Full Year 2009 Results

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1 Full Year 2009 Results 1

2 Antonio Vázquez Chairman & Chief Executive Officer 2

3 Highlights 2009 Strong decrease in revenues: weak demand and yield deterioration. High competition and drop of business traffic. Adaptation to markets through capacity reduction. Good performance of maintenance. Stabilisation of the handling business. Cost containment despite capacity reductions. 3

4 Main Figures 2009 million EBITDAR EBIT Adjusted EBIT Profit from operations EBT Net Income

5 Rafael Sánchez-Lozano Managing Director & Chief Operating Officer 5

6 Operating revenues 2009 million 2009 YoY % Passenger Cargo Handling Maintenance Rest Total 3, , % Revenue/ASK -14% -14% 6

7 Capacity adjustments: Traffic statistics Change 2009/08 (%) ASK RPK LF Domestic pp Europe pp Other medium haul pp Long haul pp Total pp 79.8% 79.8% load load factor, factor, one one of of the the highest among among European network carriers 7

8 Capacity adjustments: Fleet 33 Long Haul Long Haul 32 Total Total : Short Haul Short Haul 2009:

9 Unit revenue evolution YoY % YoY % Domestic Medium Haul Long Haul Total Yield Rev/ASK 9

10 Quarterly unit revenue evolution by segments Domestic Domestic Medium Haul Medium Haul Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q Long Haul Long Haul Q1 Q2 Q3 Q

11 Market Share 2009 Total traffic Total traffic Market share YoY change p.p. Market growth Domestic Madrid Europe (AENA) Europe Latin America 33.8% % % % -2.3% -8.8% Business traffic Business traffic Europe Latin America 23.6% % 11

12 Operating costs 2009 million 2009 YoY % Personnel Fuel Depreciation + Fleet leases Traffic services + Nav.Charges Commercials Booking systems Maintenance Rest Total costs 1,297 1, , % Operating Costs/ASK -6.3% 12

13 Headcount and Productivity Manpower Equivalent Manpower Equivalent Pilots Cabin crew Ground staff Total 2009 YoY % 1, , , , Productivity Block Hours/Pilot Block Hours/Flight Attendant Ground (ASK/Employee) Fleet Utilisation (BH/Aircr/day) YoY %

14 Efforts in headcount efficiency -8.2% 22, % 21, % 20,

15 Strong balance sheet million Gross cash 1,919 2,272 In balance-sheet debt In balance- sheet net debt -1,417-1,803 Capitalised operating leasing (x8) 2,646 2,816 Adjusted net debt 1,229 1,013 Iberia Iberia has has maintained a strong strong financial position 15

16 Fourth Quarter Results 16

17 Highlights Q Results worse than expected due to: Persistent weakness in unit revenues Difficult comparable in personnel and commercial costs Restructuring costs linked to Redundancy Programme Latest figures point to a reverse in the negative trends Demand growing in main strategic markets Recent positive evolution in unit revenues Unit cost reduction due to fuel prices. 17

18 Main Figures Q million Q Q EBITDAR EBIT Adjusted EBIT Profit from operations EBT Net Income

19 Operating revenues Q million Q YoY % Passenger Cargo Handling Maintenance Rest Total , % Revenue/ASK -13% -13% 19

20 Operating costs Q million Q YoY % Personnel Fuel Depreciation + Fleet leases Traffic services + Nav.Charges Commercials Booking systems Maintenance Rest Total , % Operating Costs/ASK -7% -7% 20

21 Exceptional items Q Revenues Non-recurring revenues: Recovery of 45 MM/ of provision for obligations to pilots Costs Personnel: Provision of 51 MM/ for the extension of the redundancy plan Negative comparable due to the downward adjustments made in 4q 2008 to recover estimated inflation provisions Maintenance: Higher costs due to aircraft returns and increase of third party revenues Commercial: More proactive commercial policy Exchange rates: Provision of 6 MM/ for devaluation of Venezuelan peso 21

22 Volume recovery YoY % YoY % YoY p.p. YoY p.p. 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% % -6.1% -6.6% -6.3% -6.8% -6.4% -5.7% Q1 Q2 Q3 Oct Nov Dec Jan ASK LF 22

23 Recent trend improvement 2009 Unit revenue evolution 2009 Unit revenue evolution Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan10 Rev/ASK 23

24 Fuel 2010 E Around 70% 70% hedged for for Total Fuel Costs mm Price sensitivity (1.40 USD/ ) 1,184-18% 975 BASE CASE Price Fuel Bill 1, YoY % -15% -18% Unit cost ( cents) % Unit Fuel Costs cents 24

25 Developments

26 Three main projects Plan 2012 IB-BA Merger IB-BA-AA Joint Business Agreement 26

27 Restructuring the Short & Medium haul Facts Short haul is not profitable nor for Iberia nor for other European network carriers Spain-Europe segment is essential to feed long haul Actions Change in the production model: creation of a new airline with lower costs Gradual transfer of short haul operations from Iberia to Newco Labour agreement needed Launch planned for 2011 with 10 aircraft 27

28 IB-BA: Current Timetable Sign Binding MOU Business Plan and synergies Contacts with UK and Spain s AA Contacts with Stock Market Regulators Sign Merger Agreement 30 th June: Deadline for BA agreement with pension Trustees Shareholders meetings Closing Q4 Q1 Q2 Q3 Q

29 Joint Business Agreement BA-IB-AA Schedule and pricing coordination Enhanced network opportunities Synergies will allow growth opportunities Boston Chicago Washington New York Dallas Miami Mexico San Juan Madrid Barcelona Better customer proposition 11.7% 11.7% of of Iberia Iberia passenger revenues affected 29

Interim Management Report First Half Results 2010/11. October 29, 2010

Interim Management Report First Half Results 2010/11 October 29, 2010 Disclaimer Certain information included in these statements is forward-looking and involves risks and uncertainties that could cause