INVESTOR RELATIONS PRESENTATION JANUARY 2016

Transcription

1 INVESTOR RELATIONS PRESENTATION INVESTOR RELATIONS PRESENTATION JANUARY 2016

2 AEROMEXICO: MEXICO S PREMIUM NETWORK CARRIER. Mexico s only full service carrier, offering customers up to a threeclass service. Operating a hub and spoke network model with main hub airports in Mexico City and Monterrey. Global Airline. Only Mexican carrier flying to long-haul markets in Europe and Asia. 86 destinations in 26 countries, over 610 daily flights million passengers transported in Founding Member of SkyTeam. Enhanced strategic alliance with Delta Air Lines. Majority shareholder in Club Premier, Mexico s largest loyalty program, partnering with AIMIA. 2

3 ABOUT US: AEROMEXICO TIMELINE Transaction Delta Master Trust. Grupo Aeromexico issued $1.5 billion through its CBF's program. Grupo Aeromexico celebrates 80 years as Mexico s flagship airline. Issuance of notes guaranteed by US Ex IM Bank (USD $195.8 million, 2.3% structured notes ). Grupo Aeromexico issued $2 billion MXP through its CBF's program Jan Apr May Jul Sep Dec 2015 Feb Mar Sep Nov Dec Tech Ops (started operations in Queretaro). Launch of new Premier Class menu. 19 aircraft incorporation, including two Boeing 787-8s. Selected to join the Sustainability Index of the BMV. Aeromexico and Delta request authorization for joint collaboration agreement. Delta announced intention to increase stake in Aeromexico to up to 49%. Bilateral Aviation Agreement Mexico- USA signed. 3

4 4.0 MEXICAN ECONOMY CONTINUES TO STRENGTHEN. Growth Opportunities for Mexican Economy (1) Air Traffic Penetration (2) Expected GDP Annual Percentage Change Flights Per Capita for Middle & Upper Class Population (>$15K) Mexico Latin America and the Caribbean Brazil Favorable Demographics Mexico Brazil Europe US Growing Middle Class (3) Favorable Demographic Trends (4) Middle Class Sources: (1) Banco de Mexico September 2015 for Mexico, IMF September 2015, World Economic Outlook for other markets (2) IMF World Economic Outlook (3) INEGI (4) CONAPO (2010 Demographics in Million) (2050 Demographics in Million) mm 70 mm Men Women 4

5 AEROMEXICO: FINANCIAL RESULTS Q1 - Q Total Revenues Millions of Pesos 34,377 Operating Margin Millions of Pesos +9.7% 5.9% 3.1 Pts. 31, % YTD 2014 YTD 2015 Operating Profit Millions of Pesos 130.0% 2,025 YTD 2014 YTD ,373 EBITDAR Millions of Pesos 50.8% 8, YTD 2014 YTD 2015 YTD 2014 YTD 2015 Source: Grupo Aeromexico Quarterly Results 5

6 SOLID PERFORMANCE IN MEXICAN MARKET. FY15 Domestic Market Share FY15 International Market Share 1.3% 1.0% 2.8% 11.7% 34.0% Others 33.6% 15.1% 16.8% 24.6% 13.1% 24.7% 3.7% 3.8% 6.2% 7.7% Domestic Passenger Growth Millions of Passengers 12.6 International Passenger Growth Millions of Passengers % +16.8% FY 14 FY 15 FY 14 FY 15 Source: Traffic Report YTD December (Passenger Information, includes Charter operations). 6

7 DELTA PARTNERSHIP ENHANCEMENT Delta intends to increase ownership stake in Grupo Aeromexico to up to 49% through a cash tender offer at MXP per share. 35% Mexican Domestic Seat Capacity** Jan-Sep % Open Skies is expected to be approved in 2016 and Delta has already applied for ATI with Aeromexico. 22% 11% 4% The transaction is subject to all regulatory approvals and would likely commence in the June quarter. others Top 10 US-Foreign Country Markets (Total Trade $Billions)* Delta and Delta pension trust hold shares and derivatives covering to approximately 17% economic interest in Grupo Aeromexico. Mexico is the largest US market in Latin America and its economy is well positioned for the future *Source: United States Census Bureau, November 2015 **Source; GAM Statistics Department, November

8 INVESTING IN OUR FUTURE: NETWORK ENHANCEMENT. Strengthening our network with new destinations and frequencies: Increased presence in Central & South America: Panama and Medellin. Strengthened service to USA, Canada, the Caribbean & Europe: Mexico City to Boston, Toronto and Vancouver, as well as Monterrey to New York and Miami. New Routes for 2016 include: Santo Domingo and Amsterdam. Increased frequencies to London. Developing Monterrey Hub. Network Enhancement in 2016 SD Sant Domingo AM Ámsterdam Improving Connectivity % Connecting Passengers of total 32% 30% 26% 21% c Strengthening Position in Mexico City and MTY Connecting Banks in Mexico City Airport Banks Embed Shuttle Product Source: Grupo Aeromexico Arrivals Departures 8

9 MEXICO CITY AIRPORT : A GROWING HUB Despite restrictions on slots, the AICM is becoming a hub of global importance, with Aeromexico as a key element for growth in connectivity : Global Airport Country Index 1 ATL USA ORD USA DFW USA CLT USA IAH USA DTW USA CGH Brazil DEN USA MEX Mexico PHX USA 778 Conectivity Index, OAG Latin America CGH MEX GRU BOG BSB Índice Index 2010 Índice Index 2015 Connectivity Index per Airline, ANNA AM Destinations Aeromexico (MEX) Copa (PTY) Azul (VCP) Avianca (BOG) TAM (GRU) GOL (GRU) Source: OAG 2016 Connectivity Index (calculated as ( possible connections / number of destinations served ) ANNA ( Airline Network News Analysis) 2015: (number of destinations served by the airline Hub). 9

10 REVENUE MANAGEMENT STRATEGY FOCUSED ON RASK. Competitive pricing with better segmentation to drive volume while protecting yields. Capturing marginal VFR and leisure passengers with competitive pricing in advance purchase. Building state of the art data sources and tools. Ancillary revenues add incremental margin at low cost. Strategy for the future Increase distribution of existing products through IT developments: Upgrades. Aeromexico Plus: choice seat in front and exit rows in economy. Excess luggage pre-payment. Concierge. Ground transportation. MXP Ancillary Revenues per Passenger $119.0 $100.0 $92.0 $ FY 2015 Discount pass. 10 VFR refers to Visiting Friends and Relatives 10

11 UNRELENTING FOCUS ON COSTS. Cost control has also been key in the transformation of the Mexican Airline Industry. Mexican Carriers have proven their ability to cut costs, with Aeromexico becoming the most efficient Full Service Carrier in the Americas. Airlines in Americas, CASK Stage Length Adjusted YTD 2015 Low Cost Carriers Full Service Carriers Latest available information from Companies 2015 Quaterly Financial Reports: January- September 2015 for Domestic and US Airlines.. American Airlines and United Includes consolidated results. Source: Company Reports. Ajuste Stage miles Exchange Rate: Considers GAM s average exchange rate for the period (15.57). 11

12 FLEET SUBSTITUTION AS KEY ELEMENT TO ACHIEVE COST EFFICIENCY WHILE IMPROVING PASSENGER EXPERIENCE Years Americas Mean: Average Fleet Age Europe Mean: Mexican Industry Aircraft Orders Up to: 100 New Boeing Aircraft Order 90 B737 MAX Up to: 10 B Americas Europe Rest of Domestic Industry +160 New Aircraft Order (1) DGAC 2015 for Mexican fleet, (2) Source for International Airlines: (2) Ascend and public information from each airline. Public orders announced since Fleet scheduled to arrive from 2012 through

13 INVESTING IN OUR FUTURE: PEOPLE. Global Management Team that combines experience of International Airlines. New Labor Contracts for new employees. Potential Labor Cost Savings 13

14 INVESTING IN OUR FUTURE: AEROMEXICO FLEET PLAN. Fleet type Model 4Q14 4Q15 4Q16E E E-170/175/ Regional Narrow Body B B B Wide Body Total Source: Grupo Aeromexico 14

15 INVESTING IN OUR FUTURE: AEROMEXICO FLEET PLAN. Fleet Plan renewal provides CASK efficiencies, maintaining flexibility and reducing ownership cost. Today Fleet Plan Long term Leased vs. Owned E-145 E-170/175/190 E-170/190 Moving towards a more balanced split of owned vs leased aircraft through our long term fleet plan s/800 s NG 767 s 787 s s NG/MAX Market conditions offer several opportunities to increase business with lessors. Economies of Scale from new aircraft acquisition. 777 s 787 s Source: Grupo Aeromexico 15

16 INVESTING IN OUR FUTURE: EFFECTIVE RISK MANAGEMENT. Reducing exposure to external factors, building flexibility in our fleet plan. Aircrafts 300 Economic Cycle Exchange Rate Exposure Revenues Fleet plan flexibility MXN 42% Costs USD 58% Reduced risk from exchange rate fluctuations MXN 33% USD 67% Year Aircraft Staggered Leases Fleet Total Regional Total Fuel Hedging Strategy Over 50% of expected fuel consumption for the next 12 months is hedged with call options and call spreads. Narrow Body Total Wide Body Total GAM Total Source: Grupo Aeromexico Fuel surcharges complement Grupo Aeromexico s hedging strategy. 16

17 INVESTING IN OUR FUTURE: DEVELOPING PARTNERSHIPS. Strategic alliances have contributed to Aeromexico s increased connectivity and premium product. Aeromexico is the only Mexican carrier in an international alliance. Club Premier Loyalty Program Aeromexico has a 51% investment in PLM. Value of PLM in Dec 2012 US$518 Million million frequent flyer members. Gross billings of USD $153M in Largest Frequent Flyer Program ( FFP ) in Mexican market. Solid commercial alliances with financial institutions (i.e. Banamex, AMEX) and retailers (i.e. Soriana). Low capital requirements and stable cash flow generation. Earn kilometers with 90+ commercial partners. Delta Air Lines Alliance Strong relationship of over 20 years. Shareholder of Aeromexico and member of our Board. Network-wide code sharing: 204 share codes 725 flights. JV-MRO facility in Querétaro. Potential for airports co-location. Looking forward to potential ATI/JV in the context of Open Skies for Mexico. Delta announced its intention to increase ownership stake in Grupo Aeromexico to up to 49%. 17

18 STRATEGIC ALLIANCE: Potential Joint Network in US-MEX Transborder market POTENTIAL JOINT NETWORK FOR MEXICO US TRANSBORDER MARKET AM and DL have filed an application with the US DOT and Mexican Competition Authorities (COFECE) seeking antitrust immunity for a new joint venture on flights between the US and Mexico. This joint venture would provide an enhanced customer proposition, deeper schedules and enhanced network possibilities for travelers, differentiating Delta and Aeromexico from other airlines in the market. Currently Delta and Aeromexico offer more than 4,000 weekly codeshare flights, representing more than 80 daily trans border round-trip flights. 18

19 INVESTING IN OUR FUTURE: NEW MEXICO CITY AIRPORT KEY OBJECTIVES. Strategic opportunity for Mexico to create and develop the best global hub in Latin America. Designed by award winning architect, Norman Foster, who was also architect for Hong Kong and Beijing International Airports, amongst other globally recognizable buildings. Enhanced processes to optimize connectivity and promote NAICM as the hub of a global flagship airline: Aeroméxico. Ensure that NAICM will allow profitable growth of the Mexican Aviation Industry, with competitiveness in operational costs and quality in service. Continuous consultative process in the design & construction of the new airport and establishment of a structured transition program to ensure a successful launch. 19

20 ONCE IN A LIFETIME OPPORTUNITIES AHEAD WITH NEW MEXICO CITY AIRPORT. Mexico City Airport is geographically well positioned to capture connecting passengers from the Americas. Total Air Passengers Origin and Destination between USA and Latin America Direct Flight 56% Connecting 44% = 31.8 mm - 4% of total connecting passengers currently transfer through Mexico City Airport. - This represents a huge opportunity for Aeromexico, particularly when the New Mexico City Airport is completed. Source: DDS, O&D passenger information for the full year period of

21 THANK YOU FOR JOINING US TODAY.

22 Investor Relations Contact Information: Tel (+52) Jonathan Wallden Contact Information: DISCLAIMER This presentation is neither an offer for sale nor a request to buy any securities. Such offer or request may only be made through an offering memorandum containing the description of the terms and conditions of such offer and shall include detailed information of the company and its management, as well as the financial statements of Grupo Aeromexico, S.A. de C.V. ( Grupo Aeromexico ), in terms of the Securities Market Law (Ley del Mercado de Valores) ( LMV ) and the General provisions applicable to securities issuers and other securities market participants (Disposiciones de carácter general aplicables a las emisoras de valores y a otros participantes del mercado de valores) (the Provisions ). Statements in this presentation that are not historical facts, including statements regarding our estimates, expectations, beliefs, intentions, projections or strategies for the future, may be "forward-looking statements". Such statements include, but are not limited to, statements about future financial and operating results, the Company s plans, objectives, estimates, expectations and intentions, and other statements that are not historical facts. These forwardlooking statements are based on the Company s current objectives, beliefs and expectations, and they are subject to significant risks and uncertainties that may cause actual results and financial position and timing of certain events to differ materially from the information in the forward-looking statements. 22