INVESTOR RELATIONS PRESENTATION MAY 2016

Transcription

1 INVESTOR RELATIONS PRESENTATION INVESTOR RELATIONS PRESENTATION MAY 2016

2 CONTENTS AEROMEXICO AT A GLANCE BUILDING A STRONG AND FLEXIBLE AIRLINE STRATEGIC INITIATIVES 2

3 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. 87 destinations in more than 20 countries, over 610 daily flights million passengers transported in LTM. Founding Member of SkyTeam. Enhanced strategic alliance with Delta Air Lines. Majority shareholder in Club Premier, Mexico s largest loyalty program, partnering with AIMIA. 3

4 ABOUT US: AEROMEXICO TIMELINE Transaction Delta Master Trust. 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. COFECE approved Antitrust Immunity with Delta subject to conditions Jan Apr May Sep Dec 2015 Mar Sep Nov 2016 Apr May Tech Ops (started operations in Queretaro). Grupo Aeromexico issued $1.5 billion through its CBF's program. 19 aircraft incorporation, including two Boeing 787-8s. 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- US, ratified by Mexican Senate. AM and Delta accepted COFECE conditions on ATI approval. 4

5 THE MEXICAN MARKET: STRONG AND GROWING Growth Opportunities for Mexican Economy (1) Air Traffic Penetration (2) Expected GDP Annual Percentage Change Mexico Latin America and the Caribbean Flights Per Capita for Middle & Upper Class Population (>$15K) 0.6 Favorable Demographics Mexico Brazil Europe US Growing Middle Class (3) Favorable Demographic Trends (4) Brazil Middle Class Sources: (1) IMF April 2016, World Economic Outlook for other markets (2) Morgan Stanley Research FY 2014 (3) INEGI (4) CONAPO (2010 Demographics in Million) (2050 Demographics in Million) mm 70 mm Men Women 5

6 THE MEXICAN MARKET: FINANCIAL RESULTS 1Q2016. Total Revenues Millions of Pesos 12,061 Operating Margin Millions of Pesos 5.3% +12.9% 10, % 0.5 Pts. 1Q15 Operating Profit Millions of Pesos 1Q EBITDAR Millions of Pesos 3, % 2, % Source: Grupo Aeromexico Quarterly Results 1Q

7 THE MEXICAN MARKET: STRONG AND GROWING 1Q16 Domestic Market Share 1Q16 International Market Share 1.8% 1.4% 12.3% 32.0% 37.5% 12.3% 14.6% 28.5% 12.1% 22.5% LTM Domestic Passenger Growth Millions of Passengers 3.8% 4.2% 9.2% 5.6% LTM International Passenger Growth Millions of Passengers % +15.9% 5.5 LTM LTM15-16 LTM LTM15-16 Source: Traffic Report YTD March 2016 (Passenger Information, includes Charter operations). Source: DGAC, Statistical Report

8 CONTENTS AEROMEXICO AT A GLANCE BUILDING A STRONG AND FLEXIBLE AIRLINE STRATEGIC INITIATIVES 8

9 BUILDING A STRONG AND FLEXIBLE AIRLINE: ENHANCING CONNECTIVITY Strengthening our network with new destinations and frequencies: Improved Connecting banks in Mexico City. Increased presence in Central & South America: Panama and Medellin. Strengthened service to USA, Canada, the Caribbean and Europe: Boston, Toronto, Vancouver, Santo Domingo, London and Amsterdam. Developing Monterrey Hub. Network Enhancement in 2016 SD Sant Domingo AM Ámsterdam Improving Connectivity % Connecting Passengers of total 30% 29% 31% c Strengthening Position in Mexico City and MTY Connecting Banks in Mexico City Airport Banks Embed Shuttle Product 27% YTD 2016 Source: Grupo Aeromexico. Statistics March 2016 Arrivals Departures 9

10 BUILDING A STRONG AND FLEXIBLE AIRLINE: AICM A GROWING HUB Despite restrictions on slots, AICM is becoming a hub of global importance, with Aeromexico as a key contributor to 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). 10

11 BUILDING A STRONG AND FLEXIBLE AIRLINE: COST PRODUCTIVITY Aeromexico is the most efficient full service carrier in the Americas. Airlines in Americas, CASK Stage Length Adjusted YTD Low Cost Carriers Full Service Carriers Q 2016 for Domestic and U.S. Airlines. Information from 2016 Quarterly Financial Reports. Includes profit sharing expense and fuel hedge losses. Adjusted Stage miles. Exchange Rate: Considers GAM s average exchange rate for the period (18.06) 11

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

13 BUILDING A STRONG AND FLEXIBLE AIRLINE: FLEET STRATEGY DRIVING EFFICIENCY Fleet type Model 4Q14 4Q15 1Q16 4Q16E E E-170/175/ Regional Narrow Body B B B Wide Body Total Source: Grupo Aeromexico. Fleet

14 BUILDING A STRONG AND FLEXIBLE AIRLINE: FLEET STRATEGY DRIVING EFFICIENCY 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 14

15 BUILDING A STRONG AND FLEXIBLE AIRLINE: FLEET PLAN Fleet substitution as key element to achieve cost efficiency while improving passenger experience Average Fleet Age Mexican Industry Aircraft Orders Years Americas Mean: Europe Mean: 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

16 BUILDING A STRONG AND FLEXIBLE AIRLINE: BEST PEOPLE Focus on productivity Global management team that combines experience of international airlines Best crew and customer service teams in the Mexican industry Attracting and developing talent Safety and security has and will continue to be our top priority Potential Labor Cost Savings 16

17 CONTENTS AEROMEXICO AT A GLANCE BUILDING A STRONG AND FLEXIBLE AIRLINE STRATEGIC INITIATIVES 17

18 STRATEGIC INITIATIVES: REVENUE MANAGEMENT Incremental Revenues at Low Cost Revenue Management Developing ability to better capture greater portion of travel expenditure: Better segmentation to drive volume while protecting yields. Capturing marginal VFR and leisure passengers with advance purchases. Building state of the art data sources and tools. Product differentiation. Increase distribution of existing products through IT developments: Upgrades Aeromexico Plus Excess Luggage pre-payment (Special & Standard bags) Concierge Discount Pass Preferred Seating Cross Border Express ( Tijuana-San Diego) MXP Ancillary Revenues per Passenger $151.0 $119.0 $92.0 $ YTD 2016 Touch Points: Website (AM.com) Kiosks Mobile App. Wi-fi on board VFR refers to Visiting Friends and Relatives Source: Revenue Management, Aeromexico

19 STRATEGIC INITIATIVES: DEVELOPING PARTNERSHIPS Strategic alliances have contributed to Aeromexico s increased connectivity and premium product. Aeromexico is the only Mexican carrier in an international alliance. Delta Air Lines Alliance Delta World leader in full service carriers. Network-wide code sharing AM/Delta:184 shared codes and more than 800 flights. JV-MRO facility in Querétaro. Airport co-location. Potential ATI/JV in the context of Open Skies for Mexico. Intention to increase ownership stake in Grupo Aeromexico to up to 49%. Club Premier Loyalty Program Partnership with AIMIA, world leader in Loyalty Programs million frequent flyer members. Largest Frequent Flyer Program ( FFP ) in Mexican market. New cobranded card with Santander. Solid partnership with AMEX. More than 90 commercial partners (Apple, Avis, City Express, Soriana, etc). 19

20 STRATEGIC INITIATIVES : 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. Delta and Delta pension trust hold shares and derivatives covering to approximately 17% economic interest in Grupo Aeromexico. Mexico is the largest US trading partner in Latin America and 3 rd largest trading partner in the world after China and Canada its economy is well positioned for the future Top 10 US-Foreign Country Markets Total Trade (Revenues $B) YTD Open Skies has been ratified in 2016 and Delta has already applied for ATI with Aeromexico The transaction is expected to complete, subject to regulatory approval, in the 3 rd quarter of *Source: United States Census Bureau, March USD Dollars 20

21 STRATEGIC ALLIANCE: Potential Joint Network in US-MEX Transborder market POTENTIAL JOINT NETWORK FOR MEXICO US TRANSBORDER MARKET AM and DL have obtained Mexican Competition Authorities (COFECE) approval for antitrust immunity for a new joint venture on flights between the US and Mexico. The process now undergoes approval from US Department of Transportation (DOT). 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. 21

22 STRATEGIC INITIATIVES: NEW MEXICO CITY AIRPORT. 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. 22

23 THANK YOU FOR JOINING US TODAY. 23

24 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. 24