“Now Everyone Can Fly” “Now Everyone Can Fly” 2005 Second Quarter Results 2005 Second Quarter Results 21 st February 2005 21 st February 2005
Disclaimer Now Everyone Can Fly Information contained in our presentation is intended solely for your personal reference and is strictly confidential. Such information is subject to change without notice, its accuracy is not guaranteed and it may not contain all material information concerning the company. Neither we nor our advisors make any representation regarding, and assumes no responsibility or liability for, the accuracy or completeness of, or any errors or omissions in, any information contained herein. In addition, the information contains projections and forward-looking statements that reflect the company’s current views with respect to future events and financial performance. These views are based on current assumptions which are subject to various risks and which may change over time. No assurance can be given that future events will occur, that projections will be achieved, or that the company’s assumptions are correct. Actual results may differ materially from those projected. This presentation is strictly not to be distributed without the explicit consent of Company management under any circumstance. 1
Agenda Now Everyone Can Fly 1. Highlight & Events 2. Results Commentary - Second Quarter 2005 3. Cost Management 4. Outlook Question & Answers 2
CONFIDENTIAL CONFIDENTIAL Now Everyone Can Fly 1. Highlight & Events 1. Highlight & Events
Highlights and Events Now Everyone Can Fly � 5 new routes added in the quarter - entered a new country (Macau) � Purchase Indonesian Airline – securing foundation of growth potential in Indonesia � Thai-AirAsia (expanding the model outside of Malaysia) � 80 Airbus Order Concluded – guarantees continues supply of aircraft and secures low cost structure � Initial Public Offering Launched � AirAsia to be inducted in MSCI Emerging Market Index, 1 st March 4
Now Everyone Can Fly 5 Low Cost Growth AirAsia Brand AirAsia in Snapshot People Margin
Growth, Growth, Growth Now Everyone Can Fly Passengers Flown ( (‘ ‘000) 000) Passengers Flown 2,924 2,839 1 ,561 1 ,481 1 ,354 61 1 291 M ar-2001 Jun-2002 Jun-2003 Jun-2004 1 Q-2005 2Q-2005 1 H-2005 � Market can’t have enough of our low fares - first half passenger flown exceeded full year 2004 passenger carried � Passenger numbers rising despite increase in average fare � Capacity rise did not undermine load factor 6
Growth, Growth, Growth Now Everyone Can Fly Thailand Statistics Q2 -2005 Q1 -2005 Q4 -2004 Average Load factor 77% 84% 74% # Passengers 434,865 369,340 230,831 Average fare (RM) 115 99 99 Cost / ASK (US cents) 2.57 3.14 2.83 RPK (mn) 409 314 182 ASK (mn) 544 371 247 # aircraft (end) 6 4 3 � Within a year, we are now the market leaders in Thailand � Strong passenger growth with improving yield and lowered cost 7
Growth, Growth, Growth: Indonesia Now Everyone Can Fly � Entry to Indonesia way ahead of initial timeline estimates � Indonesia potential is enormous, (>200 mill population, 17000 islands, minimal competition) � Fleet currently 2 planes, brought from the Malaysian operations � Indonesia is not computed in prospectus 8
“How is your Cost / ASK so low?” Now Everyone Can Fly Operating Expenses Cost/ ASK Reason (US cents) AA Others* Staff cost 0.29 1.16 Superior productivity & low cost region Fuel and Oil 1.11 1.03 Positive oil hedge benefits Maintenance & Overhaul 0.17 0.38 LT contracts at attractive levels Cost of aircraft 0.25 0.50 Lock in aircraft at bottom cycle Depreciation & Amort ’ n 0.10 0.18 Fleet biased toward lease than owned Others 0.21 2.58 Asian charges are much lower TOTAL cost per ASK 2.13 5.83 63% Cheaper than Direct Peers Others: Gol, JetBlue, Southwest,, VirginBlue, EasyJet � It’s not a myth! It’s only a mirage if you can’t see it! 9
Cost Management Now Everyone Can Fly Cost / ASK (US cents) Cost / ASK (US cents) 1.3 cents cost reduction since begin operations 3.4 2.9 2.5 2.1 2.1 2002 2003 2004 Q1 2005 Q2 2005 Superior cost containment and more to come – biggest caveat is oil price 10
Cost – where we stack against industry? Now Everyone Can Fly Source: CSFB CSFB acknowledge AirAsia as the lowest cost airline company 11
People, People, People Now Everyone Can Fly Focus on quality and service is essential to ensure continuous supply of quality staff and avoid slip-up � Training Centre aka AirAsia Academy - ensure high quality rollout of staff without major cost exposure - continuous improvement courses to ensure we’re always up to date - keen-eye to improve quality, wherever possible � Aircraft simulator - investment for future indigenous pilots - Pioneer ‘Pilot Cadet Program’ batch will graduate in June 2005 12
Training – The Bottleneck of Growth Now Everyone Can Fly Cadet Pilot Training School Cadet Pilot Training School � Introduced own Pilot Cadet Training Program in December 2003 � Cadet pilots are recruited and enrolled in the Malaysian Flying Academy � First group of 17 pilots are expected to graduate in May 2005 Engineer Recruitment Engineer Recruitment � Arrangement with Aero Precision Resources � Training center uses AirAsia’s aircraft and facilities to train potential engineers � Allows AirAsia to identify and select Flight Simulator Center Flight Simulator Center engineers for recruitment � Selected engineers are given an � Own flight simulator complex under construction at KLIA allowance for type-rating training, with � 10-year aviation agreement with CAE Labuan a bond to AirAsia for 3 - 5 years � Alleviates AirAsia’s dependence on third parties for it’s pilots type-rating training “ “Training engine Training engine” ” that produces quality pilots and engineers to support our plann that produces quality pilots and engineers to support our planned future ed future growth growth 13
Simulator Updates Now Everyone Can Fly • Scheduled completion: June 26th 2005 • Commencement of Operations : July 1st 2005 (from April) 14
Recruiting the Best People - adding value to our organization Now Everyone Can Fly Kathleen Tan (Executive Vice President – Commercial) - Specialist in arrears of marketing, communications, brand management. Over 20 years experience in Asia-Pacific region. Senjaya (Chief Executive Officer; Indonesia) - Previously in the music industry. Impeccable brand development aptitude and management skills Rozman (Chief Financial Officer; Indonesia) - Sound financial experience; previously in KLIA John Chang (Executive Vice President – Greater China & North Asia) 15
But how about your Profit Margins? Now Everyone Can Fly Profitability Air Ryan Easy Virgin Jet South AVERAGE Margin (% ) Asia air Jet Blue Blue West 13.9 EBIT 25 25 5 11 9 9 Source: AirAsia; Bloomberg; latest company reports � AirAsia possesses among the best profit margins 16
CONFIDENTIAL CONFIDENTIAL Now Everyone Can Fly 2. Second Quarter Results Commentary 2. Second Quarter Results Commentary
Financial Highlights – Q2 2005 Now Everyone Can Fly ∆ ∆ Year End : June Q2 2005 Q1 2005 Q2 2004 Figures in RM ‘000, unless otherwise stated Q2:Q1(O5) Q2:Q2(04) Revenue 178,633 125,479 106,477 + 42% + 68% EBI TDAR 67,843 32,786 39,631 + 107% + 71% EBI TDA 52,242 20,442 28,448 + 156% + 84% EBI T 45,713 15,508 27,195 + 194% + 68% Share of Associates (720) (3,300) + 80% Net I ncome 44,361 10,478 26,976 + 323% + 64% ASK (million) 1645 1326 842 + 24% + 95% 18
Performance Indicator Now Everyone Can Fly Figures in % Q2 2005 Q1 2005 Q2 2004 FY 2004 EBI TDAR Margin 38 26 37 29 EBI T Margin 26 12 26 16 Net I ncome Margin 25 11 25 15 � Consistent EBITDAR margin improvement � Profitability intact despite loses in Thai AirAsia � This is in-line with seasonality issues of October to December 19
Balance Sheet Now Everyone Can Fly Balance Sheet (RM Balance Sheet (RM’ ’ million) million) 899 Post IPO 150 161 60 49 46 35 29 3 17 -105 -582 (*) Mar-01 Jun-02 Jun-03 Jun-04 Sep-04 Dec-04 Note: (*) For the 15 months ended June 30, 2002 SHR Equity Net Debt IPO proceeds renders a very strong balance sheet 20
Cash Generating Machine Now Everyone Can Fly Cashflow from Operating Activities (RM (RM’ ’ million) million) Cashflow from Operating Activities 82 56 29 -12 -19 -3 15 7 Mar-00 Mar-01 Jun-02 Jun-03 Jun-04 Q1-05 Q2-05 (*) Note: (*) For the 15 months ended June 30, 2002 “Normalized CFO” is RM82m. RM75m is paid for aircraft and fuel deposits. Therefore CFO is ‘superficially’ depressed at RM7m 21
Operational Statistics Now Everyone Can Fly ∆ q-o-q Operational Statistics Q2 -2005 Q1 -2005 Average Load factor 75% 77% # Passengers 1,126,393 984,621 + 14% Average fare (RM) 153 122 + 25% RPK (mn) 1230 1017 + 21% ASK (mn) 1645 1326 + 24% Rev/ ASK (US cents) 2.86 2.48 + 15% Rev/ RPK (US cents) 3.82 3.27 + 17% Cost/ ASK (US cents) 2.13 2.08 + 2.4% # aircraft (beginning) 18 12 # aircraft (end) 19 15 Average # aircraft 16.7 22
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