Analyst Meeting 1Q/2015

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Jessica Lester
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1 Analyst Meeting 1Q/2015

2 DISCLAIMER 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 materialize, 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.

Roi Et Growing load factor of 83% (+3 ppts YoY) Passengers carried at 3.

YoY Rebounded International tourists, Average fares increased by 3% YoY

5 hrs/day (FY2014 : 10.9 hrs/day) TAA s cash balance of Baht 7.

98X) World s Best Low Cost Airline for 6 years straight and Best Asian

Thailand 83% Load Factors Rebounded International tourists 7% drop of

3 1Q2015 KEY HIGHLIGHTS No. 1 Low Fare Airline of Thailand Introduced 3 New Routes ; Nan, Loey and Roi Et Growing load factor of 83% (+3 ppts YoY) Passengers carried at 3.7 million, rocketed by 19% from prior year, beating 15% capacity growth YoY Rebounded International tourists, Average fares increased by 3% YoY to 1,755 Baht, while 3% growth in RASK Plummeted drop in oil price, CASK dropped by 7% to Baht 1.52 YoY 42 aircraft as at 1Q2015 (FY2014:40) with utilization 11.5 hrs/day (FY2014 : 10.9 hrs/day) TAA s cash balance of Baht 7.0 Billion 2 (net debt/equity 0.98X) World s Best Low Cost Airline for 6 years straight and Best Asian Low Cost Carrier for the 8 times by TTG Travel Low Fare Airline of Thailand 83% Load Factors Rebounded International tourists 7% drop of CASK 42 Aircraft 3 New Routes 3% Growth in RASK 7 Billion Baht Note : 1 As of March 2015 (Resource : AAV, AOT and DCA) 2 Including cash and cash equivalents, S-T investments, Investment in private funds L-T investments. 3

4 TAA : FINANCIAL HIGHLIGHTS REVENUES EBITDAR Unit: Million Baht +8% YoY Unit: Million Baht 23,485 25,356 6,426-20% YoY 5, % YoY 6,460 7,734 1, % YoY 2,433 1Q14 1Q Q14 1Q Unit: Million Baht 245 NET PROFIT >100% YoY 923 1,948-83% YoY 335 1Q14 VS 1Q15 Revenues increased by 20% due to an increase in Avg. fares EBITDAR margin was at 31% (+8 ppt YoY) mainly from lower fuel cost Net profit margin was at 12% (+8 ppts YoY) 1Q14 1Q

5 AAV : FINANCIAL HIGHLIGHTS Unit: Million Baht REVENUES 23,485 +8% YoY 25,356 NET PROFIT Unit: Million Baht 1, % YoY 6,460 7, >100% YoY % YoY 183 1Q14 1Q Q14 1Q BASIC EPS Unit: Baht >100% YoY % YoY Q14 VS 1Q15 Revenue was at Baht 7,734 million (+20% YoY) Net profit (Parent) was Baht million (+>100% YoY) Basic EPS was baht/share 1Q14 1Q

FLEET PLAN 5-year fleet plan Unit: Aircraft 35 40 +5 45 +5 50 +5 55 +5 60 27 2012 2013 2014 2015E

6 FLEET PLAN 5-year fleet plan Unit: Aircraft E 2016E 2017E 2018E FLEET PROFILE: 42 aircraft as of March 2015 All A320s with single-class 180 seats capacity Average age : 3.7 Yrs as of March operating leases 14 finance leases CONFIRMED EXPANSION PLAN: Planned 5 new deliveries in 2015E 3 more deliveries in 1H more deliveries in 2H2015 6

7 ROUTE NETWORK Nanjing Ningbo As ended of: No. of routes - Domestic -International No. of weekly flights (Dom:Int l -> 61:39) 1Q Route movements: Additional frequencies: New destinations: Nan Loei 1Q2015 Bangkok Phnom Penh (2 nd ) (Jan) Bangkok Nakonphanom (2 nd )(Jan) Phuket Bangkok (13 th )(Mar) 2Q2015 Bangkok - Phuket (14 th )(May) Bangkok Nan (1 st,2 nd )(Feb) Bangkok Loei (1 st,2 nd )(Feb) Bangkok Roi Et (1 st,2 nd )(Feb) Bangkok Buri Ram (1 st )(Apr) 7

8 OPERATIONAL HIGHLIGHTS GROWING PASSENGERS CARRIED Unit: Million passengers Domestic +19% YoY International Q14 1Q CONTINUE EXPANDING ASK Unit: Million +16% YoY 3,822 4, , , % YoY % YoY 15,419 SOLID LOAD FACTOR +3 ppts YoY 83% 80% 82% 83% 80% 1Q14 1Q AVERAGE FARE* RECOVERY Unit: Baht per pax +3% YoY 1,977 1,712 1,755 1,885-3 ppts YoY -8% YoY 1,726 1Q14 1Q Q14 1Q * Included fuel surcharge 8

9 IMPROVING RASK REVENUE PER ASK (RASK) COST PER ASK (CASK) Unit: Baht 1 Unit: Baht MOPS Singapore Jet 1 ($/bbl.) % YoY % YoY -7% YoY % YoY % 0.73 Fuel Cost CASK ex-fuel 1Q14 1Q EXPENSE BY NATURE 1Q14 1Q POSITIVE FUEL ENVIRONMENT SG&A,7% Repair and maintenance,8% Ramp and airport operation,12% Guest service and distribution,4% Dep. & amort.,4% Others, 1% Fuel,39% 1Q15 2Q15 3Q15 4Q15 Current Hedge Ratio 50% 50% 50% 50% Avg Hedge Cost (USD Jet Kero) Avg Hedge Cost Avg Effective Cost (USD Jet Kero) Avg Effective Cost Staff,11% Aircraft lease,14% 9

ANCILLARIES ENHANCEMENT Ancillary per pax (Baht) 369

) -8% YoY 1,149 1,261 341 354 358 359 +10% YoY 2,941 3,759

STRATEGIES Educate market of AirAsia key ancillary

will drive existing ancillary take up WIFI and other new

Connectivity to popular leisure destination via FLY-THRU

10 ANCILLARIES ENHANCEMENT Ancillary per pax (Baht) 369 Ancillary revenue (Baht mil.) -8% YoY 1,149 1, % YoY 2,941 3, % YoY +17% YoY 4,385 1Q14 1Q STRATEGIES Educate market of AirAsia key ancillary products VS competitors bundle prices New booking system will drive existing ancillary take up WIFI and other new services to enhance ancillary to the next level Connectivity to popular leisure destination via FLY-THRU Introduce Premium Flex to new target of business travelers 16% of Revenue Target 23% in 2020 Improve system 2% Passengers 10

2015F LOOKING FORWARD Average fare will improve by 3-5% in 2015 5 additions in 2015F (FY2014: 40

2 mil pax and 80% LF) Cost Reduction ; More Automation New system will improve user experience and drive

11 2015F LOOKING FORWARD Average fare will improve by 3-5% in additions in 2015F (FY2014: 40 aircraft being 28 OLs vs 12 FLs) 2015F targets of 14.5 mil pax with 83% LF (FY2014: 12.2 mil pax and 80% LF) Cost Reduction ; More Automation New system will improve user experience and drive existing ancillary take up Enhancing connectivity within our network via fly-thru Refocusing on Domestic and Domestic hub to hub 11

12 Tel : (+66)

13 THAILAND MARKET Continual strong tourists arrivals in the last 11-year (million) E SARS Tsunami Bird flu Coup Source: Thailand s Department of Tourism Growing LCC penetration based on AOT passenger traffics (million) 26.6% % % % 39.4% YTD15 All traffics LCC traffics LCC penetration Source: AOT s (March) Suvarnabhumi airport closure Flood H1N1 outbreak, red mob invasion Political Protest Coup YTD2015: Tourists by nationality; ASEAN & Chinese tourists still driven market January-March Nationality % Number %Share Number %Share 15/14 East Asia 4,946, ,178, ASEAN 1,860, ,359, China 2,033, ,036, Hong Kong 145, , Japan 368, , Korea 374, , Taiwan 147, , Others 16, , Europe 1,884, ,240, Americas 340, , South Asia 309, , Oceania 208, , Middle East 154, , Africa 33, , Grand Total 7,876, ,375, Source: Immigration Bureau, Police Department. (March) Tourist visit rocketed by 24% YoY amid Thai's slowing economy Government unveiled a 2015 Discover Thainess campaign aimed at promoting Thai culture and traditions Continual increasing trend of LCCs, capturing 39% of the market (both domestic & international) 13

14 TAA STATEMENT OF COMPREHENSIVE INCOME Unit: Baht million 1Q15 1Q14 Change Change Revenues 7,734 6,460 20% 25,356 23,485 8% Operating costs (6,152) (5,861) 5% (23,695) (19,908) 19% Net Gain (loss) from FOREX 15 (17) >100% % Other income % % Total SG&A (577) (390) 48% (1,927) (1,732) 11% EBIT 1, >100% 653 2,773-76% Finance costs (108) (54) >100% (313) (171) 83% Income tax (187) (67) >100% (5) (654) -99% Net profit >100% 335 1,948-83% Total comprehensive income >100% 345 1,960-82% Earnings per share (THB) >100% % Net profit margin 12% 4% +8 ppts 1% 8% -7ppts EBIT margin 16% 6% +10 ppts 3% 12% -9ppts EBITDA margin 19% 8% +11 ppts 6% 13% -7ppts EBITDAR margin 31% 23% +8 ppts 21% 27% -6ppts 14

15 TAA STATEMENT OF FINANCIAL POSITION Unit: Baht million 1Q2015 FY2014 Change Cash and equivalents* 6, , % Aircraft, leasehold improvements, Equipment -net 18, , % Intangible assets % Other non-current assets % Total assets 28, , % Deferred revenues 4, , % Finance lease liabilities 13, , % Deferred tax liabilities, net % Total liabilities 21, , % Paid-up share capital % Premium on share capital 2, , % Retained earnings 4, , % Total shareholders equity 7, , % *Including cash and cash equivalents, S-T investments, Investment in private funds and L-T investments. 15

16 TAA KEY OPERATIONAL STATISTICS 1Q15 1Q14 Change Change Passengers carried (million) % % Capacity (million seats) % % Load factor 83% 80% +3 ppts 80% 83% -3 ppts RPK (million) 3,694 3,058 21% 12,420 10,829 15% ASK( million) 4,436 3,822 16% 15,419 12,951 19% No. of stages flown 24,872 21,590 15% 85,074 70,149 21% Average stage length (km) % 1,008 1,026-2% Average fare (THB) 1,755 1,712 3% 1,726 1,885-8% RASK (THB) % % CASK (THB) % % CASK ex-fuel (THB) % % 16

17 AAV STATEMENT OF COMPREHENSIVE INCOME Unit: THB million Consolidated Consolidated Change 1Q15 1Q Change Revenues 7,734 6,460 20% 25, , % Operating costs (6,156) (5,866) 5% (23,707.7) (19,928.4) 19% Net Gain (loss) from FOREX 15 (17) >100% % Other income % % Total SG&A (577) (388) 49% (1,924.9) (1,755.7) 10% EBIT 1, >100% , % Finance costs (108) (54) >100% (312.8) (171.0) 83% Share of loss from investment in an associate (0) - N.A. Income tax (186) (62) >100% 1.3 (651.2) -100% Net profit (loss) attributable to: >100% , % Owners of the parent >100% , % Non-controlling interests >100% % Earnings per share (THB) >100% % 17

18 AAV STATEMENT OF FINANCIAL POSITION Unit: THB million Consolidated 1Q2015 FY2014 Change Cash and equivalents* 6, , % Aircraft, leasehold improvements, Equipment -net 18, , % Intangible assets 14, , % Goodwill 8, , % Total assets 52, , % Deferred revenues 4, , % Finance lease liabilities 13, , % Deferred tax liabilities, net 3, , % Total liabilities 24, , % Paid-up share capital % Premium on share capital 2, , % Retained earnings 16, , % Equity attributable to parent 20, , % Non-controlling interests 7, , % Total shareholders equity 27, , % *Including cash and cash equivalents, S-T investments, Investment in private funds and L-T investments. 18

and take in 5 aircraft in 2015 Sapporo (7x weekly) inaugural flight on 1 st May 2015 2 nd tier China, and more exotic destinations in planning 1-2%

19 POTENTIAL TAAX CONTRIBUTION Background: JV between 49% AirAsia X in Malaysia (AAX) and 51% Thai individuals Medium-haul LCC model flying 4-8 hours A fleet of 377 seats (365 seats + 12 flat beds) Connecting North Asia and Australia markets to Don Mueang hub (DMK) Updates: 2 aircraft in 2014 and take in 5 aircraft in 2015 Sapporo (7x weekly) inaugural flight on 1 st May nd tier China, and more exotic destinations in planning 1-2% Increase of TAA LF Frequencies Increase in 2015; Incheon (from 7x weekly to 14x weekly) Osaka (from 7x weekly to 14x weekly) Narita (from 7x weekly to 14x weekly) 19

20 GLOSSARY Load Factor = Represents the number of passengers carried as a proportion to capacity, which is the number of seats available for passengers (180 seats for Airbus A320) Available seat kilometers (ASK) = which is the total number of seats available on scheduled flights multiplied by the number of kilometers these seats were flown Revenue Passenger Kilometers (RPK) = Revenue passenger kilometers, which is the number of paying passengers carried on scheduled flights multiplied by the number of kilometers those seats were flown Average Fare = Calculated as Thai AirAsia' s total passenger revenues and fuel surcharge divided by total number of passengers carried Revenue per ASK (RASK) = Calculated as Thai AirAsia's revenues divided by ASK Cost per ASK (CASK) = Calculated as the sum of Thai AirAsia's operating costs, selling expenses and administrative expenses (but excluding finance costs) divided by ASK Cost per ASK (CASK ex-fuel) = Calculated as the sum of Thai AirAsia's operating costs, selling expenses and administrative expenses (but excluding finance costs) less fuel costs divided by ASK Average stage length (kilometer) = Represents the average number of kilometers flown per flight Aircraft Utilization = Represents the average block hours per day per aircraft during the relevant period. Block hours is calculated by measuring the duration between the time of departure of an aircraft and the time of arrival at its destination. On time performance (%) = A flight is deemed "on time" if the actual departure time is no more than 15 minutes of the scheduled departure time. 20

21 1Q2015 Key Highlights Low Airfare Airline of Thailand 83% Load Factor Rebounded International tourists 3% Growth in RASK 19% Growth YoY 3 New Routes 15% Growth in Capacity 7% Drop in CASK 7 Billion in Cash 2 (net debt/equity 0.98X) 42 Aircraft Utilization 11.5 hrs/day Note : 1 As of December 2014 (Resource : AAV, AOT and DCA) 2 Including cash and cash equivalents, S-T investments, Investment in private funds and L-T Fixed Deposit 23

ANALYST MEETING 3Q2015

ANALYST MEETING 3Q2015 November 12, 2015 DISCLAIMER The presentation is dated the day it is given. The delivery of this presentation shall not, under any circumstances, create any implication that there