The Leading Airline in Central Asia Ibrahim Canliel Chief Financial - - PowerPoint PPT Presentation

The Leading Airline in Central Asia

Dubai presentation 28 March 2019

Ibrahim Canliel Chief Financial Officer

This presentation has been prepared by Air Astana. The information contained herein has been prepared to assist parties in making their own evaluation of the Company. It does not purport to be all-inclusive or to contain all of the information that a prospective investor may desire. Each recipient of the information should perform their own independent investigation and analysis of the investment prospects of the Company. The information and data contained herein are not a substitute for the recipient’s independent evaluation and analysis. Parties who are interested in pursuing further discussions regarding prospective investment opportunities will be given the opportunity to perform further due diligence in due course. All initial communications or inquiries relating to this presentation should be directed to Air Astana.

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Air Astana | Presentation March 2019 2

The leading airline in Central Asia with Western safety and service standards Full-service airline with low cost structure Unique location as an ideal hub connecting the Asia, Europe and CIS Multiple growth levers with untapped potential from the sixth freedom traffic Modern and efficient fleet of Western-made aircraft Best-in-class management team with international track record Announced FlyArystan as the first Central Asian low cost carrier, launching in May 1 3 4 5 6 Exposed to attractive long term growth dynamics 2

2 1 3 4 5 7 8 6

The regional market leader – Positioned for growth

Air Astana | Presentation March 2019 3

Our mission is to build one of the finest airlines in the world

Air Astana | Presentation March 2019

> Shareholders

> 51% Samruk-Kazyna JSC > 49% BAE Systems

> Revenues US$840.8m > Passengers 4.3m > 86% on-time performance > Best Airline in Central Asia – 7 years in row (SkyTrax Awards)

34

Aircraft in fleet

8.4years

Average fleet age

5,270

Employees

19

Countries

66

Air routes In numbers

4

> First in the CIS to receive 4-star rating of the prestigious Skytrax World Airline Awards > 2012-2018 “Best Airline in Central Asia and India” by Skytrax > 2018 TripAdvisor’s “Travelers' Choice Regional Airline” > 2018 “Five Star Major Regional Airline” by Airline Passenger Experience Association

Service excellence

Air Astana | Presentation March 2019 5

Our growing route network

> Increasing international footprint > Close proximity to fast-growing Asian markets > Significant potential with Sixth Freedom traffic > Astana building strong hub position in Central Asia region

Air Astana | Presentation March 2019 6

2011 2012 2014 2017 2018 2009 2002 2003 2007 2008

September Foundation of Air Astana as a joint venture between the RK and BAE Systems

May First flight — Almatyto Astana to Almaty September First international flight — Almaty to Dubai to Almaty August First JAR/EASA 145 certification for Engineering and Maintenance December Launch of Frequent Flyer Programme December Official registration by IATA as an IOSA- compliant carrier December Launch of the Ab-initio pilots training programme June Achievement of 3-star

• verall Skytraxrating

June 2nd place in “Best AirlineEastEurope”at the 2011 World AirlineAwards October First own aircraft delivery 2012-2018 – Skytrax awardsfor “BestAirline inCentralAsia andIndia”forthesevenyearsinarow November2012— June2014 6 x A320 and 3 x B767 added Nov 2016 – Dec 2017 Delivery of first A320 NEOand A321 NEO aircraft November Delivery of first E2 aircraft November Announcement to launch FlyArystan-the first LCC in the region December 2017 Opening of aviation technical centrein Astana June Achieves IATA 100% E-Ticketingtarget (first in CIS) 2001

Company history and key milestones

Air Astana | Presentation March 2019 7

> A team of highly experienced professionals led by Peter Foster, a CEO with more than 35 years of management experience > Pedigree of major European and Asian airlines and BAE Systems > Average tenure amongst the top management of 11 years with a turnover

• f less than 6% since inception

> Strong commitment to corporate governance

Experienced senior management team

Peter Foster President & CEO

 35 years in the industry  13 years with the company  Previously: Cathay Pacific Airways and Royal Brunei Airlines

Ibrahim Canliel Chief Financial Officer

 25 years in the industry  15 years with the company  Previously: KLM

Gerhard Coetzee Senior Vice-president Corporate Safety Compliance

 25 years in the industry  13 years with the company  Previously: BAE Systems

Keith Wardle Vice President Engineering and Maintenance

 34 years in the industry  4 years with the company  Previously: BAE Systems, DHL Express

Alma Aliguzhinova Chief Planning Officer

 17 years with the company  MBA in Business Management  MBA in Aerospace

Anthony Regan Chief Operating Officer

 36 years in the industry  6 years with the company  Previously: Cityjet, Park Aviation, Irish Air Corps

Yerdaulet Shamshiyev Vice President Strategy and Development

 20 years in the industry  17 years with the company

YevgeniyaNi Vice President HR and Administration

 16 years with the company  Diplomas in Legal and English/French languages

Air Astana | Presentation March 2019 8

Kazakhstan Domestic market share Kazakhstan International market share

Air Astana 35%

Aeroflot 16% Scat 7% S7 Airlines 5%

Turkish Airlines 5% Ukraine Airlines 4%

Others 28%

Air Astana 46%

SCAT 28% Bek Air 20% Qazaq Air 6%

Domestic and International market share in 2018

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1 1

2,184 2,281 2,088 2,156 2,068 1,384 1,395 1,351 1,548 1,532 202 186 310 489 723

2014 2015 2016 2017 2018

Passengers ('000)

Domestic routes International routes 6th freedom traffic 3,770 3,862 3,749 4,193 4,323

11,668 12,417 12,717 13,590 14,267

2014 2015 2016 2017 2018

ASK (Million)

Passengers carried and capacity

Air Astana | Presentation March 2019 10

1.2 3.1 3.8 4.1 4.8 4.9 5.1 5.0 5.7

2009 2010 2011 2012 2013 2014 2015 2016 2017

Source: The World Bank

Passenger growth in Kazakhstan (PAX mm)

5,7% 3,9% 3,8% 3,1%

Asia Pacific CIS Europe North America

Air Travel penetration vs. GDP per capita

• No. of flights per person p.a.

Number of passengers per capita

1.3 0.8 0.4 0.2

Malaysia EU-28 Kazakhstan Denmark Norway Switzerland China Brazil Romania Austria Germany UK Netherlands France Italy Spain Greece Portugal Bulgaria Croatia Malaysia Thailand UAE Finland Russia Kazakhstan 10 1 10,000 20,000 30,000 40,000 50,000 60,000 70,000 0.1 GDP per capita, $

Passenger growth (RPK) 2017-2037E CAGR

Source: Boeing

The Kazakh aviation market

14m

New passenger record in 2018

31.5%

growth in international travel routes 2013- 2018

21.5% CAGR

passenger growth 2009-2017

4X

more passengers per capita in Malaysia vs Kazakhstan

900,000

transit passengers in 2018, up 40%

5.7% CAGR

passenger growth (RPK) expected in Asia Pacific 2017-2037 Air Astana | Presentation March 2019 11

Russia

> Central Asia’s first Low Cost Carrier > Announced in November 2018 > Ticket sales start 29th March 2019 > First flight expected 1st May 2019 > Separate AOC expected in early 2020 > Separate management team and business model > Initially a domestic offering but with ambitions to service the significant near home markets > The LCC will stimulate significant new traffic in its chosen markets – Kazakh propensity to fly just 0.22 > FlyArystan’s flight schedule has been constructed to where possible complement the existing schedule of Air Astana > EBITDAR positive in 2019 and with significant growth potential

Launch of Low Cost Carrier (LCC) - FlyArystan

Air Astana | Presentation March 2019 Based on extrapolated Air Astana frequent flyer data

12

90%

Kazakhs don’t yet fly domestically

The opportunity for an LCC in Central Asia is obvious

Air Astana | Presentation March 2019 13

+18%

Air Astana’s historical passenger growth by region

Passengers per year (‘000)

2013 2018

180 213

China

460 591

Russia

+28% 151 252

UAE & India

+67%

3,675 4,323

Total passengers

+18% 185 723

6th Freedom

+291%

Outstanding growth prospects

> Increased frequencies and improved connectivity have driven traffic flows > Focus on under-served markets with substantial size (e.g. Urumchi with 17m population and 28m catchment area) > Low unit costs allow Air Astana to compete and grow effectively > Competitive and dynamic pricing > Aggressive marketing > Expected passenger traffic growth translates into a requirement to double the fleet

Air Astana | Presentation March 2019 14

B767-300ER/ERW (PW) B757-200 (RR) A320 CEO/NEO (IAE/PW) E190LR/E2 (GE) A321 CEO/NEO (IAE/PW)

> Currently Air Astana operates a mixed fleet of 34 aircraft from western manufacturers > The Airline plans significant fleet expansion and replacement over the next 5 years > Current fleet age – 8.4 years > Expected fleet age by end of 2020 – 3.7 years - younger than competitors’ existing fleet

32 64 2017 2026

Fleet overview and expansion

2X

Air Astana | Presentation March 2019

Current Average age of fleet

15

4.4 5.5 6.6 6.7 6.8 8.2 8.4 9.2 9.9 10.6 10.9 11.3 11.3 11.9 15.1 16 Aeroflot China Eastern Singapore China Southern Air China Turkish Airlines Air Astana Qantas Cathay Pacific AA Air France - KLM CIS average IAG Lufthansa United Airlines Delta Air Lines

New International Terminal in Nursultan Nazarbayev International Airport

Nursultan Nazarbayev International Airport – An opportunity for growth

> One of the biggest airports in Central Asia > Commenced operation in June 2017 > Significantly Improved transit facilities > Capacity of the airport will more than double to 8.2 million passengers per year

16

> First MRO Technical Centre in Central Asia > 5,500m2 weatherproof area > Creating 190 highly skilled jobs > Heavy maintenance capability together with expertise in composites repair and non- destructive testing

Leading MRO Technical Centre in Central Asia

Air Astana | Presentation March 2019 17

324,209 252,811 179,914 214,190 221,777 610,571 508,936 441,100 553,347 619,084

2014 2015 2016 2017 2018

Operating revenue ('000 USD)

Domestic routes International routes 761,747 621,014 767,537 840,861 934,780

209,903 138,219 123,744 150,126 130,862

2014 2015 2016 2017 2018

EBITDAR ('000 USD)

EBITDAR ('000 USD)

Key financial indicators 2014-2018

Air Astana | Presentation March 2019 18

5.01 4.54 3.56 3.83 4.03 7.17 5.87 4.59 5.18 5.64

2014 2015 2016 2017 2018

Cost per ASK (US cents)

Cost per ASK excl.fuel (US cents) Cost per ASK (US cents)

28% 15% 14% 14% 9% 6% 5% 9%

Fuel Airport & Ground Engineering Staff costs Leasing AC & Spares Navigation Passenger related Other

Key financial indicators 2014-2018

Operating costs breakdown for 2018

Air Astana | Presentation March 2019 19

CASK 2018 (adjusted), us cents per ask

Air Astana | Presentation March 2019 20 14.2 13.3 12.7 12.2 10.8 10.5 10.2 9.9 8.8 8.7 8.1 7.3 7.2 7.1 6.9 6.6 6.3 6.1 5.7 5.7 4.7 4.3 3.9 3.8 3.4

2 4 6 8 10 12 14 16

Airline data is based on 2017 and adjusted for fuel price increase in 2018.

Conclusion

Air Astana | Presentation March 2019 21

Our mission:

From the Heart of Eurasia we are building one of the finest airlines in the world.

Our purpose:

to deliver maximum returns to our shareholders by maintaining high levels of efficiency, excellence and passenger satisfaction A regional hub Uniquely positioned to capture growth as a hub connecting Asia, Europe and the CIS Untapped potential FlyArystan presents substantial growth

• pportunities in a

largely under-served LCC market in Central Asia A low-cost structure A rigorous focus on efficiency drives our success and helps us maintain a low-cost base as a key strategic advantage World class team A best in class management team blends international experience with local knowledge to drive excellence