JAL. oneworld Value Proposition

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1 JAL oneworld Value Proposition December 3, 2009

2 Tom HORTON Executive Vice President of Finance and Planning and Chief Financial Officer of AMR Corp. and American Airlines 2

An introduction to American Airlines A world-class

AmericanConnection global airline: 250 cities in 40

history strong focus on quality The combined network

3 An introduction to American Airlines A world-class airline American Airlines, American Eagle and AmericanConnection global airline: 250 cities in 40 countries more than 3,400 daily flights 80 years of history strong focus on quality The combined network fleet numbers more than 900 aircraft One of the largest fleets in the world 3

4 The oneworld Alliance 10 Years of oneworld 4

Broad Commercial Support Current: oneworld

and global l alliance relationships have significant

$500 million annually Revenues have grown

5 Broad Commercial Support Current: oneworld partnerships JAL s longstanding oneworld bilateral l and global l alliance relationships have significant and proven value for JAL, contributing approximately $500 million annually Revenues have grown significantly over the years, particularly after JAL joined oneworld 5

6 Why Open Skies and ATI do matter Open Skies has transformed the landscape of international aviation US U.S.-Japan Open Skies: airlines in both countries would be able to fly from any point in Japan to any point in the U.S., and vice versa An American-JAL immunized partnership and joint business agreement would promote a truly integrated network capable of competing with other immunized alliances, a stated goal of the Open Skies policy Antitrust immunity is necessary to facilitate stronger partnerships Antitrust immunity allows airlines to coordinate schedules, pricing, capacity and routes, and other functions so the public benefits from expanded and coordinated route networks and efficiencies Without antitrust immunity, airlines are unable or unwilling to integrate their networks given stringent antitrust laws and penalties 6

7 oneworld to JAL superior total value Current benefits Strong alliance to partner with JAL and serve its customers Fully operational partnershipp US$500 million in annual revenues to JAL Additional opportunities Increased cooperation with oneworld partners Antitrust Immunity and a Joint Venture between AA and JAL incremental revenues to JAL Minimum of US$100 million / year (Net present value of US$700 million) Available direct investment into JAL of up to US$1.1 billion 7

8 oneworld to JAL: superior total value In million US$ $1, / Based on $100 million incremental annual revenue over the first ten years at present value ($100M per year for 10 years discounted at 10% assuming 2% growth) 2/ As part of a comprehensive restructuring, AA/oneworld and TPG are prepared to invest up to $1.1 billion USD (100 billion Yen) in JAL 3/ Collateralized debt financing provides near-term cash, but is short-term and adds to debt burden

9 Japan-N. America vs. Japan-Europe p A discussion of the relative importance of the Japan-N. America and Japan-Europe markets must first be qualified by understanding that the Japan-N. America market: is 30% larger in total market size, and nearly 20% larger in premium market size Total Market Size EU Japan +31% North America Japan Premium Market Size EU Japan +19% North America Japan 9 Source: MIDT (YE Oct 2009) Privileged

10 Customer Quality vs. Quantity: AA delivers it in the U.S. What matters most is the quality of the passenger revenue Japan U.S. Premium Traffic by U.S. Gateway # of oneworld Passengers Carried SkyTeam JFK LAX SFO ORD SEA DTW ATL DFW PDX MSP SLC 10 Source: MIDT (YE Oct 2009) Note: oneworld includes JAL to properly reflect US domestic network support of Trans-Pacific operations

11 Customer Quality vs. Quantity: AA also delivers it from North America AA delivers premium traffic across the Pacific through its U.S. gateways, where DL does not AA s strength at the key premium gateways in the U.S. translates to a higher passenger unit revenue on transpacific routes, 10.1 /ASM, 6% higher than DL s 9.5 /ASM 1/ % / Source: F-41 data (YE June 2009) 9.0 AA DL / NW

12 oneworld s European hubs: deliver a premium oneworld provides the best access to premium passengers in its primary connecting hubs from Asia oneworld hubs (London, Helsinki) deliver more premium travelers to Japan than SkyTeam s hubs (Paris, Amsterdam) 16% 14% 12% Premium Market Concentration (Premium as % of Total) +56% 10% 8% 6% 4% 2% 0% LHR CDG 12 1/ Source: MIDT (YE Oct 2009)

13 oneworld s European hubs: geographic g advantage oneworld is optimally positioned for delivering value to JAL and convenience in Europe Strategically, oneworld in hubs Madrid and Helsinki are positioned to complement London London Madrid Helsinki 13

14 oneworld s Latin American network: strength oneworld has the strongest network of any alliance in Latin America oneworld also serves over 150 destinations in Latin America, compared to only 95 by SkyTeam 160 Destinations Served in Latin America % 95 0 oneworld SkyTeam 14

15 Antitrust Immunity within a Joint Venture: a benefit only oneworld can achieve JAL/oneworld continuation is pro- competitive JAL/SkyTeam switch is anti-competitive 33% 31% 35% 62% 31% 6% 15 Source: MIDT (YE June 2009)

16 DL/JAL vs. AA/BA: An illustrating example Less mpetition Co 40% 60% More 16 Source: MIDT (YE June 2009)

17 DL/JAL vs. AA/BA: An illustrating example Preserving Competition (% Passengers left with Three or More Competitive Options in Markets where Partners each offernon Stop Service) mpetition More 90% 80% 70% 60% 50% 40% 78% Co Less 30% 20% 10% 0% 27% AA/BA JAL/DL 17 Source: MIDT (YE June 2009)

18 oneworld proposition: Superior Total Value Remaining with American Airlines and oneworld is the best solution for JAL Superior alliance value and enhanced financial support 1.8 billion USD from American/oneworld and its financial partner TPG More than double the direct capital investment Operational and revenue stability lowest risk Antitrust Immunity success competitive parity with ANA A continued global presence and profitability network support through key premium global gateways 18

19 19 Appendix

20 TPG Overview Prominent Private Investment Platform Approximately $45 billion of capital under management Long-Standing Global Presence Global presence in North America, Europe, and Asia for more than a decade Strong Expertise in the Airline Sector TPG is one of the most experienced private investment firms in the airline sector Distinctive Team Corporate Partner Investment and Operating Expertise Over 150 professionals distinguished by their experience and diverse backgrounds TPG not only provides capital but also acts as the problem solver and the value-added added partner of corporations Investment insights and impact driven by diverse investment strategies, differentiated views and operating capabilities 20

21 TPG Global Portfolio 21 TPG invests in a broad range of industries and world class companies

22 TPG Airline and Travel Investments (1) TPG is one of the most experienced private investment firms in the airline sector 22 (1) Investment made by TPG principals, among others.

Tom Horton. Executive Vice President of Finance and Planning and Chief Financial Officer of. AMR Corp. and American Airlines

Tom Horton. Executive Vice President of Finance and Planning and Chief Financial Officer of. AMR Corp. and American Airlines Tom Horton Executive Vice President of Finance and Planning and Chief Financial Officer of AMR Corp. and American Airlines Good afternoon, everyone. Konnichiwa. Thank you for joining us. I ve been to Japan