Air Berlin PLC 28th April 2014 Annual Results Press Conference

Air Berlin PLC 28th April 2014 Annual Results Press Conference

AGENDA Executive summary A. airberlin at a glance 5 B. airberlin s financial situation / full year results 2013 12 C. Recapitalisation, accelerated restructuring and perspectives 2014 18 D. Backup 27 Air Berlin PLC l 28. April 2014 2

Executive summary 2013: a challenging year for airberlin Operational loss of 231.9 million euros Group revenue down in line with capacity cuts Turbine has delivered planned contribution However not sufficient to counter difficult market conditions and headwinds Program continues, full effect to become effective 2014 Substantial recapitalisation basis for accelerated turnaround leading to sustainable profitability Cash inflow amounting to a total of 450 million euros, of that 300 millions euros through subordinated perpetual convertible bond Minimum 250 million euros for early refinance upcoming maturities, of which 100 million euros can be subscribed by way of exchange of existing bonds at preferential terms airberlin is deleveraged, has substantial liquidity, improved capital structure Air Berlin PLC l April 2014 3

Executive summary Deeper and more radical restructuring Fundamental review and accelerated, intensified,operational restructuring Management Board strengthened with Chief Restructuring Officer (CRO) Support by external Management Consultants Long term perspective for airberlin Well known brand in the key markets in the DACH-region Support of shareholder(s) and capital markets in the potential of airberlin Ensuring benefits for customers and wider economy Restructuring process will ensure a financially viable airberlin Air Berlin PLC l 28. April 2014 4

A. airberlin at a glance Air Berlin PLC l 28. April 2014 5

airberlin today No. 1 in Berlin, Dusseldorf and Palma de Mallorca < No. 2 in core market Germany/Austria/Switzerland (DACH) Fourth time in a row over 30 million guests Full-service network carrier with focus on business & leisure travelers Global airline partnerships oneworld member Etihad equity alliance Air Berlin PLC l 28. April 2014 6

airberlin s worldwide comprehensive network reach (including codeshare) Los Angeles Hawaii Chicago Fort Myers Miami New York Curacao Oslo Helsinki Moscow London Berlin Paris Madrid Rome Abu Dhabi Irkutsk Phuket Beijing Sydney Destinations operated by Codeshare destinations worldwide airberlin & codeshare destinations available for booking Air Berlin PLC l 28. April 2014 7

Strategic partnership with Etihad Airways has shown strong momentum in 2013 EUR 200 million in combined partnership revenue Partnership performance Etihad Airways Common Guests development 2013 [ 000] Etihad Airways is codeshare partner No.1 for airberlin 510 562 Portfolio of almost 100 codeshare routes Combined partnership revenues of EUR 200 million (increase of 100% vs 2012) Latest extension: Codeshares to India Due to hub development, codeshare opportunities will grow further (e.g. Hong Kong, Korea) Codeshare agreements implemented with Equity Alliance partners Air Seychelles, Air Serbia and Virgin Australia Guests 2012 Guests 2013 188 141 91 46 33 2 13 0 52 228 464 420 376 315 280 265 241 198 162 115 75 323 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Air Berlin PLC l 28. April 2014 8

oneworld presents further opportunities for growth by providing airberlin with access to new destinations and additional passengers Partnership performance oneworld Common Guests development 2013 [ 000] Extended codeshare with oneworld partners predominately with American Airlines and S7 Airlines More than 1 million common guests in 2013 Alliance of service-orientated quality airlines with highest quality and safety standards Guests 2012 Guests 2013 552 675 783 877 940 1,013 News: American Airlines Merger between AA and US Airways offers great opportunities for airberlin to strengthen North Atlantic network S7 Airlines New codeshare routes planned for summer 2014 47 16 89 34 56 157 75 228 434 324 158 127 98 190 223 254 280 310 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Air Berlin PLC l 28. April 2014 9

Product Full Service, Business Class, WiFi Full Service Offer New Business Class WiFi airberlin is a full service carrier Free snacks and free drinks on every flight Exclusive waiting areas and lounges Attractive baggage allowance New Business Class with FullFlat Seats Product harmonization with Etihad Airways New on-board entertainment system in Business and Economy Class airberlin will start to install WiFi functionality on board First aircraft to be equipped in the second half of 2014 Roll-out planned to all narrowbody and wide-body aircraft to be completed within 3 years Air Berlin PLC l 28. April 2014 10

Development of brand awareness and satisfaction Brand awareness (+2pp vs PY) Brand satisfaction: 82% of our passengers are satisfied (Feb14, +5pp vs. Oct13) ONBOARD PUNCTUALITY DEBOARDING CHECK IN BOOKING CHOICE airberlin PLANNING Air Berlin PLC l 28. April 2014 11

B. airberlin s financial situation / full year results 2013 Air Berlin PLC l 28. April 2014 12

Financial Performance FY 2013* Revenue EBITDAR** & EBIT Net result Decrease in revenue in line with capacity development Drop in EBITDAR and EBIT driven by lower revenue and lower other operating result Drop in net result follows EBIT development as financial result is broadly stable -3.8% 4,311.7 4,146.8-41.2% 736.5 432.7 70.2 6.8 2012 2013 [in EURm] -231.9-315.5 * PRELIMINARY NUMBERS SUBJECT TO APPROVAL ** EBITDAR = earings before interest, taxes, depreciation, amortisation, and leasing expense Air Berlin PLC l 28. April 2014 13

Seat load factor development Touristic Travel in % 94 93 92 91 90 89 88 87 86 85 84 83 2012 ACT 82 81 80 H1 H2 2013 ACT 79 0 Jan Feb Mar Apr May Jun 2011 ACT Jul Aug Sep Oct Nov Dec Air Berlin PLC l 28. April 2014 14

Key performance indicators FY 2013 Operational development 2013 vs. 2012 2012 2013 Guests [m] Capacity [m] & Number of flights [#] 33.35-5.4% 31.54 Improvement in SLF lead to guests decline below decline in capacity 41.79-6.9% 38.89 250,406-7.4% 231,836 Streamlining and re-focussing the network leads to 6.9% capacity and 7.4% flight reduction Load factor [%] Yield [EUR] ASK [bn] +1.3%p 83.6 84.8 Focus strategy in the network helps to improve load factor 120.2 +0.7% 121.0 Despite load factor increase, yield only slightly increased given the weak environment especially in the 2 nd half -5.0% 60.3 57.3 Change towards bigger aircraft lead to an ASK reduction below reduction in number of flights Yield based on IFRS flight revenue including a/p tax revenue Air Berlin PLC l 28. April 2014 15

Development Revenue and Cost per ASK 2013* vs. 2012 Revenue 1) per ASK [EUR ct] Cost 2) per ASK excluding fuel [EUR ct] +5.2% +1.3% 7.15 7.24 5.59 5.88 2012 Airport charges 30.2% 1.69 29.1% 1.71 2013 Cost 2) per ASK incl. fuel [EUR ct] Leasing & depreciation Navigation 16.2% 7.7% 0.90 0.43 16.0% 7.7% 0.94 0.45 +3.7% Personnel 19.7% 1.10 19.8% 1.16 7.47 7.75 Other excl. OOR 26.3% 1.47 27.6% 1.62 2012 2013 2012 2013 1) Total revenue 2) Cost on EBIT level excluding other operating result * PRELIMINARY NUMBERS SUBJECT TO APPROVAL Air Berlin PLC l 28. April 2014 16

[EUR m] Balance sheet structure illustrative impact of transaction effect of recapitalisation on B/S as of Dec 31, 2013 B/S as of Dec 31, 2012 B/S as of Dec 31, 2013* 2,218 1,885 illustrative impact on B/S as of Dec 31, 2013 2,335 6% Equity 5% 5% Equity Fixed & current assets 85% 94% Debt Fixed & current assets 88% 109% Debt Fixed & current assets 71% 95% 95% Debt Liquid assets 15% Liquid assets 12% -9% Equity Liquid assets 29% Net debt: 770 Net debt: 796 Net debt: 496 * PRELIMINARY NUMBERS SUBJECT TO APPROVAL Air Berlin PLC l 28. April 2014 17

C. Recapitalisation, accelerated restructuring and perspectives 2014 Air Berlin PLC l 28. April 2014 18

Recapitalisation of group through subordinated perpetual loan and corporate bond In order to achieve an increase in equity and liquidity Air Berlin PLC finalized two transactions: 1 Cumulative perpetual subordinated loan subscribed by Etihad Airways Size: EUR 300m Status: subordinated, IFRS equity treatment Conversion: 3 months VWAP -10% prior to issue Maturity: Perpetual Etihad Airways CCPS EUR 300m Air Berlin PLC Corporate Bond EUR 250m Anoa Capital S.A. Size: EUR 250-300m Maturity: 5-7 years Denomination: EUR and CHF Cash inflow amounting to a total of EUR 450m Use of proceeds: 2 New Corporate Bond Coupon: EUR tranche: 6.375% +/- 0.375% p.a. CHF tranche: 5.875% +/- 0.375% p.a. Standard covenants Status: EUR 250m underwritten Refinancing of bond maturity in November 2014 Tender to swap bond maturity in November 2015 of minimum EUR 100m General corporate purpose including restructuring of business Air Berlin PLC l 28. April 2014 19

Cumulative effect: EUR 400m airberlin improvements and accelerated restructuring Turbine 2013/2014 Deeper & more radical restructuring 2014/2015 Planned initiatives 2014 Revenue management system Increased synergies with Equity Alliance Partners Intensified cooperation with partner airlines Fleet optimisation Fundamental review and accelerated, intensified, operational restructuring Personnel reduction ~600 FTE Network optimisation Focus on major city pairs Strengthening frequencies Flattening seasonality Sales & Commercial Reorganisation distribution/sales Strengthening distribution systems Outsourcing service centres 2013 Comprehensive product improvement Operations New stationing concept & single type A/C relocation Fuel savings (avg. 3.3 litres/100 RPK) Maintenance consolidation Line maintenance station consolidation Base maintenance consolidation in MUC Supplier/lessor negotiations Strengthened Management Board with Chief Restructuring Officer (CRO) Support by external Management Consultants Air Berlin PLC l 28. April 2014 20

Capacity development A Stand-alone improvement potential: Capacity development 2014 Capacity seats [m] Load factor [%] ASK [bn] Comments 38.89 +>3% +>2.5% 84.8 57.3 +>4% 2013 2014 2013 2014 2013 2014 Business unit Seats Var.13 Cityshuttle >3% Balearic/Iberia >2% Domestic Spain >-20% Domestic Germany >5% Intern. Charter >4% Intercontinental >5% Total >3% Increased focus on DUS & TXL Frequency increase German Domestic and DACH Strengthening Touristic long-haul flying Higher average frequency on core routes Cancellation of non-strategic routes with high seasonality Air Berlin PLC l 28. April '14 21

R/ASK & C/ASK development Stand-alone improvement potential: Revenue/ASK and Cost/ASK development Main improvement drivers in 2014 Increase of revenue per ASK Improved base load strategy Business segment development Enhanced point of sale strategy Main revenue drivers: Codeshare development with Etihad and oneworld 2013 2014 Decrease of Cost 1 per ASK 2013 2014 Air Berlin PLC l 28 April '14 (1) Cost on EBIT level excluding other operating result Main cost drivers: Fixed cost leverage Cost of aircraft ownership reduction: Decrease due to lease rate re-negotiation and productivity Dollar/fuel: EBIT effect > 80m Crew productivity increase Overall Turbine effects No turnaround charge cost (EUR 40m in 2013) 22

airberlin has Codeshare Partnerships with 16 Airlines Etihad Airways is the biggest codeshare partner About 563.00 guests on joint codeshare routes 2013 New codeshare agreement with EY-Partner Air Seychelles, Virgin Australia and Air Serbia March 2014: 2 nd anniversary of oneworld membership Codeshare Agreements with seven oneworld partners More than 100 codeshare destinations Other partners Codeshare agreements with five alliance-free carriers Enlargement of the route network offered Air Berlin PLC l 28. April 2014 23

R/ASK development A Stand-alone improvement potential: Codeshare development in 2014 and beyond Guests booked on codeshare flights Guests 2012 Guests 2013 180 93 17 37 70 299 416 108 150 552 201 699 867 1,051 273 352 421 1,204 1,450 1,575 1,341 494 560 633 Comments Codeshare booking supported base load strategy strongly in 2013 Passenger number more than doubled Due to full year effects in ramp up an increase of more than 200,000 guests is expected in 2014 bringing codeshare passengers to more than 5% of total passenger Strong double digit increase already in the first two month in 2014 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Air Berlin PLC l 28. April '14 24

C/ASK development B Good cost performance achieved in Q1 2014 [EURct] +8.65-8% -0.20-0.18-0.07-0.22-0.06 <7.96 ACT Q1 2013 Apt. Charg. & Nav. Fuel Inflight A/C Leasing & Depr. Other ACT Q1 2014 *C/ASK excluding cargo & other operating result - preliminary numbers Air Berlin PLC l28. April 2014 25

C/ASK development B Stand-alone improvement potential: Cost of aircraft ownership Fleet development [average # of aircraft] Effective dollar rate [EUR/USD] Comments 147 143 +>4% Shift of AC family increases 64 66 1.31 A320 family and decreases 10 14 52 2013 7 10 14 46 2014 7 A320 family A330 family B737 family E190 Q400 2013 2014 B737 family. Overall number of aircraft shrinks slightly Average lease rates will a/c cost per BLH [EUR] 968.0 >-10% a/c cost per cycle [EUR] >-10% 2,014 a/c cost per guest [EUR] 14.96 >-13% decrease mainly due to Turbine renegotiations and Sale & Lease back transactions 2013 2014 2013 2014 2013 2014 Air Berlin PLC l RS April '14 26

F. Backup Air Berlin PLC l28. April 2014 27

TURBINE Turbine effects exceed the EUR 200m target [EUR m] 207 50 25 31 66 35 Network Direct operating cost Personnel expense Other operating cost Cost of aircraft ownership Turbine effect 2013 Air Berlin PLC l28. April 2014 28

FINANCIAL RESULT Financial result and income tax development FY 2013* stable to 2012 [EUR m] Breakdown of financial result Net interest result Currency & derivatives effects Total income tax expense 6.8 10.0 2.6-76.4-80.0-10.3 2012 2013 2012 2013 2012 2013 * PRELIMINARY NUMBERS SUBJECT TO APPROVAL Air Berlin PLC l 28. April 2014 29

HEDGING Dollar hedging Hedging profile [%] FX rate development [USD/EUR] 1) 2014 Hedge %- age: 100 91 79 57 110 1.40 100 1.38 90 1.36 80 1.34 70 1.32 60 1.30 50 1.28 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 1.26 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Hedging price 2014 (as of 15 Apr 2014) Hedging price 2013 (as of 29 Apr 2013) Current hedge rate 2014 Market/Forward rate Hedge rate 2013 1) as of 15 Apr. 2014 l as of 29 Apr. 2013; excl. differentials Air Berlin PLC l 28. April 2014 30

HEDGING Fuel hedging Hedging profile [%] Price development [USD/t] 1) 2014 Hedge %- age: 80 84 81 75 100 1,020 95 90 85 80 1,010 1,000 990 980 970 75 960 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 550 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Hedging price 2014 (as of 10 Mar 2014) Current hedge rate 2014 Hedge rate 2013 Hedging price 2013 (as of 08 Mar 2013) Market/Forward rate 1) as of 15 Apr. 2014 l as of 29 Apr. 2013; excl. differentials Air Berlin PLC l 28. April 2014 31