INVEST INVESTORS ORS PRESENTATION PRESENTATION NOVEMBER 2019
LEG LEGAL AL DISC DISCLAIMER LAIMER The presentation is dated the day it is given. The delivery of this presentation shall not, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. The third party information and statistical data in this presentation have been obtained from sources the Company believes to be reliable but in no way are warranted by the Company as to accuracy or completeness. This presentation may not contain all material information concerning the Company and the information set forth in this material is subject to change without notice. These materials included herein that are not historical facts are forward-looking statements. Such forward looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties materialise, AAV’s results could be materially affected. The risks and uncertainties include, but are not limited to, risks associated with the inherent uncertainty of airline travel, seasonality issues, volatile jet fuel prices, world terrorism, perceived safe destination for travel, Government regulation changes and approval, including but not limited to the expected landing rights into new destinations. This presentation is strictly not to be distributed without the explicit consent of Company’s management under any circumstances. 1
THAI THAI AIRASIA AT A GLANCE AIRASIA AT A GLANCE (AIRCRAFT) 62 62 Carried over 135 million passengers with CAGR of 23% 56 51 Aircraft Growth Rate of 18% 45 40 35 27 22 22.5 21.6 20 19 19.8 17.2 16 15 14.8 12 12.2 10.5 9 8.3 6 6.9 5.7 5.0 4.2 3.6 3.0 1.8 1.2 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019E 66 66 94 94 25 25 14 14 2 Note: 1 As of 31 October 2019
THAILAND THAILAND MARKET MARKET US 4%Others 4% E.Asia 70% S.Asia 6% EXPECTED OVER 40 AND 41.5 MILLION VISITORS IN 2019 AND 2020 Tourists from China grew 17% YoY with 23% YoY jumps in arrival from India in 3Q2019 29 EU 16% 2 LCC penetration 1 million 36% 36% OVERALL Europe 9M19 visitors grew 4% YoY to 29.5 million 31% 30% 55% 52% 52% 49% 51% CHINA 48% North America Grew 2% YoY and 29% contribution ASEAN South Asia SE Asia Thailand Grew 5% YoY and 26% contribution EUROPE Edged down 2% YoY and 16% contribution SOUTH ASIA 2018 2019 Grew 21% YoY and 6% contribution 1 source: CAPA 3 2 source: Ministry of Tourism and Sport
ANCIL ILLARY LARY PE PERF RFORMAN RMANCE CE +8%YoY 19 % CHECKED BAGGAGE Percent contribution to 50% • 9M19 inched up by 2% YoY, relating to an expansion Revenues 5,677 total ancillary in international route 5,237 revenue Unit : Million SEAT SELECTION • 9M19 up by 24% YoY, relating to an expansion in 8% international route and dynamic pricing 9M18 9M19 • Persuasive advertising influences demand on value pack and seat selection IN-FLIGHT SERVICES 8% • Continue promoting pre-book In-flight combo set • Enhance house-brand on F&B and merchandise FLY-THRU • 9M19 up by 55% from additional flights among AOCs, 6% reflected in a 59% growth in traffics • No. Fly-Thru accounted for 6% of total pax OTHERS (Cargo, Tune, Fees) • Freight revenues was 4% of ancillaries 28% • Fee structure adjustment; processing fee • Upsell on Fly-Thru lounge access ON TRACK TO ACHIEVE 2019 BT 343 PER PAX (+4%YoY) 4 9M19 achieved 5.7bn (+8%YoY) or Bt 339 per pax (+4%YoY)
DOMESTIC DOMES TIC MARKET MARKET 65 % MARKET SHARE 1 BY PAX FLOWN Regional Capacity 2 9M2019 FY2018 33.2% 12 32.4% Unique Routes 3 18.0% 16.7% 18.1% 18.1% 23 9.9% 9.4% 7.1% 5.7% 9.7% 9.3% 7.3% Cities 4.9% AirAsia Nok Lion Smile Thai Bangkok Vietjet 21 Note: 1 9M2019 compared to FY2018 (Source: AAV, AOT and Department of Airport) Transfer Routes 2 Capacity share as of FY2019 (source : OAG) 3 As of October 31 2019 5
DECELERATED GROWTH DECELERATED GROWTH SPUR SPUR THE THE AV AVERA ERAGE GE FAR FARE Peers THAILAND DOMESTIC CAPACITY Thai VietJet 1% Bangkok Airways 5% Nok Air 9% Unit : million 49.55 48.38 47.51 Thai Airways Group 18% Thai Lion Air REDUCTION 67% 27.24 Hubs DMK BKK 2013 2014 2015 2016 2017 2018 2019 Competitors have decreased its Thailand domestic market capacity over the past 5-year had grown by 15% , capacity by 1.8 million seats, resulting in intense competition and the price war. Recently, the market has a more rational environment, reflected in a 4% decline in capacity. particularly DMK hub. (source : OAG) 6
LISTED-AI LISTED AIRLI RLINE NE PERFOR PERFORMA MANCE NCE HIGHEST PAX GROWTH LOWEST CASK* Million passengers Baht 3.52 18.1 16.7 2.20 2.17 1.53 6.2 4.4 AAV THAI NOK BA AAV THAI NOK BA +5% -3% -8% +2% YoY * Cost excluded finance costs and tax expense HIGHEST EBITDAR MARGIN 1 HIGHEST ASK GROWTH Percent Percent 87 17 83 80 13 68 12 10 AAV THAI NOK BA AAV THAI NOK BA Source: 1 SET filing, Company data, AAV estimates based on 9M2019 Results ( NOK excluding Nokscoot) ASK Growth +10% -3% -10% -2% YoY 7 EBITDAR Margin: Earning before finance cost, income tax, depreciation and amortisation, rental / Total sales and service
UNIT COSTS : ON TRAC UNIT COSTS : ON TRACK K TO BEAT FY2 TO BEAT FY201 019 9 PLAN PLAN Unit : Baht -3% 1.57 1.53 34 % Fuel Costs 1.00 1.00 EX-FUEL 16 % Staff Costs FUEL 0.57 0.53 13 % Aircraft and Aircraft Engine Rental 9M19 9M2018 9M2019 CASK decreased by 3% YoY as a result of a 9% decrease in fuel per ASK. CASK ex-fuel unchanged due to the cost 12 % containment. Ramp and Airport Operation 9% Repair and Maintenance Fuel costs in 9M2019 increased by 1% along with a 10% decrease in fuel price and favourable exchange rate of 2%, 6% Selling and Administrative despite a 11% rise in the fuel consumption. 10% Other costs TAA has hedged 86% and 73% of Brent at an effective cost of Jet at $75.6/bbl for 4Q2019 and FY2020, respectively. 8
NETWORK NETWORK REALL REALLOCATION TO OCATION TO MAX MAXIMIS IMISE E OPERATION OPERATIONAL RETURNS AL RETURNS ADD FREQUENCIES: NEW ROUTES: CNX – Danang DMK – Roi Et DMK – Nha Trang 2Q/2019 DMK – Khon Kean DMK – Can Tho CEI – Shenzhen DMK – Shenzhen CNX – Shenzhen CNX – Taipei (6x > 7x) DMK – Ahmedabad HKT – Phnom Penh 3Q/2019 DMK – Narathiwat(7x > 11x)* DMK – Sihanoukville 4Q/2019 DMK – Jaipur (4x > 7x)** DMK – Varanasi DMK – Nan(28x > 31x)*** CEI – Hangzhou * JUL 2019 – OCT 2019 ** WINTER SEASON 9 *** DEC 2019 – JAN 2020
GROWTH GROWTH STRATEG STRATEGIES IES +1 % Revenues by routes in 5-year Growth in ancillary to revenue each year, expected to see 25% in next 5 yrs Diversify Revenue SOUTH ASIA, 10% +10 % Network Growth Growth in cargo revenue ASEAN ex each year, cooperate with Teleport CLMV, 10% DOMESTIC, 45% +2 % CLMV, 15% Growth in Fly-Thru passengers each year Cost CHINA, 20% Reduction Digital Transform Efficient Operation Training Academy • Invest in pilot training academy • AVA • Green flight operation and flight simulator center • FACES • Flight plan efficiency • Aim to reduce cost >100 MB 10
COMPANY COM PANY GU GUIDANC IDANCE • FY2019 capacity growth expected between 5 and 6% driven by disciplined network expansion GROWTH • First A321neo delivered in December and entry to service during 1Q/2020 ASK growth in 2019 between 10 and 11% on the back of international route expansion • Passengers to achieve at 22.5 million on due to waiving VOA fees till 30 Apr 2020 and other tourism measures; • expect to achieve at 86% of load factor On track to achieve 2019 goal; CASK guidance narrowed to -2.0 to 0.0% ; CASK ex-fuel unchanged • COSTS • Maintain a cost advantage over competitors, even under the same or different business models • Cost initiative; transferred call centre services to AVA with 24/7 automated chat system • Taking immediate capacity actions to address near-term RASK weakness, driven by some new routes taking COMMERCIAL longer than usual to mature; network reallocation continues to ramp during the peak seasons • Maintaining its favourable operating performance (OTP) to more than 85%; which is key in positive brand awareness • On track to deliver ancillary revenue; engaging in dynamic pricing of its products & adding a bundled products • Maintain the goal to ensure that our guests feel like they get the great value from the company’s low fare 11
RELE RELEVANT VANT MATE MATERIALS RIALS https://www.aavplc.com/en/investor-relations/home DOCUMENT LOCATION Investor https://www.aavplc.com/en/investor- Presentation relations/downloads/presentations-webcasts Earning https://www.aavplc.com/en/investor- Releases relations/updates/news Annual https://www.aavplc.com/en/investor- Reports relations/downloads/annual-report Investor https://www.aavplc.com/en/investor- Kits relations/publications-and-download/investor-kits Operating https://www.aavplc.com/en/investor- Statistic relations/operating-statistics Sustainability https://www.aavplc.com/en/investor- Report relations/downloads/sustainability-report taa_ir@airasia.com www.aavplc.com +662 5625745-6 Don Mueang International Airport, 3rd Fl., Central Office Building, No.3200,Vibhavadi Rangsit Road, Sanambin, Don Mueang, Bangkok 10210
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