Hongkong, November 2016 Content Milestones Success Factors Future - PowerPoint PPT Presentation

Hongkong, November 2016

Content Milestones Success Factors Future Growth 39

Milestones

Successful execution of the low cost carrier model in Vietnam and Southeast Asia 65% 65% Milestones Flew its first Achieved Achieved commercial 29.6% 37.1% Incorporated Flew its first Hosted its Signed Signed contract Hosted its Hosted its and obtained air flight from Ho international 3,000,000 th contract with domestic domestic with Boeing to 10,000,000th 19,000,000th operator’s flight between carried Airbus for purchase 100 Chi Minh City market share market share passenger passenger (“HCMC”) to as at as of 31 certificate HCMC and passenger purchasing Boeing 737 MAX ceremony ceremony “AOC” Bangkok ceremony 100 Aircrafts 200 aircraft Hanoi as well 31 December December as to Da Nang 2014 (1) 2015 (2) 2007 2011 2012 2013 2014 2015 2016 Awards Top 10 Golden Award Vietnam Best outstanding Vietnam Best Recognitions of International Star PATA 2015 for “Best Asian Low Places to Work in brands by the Best airline award Places to Work in Achievement Award for Quality, innovative Cost Carrier 2015”, the Tourism and International from the Vietnam the Tourism and given by Prime by the Business by TTG Travel marketing campaign Intellectual Hospitality industry Economic Times Hospitality industry Minister in 2015 by the Pacific Asia Initiative Directions Awards 2015 2014 by Anphabe Property Institute, 2014 by Anphabe Travel Association & Nielsen Vietnam & Nielsen (1) Source: CAAV; based on total passengers boarding domestically via Vietnam-based airlines for the full year ended 31 December 2014 (2) Source: CAAV; based on total passengers boarding domestically via Vietnam-based airlines for the full year ended 31 December 2015 41

Key Factors (2015) 20 mm 89% Domestic cumulative passengers 88% Network Ha Noi carried (1) Hai Phong Load Factor (2) Thanh Hoa Vinh 35 Aircraft (1) Dong Hoi 40%++ Da Nang 04 Operational bases Domestic Share (1) Hue Quy Nhon Buon Ma Thuot 47 Routes (1) Nha Trang Da Lat 13.3 hours Can Tho 31 Domestic Phu Quoc Aircraft Utilization 16 International Ho Chi Minh US$489.5mm US$379.7mm US$21.5mm US$83.9mm US$4.3mm + + + = Total Revenue (3) Passenger Revenue (2) Cargo Revenue (2 ) Ancillary Revenue Other Revenue á 59% YOY 2014 á 49% YOY 2014 á 62% YOY 2014 á 114% YOY 2014 á 326% YOY 2014 (1) Up to date 2016; (2) Data of 2015; Exchange rate: 22.500 VND/USD (3) Unconsolidated financial statement 2015 42

Key Factors (09/2016) 40 Aircrafts 9.8 mil Passengers ( á 114% YOY 2015) ( á 120% YOY 2015) 5 Operational bases 53 Routes ( á 113% YOY 2015) 89% Load Factor 36 Domestic 17 International 63,128 Operational Flights 71,281 Flight Hours ( á 119% YOY 2015) ( á 118% YOY 2015) * Data of Q2 2016 43

Success Factors

Vietnam – A large market Amongst fastest growing urbanizing The fastest growing economy in ASEAN economies in ASEAN 2014 2050 Projected real GDP per Urbanization (share of total capita CAGR (CY2015- 5.0% population living in urban 100% 12% 100% 4.4% 4.2% 23% 86% 18% Avg. ASEAN (1) : 3.5% 74% CY2020) 12% 21% 71% 72% 3.2% 3.1% areas) 2.5% 56% 54% 53% 49% 44% 33% Vietnam Philippines IndonesiaThailand Malaysia Singapore Vietnam Indonesia Malaysia Strong historical and forecasted international Low air-travel penetration – even within Asia tourism growth 10,000 % 2010-2014 CAGR 2010 2014 2020 2014 total RPKs per capita Brunei % 2014-2020 CAGR 8,000 5.9% 5.4% 6.0% 5.5% 5.0% 5.9% New International tourist 11.3% 5.9% 7.7% 4.3% 11.7% 2.8% Zealand arrivals (in millions) Australia 6,000 36.5 US 31.6 4,000 27.5 24.8 22.3 24.6 Malaysia South 17.1 15.9 Korea 12.6 14.5 2,000 Thailand 8.1 9.4 6.0 7.0 Japan 6.1 Vietnam 4.6 4.0 3.3 China Indonesi 0 a 0 15,000 30,000 45,000 60,000 75,000 Vietnam Indonesia Thailand 2014 GDP per capita (US$) (1) Includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam 45 Source: SAP independent industry report; IMF World Economic Outlook Database (July 2015), ICAO (2014 annual report), Travelocity, Vietnam Rail, Hoang Long Transit Co, (December 2015)

Vietnam – Why LCC? Road Rail 2011 2014 20,000 17,500 stimulates airline travel 15,000 12,000 11,900 11,900 and captures market share from Passengers ('000s) 10,000 other modes of transport such as bus and rail due to 5,000 advantages of air travel vis-à- 2,872 2,307 vis land transport 142 146 0 60% 53.8% Share of domestic transport modes 50% 45.3% 45.3% Air travel is the most efficient transport mode (1) 36.9% 40% Hanoi HCMC – Hanoi HCMC – Danang 30% Travel modes Time Fare Fare Time Fare Fare (%) (hrs) (VND) (USD) (hrs) (VND) (USD) 615 km 20% (2) Air 2:05 961,000 44 3 1:20 615,000 28 4 1,150 km 8.8% 8.8% 10% Bus 35:00 861,385 39 15:30 405,458 19 0.5% 0.4% 0% Rail 34:00 1,066,278 49 17:00 616,833 28 HCMC Air Road Rail River 46

Vietnam – Significant government support Stringent licensing requirements Highly concentrated domestic markets, effectively a duopoly # of AOCs (Air Operator’s Certificate excludes General Aviation) (Controlled by ) 1.4% 61 15.3% (Controlled by 37 ) 27 (1) 4 46.2% 37.1% Vietnam Indonesia Philippines Thailand Domestic market share % by air passenger volume for 2015 (2) þ No new commercial entrants since 2011 when VietJet þ Minimal foreign competition as no foreign airlines permitted to commenced its first commercial flight operate domestic routes Air transport master plan Key government incentives to support VietJet þ US$10.5bn investment to develop airport infrastructure across the country, increasing the number of operational airports from Fuel Airport 22 to 26 by 2020 Tax supply costs (1) Excluding 2 licenses withdrawn due to bankruptcy (2) Source: CAAV; based on total passengers boarding domestically via Vietnam-based airlines for the year 2015 Source: SAP independent industry report; CAAV, Ministry of Transportation Republic of Indonesia, Civil Aviation Authority of the Philippines, Department of Civil Aviation (DCA) of Thailand, Axis Research Ltd. report dated July 2015 47

Vietjet – Domestic airline & LCC in Vietnam VietJet represents the majority of growth in the Leading airline in the domestic market within only 4 years domestic passenger aviation market 2012–2015 domestic air passenger (million) þ Increasing market share since 2012 (by full year all VietJet Vietnam ex VietJet Vietnam passenger volume) 21.2 þ Creating a new market – 14% of the passengers between 17.5 14.5 Jul 2015 and Dec 2015 were first-time air travelers 13.3 12.3 12.2 11.6 11.2 Domestic market share % (by full year air passenger volume) 7.9 80% 4.9 3.0 1.0 70% 2012 2013 2014 2015 60% þ More than 70% of new passengers every year fly with VietJet 50% Stimulating aviation growth as a transport mode 40% Air travel as a % of domestic transport modes (2) 30% 53.8% 49.3% 45.0% 20% 10% 0% 2012 2013 2014 2015 (1) 2012 2013 2014 þ VietJet focuses on attracting passengers from other VietJet ’s entry in 2011 has created new demand for transport modes such as road and rail and also first air travel in Vietnam, allowing the company to avoid time travelers . As a result, air travel market share has fighting for market share from competitors been growing significantly 48

Vietjet – Best-in-class cost structure CASK ex-fuel (1) (US Cents / ASK) Asia Europe/ Middle East Americas Average: 4.49 Average: 3.11 Average: 2.87 2.48 2.42 2014 2015 There is still headroom for cost structure improvement to further decrease both CASK & CASK ex-fuel (1) As of fiscal year 2014 and 2015 for peers; excluding net interest expense Source: SAP independent industry report, company information, financial model 49

Vietjet – Best-in-class cost structure (cont’d) A B Young, modern and fuel efficient fleet Lowest labor cost Average fleet age ( 1) 3.5 Asia Pacific Area Asia Pacific Area Peer Avg: 5.2 Peer Avg: 0.53 þ Highest seat density 0.48 þ New, fuel efficient aircraft on order expected to achieve additional fuel efficiency þ New engines on aircraft also allow significant cost savings D E Lowest airport cost Among lowest unit maintenance cost Unit airport operating charges (1) (US Cents/ASK) þ Young and efficient fleet þ Attractive maintenance and support arrangements due to large aircraft and engine orders Unit maintenance cost (1) (US Cents/ASK) Asia Pacific Area Peer Avg: 0.82 Asia Pacific Area 0.46 Peer Avg: 0.27 0.20 (1) As of fiscal year 2014 and 2015, FY 2015 data used for VietJet 50 Source: SAP independent industry report, Airbus, company information, financial model