boeing 767 11 Boeing 787 38 Boeing 777 14 Boeing 787 2 Other Narrowbody 5 Other Widebody 26 (1) No. of transactions from July 1, 2014 to December 31, 2016 (includes owned and managed aircraft) 3 14 4

What to Watch in 2017 We expect stable growth with these key areas of focus in 2017 Strong passenger traffic Stable demand for aircraft Impact of strong U.S. Dollar Consolidation and emergence of new investors Rising interest rate environment Geopolitical changes 3 15 4

Q&A