Air Arabia PJSC · DFM:AIRARABIA
Air Arabia PJSC — Investor Presentation (July 2007)
27 slides from Air Arabia PJSC's investor presentation, July 2007
Slide 1: Air Arabia PJSC Investor Presentation July 2007
Air Arabia PJSC Investor Presentation July 2007 July 2007 -1-
Slide 2: Disclaimer
Disclaimer Information contained in this presentation is subject to change without notice, its accuracy is not guaranteed and it may not contain all material information concerning the company. Neither we nor our advisors make any representation regarding, and assumes no responsibility or liability
Slide 3: Agenda
Agenda Air Arabia at a Glance Investment Highlights Financial Highlights Strategy and Outlook July 2007 -3-
Slide 4: Air Arabia at a Glance
Air Arabia at a Glance July 2007 -4-
Slide 5: Highlights
Highlights Route Network – as of Q1 2007 A national carrier of the UAE… Established in 2003 by the Government of Sharjah First and largest low-cost airline in the MENA region 3.7 billion RPK(1) 2.5x the number of passengers as its closest LCC rival(1) Current fleet of 9 leased Airbus 320s
Slide 6: Passenger and Aircraft Growth
Passenger and Aircraft Growth Number of Destinations Fleet Size 40 10 9 34 35 32 8 30 8 # of Destinations # of Aircrafts 25 23 6 5 20 15 15 4 3 10 2 5 0 0 2004 2005 2006 Q1 2007 2004 2005 2006 Q1 2007 Total Passengers and Load Factor Geographic Distribution Central Asia 84.3% 3,000 79.6% 85.0% 5% 79
Slide 7: Investment Highlights
Investment Highlights July 2007 -7-
Slide 8: Investment Highlights
Investment Highlights Highly favorable home and regional market dynamics Strong air traffic growth projected in our target regions Low Cost Carrier (LCC) model highly untapped in the Middle East Strong brand awareness - ranked 27th in the top 40 Arab brands by Forbes Arabia magazine Highly
Slide 9: Highly Favorable Home and Regional Market Dynamics: Air Traffic Growth
Highly Favorable Home and Regional Market Dynamics ong Air Traffic Growth Projected in Our Target Regions International Air Traffic Growth by Key Middle East Passenger Traffic(1) Route Area 7.1% 270 6.0% 5.3% 5.3% AAGR % 2005A-2015E % .2 Passengers in MM :6 R G A C 81 Middle East Routes All Internat
Slide 10: Highly Favorable Home and Regional Market Dynamics: LCC Model Untapped
Highly Favorable Home and Regional Market Dynamics w Cost Carrier (LCC) Model Highly Untapped in the Middle East LCC Penetration – Proven LCC Penetration - Middle East (2) Markets – 2005A(1) Europe LCC, 11% 2005A 2006E – Air Arabia LCC, 0.8% Estimate LCC, 1.4% Traditional Carriers, 89% North America
Slide 11: Highly Profitable Low Cost Carrier Business Model
Highly Profitable Low Cost Carrier Business Model Revenue / ASK Cost / ASK Company EBITDAR (AED - Fils) (AED - Fils) AirAsia 12.0 10.0 21% Air Arabia 16.0 14.3 25% Ryanair 21.5 16.8 35% GOL 34.0 18.0 28% EasyJet 32.0 29.0 17% JetBlue 30.0 29.0 16% SouthWest 36.0 29.0 18% VirginBlue 39.0 32.0 22% Wes
Slide 12: Highly Profitable Low Cost Carrier Business Model: Operating Costs
Highly Profitable Low Cost Carrier Business Model Operating Costs as a Percentage of Revenues 100.9% 100% 4.6% 97.2% 3.7% 89.0% 13.6% 86.3% 3.7% 1.9% 12.5% 80% 14.3% 14.4% 14.1% 11.4% 9.1% 6.8% 11.4% 10.9% 60% Cost of Sales 9.9% 13.0% 86.8% Cost of Sales 14.4% 13.5% 87.8% Cost of Sales 13.9% Cost of
Slide 13: Highest Level of Aircraft Utilization in the A320 Family
Highly Profitable Low Cost Carrier Business Model stently Achieved the Highest Level of Aircraft Utilization in the A320 Family 100.0 * 99.8 99.6 Operational Reliability % 99.4 Avg. A320 99.2 99.0 98.8 98.6 98.4 98.2 98.0 7 8 9 10 11 12 13 14 15 Daily Utilization (Hours) *Data indicated for Q1 2007
Slide 14: Cost Effective Distribution Network and Booking System
Highly Profitable Low Cost Carrier Business Model st Effective Distribution Network and Booking System Internet bookings significantly reduce staff Distribution Channels and running costs 2006 Q12007 2008E No travel agent costs Internet Booking 23% 30% 50% Customized in-house booking system th
Slide 15: Drive Growth Through an Aggressive Expansion Plan
Drive Growth Through an Aggressive Expansion Plan cant Route and Fleet Expansion Planned, Supported by Sharjah Airport Expa 5 Hour Flying Radius (Sharjah Hub) Fleet Expansion (Sharjah Hub) Aircrafts Target 32 50 85 Destinatio ns Sharjah Airport Expansion 8.0 Passengers (in s e rea c In MM) 3x > 2.5
Slide 16: Track Record of Profitable Expansion
Drive Growth Through an Aggressive Expansion Plan Track Record of Profitable Expansion Breakeven Load Factor vs. Actual Load # of Destinations vs. Net Profit Margin * Factor 40 34 30% 90% Net Profit Margin (%) 32 85% 30 Destinations 23 20% 80% 18% 20 15 13.5% 75% 84% 10% 70% 79% 80% 10 7.6% 77% 65%
Slide 17: Experienced Management Team
Experienced Management Team HH Sheikh Abdullah Bin Mohammed Al Thani Chairman H.H. Sheikh Abdullah holds several prominent positions in the UAE. H.H. Sheikh Abdullah is also the Chairman of the Sharjah Airport Authority Chief Executive Office Adel A. Ali Mr. Adel Ali was ranked one of the 100 most i
Slide 18: Financial Highlights
Financial Highlights July 2007 - 18 -
Slide 19: Historical Financial Performance
Historical Financial Performance Revenues Gross Profit 800.0 749.2 150.0 20% GR 129.5 CA Gross Profit (AED in MM) % Revenues (AED in MM) 600.0 GR 13 3 15% % CA 100.0 98 % Margin 411.2 400.0 65.2 10% 191.8 50.0 200.0 23.9 5% 0.0 0.0 0% 2004A 2005A 2006A 2004A 2005A 2006A Gross Profit Margin EBITDAR N
Slide 20: Q1 2007 Financial Performance
Q1 2007 Financial Performance Revenues EBITDAR Margin 300 30% 246 250 27% % 78 25% AED in Millions 200 20% 138 150 15% 14% 100 10% 50 5% 0 0% Q1 06 Q1 07 Q1 06 Q1 07 Net Income Net Income Margin 50 20% 43 18% 40 AED in Millions 15% % 30 7 60 10% 20 10 5% 5 4% 0 0% Q1 06 Q1 07 Q1 06 Q1 07 Note: Figur
Slide 21: Strategy and Outlook
Strategy and Outlook July 2007 - 21 -
Slide 22: Business Strategy
Business Strategy Offer the lowest fares in the MENA region on a profitable basis, through a single class offering with a simple fare structure Continued focus on the Focus on lowering costs and introducing operational efficiencies Low Cost model Offer point-to-point service to maximize aircra
Slide 23: Business Outlook
Business Outlook 2007E 2010E Aircraft 10 ~ 19 Destinations 38 ~ 50 Passengers 2.2 Million ~ 4.5 Million Sharjah Hub Growth expected to be Revenue Y-o-Y 30% maintained at ~ 20%-25% p.a. Growth for the next 3 years We expect to maintain, at minimum, our current profitability Profitability levels in te
Slide 24: Use of IPO and Private Placement Proceeds
Use of IPO and Private Placement Proceeds l proceeds from IPO and Pre-IPO private placement amount to AED 3.3 billion Investment Amount (AED MM) Timing Aircraft order deposits for Sharjah hub (34 1,700 – 2,000 2007 – 2010 aircraft) Spare engines, maintenance and 160 – 180 Over the next 5 years engin
Slide 25: Appendix
Appendix July 2007 -25- Ubub Ua yc II airarabia.com
Slide 26: Operating Statistics
Operating Statistics 2004 2005 2006 Q12007 # of Aircrafts 3 5 8 9 Average Aircrafts 3.0 4.9 6.0 8.4 Destinations 15 23 32 34 # Passengers (Millions) 0.6 1.1 1.7 0.6 RPK (Billions) 1.2 2.5 3.7 1.1 ASK (Billions) 1.8 3.2 4.7 1.3 Average Load Factor 68% 79% 80% 84% Revenue / Passenger 318.2 354.7 417.8
Slide 27: Air Arabia IPO Summary
Air Arabia IPO Summary Issuer: Air Arabia PJSC Listing: Dubai Financial Market Par Value per Share: AED 1.00 45% of the capital (2.1 billion shares) contributed by founding shareholders: 1.4 billion shares in kind contribution 0.7 billion shares in cash (pre-IPO Private Placement) Capita