UBS Transport Conference September 15 th Jean-Cyril Spinetta

Transcription

1 UBS Transport Conference September 15 th 2008 Jean-Cyril Spinetta

2 Air France-KLM key operating data Fiscal year The number one airline worldwide in terms of revenues* and number one in Europe in terms of passenger and cargo traffic* A fleet of 607 aircraft in operation: 156 long-haul aircraft 13 full freighters 231 medium-haul aircraft 207 regional aircraft 258 destinations in 103 countries linked by 2,500 daily flights 75 million passengers and 1.5 million tons of cargo in last financial year * Source: Air Transport News September 1,

3 Continuous improvement in profitability since the merger millions Revenues x% Operating income Adjusted operating margin* 21,448 23,073 24,114 1,240 1,405 19, % 6.7% 5.4% 3.8% pro forma pro forma * Adjusted for the portion of financial costs of operating leases (34%) 3

4 Airline sector: undergoing profound change Deterioration in the economic environment is currently impacting demand Rise in fares to compensate for higher fuel costs is accelerating the slowdown in demand Leading to a re-drawing of the airline industry landscape through bankruptcies, mergers and acquisitions Strongest players reinforced under these conditions 4

5 Air France-KLM: Among the strongest of the leading players We have already paved the way with the Air France-KLM merger and we will seize any compelling opportunity to reinforce our position We have key competitive advantages allowing us to remain in profit in this difficult environnement and that will ensure we emerge as a winner from the current downturn 5

6 Six key competitive advantages Largest international network linked by the most powerful European hubs A four-way joint-venture on North Atlantic A balanced network in terms of markets, traffic and customers A fuel-efficient and flexible fleet Synergy and cost-saving reserves thanks to the merger A strong balance sheet and efficient hedging policies 6

7 The number one network linking Europe to the rest of the world Of the 181 long-haul destinations* operated from Europe by AEA members British Airways: 71 destinations i.e 39% Lufthansa + Swiss : 85 destinations i.e 47% Air France: 80 destinations i.e 44% KLM: 62 destinations i.e 34% AF+KLM = 114 destinations i.e 63% * Number of destinations served by operational flights S2008 program 7

8 with unique competitive advantages The highest number of unique destinations The highest number of connection opportunities 114 destinations 42 uniques destinations 7 4 uniques 85 destinations 18 uniques 6,872 AMS 3,749 ZRH 4,904 23,694 MUC CDG 14,011 FRA 7,156 LHR Air France-KLM Lufthansa + Swiss BA Long-haul destinations from Europe (Summer 2008) Long-haul/medium-haul connection opportunities in under 2 hours (Summer 2008) 8

9 A balanced network in terms of markets, traffic and customers Asia: 16% Business: 48% - Leisure: 52% France: 12% North America: 16% Latin America: 7% Revenues Point to point traffic: 20% Europe: 27% Africa and Middle East: 14% Caribbean and Indian Ocean: 7% 9

10 The North Atlantic: an important source of additional profitability A ground-breaking organisation around two JVs: between KLM and Northwest between Air France and Delta ATI granted for a JV between Air France, KLM, Delta and Northwest which would be launched before the end of 2009 Market share: 25% Turnover: $12 billion* RASK: + 3 points* * Estimation 10

11 Position in London reinforced Direct transatlantic flights from London Heathrow in cooperation with our US partners, Northwest for KLM and Delta for Air France SEA LAX MSP DTW ATL JFK Point-to-point offer extended on short and medium-haul from London City Airport with the acquisition of VLM Compelling offer on RoW via our two long-haul hubs 11

12 Capacity growth adapted to current conditions Total Group capacity growth : 2.6% +2.8% on long-haul +2.3% on medium-haul North America: +1.1% Europe and North Africa: +2.3% Middle East: +3.2% Africa: +4.3% Asia:+4.0% Latin America: +4.2% Caribbean & Indian Ocean: +0.1% 12

13 Operating lease policy gives us significant flexibility to adjust capacity Long-haul fleet (number of seats) Five year plan Downward flexibility Medium-haul fleet (number of seats) % +17% % +8% +4% +4% +9% % +3% +4% +5% +6% % % -11% -12% % -6% -12% -17% S 2008 S 2009 S 2010 S 2011 S 2012 S S 2008 S 2009 S 2010 S 2011 S 2012 S

14 Ongoing fleet modernization to improve efficiency in terms of fuel consumption Trend in fuel consumption 4.27 Air France long-haul fleet KLM long-haul fleet (litres par PAX/100 kms) % of fuel consumption % of fuel consumption

15 Challenge 10 cost-savings programme revised upwards millions 114m in savings realised in Q m in further savings identified over the next three quarters 1, Objective for FY of 620m versus 430m realized objective objective 15

16 Challenge 12 : a new set of structural savings In addition to Challenge 10, Air France-KLM is working on a new set of savings, aimed at adapting its cost base to enable it to remain comfortably in profit in an environment of persistently high oil prices, even without the benefit of hedging 16

17 Reserves of future synergies thanks to merged structure New organisation in place since October 2007 will accelerate the further integration of the Group New sources of synergies under review Development of around 100 IT applications to improve current processes and develop new projects to generate synergies Implementation of a new, common central buying organisation 17

18 Among the most efficient fuel hedging policies Fuel bill before hedging ( bn) Fuel bill after hedging ( bn) Total value of hedges $/bl $/bl $/bl $/bl 1=$1.51 1=$1.40 1=$1.39 1=$ Total: $6.81bn *Brent IPE realized + forward price at 5th September

19 A strong balance sheet Net financial debt ( billion) Shareholders funds ( billion) x x Net debt Gearing ratio Gearing ratio ex derivatives Shareholders funds Derivative instruments /03/ /03/ /06/ /03/07 31/03/08 30/06/08 19

20 To conclude Current year: we will remain comfortably in profit with an objective of operating income in the region of 1bn Longer term: our competitive advantages will allow us to continue to strengthen our position in this changing landscape 20