Air Berlin PLC Munich, 25. September 2012 Baader Investment Conference

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1 Air Berlin PLC Munich, 25. September 2012 Baader Investment Conference

Management summary Successful operating development in the first half 2012 Shape & Size has accounted to the operational improvement with more than EUR 100 m Positive revenue development with an

2 Management summary Successful operating development in the first half 2012 Shape & Size has accounted to the operational improvement with more than EUR 100 m Positive revenue development with an increased seat load factor by 1.9%-points and yield improvement by 8.7% compared to H1/2011 Cancellation of routes and capacity reduction have positively contributed to the operating result in H1/2011 The severe fuel price increase could particularly be compensated by cost reduction measures out of Shape & Size Operating result improved by 19% compared to H1/2011 2

3 Key highlights H Total revenue development Yield Seat load factor +8.4% +3.6% % % %p R/ASK [EUR ct.] Revenue/Pax [EUR] Revenue/RPK [EUR ct] Yield [EUR] SLF [%] Cost 1) per ASK incl. & excl. fuel Operational KPIs +5% +1.4% % % C/ASK incl fuel [EUR ct] C/ASK excl fuel [EUR ct] a/c utilization Fuel burn/100 ASK [ltr.] 1) Cost on EBIT level 3

4 Financial Performance [EUR m] H Revenue EBITDAR EBIT Net result Good revenue performance especially in Q1 delivered good H1 rolling increase despite capacity reduction Revenue increase and cost control helped to offset fuel price increase (EUR 70 m) and still achieve higher EBITDAR EBIT increase in line with EBITDAR development Higher non cash financial result increased net loss +2.7% 1, ,948.1 H1/11 H1/ % % -2.9%

5 EBIT development: H to H incl. view Shape & Size [EUR m] Revenue Effects Cost Effects EBIT ACT 2011 Routes cxl Top Line Revenue Price Revenue Capacity Revenue SLF Costs Network MRO Fuel Other Expenses EBIT ACT 2012 Shape & Size = EUR m over four clusters Revenue Price = +9.9% Capacity = k seats (-6,7%) whilst pax reduced by 725k (-4.4%); seat load factor +1.9pP Fuel = Fuel Price/metric tonne = $1,077 (2011: $916 -> +$161; +17,6%); USD/EUR (+1.7%) 5

6 Cost of aircraft ownership H Fleet development [number of aircraft] Net cost of leases & depreciation [EUR m] % % Effective dollar rate [EUR/USD] % Q2/11 Q2/12 H1/11 H1/12 H1/11 H1/12 A320 family A330 family B737 family E190 Q400 6

7 airberlin offers significant advantages to their guests Network of airberlin, Etihad Airways and oneworld NETWORK Brand for business and leisure travelers Attractive mix of leisure and business destinations Three major hubs in Germany/Austria with access to America and through the hub in Abu Dhabi to Asia, India and Australia Huge variety of distribution channels (online, travel agencies, TOPs, GDS) COST Competitive cost structure GUEST SERVICE Unique combination of attractive prices and full service Business class product on long-haul services Worldwide lounge access FREQUENT FLYER PROGRAM Integration Etihad Airways and in oneworld with full compatibility 7

8 Customer Service Etihad Airways and oneworld allow airberlin further strategic development towards a full service airline airberlin strategic development transformation process HYBRID CARRIER FULL SERVICE AIRLINE BUSINESS LOW COST LEISURE Stand-alone airline (cooperation with NIKI) 135 destinations (mainly Europe) Global network (from America to Asia) alliance member Global positioned frequent flyer program (topbonus) Full service airline (lounge, priorities, etc.) Timeline 8

9 Global Growth Opportunities for the Airline Industry Going Forward Europe North America +3.2% +3.6% +4.4% +5.4% +5.8% Asia/Pacific +5.1% +4.6% Africa +6.0% Middle East +6.6% +5.1% Intra Region Traffic Growth Inter Region Traffic growth +6.7% South America Source: Boeing Current Market Outlook 2011; based on RPK 9

10 Two Complementary Networks now Combined Europe covered by AB Russia North America Central America Caribbean DUS BER Northern Africa Middle East AUH India Asia/Pacific Central- & South Africa AB operated EY operated Jointly operated Australia Etihad s and airberlin s combined network strategy enables a wider network reach and market growth Source: PaxISplus of airline

11 2012 is the transition year business transformation airberlin on its journey to sharpen its profile in the scheduled business Shape & Size efficiency program Topline Network & Fleet Costs Maintenance Etihad Airways partnership Oneworld membership New revenue management system and passenger service system Introduction of fare classes Organizational structure Guest experience Measures taken to improve profitability Initiatives with short term negative impacts in H Developing new hubs and investment of new routes Enhancing the long-haul product Lounge development Frequency reduction Route cancellation Investment in staff training Migration process in booking systems Temporary higher FTE needs 11

With the continuous development of our partnership plus the effective usage of new systems airberlin is on the right track for the second half Update on partnerships Code-shares in

) Joint OEM 1) negotiations Joint sales calls to TMCs 2), agents and corporates Codeshares with seven oneworld partners successfully implemented (AA, AY, BA, IB, JAL, RJ, S7) Codeshare

12 With the continuous development of our partnership plus the effective usage of new systems airberlin is on the right track for the second half Update on partnerships Code-shares in place (except for bilaterally constrained markets) Abu Dhabi to Phuket flight revenue management by Etihad (70% of cap.) Joint OEM 1) negotiations Joint sales calls to TMCs 2), agents and corporates Codeshares with seven oneworld partners successfully implemented (AA, AY, BA, IB, JAL, RJ, S7) Codeshare pax volumes H1/2012 vs. H1/ % Joint marketing campaign in Germany Joint procurement of: +136% ULD 3) (7 year lease) Fuel at common stations 1) Original Equipment Manufacturer 2) Travel Management Companies 3) Unit Load Device Partner AB

13 Contribution to full year EBIT improvement more than EUR 100 m in the first half of 2012 [EUR m] H Shape & Size performance H1 H1 > 40.5 > Cost initiatives MRO 4 H1 6 Process improvement Yield & Rev. mgmt Profitability Improvement EUR 2 Network reduction & productivity H1 > 1.9 Alliances 3 > H1 H1 > 34.3 > 7.0 SHAPE & SIZE profitability improvement in H1/12 > EUR 100 m 1 Enhanced yield development 2 Codeshare effects from partnership with Etihad Airways and oneworld 3 Aircraft sourcing and improvement of network productivity 4 Strategic procurement and reduction of maintenance cost 5 Several cost measures EBIT values without effects from cost avoidance 13

Yield- and Revenue improvement measures 1 Yield & Ancillaries Optimize existing distribution

alliances Increase of yield in significant business segments Additional ancillary revenue through

high airberlin presence Push principle for selected distribution channels in Offlinemarkets

14 Yield- and Revenue improvement measures 1 Yield & Ancillaries Optimize existing distribution channels and support additional opportunities, e.g. alliances Increase of yield in significant business segments Additional ancillary revenue through offering of new services to customers (e.g. piece-concept) Enhancing points of sale Increase in market share in international markets with a high airberlin presence Push principle for selected distribution channels in Offlinemarkets Systematic opening up of new customer segments, distribution and sales channels, e.g. in Spain Systems Improvement of the sales platform to increase revenue in new business segments Installation of new Revenue Mgmt System to efficiently manage availabilities & tariffs Systems as enabler for yield- and revenue improvements 14

Our all-encompassing cooperation with Etihad Airways opens a new world of destinations 2 Etihad Airways partnership More attractive corporate contracts due to wider network Increase passenger flows

15 Our all-encompassing cooperation with Etihad Airways opens a new world of destinations 2 Etihad Airways partnership More attractive corporate contracts due to wider network Increase passenger flows through code share Joint sales and distribution channels Joint frequent flyer program Joint network with aligning hub traffic Cabin crew training; joint simulators Joint procurement Airport sourcing 15

With oneworld airberlin enters into an attractive alliance 2 oneworld alliance Codesharing and interlining with partners to multiply the number of airberlin destinations offered Substantial increase

16 With oneworld airberlin enters into an attractive alliance 2 oneworld alliance Codesharing and interlining with partners to multiply the number of airberlin destinations offered Substantial increase of seat load factor Enhancing attractiveness by offering joint products, e.g roundthe-world tickets through linking the airberlin topbonus program to the frequent flyer programs of other partner airlines Offer seamless travel to all customers on all oneworld flights 16

Cut of unprofitable routes and related capacities increases efficiency & allows fleet optimization 3 Network reduction Reduction of fleet from 170 to 152 aircraft will decrease cost of aircraft

17 Cut of unprofitable routes and related capacities increases efficiency & allows fleet optimization 3 Network reduction Reduction of fleet from 170 to 152 aircraft will decrease cost of aircraft ownership per block hour by more than 9% Elimination of unprofitable network elements and optimization of fleet rotation Increase of aircraft productivity by 7% Optimize cycles to reduce crew travel and unproductive working hours Focus on high frequency destinations 17

18 Capacity development Total seats [m] ASK [bn] Comments >-5% >-1.5% ASK development 2011 to 2012 [bn] long haul medium haul 17.4% 62.8% 12.3 >+6% 39.0 <-3% Sharp fleet reduction from 170 to 152 aircraft Capacity reduction in medium and short haul by Giving up unprofitable routes Alignment of aircraft utilization Focusing on high frequency Expansion in long haul by Increasing flights to Abu Dhabi Strengthening Berlin hub with flights to North America short haul 19.8% 10.8 <-7% 18

19 Topline development yield and seat load factor improvement Revenue/pax [EUR] Seat load factor [%] Revenue/ASK development [EUR ct] >+5% >+2%p. >+6.5% 78.2% Effect through alliances & partnerships Shape & Size Price SLF Ancillaries 2012 Initiatives to increase yield Increase of base fare ( Eckpreis ) to all destinations Restrictive booking class steering drive higher yields (implementation of better RMS) Increase of fuel surcharge has been established in January further increase in March Cancellation of routes helps to improve yield and seat load factor Partnerships positively impact seat load factor 19

20 In the course of 2012, increasing impact on EBIT current improvement > EUR 230 m [EUR m] Share of Total 26% 30% >60 >70 >230 >50 >50 Q1 Q2 Q3 Q Implementation Realization 20

21 Balance sheet structure [EUR m] B/S as of Dec 31, 2011 B/S as of Jun 30, ,264 2,528 Fixed assets 66% 11% Equity Fixed assets 55% 4% Equity Other current assets 24% 89% Debt Other current assets 33% 96% Debt Liquid assets 10% Liquid assets 12% Based on changes in market value from end of June to end of July additional EUR 60 m were accounted for in the adjusted view on equity EUR 320 m Balance negatively impacted by changes in market valuation Target is to achieve a better equity ratio at the end of the year 2012 Net debt target is around EUR 500 m 21

22 Dollar hedging 2012 Dollar hedging profile and FX rate development, 2012 vs Hedging profile [%] FX rate development * [USD/EUR] Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec jan Feb Mar Apr May Jun Hedging Rate 2012 (as of 07/30/2012) Hedging Rate 2011 (as of 08/12/2011) Current Hedge rate Market / Forward rate Hedge rate 2011/12 * as of 30 Jul 2012 / 12 Aug

23 Fuel hedging 2012 Fuel hedging profile and fuel price development, 2012 vs Hedging profile [%] Price 1) development * [USD/t] ,020 1, Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 540 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Hedging Rate 2012 (as of 07/30/2012) Hedging Rate 2011 (as of 08/12/2011) Current Hedge price Market / Forward price Hedge price 2011/12 * as of 30 Jul 2012 / 12 Aug 2011 // 1) excl. differentials 23

24 Strong earning improvement envisaged Operational performance Capacity Moderate increase in long haul business Capacity utilization and income Increasing load factor through network reduction, improved sales platform and partnerships Result Revenue Growth in revenue through yield and SLF growth expected Expenses Cost per ASK excl. fuel will be kept stable; structural cost increases will be offset through Shape & Size Result Improvement in profitability Balance sheet Target 2012 A L Balance sheet Equity and liquidity stabilized through Etihad Airways investment Equity ratio better than previous year at year end 2012 Deleveraging is the key objective for 2012; initiatives are on the way Net debt target around EUR 500 m by year end 2012 Strong earnings improvement targeted for

25 Management Board airberlin group Dr-Ing. E.h. Hartmut Mehdorn Chief Executive Officer (CEO) Wolfgang Prock- Schauer Chief Strategy & Planning Officer (CSPO) Paul Gregorowitsch Chief Commercial Officer (CCO) Ulf Hüttmeyer Chief Financial Officer (CFO) Helmut Himmelreich Chief Operating Officer (COO) Dr. Martina Niemann Chief Human Resources Officer (CHO) 2

Board of Directors Air Berlin PLC Dr Hans-Joachim Körber Chairman of

Member of Remuneration Committee, Finance Committee James Hogan CEO

CEO of Air Berlin PLC, Member of the Board of Directors,

James Rigney CFO d Airways, Member of the Board of Directors Ali

Airlines, Member of the Board of Directors, Remuneration Committee,

Trimet Aluminium AG, Essen, Member of the Board of Directors, Cha

Committee Nicholas Teller CEO of E.R. Capital Holding GmbH & Cie.

26 Board of Directors Air Berlin PLC Dr Hans-Joachim Körber Chairman of the Board of Directors, Chairman of the Nominations Committee, Member of Remuneration Committee, Finance Committee James Hogan CEO of Etihad Airways, Vice Chairman of the Board of Directors Dr-Ing. E.h. Hartmut Mehdorn Chief Executive Officer (CEO) Joachim Hunold Former CEO of Air Berlin PLC, Member of the Board of Directors, Remuneration Committee Niki Lauda Member of the Board of Directors James Rigney CFO of Etihad Airways, Member of the Board of Directors Ali Sabanci Member of the Board of ESAS Holding and Chairman of Pegasus Airlines, Member of the Board of Directors, Remuneration Committee, Finance Committee Heinz-Peter Schlüter Chairman of the Supervisory Board of Trimet Aluminium AG, Essen, Member of the Board of Directors, Chairman of the Audit Committee, Member of Nominations Committee, Remuneration Committee Nicholas Teller CEO of E.R. Capital Holding GmbH & Cie. KG, Hamburg, Member of the Board of Directors, Chairman of the Finance Committee, Member of Audit Committee Johannes Zurnieden Managing Director at Phoenix Reisen GmbH, Bonn, Former Chairman of the Board of Directors, Member of the Board of Directors, Remuneration Committee 2

Air Berlin PLC Frankfurt, 29 August 2012 DVFA Small Cap Conference

Air Berlin PLC Frankfurt, 29 August 2012 DVFA Small Cap Conference 2012 is the transition year business transformation airberlin on its journey to sharpen its profile in the scheduled business Shape &