PRESENTATION PRESENTATION NOVEMBER 2019 LEG LEGAL AL DISC - - PowerPoint PPT Presentation

NOVEMBER 2019

INVEST INVESTORS ORS PRESENTATION PRESENTATION

LEG LEGAL AL DISC DISCLAIMER LAIMER

1

The presentation is dated the day it is given. The delivery of this presentation shall not, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. The third party information and statistical data in this presentation have been obtained from sources the Company believes to be reliable but in no way are warranted by the Company as to accuracy or completeness. This presentation may not contain all material information concerning the Company and the information set forth in this material is subject to change without notice. These materials included herein that are not historical facts are forward-looking

• statements. Such forward looking statements involve a number of risks and

uncertainties and are subject to change at any time. In the event such risks or uncertainties materialise, AAV’s results could be materially affected. The risks and uncertainties include, but are not limited to, risks associated with the inherent uncertainty of airline travel, seasonality issues, volatile jet fuel prices, world terrorism, perceived safe destination for travel, Government regulation changes and approval, including but not limited to the expected landing rights into new destinations. This presentation is strictly not to be distributed without the explicit consent of Company’s management under any circumstances.

1.2 1.8 3.0 3.6 4.2 5.0 5.7 6.9 8.3 10.5 12.2 14.8 17.2 19.8 21.6 22.5 6 9 12 15 16 20 19 22 27 35 40 45 51 56 62 62 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019E

(AIRCRAFT)

Aircraft Growth Rate of 18%

THAI THAI AIRASIA AT A GLANCE AIRASIA AT A GLANCE

Note: 1 As of 31 October 2019

2

66 66 94 94

Carried over 135 million passengers with CAGR of 23%

25 25 14 14

THAILAND THAILAND MARKET MARKET

3

31% 30% North America 36% 36% Europe

51% 55%

South Asia

48% 49%

SE Asia

LCC penetration 1

52% 52%

Thailand

2018 2019

CHINA Grew 2% YoY and 29% contribution ASEAN Grew 5% YoY and 26% contribution EUROPE Edged down 2% YoY and 16% contribution SOUTH ASIA OVERALL 9M19 visitors grew 4% YoY to 29.5 million

E.Asia 70% EU 16% S.Asia 6% US 4%Others 4%

29

2

million Tourists from China grew 17% YoY with 23% YoY jumps in arrival from India in 3Q2019 Grew 21% YoY and 6% contribution EXPECTED OVER 40 AND 41.5 MILLION VISITORS IN 2019 AND 2020

1 source: CAPA 2 source: Ministry of Tourism and Sport

ANCIL ILLARY LARY PE PERF RFORMAN RMANCE CE

ON TRACK TO ACHIEVE 2019 BT 343 PER PAX (+4%YoY) 9M19 achieved 5.7bn (+8%YoY) or Bt 339 per pax (+4%YoY) 4

5,237 5,677

FLY-THRU

• 9M19 up by 55% from additional flights among AOCs,

reflected in a 59% growth in traffics

• No. Fly-Thru accounted for 6% of total pax

CHECKED BAGGAGE

• 9M19 inched up by 2% YoY, relating to an expansion

in international route IN-FLIGHT SERVICES

• Continue promoting pre-book In-flight combo set
• Enhance house-brand on F&B and merchandise

SEAT SELECTION

• 9M19 up by 24% YoY, relating to an expansion in

international route and dynamic pricing

• Persuasive advertising influences demand on value

pack and seat selection OTHERS (Cargo, Tune, Fees)

• Freight revenues was 4% of ancillaries
• Fee structure adjustment; processing fee
• Upsell on Fly-Thru lounge access

19%

Revenues

50% 8% 8% 6% 28%

9M18 9M19 +8%YoY

Percent contribution to total ancillary revenue Unit : Million

5

MARKET SHARE1 BY PAX FLOWN

65% 12 23

33.2% 18.0% 16.7% 9.4% 7.1% 9.9% 5.7%

32.4% 18.1% 18.1% 9.3% 7.3% 9.7% 4.9%

9M2019 FY2018

Note: 1 9M2019 compared to FY2018 (Source: AAV, AOT and Department of Airport)

2 Capacity share as of FY2019 (source : OAG) 3 As of October 31 2019

DOMES DOMESTIC TIC MARKET MARKET

Regional Capacity2 Unique Routes3 Cities

AirAsia Nok Lion Smile Thai Bangkok Vietjet

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Transfer Routes

6 27.24 48.38 49.55 47.51

2013 2014 2015 2016 2017 2018 2019

THAILAND DOMESTIC CAPACITY

(source : OAG)

Peers

Unit : million

Thai Lion Air 67% Thai Airways Group 18% Nok Air 9% Bangkok Airways 5% Thai VietJet 1%

Hubs REDUCTION

Competitors have decreased its capacity by 1.8 million seats, particularly DMK hub. Thailand domestic market capacity over the past 5-year had grown by 15%, resulting in intense competition and the price war. Recently, the market has a more rational environment, reflected in a 4% decline in capacity. BKK DMK

DECELERATED DECELERATED GROWTH GROWTH SPUR SPUR THE THE AV AVERA ERAGE GE FAR FARE

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16.7 18.1 6.2 4.4

AAV THAI NOK BA

83 80 87 68

AAV THAI NOK BA

1.53 2.20 2.17 3.52

AAV THAI NOK BA

17 12 10 13

AAV THAI NOK BA Percent

HIGHEST PAX GROWTH LOWEST CASK* HIGHEST EBITDAR MARGIN1

Baht Million passengers +5%

• 3%
• 8%

+2% YoY

* Cost excluded finance costs and tax expense

HIGHEST ASK GROWTH

Percent

Source: 1 SET filing, Company data, AAV estimates based on 9M2019 Results ( NOK excluding Nokscoot) EBITDAR Margin: Earning before finance cost, income tax, depreciation and amortisation, rental / Total sales and service

ASK Growth +10%

• 3%
• 10%
• 2% YoY

LISTED LISTED-AI AIRLI RLINE NE PERFOR PERFORMA MANCE NCE

8

CASK decreased by 3% YoY as a result of a 9% decrease in fuel per ASK. CASK ex-fuel unchanged due to the cost containment. Fuel costs in 9M2019 increased by 1% along with a 10% decrease in fuel price and favourable exchange rate of 2%, despite a 11% rise in the fuel consumption. TAA has hedged 86% and 73% of Brent at an effective cost

• f Jet at $75.6/bbl for 4Q2019 and FY2020, respectively.

34% Fuel Costs 16% Staff Costs 13%

Aircraft and Aircraft Engine Rental

9% Repair and Maintenance

12%

Ramp and Airport Operation

6% Selling and Administrative

10% Other costs 9M19 UNIT COSTS UNIT COSTS : ON TRAC : ON TRACK K TO BEAT FY2 TO BEAT FY201 019 9 PLAN PLAN

0.57 0.53 1.00 1.00 9M2018 9M2019

1.57 1.53

Unit : Baht

• 3%

FUEL EX-FUEL

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NETWORK NETWORK REALL REALLOCATION TO OCATION TO MAX MAXIMIS IMISE E OPERATION OPERATIONAL RETURNS AL RETURNS

* JUL 2019 – OCT 2019 ** WINTER SEASON *** DEC 2019 – JAN 2020

CNX – Danang DMK – Nha Trang DMK – Can Tho CEI – Shenzhen CNX – Shenzhen DMK – Ahmedabad HKT – Phnom Penh DMK – Narathiwat(7x > 11x)* DMK – Jaipur (4x > 7x)** DMK – Nan(28x > 31x)*** DMK – Sihanoukville DMK – Varanasi CEI – Hangzhou

ADD FREQUENCIES: NEW ROUTES:

2Q/2019 3Q/2019 4Q/2019

DMK – Roi Et DMK – Khon Kean DMK – Shenzhen CNX – Taipei (6x > 7x)

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GROWTH GROWTH STRATEG STRATEGIES IES

Efficient Operation Digital Transform

• AVA
• FACES
• Invest in pilot training academy

and flight simulator center

• Aim to reduce cost >100 MB

Training Academy

• Green flight operation
• Flight plan efficiency

Growth in ancillary to revenue each year, expected to see 25% in next 5 yrs

+1% +10%

Growth in cargo revenue each year, cooperate with Teleport

DOMESTIC, 45% CHINA, 20% CLMV, 15% ASEAN ex CLMV, 10% SOUTH ASIA, 10%

+2%

Growth in Fly-Thru passengers each year Revenues by routes in 5-year

Diversify Network Cost Reduction Revenue Growth

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GROWTH COSTS COMMERCIAL

• FY2019 capacity growth expected between 5 and 6% driven by disciplined network expansion
• First A321neo delivered in December and entry to service during 1Q/2020
• ASK growth in 2019 between 10 and 11% on the back of international route expansion
• Passengers to achieve at 22.5 million on due to waiving VOA fees till 30 Apr 2020 and other tourism measures;

expect to achieve at 86% of load factor

• On track to achieve 2019 goal; CASK guidance narrowed to -2.0 to 0.0% ; CASK ex-fuel unchanged
• Maintain a cost advantage over competitors, even under the same or different business models
• Cost initiative; transferred call centre services to AVA with 24/7 automated chat system
• Taking immediate capacity actions to address near-term RASK weakness, driven by some new routes taking

longer than usual to mature; network reallocation continues to ramp during the peak seasons

• Maintaining its favourable operating performance (OTP) to more than 85%; which is key in positive brand

awareness

• On track to deliver ancillary revenue; engaging in dynamic pricing of its products & adding a bundled products
• Maintain the goal to ensure that our guests feel like they get the great value from the company’s low fare

COM COMPANY PANY GU GUIDANC IDANCE

RELE RELEVANT VANT MATE MATERIALS RIALS

https://www.aavplc.com/en/investor-relations/home

DOCUMENT LOCATION Investor Presentation https://www.aavplc.com/en/investor- relations/downloads/presentations-webcasts Earning Releases https://www.aavplc.com/en/investor- relations/updates/news Annual Reports https://www.aavplc.com/en/investor- relations/downloads/annual-report Investor Kits https://www.aavplc.com/en/investor- relations/publications-and-download/investor-kits Operating Statistic https://www.aavplc.com/en/investor- relations/operating-statistics Sustainability Report https://www.aavplc.com/en/investor- relations/downloads/sustainability-report

Don Mueang International Airport, 3rd Fl., Central Office Building, No.3200,Vibhavadi Rangsit Road, Sanambin, Don Mueang, Bangkok 10210

www.aavplc.com taa_ir@airasia.com +662 5625745-6

SHAREHOLDING STRUCTURE:

13

AirAsia Group Berhad Management & BOD

Thai AirAsia

(Operating company)

Public

100% 45% 59% 55%

AirAsia Investment

Asia Aviation

(Listed company) 41%

KEY MILESTONES:

Launched second hub in Phuket

2017

2017

Marketing Excellence Award, TMA Outstanding IR Award, SET

2015 2014

The World Best LCC’s OTP Flightstats Launched Fourth hub in Krabi

2013

Launched Third hub in Chiang Mai

2012

AAV was listed in the SET & increase its shareholding in TAA to 55% Moved back to Don Mueang Airport Owned first aircraft in our book

2010

Comprised of single aircraft type the Airbus A320

2009 2007

Moved to Suvarnabhumi Airport Received first delivery Airbus A320 AAV was incorporated and acquired 50% of shares in TAA

2004

Began services from Bangkok to Phuket, Hat Yai, Chiang Mai and Singapore with two Boeing aircraft

2016

Received the first delivery

• f A320neo

2018

First Thai LCC to receive AOC Re-Certification

2006

The best of Airline from the best of Thailand awards voted by Chinese tourists Launched Fifth hub in Utapao

OUR VISION:

To be the leading sustainable travel technology company in Asia providing more than just affordable flights

OUR MISSION:

• 1. To provide the highest quality product, embracing

technology to reduce cost and enhance service

• 2. To create jobs across the region and be the best

company to work for where dreams come true

• 3. To care for all our stakeholders, from Allstars, guests,

business partners, investors to communities and governments

• 4. To create a globally recognised, sustainable ASEAN

brand focused on adding value to the economy, society and environment

(as of June 2019)

BUSINESS BUSINESS OVERVIEW OVERVIEW

TFRS 16 TFRS 16 IMPAC IMPACT T TO LEASE TO LEASED D ASS ASSET ET

Adoption of TFRS 16 by using the Modified Approach method whereby the leases were computed based on the present value of all its future payments based on the company's borrowing rate with the impact taken to

• pening retained earnings.

The chart depicts that combined depreciation and interest will be less than the operating lease amounts.

1 2 3 4 5 6 7 8 9 10 Depreciation Interest Operating lease

For a new aircraft, combined depreciation and interest will be more than the operating lease amounts during the earlier portion of the lease terms before the adoption of TFRS 16.

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Depreciation Interest Operating lease 14

TA TAA : : KEY KEY STATIST STATISTICS ICS

3Q2019 3Q2018 Change 9M2019 9M2018 Change

Passenger carried (Million seats) 5.28 5.12 3% 16.73 16.07 4% International passenger 2.23 1.97 13% 6.90 6.03 14% Domestic passenger 3.05 3.15

• 3%

9.82 10.04

• 2%

Capacity (Million seats) 6.55 6.34 3% 19.81 18.84 5% Load factor 81% 81% 0 ppt 84% 85%

• 1 ppt

RPK (Million) 5,444 4,979 9% 17,237 15,791 9% ASK (Million) 6,766 6,167 10% 20,542 18,559 11%

• No. of stages flown

36,253 35,105 3% 109,678 104,382 5% Average stage length (km) 1,034 972 6% 1,037 985 5% Fleet size (Aircraft) 62 60 +2 62 60 +2 Aircraft utilisation (Hours/day) 12.2 11.7 +0.5 12.4 12.0 +0.4 On time performance 88% 89%

• 1 ppt

86% 85% +1 ppt Average fare (Baht) 1,457 1,418 +3% 1,469 1,499

• 2%

RASK (Baht) 1.39 1.45

• 4%

1.47 1.58

• 7%

CASK (Baht) 1.49 1.60

• 7%

1.53 1.57

• 3%

CASK ex-fuel (Baht) 0.98 0.98 0% 1.00 1.00 0%

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TAA AA ST STAT ATEMENT EMENT OF OF COMP COMPREHENSIV REHENSIVE E INCOME INCOME

Unit: Baht million

3Q2019 3Q2018 Change 9M2019 9M2018 Change

Revenue from sales and services 9,419 8,945 5% 30,183 29,250 3% Gain on exchange rate 104

• >100%

271 133 >100% Other income 242 258

• 6%

764 821

• 7%

Total revenues 9,661 9,307 4% 31,219 30,203 3% Cost of sales and services (9,350) (9,138) 2% (28,957) (26,897) 8% Selling and administrative expenses (716) (704) 2% (2,409) (2,277) 6% Loss on exchange (80) n/a n/a Total expenses (10,146) (9,842) 3% (31,366) (29,174) 8% EBIT (485) (535) 9% (147) 1,029

• >100%

Finance costs (198) (188) 5% (570) (536) 6% Profit (loss) before income tax (683) (722)

• 5%

(717) 493

• >100%

Income tax income (Expense) (77) 67 >100% (20) 118

• >100%

Net Profit (loss) (761) (656) 16% (737) 611

• >100%

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TAA AA ST STAT ATEMENT EMENT OF OF FINANCIAL FINANCIAL POSIT POSITION ION

Unit: Baht million

3Q2019 FY2018 Change

Assets Cash and Cash equivalents 2,476 4,037

• 39%

Other current assets 3,635 2,238 +62% Aircraft, leasehold improvements and equipment, net 25,104 26,129

• 4%

Other non-current assets 6,019 5,514 +9% Total assets 37,234 37,918

• 2%

Liabilities Deferred revenues 4,373 4,987

• 12%

Borrowings from financial institutions 5,076 3,488 +46% Debenture 4,096 4,095 0% Finance lease liabilities 11,900 13,219

• 10%

Other liabilities 4,881 4,351 +12% Total liabilities 30,326 30,140 +1% Share capital Ordinary Share Capital 436 436 0% Share Premium 2,629 2,629 0% Retained earnings - legal reserve 44 43 0% Retained earnings - unappropriate 3,800 4,670

• 19%

Total share capital 6,908 7,778

• 11%

Total liabilities and share capital 37,234 37,918

• 2%

17

3Q2019 3Q2018 Change 9M2019 9M018 Change

Earnings (loss) per Share (THB) (17.46) (15.05)

• 16%

(16.92) 14.04

• >100%

Return on Total Assets

• 3.2%

4.0% 

• 3.2%

4.0%  Return on Shareholders' Equity

• 16.1%

15.3% 

• 16.1%

15.3%  EBITDAR Margin 13.2% 13.6%

• 0 ppt

17% 21%

• 4 ppt

EBIT Margin

• 5.1%
• 6.0%

+1 ppt 4% 8%

• 4 ppt

Net Income Margin

• 8.1%
• 7.3%
• 1 ppt
• 2.4%

2.1%

• 4 ppt

Debt1 : Equity ratio (Times) 3.05 2.56  3.05 2.56  Net Debt2 : Equity ratio (Times) 2.69 2.08  2.69 2.08  Net Liabilities3 : Equity ratio (Times) 4.03 3.11  4.03 3.11 

TAA AA : FINANCIAL FINANCIAL SU SUMMA MMARY RY

Note: 1 Debt = Borrowings from financial institutions + Finance lease liabilities + Debenture

2 Net Debt = (Borrowings from financial institutions + Finance lease liabilities + Debenture) - Cash and Cash Equivalents – Short-term Investments 3 Net Liabilities = Total liabilities – Cash and Cash Equivalents – Short-term Investments

Percentage Point (PPT)

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AAV AAV ST STAT ATEMENT EMENT OF OF COMP COMPREHENSIV REHENSIVE E INCOME INCOME

Unit: Baht million

Consolidated Change Consolidated Change 3Q2019 3Q2018 9M2019 9M2018

Revenue from sales and services 9,419 8,945 5% 30,183 29,250 3% Gain on exchange rate 104

• >100%

271 133 >100% Other income 242 258

• 6%

765 821

• 7%

Total revenues 9,661 9,307 4% 31,219 30,203 3% Cost of sales and services (9,350) (9,138) 2% (28,957) (26,897) 8% Selling and administrative expenses (714) (701) 2% (2,405) (2,273) 6% Loss on exchange (80) n/a n/a Total expenses (10,144) (9,838) 3% (31,362) (29,169) 8% EBIT (482) (531) 9% (142) 1,034

• >100%

Finance costs (198) (188) 5% (570) (536) 6% Profit (loss) before income tax (681) (719) 5% (712) 498

• >100%

Income tax income (Expense) (78) 66 >100% (21) 117

• >100%

Profit (loss) attributable to (759) (653)

• 16%

(733) 615

• >100%

Equity holders of the company (417) (358)

• 16%

(402) 340

• >100%

Non-controlling interests of the subsidiary (342) (295)

• 16%

(332) 275

• >100%

Earnings (loss) per share (THB) (759) (653)

• 16%

(733) 615

• >100%

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Unit: Baht million Consolidated Change

3Q2019 FY2018

Assets Cash and Cash equivalents 2,566 4,123

• 38%

Other current assets 3,636 2,243 +62% Aircraft, leasehold improvements and equipment, net 25,160 26,185

• 4%

Intangible assets 1) 14,878 14,883 0% Goodwill 2) 8,825 8,825 0% Other non-current assets 6,001 5,488 +9% Total assets 61,066 61,747

• 1%

Liabilities Deferred revenues 4,373 4,987

• 12%

Accrued expenses 2,271 2,562

• 11%

Finance lease liabilities 11,900 13,219

• 10%

Borrowings from financial institutions 5,076 3,488 +46% Debenture 4,096 4,095 0% Other liabilities 5,594 4,773 +17% Total liabilities 33,310 33,124 +1% Share capital Ordinary Share Capital 485 485 0% Share Premium 2,600 2,600 0% Retained Earnings – Legal reserve 49 48 0% Retained Earnings – Unappropriated 16,847 17,322

• 3%

Non-controlling interests 7,776 8,167

• 5%

Total share capital 27,756 28,623

• 3%

Total liabilities and share capital 61,066 61,747

• 1%

AAV AAV ST STAT ATEMENT EMENT OF OF FINANCIAL FINANCIAL POSIT POSITION ION

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Load Factor = Represents the number of passengers carried as a proportion to capacity, which is the number of seats available for passengers. Available Seat Kilometres (ASK) = which is the total number of seats available on all flights multiplied by the number of kilometres these seats were flown Revenue Passenger Kilometres (RPK) = Revenue passenger kilometres, which is the number of paying passengers carried on all flights multiplied by the number of kilometres those seats were flown Average Fare = Calculated as Thai AirAsia' s total passenger revenues and fuel surcharge divided by total number of passengers carried Revenue per ASK (RASK) = Calculated as Thai AirAsia's revenues divided by ASK Cost per ASK (CASK) = Calculated as the sum of Thai AirAsia's operating costs, selling expenses and administrative expenses (but excluding finance costs) divided by ASK Cost per ASK (CASK ex-fuel) = Calculated as the sum of Thai AirAsia's operating costs, selling expenses and administrative expenses (but excluding finance costs) less fuel costs divided by ASK Average Stage Length (kilometres) = Represents the average number of kilometres flown per flight Aircraft Utilisation = Represents the average block hours per day per aircraft during the relevant period. Block hours is calculated by measuring the duration between the time of departure of an aircraft and the time of arrival at its destination. On Time Performance (%) = A flight is deemed "on time" if the actual departure time is no more than 15 minutes of the scheduled departure time.

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GL GLOSSARY OSSARY