Turkish Market Growth Domestic (*) International CAGR 24% CAGR 11% 80 75 69 72 65 59 60 52 44 44 44 38 40 37 40 33 33 29 25 14 16 18 21 20-2006 2007 2008 2009 2010 2011 2012E 2013E 2014E 2015E Source: General Directorate of State Airports Authority (DHMI). (*):Adjusted for double count on Domestic Pax RPK Growth % 30% 26.6% 22.9% 19.1% 19.2% 19.5% 20% 17.1% 13.3% 8.5% 10% 6.0% 5.9% 5.3% 4.3% 2.4% -1.1% 0% 2006 2007 2008 2009 2010 2011 2012 World RPK Growth THY RPK Growth -10% 2 Annual GDP Growth Forecast (2012-2032) Asia Pacific 4.5% Africa 4.4% Latin America 4.0% M.East 3.8% CIS 3.4% World 3.2% North America 2.5% Europe 1.8% Annual RPK Growth Forecast (2012-2032) Latin America 6.9% M.East 6.3% Asia Pacific 6.3% Africa 5.7% World 5.0% CIS 4.5% Europe 4.2% North America 2.7% Source: Boeing Current Market Outlook (2013-2032)
8.2 0.8 3.8 5.6-0.5 2.6 3.1-0.9 2.6 5.4 3.3 5.3 3.2 1.4 2.4 6.6 7.8 5.3 10.0 5.3 6.0 14.0 13.6 15.7 15.4 19.8 18.9 14.7 10.5 20.0 10.2 13.7 8.7 13.0 18.0 11.4 17.6 28.4 25.2 24.0 22.9 25.2 25.3 24.0 31.4 33.1 34.0 45.6 2.7 0.0 2.6 2.2 1.8 4.1 1.9 1.4 3.0 3.0 0.0 3.0 2.8 1.2 3.9 2.3 0.7 3.9 7.1 8.9 8.0 11.0 11.4 10.4 10.4 11.8 9.5 11.9 9.8 8.0 9.7 15.8 15.2 19.0 24.1 21.7 20.5 19.8 25.6 21.3 26.8 21.2 27.8 27.3 27.5 32.6 25.8 33.7 Total % Change PAX ASK RPK Europe %Change PAX ASK RPK TK AEA TK AEA TK AEA TK AEA 2010 2011 2012 1H'13 Middle East PAX ASK RPK %Change TK AEA TK AEA TK AEA TK AEA 2010 2011 2012 1H'13 Far East PAX ASK RPK % Change TK AEA TK AEA TK AEA TK AEA 2010 2011 2012 1H'13 TK AEA TK AEA TK AEA TK AEA 2010 2011 2012 1H'13 Source: AEA= Association of European Airlines June 13 Results (Scheduled Traffic) 3
Weekly Flights 8,000 46,0 mn pax 7,000 6.833 39 mn pax 2013-214 2013- Aircraft 234 Aircraft 6,000 5,000 2009-132 25,1 mn pax 2010-153 29,1 mn pax 32,6 mn pax 2011-180 2012-202 22,6 mn pax 2010-158 4,000 3,000 14,1 mn pax 11,9 mn pax 2005-83 19,7 mn pax 2008-127 16,9 mn pax 2007-101 2006-103 2009-132 2,000 2004-73 2003-65 10,4 mn pax Destinations 1,000 90 100 110 120 130 140 150 160 170 180 190 200 210 220 230 236 240 250 4
TEKİRDAĞ İSTANBUL İSTANBUL SİNOP SAMSUN MERZİFON TRABZON KARS İZMİR BALIKESİR KÜTAHYA DENİZLİ ESKİŞEHİR ISPARTA ANKARA KONYA ERZURUM ERZİNCAN SİVAS MUŞ NEVŞEHİR ELAZIĞ KAYSERİ MALATYA DİYARBAKIR K.MARAŞ ADIYAMAN BATMAN AĞRI IĞDIR VAN BODRUM DALAMAN ANTALYA ADANA G.ANTEP Ş.URFA MARDİN HATAY 5
AMERICAS (8) EUROPE (93) FAR EAST (28) BUENOS AIRES (4) ATLANTA CHICAGO (7) BOGOTA HOUSTON (4) BOSTON LOS ANGELES (7) CARACAS NEW YORK (21) HAVANA SAO PAULO (7) MEXICO CITY TORONTO (5) MONTREAL WASHINGTON D.C. (7) SAN FRANCISCO *As of June 13 Planned (Weekly Frequency) AFRICA (34) ABIDJAN (4) MISRATA (7) ACCRA (7) MOGADISHU (3) ADDIS ABABA (7) MOMBASA (5) ALEXANDRIA (4) NAIROBI (7) ALGIERS (7) NIAMEY (3) BENGHAZI (10) NOUAKCHOTT (4) CAIRO (17) OUAGADOUGOU (3) CAPETOWN 7) SEBHA SHARM EL CASABLANCA (7) SHEIHK (4) DAKAR (4) TRIPOLI (14) DAR ES SALAAM (7) TUNIS (14) DJIBOUTI (3) YAOUNDE (4) DOUALA (4) ABUJA ENTEBBE(5) ASMARA HURGADA (3) ASWAN JOHANNESBURG(7) BAMAKO KIGALI (5) JUBA KINSHASA (5) KANO KHARTOUM (7) LUXOR KILIMANJARO (5) NDJAMENA LAGOS (7) LUANDA LIBREVILLE (3) ORAN AALBORG (3) DUSSELDORF (28) MALTA (3) SIMFEROPOL (7) AMSTERDAM (28) EDINBURGH (7) MANCHESTER (14) SKOPJE (14) ATHENS (25) EKATERINBURG (4) MARSEILLE (4) SOCHI (3) BAKU (28) FRIEDRICHSHAFEN (4) MILAN (28) SOFIA (14) BARCELONA (21) FRANKFURT (30) MINSK (4) STOCKHOLM (21) BASEL (7) GANJA (4) MOSCOW (28) ST.PETERSBURG (4) BATUMI (7) GENEVA (21) MUNICH (28) STUTTGART (24) BELGRADE (14) GENOA (5) NAKHICHEVAN (4) TALLINN (3) BERLIN (28) GOTHENBURG (12) NAPOLI (7) TBILISI (21) BILBAO (4) HAMBURG (28) NICE (10) THESALONIKI (7) BILLUND (3) HANNOVER (17) NOVOSIBIRSK (3) TIRANA (14) BIRMINGHAM (10) HELSINKI (14) NURNBERG (18) TORINO (7) BOLOGNA (14) KAZAN (4) ODESSA (11) TOULOUSE (7) BREMEN (7) KIEV (13) OSLO (14) UFA (5) BRUSSELS (30) LEFKOSA (35) PARIS (28) WARSAW (4) BUCHAREST (21) LEIPZIG (7) PODGORICA (7) VALENCIA (5) BUDAPEST (14) LISBON (7) PRAG (14) VENICE (21) CHISINAU (7) LJUBLJANA (7) PRISTINA (14) VIENNA (28) COLOGNE (21) LONDON (45) RIGA (6) VILNIUS (3) CONSTANTA (3) LUXEMBOURG (4) ROME (25) ZAGREB (10) COPENHAGEN (21) LVIV (3) ROSTOV (3) ZURICH (28) DONETSK (7) LYON (14) SANTIAGO DE COMPOSTELA(3) KHARKIV DNEPROPETROVSK (7) MADRID (20) SALZBURG (4) KRAKOV DUBLIN (10) MALAGA (7) SARAJEVO (18) LA CORUNA NANTES ROTTERDAM 6 ALMATY (9) JAKARTA (7) TOKYO (7) ASHKHABAD (14) KABUL (7) ULANBATOR (3) ASTANA (3) KARACHI (4) KATHMANDU BANGKOK (11) KUALA LUMPUR (4) LENKERAN BEIJING (7) MALE (4) MANILA BISHKEK (11) MUMBAI (7) MEZAR-I SHERIF COLOMBO (5) NEW DELHI (7) DHAKA (7) OSAKA (7) DUSHANBE (2) OSH (3) GUANGZHOU (7) SHANGHAI (7) HO-CHI-MINH (7) SEOUL (7) HONG KONG (6) SINGAPORE (7) ISLAMABAD (3) TASHKENT (7) MIDDLE EAST (33) ABU DHABI (6) ESFEHAN (2) TAIF (3) ADEN (4) JEDDAH (21) TEHRAN (21) ALEPPO KERMANSHAH (2) TEL AVIV (39) AMMAN (14) KUWAIT (28) YANBU (3) AQABA (3) MADINAH (14) EL-KASIM (4) BAGHDAD (7) MASHAD (5) AHVAZ BAHRAIN (7) MOSUL (4) ABHA BASRA (7) MUSCAT (7) BEIRUT (21) NAJAF (5) DAMASCUS RIYADH (14) DAMMAM (7) SANAA (6) DOHA (10) SHIRAZ (5) DUBAI (14) SULAYMANIYAH (5) ERBIL(7) TABRIZ (7)
168 out of 196 international destinations within narrow body range More than 40% of world-wide international traffic within narrow body range 7
ASK % RPK % PAX % 14% 12.4% 12% 10% 8% 6% 4% 2% 4.8% 3.7% 3.3% 5.2% 3.9% 3.7% 6.1% 4.2% 4.1% 7.5% 5.6% 5.2% 8.2% 6.3% 6.0% 8.7% 7.2% 6.8% 10.3% 10.0% 8.5% 10.0% 8.4% THY ranks 3rd in passenger; 4th in ASK and 5th in RPK among European Airlines 0% 2006 2007 2008 2009 2010 2011 2012 1H'13 Source: AEA= Association of European Airlines (Scheduled Traffic) June 13 Results 8
('000) Total Transfer Passengers 30% 9,000 8,000 8,976 12,673 16,483 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 6,249 5,147 4,445 38% 2,487 3,129 1,801 2,229 1,563 2006 2007 2008 2009 2010 2011 2012 1Q'12 1Q'13 2011 2012 Int l to int l transfer passengers share in total international passengers was 39% in 2012. Int'l Direct 20% Domestic 41% Int'l-Dom Transfer 16% Int'l-Int'l Transfer 23% 9
41.6 30.3 46.3 34.3 56.6 40.1 65.1 47.9 58.9 81.2 74.4 96.1 44.6 33.7 42.7 (%) 54.1 120 100 80 60 72.7 73.9 70.9 73.7 ASK RPK L/F % 77.4 78.9 75.5 72.6 80 70 60 THY Passenger Traffic First Half 2012 vs 2013 Landing up by 22.7% ASK up by 21.3% 40 20 0 2007 2008 2009 2010 2011 2012 1H'12 1H'13 50 40 RPK up by 26.8% Passenger # ('000) up by 25.8% L/F up by 3.4 pt Total Passengers (Mn) 19.6 22.6 25.1 29.1 32.6 39.0 17.8 22.4 ANNUAL CHANGES 2006 2007 2008 2009 2010 2011 2012 ASK (%) 24 13 11 22 15 25 18 RPK (%) 19 19 13 17 19 23 26 PAX (%) 20 16 15 11 16 12 20 L/F (Pt) -2.8 4.0 1.2-3.0 2.8-1.0 4.8 2007 2008 2009 2010 2011 2012 1H'12 1H'13 10
33.5 24.3 37.9 27.8 5.9 6.4 6.8 47.5 33.3 8.1 8.5 9.0 8.0 8.6 (%) 54.7 39.9 10.4 9.5 11.2 4.4 70.0 50.3 84.1 64.9 12.0 38.9 29.2 (%) 5.6 5.6 47.2 37.1 6.9 Domestic (Bn) ASK RPK L/F% International (Bn) ASK RPK L/F (%) 12 10 8 6 4 2 73.0 75.6 75.4 76.7 76.9 78.8 78.7 80.8 90 80 70 60 50 100 80 60 40 20 72.6 73.6 70.1 73.1 71.9 77.2 75.0 78.6 80 70 60 50 0 2007 2008 2009 2010 2011 2012 1H'12 1H'13 40 0 2007 2008 2009 2010 2011 2012 1H'12 1H'13 40 Domestic Passengers (Mn) International Passengers (Mn) 23% 28% 10.0 11.1 11.7 13.6 14.5 15.9 7.4 9.1 9.7 11.5 13.4 15.5 18.2 23.1 10.4 13.3 2007 2008 2009 2010 2011 2012 1H'12 1H'13 11 2007 2008 2009 2010 2011 2012 1H'12 1H'13
Financial Opr. Seat Avg.Fleet YEAR END FLEET* Type Total Owned Lease Lease Capacity Age 2013 2014 2015 2016 2017 2018 2019 2020 2021 A330-200 7 5 2 1,812 8.3 10 10 10 10 8 8 5 5 5 A330-300 10 10 2,890 2.2 12 17 25 30 30 30 30 30 30 Wide Body A340-300 7 7 1,890 17.2 7 7 7 7 7 7 7 7 7 B777-3ER 12 10 2 4,044 2.4 12 15 22 28 32 32 32 32 32 Wet Lease 2 2 286 6.4 3 Total 38 7 25 6 10,922 6.3 44 49 64 75 77 77 74 74 74 B737-900ER 10 10 1,510 1.2 10 10 15 15 15 15 15 15 15 B737-9 MAX 5 10 10 B737-800 68 11 36 21 11,264 8.4 70 77 76 94 93 82 82 78 78 B737-8 MAX 20 30 55 65 B737-700 14 14 1,986 7.3 13 8 2 Narrow Body A320-200 30 13 17 4,682 6.4 33 33 30 30 23 19 12 12 12 A321-200 39 36 3 6,850 3.1 41 41 54 64 66 66 66 66 64 A320 NEO 4 4 4 4 4 4 A321 NEO 4 31 56 88 88 A319-100 14 6 8 1,854 5.2 14 12 12 12 9 7 6 6 6 Wet Lease Total 175 11 101 63 28,146 6.1 181 181 189 219 214 244 276 334 342 A310-300 3 2 1-24.9 2 2 2 2 2 2 2 2 2 Cargo A330-200 4 4-1.7 5 5 5 5 5 5 5 5 5 Wet Lease 3 3-8.1 2 Total 10 2 4 4-11.6 9 7 7 7 7 7 7 7 7 TOTAL 223 20 130 73 39,068 6.4 234 237 260 301 298 328 357 415 423 Year End Seat Capacity : 43,018 44,533 50,783 59,096 59,375 64,674 69,206 79,022 80,176 Seat Capacity Change : 18% 4% 14% 16% 0% 9% 7% 14% 1% * After exit/delivery 12
2013-2021 Aircraft Purchases Fleet Group Fleet Type 2013* 2014 2015 2016 2017 2018 2019 2020 2021 TOTAL Wide Body Narrow Body A330-300 2 5 8 5 20 B777-3ER 3 7 6 4 20 Total 2 8 15 11 4 40 B737-900 5 5 B737-9 MAX 5 5 10 B737-800 10 20 30 B737-8 MAX 20 10 25 10 65 A321 1 13 10 24 A320 NEO 4 4 A321 NEO 4 27 25 32 88 Total 1 10 18 34 6 47 40 62 10 228 Cargo A330-200 1 1 Total 1 1 TOTAL 4 18 33 45 10 47 40 62 10 269 * Remaining as of June 13 13
Revenue Breakdown PAX 86% Cargo 8% Other 5% Charter 1% Revenue* Breakdown by Geography Domestic 14% Far East 22% Middle East 14% Europe 32% America 10% Africa 8% * Scheduled pax and cargo revenue Int l. Passenger Breakdown by Geography Middle East 15% Far East 12% Africa 8% America 5% Europe 60% 14
Revenue (Mn$) Expenses (Mn$) Other* Domestic International Fuel Personnel Other 10000 8000 6000 4000 2000 0 5,448 4,719 4,552 4,552 3,737 6,171 3,726 5,078 2,883 3,182 3,154 3,793 3,298 2,480 2,667 2,059 1061 1117 818 992 885 985 501 599 606 168 439 545 513 670 931 1031 557 655 2006 2007 2008 2009 2010 2011 2012 1H'12 1H'13 10,000 8,319 7,734 8,000 7,070 6,855 22% 18% 6,000 5,149 3,475 4,351 4,148 3,136 4,058 3,676 4,000 3,348 2,773 1,378 1,812 2,602 1,981 2,286 1,339 1,614 1,662 2,000 1,428 909 1,141 766 692 570 782 782 2,395 2,881 1,427 775 904 990 1,406 1,369 1,604 0 2006 2007 2008 2009 2010 2011 2012 1H'12 1H'13 * Cargo, charter and other revenue 15
Cost Per ASK ($ cent) 10.0 8.0 7.51 CASK Personnel/ASK Fuel/ASK Others /ASK 8.95 8.04 7.91 8.44 8.03 8.24 8.04 7.17 6.0 4.0 2.0 0.0 3.87 3.99 3.91 3.81 4.00 3.84 3.61 3.62 3.66 3.08 2.95 2.10 2.17 2.16 1.75 3.00 3.07 2.96 1.54 1.88 1.96 1.75 1.61 1.65 1.42 1.55 1.42 2006 2007 2008 2009 2010 2011 2012 1H'12 1H'13 16
1,516 1,606 1,024 1,644 1,701 1,122 1,826 2,184 12,951 14,072 15,269 17,119 17,876 17,879 17,391 19,965 Number of Personnel* 15% 2007 2008 2009 2010 2011 2012 1H'12 1H'13 * THY Technic Personnel is included. Passenger per Employee 10% 2007 2008 2009 2010 2011 2012 1H'12 1H'13 Average Daily Flight Utilization (hrs) 14:21 14:19 14:59 13:26 13:20 13:18 12:49 12:31 12:36 12:02 12:14 12:11 11:40 11:39 11:40 11:13 11:32 11:40 11:55 12:07 11:48 11:45 11:20 11:00 2007 2008 2009 2010 2011 2012 1H'12 1H'13 WB Long-Haul NB Medium Haul Total 17
($ Mn) 1H'12 % in Total 1H'13 % in Total 13/'12 % Fuel 1,369 37% 1,604 37% 17% Personnel 692 19% 766 18% 11% Landing 291 8% 371 9% 27% Depreciation 240 7% 321 7% 34% Sales and Marketing 253 7% 304 7% 20% Ground Handling 217 6% 261 6% 21% Passenger Catering 162 4% 206 5% 27% Rents 136 4% 209 5% 53% Maintenance 111 3% 135 3% 21% Others 63 2% 52 1% -17% Codeshare 55 2% 19 0% -65% Advertising 35 1% 49 1% 41% General Administration 25 1% 35 1% 42% Insurance 26 1% 18 0% -31% TOTAL 3,676 100% 4,351 100% 18% Op.Cost per ASK ($) 8.24 8.04-2% Op.Cost per ASK ($) except fuel 5.17 5.08-2% 18
30 20 10 22.3 20.2 15.9 AVG (2006-2012):18,5% 22.9 16.5 14.1 17.5 11.5 16.1 0 2006 2007 2008 2009 2010 2011 2012 1H'12 1H'13 (Mn$) 2006 2007 2008 2009 2010 2011 2012 1H'12 1H'13 Revenue 2.834 3.737 4.719 4.552 5.448 7.070 8.319 3.726 4.552 Net Income 125 204 874 362 185 11 644 96 67 Net Income Margin (%) 4,4 5,5 18,5 7,9 3,4 0,2 7,7 2,6 1,5 EBIT 60 389 571 494 299 215 597 50 201 EBIT Margin (%) 2,1 10,4 12,1 10,8 5,5 3,0 7,2 1,3 4,4 EBITDA 297 670 792 795 596 701 1.171 290 522 EBITDA Margin (%) 10,5 17,9 16,8 17,5 10,9 9,9 14,1 7,8 11,5 EBITDAR 451 834 954 1.044 901 998 1.468 427 731 EBITDAR Margin (%) 15,9 22,3 20,2 22,9 16,5 14,1 17,6 11,5 16,1 19
Revenue by Currency Expenses by Currency Other 29% USD 17% TL 13% TL 26% EUR 13% Other 8% EUR 42% USD 53% 20
M+1 M+2 M+3 M+4 M+5 M+6 M+7 M+8 M+9 M+10 M+11 M+12 M+13 M+14 M+15 M+16 M+17 M+18 M+19 M+20 M+21 M+22 M+23 M+24 M+1 M+2 M+3 M+4 M+5 M+6 M+7 M+8 M+9 M+10 M+11 M+12 M+13 M+14 M+15 M+16 M+17 M+18 M+19 M+20 M+21 M+22 M+23 M+24 Turkish Airlines Fuel Hedging Rate Turkish Airlines Currency Hedging Rate 60% 60% 50% 40% 30% 20% 10% 50% 48% 46% 44% 42% 40% 38% 35% 33% 31% 29% 27% 25% 23% 21% 19% 17% 15% 13% 10% 8% 6% 4% 2% 50% 40% 30% 20% 10% 30% 29% 28% 26% 25% 24% 23% 21% 20% 19% 18% 16% 15% 14% 13% 11% 10% 9% 7% 6% 5% 4% 2% 1% 0% 0% Maximum Fuel Hedge Level: 50% Active Surcharge Policy Short position on USD and TRY is hedged 21
EBITDAR Margin % Comparison 2012 Annual 2013 1H 19.0 17.6 15.7 16.1 9.9 9.4 8.3 8.2 6.9 6.4 12.4 11.4 9.7 7.0 7.0 6.6 5.2 4.5 EK TK SQ AY AF-KL LH* IAG UA SAS TK LATAM DL UA SAS AF-KL AY LH* IAG *Lufthansa Passenger Airlines. Others based on Group Financials. Source: Calculated based on web site & annual reports. 22
PAX Per Personnel 2012 Annual Cost Per ASK ($ Cent) 2013 1H Others/ASK Fuel/ASK Personnel/ASK 16.3 15.1 15.1 2,184 1,866 1,740 1,660 927 917 826 773 769 8.2 12.6 12.2 6.5 11.0 7.4 5.4 6.8 4.7 3.4 5.1 4.33 3.4 3.5 3.3 4.7 3.6 3.39 3.8 2.1 2.8 10.5 9.2 8.1 8.0 5.9 4.2 3.8 3.7 4.7 2.9 3.5 3.20 3.0 2.1 1.6 1.7 1.4 1.04 1.4 1.0 TK LH** SAS UA SQ IAG EK AY AF-KL SAS UA DL AF-KL LH* IAG AY SQ** EK*** TK LAN **LH is based on airlines business only. Others based on Group Financials. * LH is based on airlines business only. Others based on Group Financials. ** April-June 13, 1st quarter results ** * April 12-March 13, 12M results THY is the most cost efficient among its European Peers 23
The Best in Europe in the last 3 years Winner of 3 awards at the 2013 Skytrax World Airline Awards: 24 Best Airline Europe Best Business Class Catering Best Airline in Southern Europe The only 4 Star Airline in all categories in Europe
THANK YOU Mr. Coşkun KILIÇ, CFO Tel: +90 (212) 463-6363 x-13630 Ms. Duygu İNCEÖZ, IR Manager E-Mail: ir@thy.com 25
Assets ( Mn$) 2006 2007 2008 2009 2010 2011 2012 1H'13 Cash and Equivalents 260 412 1.288 871 581 934 1,070 1,374 Trade Receivables 177 211 231 295 374 405 436 667 Other Current Assets 318 654 214 693 1.304 802 691 402 Total Current Assets 755 1.277 1.733 1.858 2.259 2.140 2,197 2,443 Net Fixed Assets 2.196 2.777 3.343 3.195 4.168 5.873 7,121 7,773 of which Aircraft and Engines 1.941 2.414 3.046 2.914 3.822 5.319 6,392 6,915 Other Non-Current Assets 194 169 155 638 462 672 1,227 1,472 Total Non-Current Assets 2.400 2.949 3.499 3.834 4.629 6.545 8,348 9,245 Total Assets 3.155 4.226 5.231 5.692 6.888 8.685 10,545 11,688 Liabilities (Mn$) 2006 2007 2008 2009 2010 2011 2012 1H'13 Lease Obligations 1.183 1.541 2.127 1.985 2.703 4.189 4,862 5,222 Passenger Flight Liabilities 229 326 322 390 436 677 936 1,546 Accounts Payable 226 313 288 371 476 461 512 625 Other Liabilities 372 460 519 659 850 976 1,204 1,266 Total Liabilities 2.010 2.640 3.256 3.404 4.464 6.303 7,513 8,659 Total Shareholders Equity 1.145 1.587 1.975 2.288 2.424 2.382 3,032 3,029 of which Issued Capital 125 150 116 581 647 635 673 717 of which Retained Earnings -443-280 0 613 910 971 969 1,525 Total Liabilities & Shareholders Equity 3.155 4.226 5.231 5.692 6.888 8.685 10,545 11,688 26
Income Statement (Mn$) 2006 2007 2008 2009 2010 2011 2012 1H'12 1H'13 13/12% Operating Revenue 2,834 3,737 4,719 4,552 5,448 7,070 8,319 3,726 4,552 22% Operating Expenses 2,773 3,348 4,148 4,058 5,149 6,855 7,722 3,676 4,351 18% of which Fuel 775 904 1,427 990 1,406 2,395 2,881 1,369 1,604 17% of which Personnel 570 782 909 912 1,141 1,339 1,366 692 766 11% of which Depreciation 236 281 221 302 297 486 575 240 321 34% of which Rent 154 164 162 249 305 297 297 136 209 53% Operating Profit 60 389 571 494 299 215 597 50 201 302% Income From Other Operations 193 174 44 59 92 96 335 77 83 7% Loss From Other Operations 42 8 162 84 79 237 24 43 41-6% Profit from Operating Activities 211 556 453 468 312 73 907 84 243 190% Income From Investment Activities 18 16-12% Share of Investments' Profit (Loss) 12 3 8-24 6 3-5 -3 36% Financial Income 238 1,100 112 47 158 90 65 20-69% Financial Expense 79 520 550 112 99 150 231 72 148 105% Profit Before Tax 132 285 1,006 477 237 87 769 89 128 43% Tax 7 81 132 115 51 76 125 7-61 -1031% Net Profit 125 204 874 362 185 11 644 96 67-30% 27
TURKISH CARGO Leading cargo carrier in total export and import cargo in Turkey. As of June 2013, operates 45 destinations with 10 cargo aircraft and 234 destinations with 213 passenger aircraft. By the end of June 2013, THY carried 263.233 tons of cargo, indicating 15% increase compared to the same period of 2012. Revenue (Mn$) 18% 221 246 294 286 405 578 673 325 382 2006 2007 2008 2009 2010 2011 2012 1H'12 1H'13 28
Regional Training Partner for IATA & IATA Authorized Training Center. Provides training services for about 20.000 people each year Currently has 46 instructors with 40 classrooms. Provides training services in these areas: Technical (Theoretical and Practical) Commercial and Ground Handling Quality and Management Trainings Marketing and Sales Trainings Computer and IT Trainings SAP Trainings Turkish Airlines Flight Training Center Offers Cockpit Crew Training, Cabin Crew Training, Ground Training and Simulators with: 6 full Flight Simulators for B737 800s, A320s, B777-300ER, A330/340 aircraft 1 FNPT II MCC 4 Flight Training Devices for A320, A330/340, B737-800 and B777 1 A320 Door Trainer, 1 B777 Door Trainer A340 Business class, B737 Economy Class Cabin Service Trainer (CST) B737/A310/A320/A340 Cabin Emergency Evacuation Trainer(CEET) 29 29
THY Group (1H'13) Revenue (Mn $) Personnel THY Rev. % Partnership Structure 1 THY (Consolidated) 4,552 17.941* - %49 ÖİB - %51 Open to Public 2 Turkish Opet Aviation Fuels 1,121 227 85% %50 THY - %50 Opet 3 THY Turkish Technic 229 2,024 72% % 100 THY 4 THY Turkish Do&Co 152 3,268 87% %50 THY - %50 Do&Co 5 Turkish Ground Services 110 7,956 80% %50 THY - %50 Havaş 6 Pratt Whitney THY Turkish Engine Center (TEC) 50 207 78% %51 PW - %49 THY 7 HABOM Aviation Maintenance, Repair and Modification Center 11 1,491 100% % 100 THY 8 Goodrich Turkish Airlines Technical Service Center 3 22 38% %60 Goodrich - %40 THY Teknik 9 Turkish Cabin Interior Systems Industries, Inc. - 60 0% %30 THY - %21 THY Teknik - %49 TAI 10 Turkbine Technical Gas Turbines Maintenance & Repair, Inc. 0.1 19 - %50 THY Teknik - %50 Zorlu O&M 11 Aircraft Seat Manufacturing Industry & Trade, Inc. - 22 0% THY & THY Teknik %50-Assan Hanil %50 12 Sun Express (Turkey & Germany Consolidated) 445 2,507 - %50 THY - %50 Lufthansa 13 THY Aydın Çıldır Airport Management, Inc. 0 - - %100 THY 14 THY Aviation Maintenance, Repair and Modification Center 25 809 3% % 100 THY * THY A.O. Personnel 30
Turkish Technic Owned 100% by THY. Provides maintenance services to more than 100 customers, including international airlines such as Lufthansa, KLM, BA and Alitalia as well as domestic airlines. HABOM (Maintenance Repair & Overhaul Center) Plans to provide maintenance service to around 400 aircraft yearly, as well as training and other services to civil aviation industry in Turkey and its region. The facility, designed according to LEED Gold standards, will be located in Sabiha Gokcen International Airport in Istanbul with a total investment of nearly 500 mn$. HABOM is expected to be in full capacity starting from the second half of 2013 and gradually by the year 2022. Expected full capacity revenue is around 6.5 bn$. Goodrich THY Technic Service Center Provides repair, overhaul and modification services for Nacelle, Thrust Reverser, and its components; for Turkish Airlines and other customers from Turkish domestic and International markets. The 4.000 sq meters (indoor) facility is located in Gebze Organized Industrial Zone Turkish Engine Center Provides engine maintenance, repair and overhaul (MRO) services to customers located in Turkey, surrounding regions and worldwide. The environmentally efficient engine overhaul facility has total usage area of 100,000 sq. meters located at the Sabiha Gokcen International Airport. 31
Turkish OPET In terms of investment on jet fuel supply; Turkish Airlines established a jet fuel supply company together with local oil retailer OPET on September 2009. The business activity of the established company is to supply jet fuel to any type of aircraft. Started supplying jet fuel to THY for all domestic airports as of July 1st 2011. Turkish Do&Co Since 2007, operating nine gourmet kitchens all over Turkey: Istanbul (Atatürk and Sabiha Gökcen), Ankara, Antalya, Izmir, Bodrum, Trabzon, Dalaman and Adana. Over 60 national and international airlines are catered from these locations. Turkish Airlines won the Best Business Class Catering award at the 2013 Skytrax World Airline Awards and World's Best Economy Class Onboard Catering award at the 2010 Skytrax Awardswith Turkish Do&Co. 32 TGS Ground Services Owned 50% - %50 by THY and Havaş Havaalanları Yer Hizmetleri A.Ş. Provides ground services to Turkish Airlines since the beginning of 2010, currently at eight major airports in Turkey: Istanbul (Ataturk and Sabiha Gokcen), Izmir, Ankara, Antalya, Adana, Bodrum, Dalaman.
Sun Express Turkey Founded in October 1989 as a 50% - 50% subsidiary company of Lufthansa and Turkish Airlines. Market leader in charter flights between Germany and Turkey. Flies to/from 21 airports in Germany, 18 in Turkey and 39 in other countries. Operates with 21 B737-800 aircraft with total seat capacity of 3.969 as of June 2013. Carried 2,511,251 passengers with 80.8% load factor by the end of the first half of 2013. 33
This presentation is confidential and does not constitute or form part of, and should not be construed as, an offer or invitation to subscribe for, underwrite or otherwise acquire, any securities of Turkish Airlines A.O (the Company ) or any member of its group nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities of the Company or any member of its group nor shall it or any part of it form the basis of or be relied on in connection with any contract, investment decision or commitment whatsoever. This presentation has been made to you solely for your information and background and is subject to amendment. This presentation (or any part of it) may not be reproduced or redistributed, passed on, or the contents otherwise divulged, directly or indirectly, to any other person (excluding the relevant person s professional advisers) or published in whole or in part for any purpose without the prior written consent of the Company. This presentation includes forward-looking statements. These forward-looking statements include all matters that are not historical facts, statements regarding the Company s intentions, beliefs or current expectations concerning, among other things, the Company s results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which the Company operates. By their nature, forward-looking statements involve risks and uncertainties, including, without limitation, the risks and uncertainties set forth in the Company s Offering Memorandum, because they relate to events and depend on circumstances that may or may not occur in the future. The Company cautions you that forward-looking statements are not guarantees of future performance and that its actual results of operations, financial condition and liquidity and the development of the industry in which the Company operates may differ materially from those made in or suggested by the forward-looking statements contained in this presentation. In addition, even if the Company s results of operations, financial condition and liquidity and the development of the industry in which the Company operates are consistent with the forward-looking statements contained in this presentation, those results or developments may not be indicative of results or developments in future periods. The Company does not undertake any obligation to review or confirm analyst expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of this presentation. 34