December 2005 ROAD SHOW
Disclaimer DISCLAIMER • The following presentation (the "Presentation") has been prepared by Centrobanca SpA (“Centrobanca”) and Banca Profilo S.p.A. (“Joint Global Coordinators”) based on information and guidelines coming from Eurofly S.p.A. (“Eurofly” or the “Company”). • Information, opinions, estimates and forecasts contained herein have been obtained from, or are based upon, sources believed by Centrobanca to be reliable but no representation of warranty, express or implied, is made and no responsibility or liability is accepted by Centrobanca (and its own employees and management) as to their accuracy or completeness. • The Document is for information purposes only and is not intended as an offer or solicitation of an offer to sell or to buy any financial instrument. • All unauthorized use, duplication or disclosure is prohibited. The acceptance of this presentation implies a personal responsibility to maintain the greatest confidentiality as regard to all information contained, avoiding any disclosure to third parties . 2
CONTENTS BUSI NESS & COMPANY OVERVI EW …….……………………….. 4 I NDUSTRY OVERVI EW & ACHI EVEMENTS..……………………. 8 OPERATI ONS ………….…………..………………………………….. 23 FI NANCI ALS……………………………………………………………. 27 STRATEGY & I NVESTMENTS CONSI DERATI ONS……………… 33 OFFER STRUCTURE…………………………….…………………….. 42 Q&A 3
BUSI NESS & COMPANY OVERVI EW 4
Consolidated Expertise � New positioning, from a pure charter carrier to a 2004-present leisure carrier, with a multi-channel distribution BUSI NESS BUSI NESS � Portfolio Optimization (Routes and Products) I NNOVATI ON I NNOVATI ON � Actions to mitigate seasonality 2001-2003 � New aircrafts with improved cost-pricing mix COMPANY’S COMPANY’S REORGANI ZATI ON REORGANI ZATI ON � Back to Profit � Independence from Alitalia 1998-2000 � Expansion in Long Haul: reverse DI VERSI FI CATI ON DI VERSI FI CATI ON seasonality compared to Medium Haul � Charter arm of Alitalia 1989-1998 � The first Italian Medium Haul carrier FOCUS ON MH FOCUS ON MH 5
The Existing Models Flag Carrier Low Cost Charter Low Cost Charter Flag Carrier Low Cost Holiday Lean Cost Destinations Safety Structure Market consolidation Flag Carrier Charter Leisure Leisure Eurofly is a leisure carrier characterized by a cost-driven organization, that flies mainly point-to-point to tourist destinations and Leisure targets people who travel for holidays 6
Key People 594 employees (Avg. at 06/30/2005) � 128 Pilots � 268 Flight attendants � 189 Employees � 8 Managers Operating Commercial Operating Commercial Unit Unit Unit Unit 7
I NDUSTRY OVERVI EW & ACHI EVEMENTS 8
Air Transportation Demand Rising demand both in domestic and international markets (expected 2005-2008 CAGR: 6% - source: Airbus, Boeing) I nternational Market Domestic Market I nternational Market Domestic Market I NTERNATI ONAL FLI GHTS (2004 vs 2003) I NTERNATI ONAL PASSENGERS I ndustry 15.3% I H 2005 vs. 12.2% I H 2004 S America 12.7% 2004 vs. 13.5% 2003 14.8% N America Middle East 24.8% 0.0% 5.0% 10.0% 15.0% Chg. % pax Europe 10.1% 20.5% Asia Pacific Source: ASSAEROPORTI Africa 10.3% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Chg. % RPK Source: I ATA RPK: Revenue Passengers Kilometers 9
Tourism Demand 2004 witnessed a return to growth of tourism demand (+ 10% , source WTO), a lower percentage of holiday packages against total holiday spend and a growing on line (DI Y) tourism European Mkt Tourism on-line (€ mln) European Mkt Tourism on-line (€ mln) 30 CAGR 38% 20 10 0 2002 2003 2004 2005 Source: BCG analysis 2005 10
The Reference Market � I talian charter flights account for approx. 15% of total traffic � Spain and Egypt are the main leisure markets in terms of passengers: 1,5 million (18% of total) and 1,3 million (15% of total) respectively. Italian Carriers 63% Charter outgoing: 10.000 historic reference Foreign Market for Eurofly 8.000 Carriers PASSENGERS 37% 5.808 6.000 5.608 (000) 5.509 5.125 4.000 Italian Carriers 2.000 3.087 2.944 2.980 2.722 Foreign 9% Carriers I ncoming traffic: 0 91% Room to grow 2001 2002 2003 2004 Incoming Traffic Outgoing Traffic Source: ENAC Data - 2003 Eurofly is gradually transforming itself into a leisure operator from a pure charter. As a result, the current reference market of 5,8 million of passengers is progressively expanding 11
Italian Airlines Overview Airline Companies from 1999 to 2005 Med Airlines National Jet I talia Panair Air Sicilia Eureca Neos Silfly Federico I I Airways At risk Closing down Going concern 13 4 14 Many but weak competitors: � nearly 50% of airline companies have ceased to operate over the last 6 years or are currently at risk � increasing competitive pressure on yield factor due to the entrance of foreign operators and low-cost carriers active on the most congested routes 12
Competitive Positioning Main Leisure I talian Carrier I nternational Air Traffic Passengers Mkt Share 2004 Mkt Share 2004 19% 19,7% 28,9% Alitalia Eurofly 2,2% 1 9 , 7 % Neos 2 , 2 % 1 , 1 % 1,1% 1 1 1 , , 7 % % 1 , 5 % 7 2 7 , % 1,7% 15% Livingston + Lauda Air 1,1% 1,5% Blue Panorama Volare + Air Europe 14% 72,7% Altri vettori 23% Source: Assaeroporti (2004 international traffic data - 57.950.770 pax) and company data . Peer group comparison (Blue Panorama, Lauda Air e Livingston, Neon, Volare and Air Europe) suggests Eurofly is the leader in the I talian leisure market with a market share of approx. 29% 13
Medium Haul Business Unit Medium Haul: flight duration of up to 5 hours involving mainly European and Mediterranean destinations 2004 Revenues (% on total MH) Canarian Baleari 7% 7% Greece Egypt 13% 41% Rest of MH 32% 2004 Market Shares 10,5% Israel 8,0% Greece Bundle Canarian 23,3% 13,8% Baleari Egypt 25,6% 0 400 800 1,200 1,600 2,000 Passengers (000) COMPETITORS EUROFLY 14
Long Haul Business Unit Long Haul: flight duration over 5 hours, i.e. typically intercontinental flights 2004 Revenues (% on total LH) Kenya S. Domingo 5% 16% Maldive 37% Rest of LH 23% Mexico 19% 2004 Market Shares 50,4% MALDIVE Fascio 26,3% KENYA 21,7% SANTO DOMINGO 20,4% MEXICO 0 50 100 150 200 250 Passeggeri (000) COMPETITORS EUROFLY 15
Main Achievements: Strong Growth And… Eurofly’s operations have grown at a very steady pace underpinned by a successful strategy Passengers + 51% 1,600,000 11 sett. 1,400,000 + 3% + 20% CAGR 01-04: + 13% 1,200,000 -21% 1,000,000 CAGR 02-04: + 35% n. pax 800,000 600,000 400,000 200,000 0 2001 2002 2003 2004 9 M 04 9 M 05 Revenues 11 sett. + 45% + 16% 250,000 + 31% 200,000 -38% CAGR 01-04: + 6% 150,000 €/000 CAGR 02-04: + 38% 100,000 50,000 - 2001 2002 2003 2004 9 M 04 9 M 05 16
…Milder Seasonality Monthly Flight-H per aircraft Medium Haul Medium Haul and Long Haul routes seasonality 450 comparison suggests: 400 350 � Medium Haul: Strong seasonality with a 300 2004 summer peak demand. Restrained monthly 250 aircraft productivity 200 150 2003 � Long Increased productivity Haul: Lower seasonality and high 100 aircraft productivity, excepting spring and 50 autumn 0 January February March April May June July August September October November December Monthly Flight-H per aircraft Long Haul 600 2004 2004 data show a reduction in 500 seasonality, thanks to: 2003 400 � increased weight of Long Haul 300 flights on total 200 Increased productivity 100 � increased the productivity on both 0 business units January F ebruary M arch April M ay June July August September October November December 17
Innovation In Established Markets… Reverse Model from Egypt: � First European carrier to implement such a system � Direct link from the Red sea (Sharm) to secondary airports in I taly � Passengers increased by 40% in 1H 2005 WINTER SEASON 2003/04 WINTER SEASON 2004/05 MXP 2 AEREI MXP 3 AEREI BGY 1 AEREO SSH 2 AEREI BLQ 1 AEREO VRN 1 AEREO BGY BGY BGY VRN VRN VRN MXP ° ° ° MXP MXP ° ° ° BLQ ° TRN TRN BLQ BLQ ° VCE VCE ° PSA ° ° PSA FCO FCO ° NAP NAP BRI BRI ° ° CTA CTA ° SSH ° SSH SSH ° 18
… And In New Markets Launch of the “NYC Leisure ” product: � I ntercontinental product that offers more convenient point-to-point connections and avoids busy hubs � Leisure-oriented market characterized by high incoming flows and reverse seasonality with respect to “traditional” Long Haul destinations � Achieved Load factors in the first year of activity : Bologna 63% , Naples 75% , Palermo 75% 19
Solid Tour Operators Client Base Relationships with Tour Operators will continue to represent a major asset for the Company � Eurofly is a partner of the major Italian and European Tour Operators � The Company is the official carrier of: • FC Inter Football Team and Italy’s National Football Team • Ferrari Racing Team • Italian Military Forces 20
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