AIRASIA, UPS & DOWNS - A LONG TERM STORY

AIREEN OMAR CEO, AIRASIA BERHAD 1 AIRASIA’S GROWTH STORY

- From to Asean to 196 70.00 200 Passengers Flown (in mil) No. of Aircraft 169 60.00 CAGR: 74% CAGR: 41% 127 50 150 50.00 101 108 46 100 40.00 78 84 37 65 32 30.00 42 28 27 24 50 17 19 20.00 2 3 7 15 12 0 10.00 7 5 1 2 0.03 -50 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Malaysia Thai AirAsia ’ AirAsia AirAsia AirAsia AirAsia X AirAsia India

All figures refer to MAA, TAA, IAA, PAA, AAI and AirAsia X *YTD Sep 2015 for MAA, TAA, IAA, PAA, AAI and AAX 2 FROM ASEAN TO ASIA - Associate Structure

MALAYSIA AirAsia • Population base: 29m • Years in Operation: 14 • Listed on (AirAsia Bhd)

THAI AirAsia (Associate Co - 45% owned) • Population base: 67m • Years in Operation: 12 • Listed on SET under Asia Aviation PCL

INDONESIA AirAsia (Associate Co - 49% owned) • Population base: 247m • Years in Operation : 11

PHILIPPINES’ AirAsia (Associate Co - 40% owned) • Population base: 97m • Years in Operation : 3 AirAsia INDIA (Associate Co - 49% owned) • Population base: 1.2b • Years in Operation : 1

AirAsia (Associate Co - 49% owned) • Population base: 127m • Years in Operation : To start in 2016

AirAsia X (Investment - 13% owned) • AAX (Malaysia), TAAX (), IAAX (Indonesia) • Years in Operation : 8 • Listed on Bursa Malaysia (AirAsia X Bhd) 3 EXTENSIVE 21

NETWORK 173 5 79 +3 lease to PIA 5 45 5 20 +5 A320 under IAAX 3 14 2 6 1 AirAsia Japan 1

27 20 5 2

117

routes 243 are across 85 unique 23 countries4 50 LARGEST LCC IN ASIA million 101 Passengers Carried in 2014* 83 84 (in millions) 50 40 45 46 29 32 13 14 14 17 18 19

5 7 7 9

SIA

JAL

EVA

ANA

Thai

Cebu

Etihad

Garuda

Cathay

Tigerair

Spicejet

Skymark

Emirates

Air China Air

Air Arabia Air

China China

China Eastern China AirAsia Group AirAsia LARGEST & YOUNGEST JET FLEET IN ASIA Southern China

225 25% 200 = ATRs 140 94 105 76 56 35 46 10 25 24

*MAA, TAA, IAA, PAA, AAI & AAX (42.6 million excluding AirAsia X) **MAA, TAA, IAA, PAA, AAI & AAX (174 aircraft excluding AirAsia X) MAA = 79 (+3 lease to PIA) ; TAA = 45 ; IAA = 25 ; PAA = 14 ; AAI = 6 ; AAJ = 1 ; AAX = 27 Source: Airlines’ Financials and CAPA 5 AIRASIA’S RESILIENT BUSINESS MODEL

KEY ACHIEVEMENTS

2012 2014 2015 2001 2004 2007 2015 AirAsia ordered AirAsia India Voted world’s best low- Tune Air acquires AirAsia successfully Launch of AirAsia flew its 300 100 more A320neo begins cost for 7th AirAsia and listed on Bursa long-haul millionth passenger converts to an LCC Malaysia unit AirAsia X (64) and A320ceo operations consecutive year

2004 2005 2011 2012 2015 49,811 Thai & Indonesia AirAsia receives AirAsia ordered 200 A320neo AirAsia AirAsia Japan AirAsia begin first Airbus A320 (Airbus’s biggest narrow body Philippines received AOC 45,776 operations aircraft aircraft customer) established

32,388 36,973 27,603 23,895 18,859 15,342 11,952 7,227 4,872 KEY CHALLENGES 2,095 1,042 36 2008 2011 2014 2014 2015 2003 2006 Global Widespread Indonesia AirAsia MH370 & MH17 USDMYR Iraq War and Military takes Financial floods in Flight 8501 incident incidents affecting reached a SARS outbreak over Thailand Crisis Thailand travel demand high of RM4.45/$ 2002 2004 2008 2011 2013 2014 2015 on 29 Sep Terrorist 2005 2001 Indian Record high oil Jet price Typhoon Kidnapping GMT 2015 bombings in Bombings Inherits RM40 Ocean price of USD145 reached a high Haiyan hits the incident in Research Bali, Indonesia in Bali, mil of liabilities Tsunami Indonesia per/bbl of USD 141 Philippines published /bbl report AirAsia Group6 Passengers Flown (Annual) ‘000 HOW DO WE DO IT? 7 A PROVEN LEAN BUSINESS MODEL

Single Class One Class Configuration Same specification on all aircraft Point to Point Point to point routes

Single Aircraft All Airbus A320 (AirAsia) All (AirAsia X) Type Single pool of professionals training, spare parts inventory, tools Modern & Efficient Young fleet with average age of 5 yrs Fleet with Good Sharklets (4% more fuel efficient) A320neo (16%) Maintenance Long term engine programme with GE Operational 25 minutes turnaround time (AirAsia) Excellence 40 minutes turnaround time (AirAsia X) Interest Low interest rate on all aircraft financing Rate People No Unions High productivity and deep management High Aircraft 12.5 hours a day (AirAsia) Utilisation 16.3 hours a day (AirAsia X) Low Distribution Cost 73% sales via internet Favorable terms Discount on aircraft and engine purchase Tax incentives on purchase of aircraft Economies of scale Cost Savings among AOC when operating same destination Simplified Model No dedicated cargo fleet, catering, MRO, etc. 8 DISCIPLINED COST STRUCTURE FSC’s nature of Jan-Dec 2014 CASK & CASK Ex-Fuel business and target (US cents) market typically result to high cost LCCs have the lowest unit costs. CASK CASK (ex-fuel) Target market is price sensitive.

Low cost is the only way to 13.59 13.59

maintain margins. 12.91

11.86 11.86

10.38

10.07 10.07

9.98 9.98

9.68 9.68

9.68

9.54 9.54

9.23 9.23

8.88 8.88

8.65 8.65

8.61

8.26 8.26

7.77 7.77

7.62 7.62

7.32 7.32

7.22

7.14 7.14

6.94

6.73 6.73

6.68 6.68

6.67

6.29

6.28

5.73

5.69 5.69

5.54

5.44 5.44

5.26

5.26 5.26

5.22 5.22

5.21 5.21

5.20 5.20

5.17

5.14 5.14

5.05 5.05

5.00 5.00 5.00

4.98 4.98

4.91

4.90

4.87 4.87

4.80 4.80

4.76

4.74 4.74

4.68

4.67 4.67

4.58 4.58

4.95

4.38 4.38

4.02 4.02

3.97 3.97

3.81

3.76

3.73

3.51

3.39

3.35

3.20

3.10

2.93

2.82

2.77 2.77

2.75

2.75 2.75

2.71

2.68

2.64

2.59

2.14 2.14

2.03 2.03

SIA

KAL

EVA

Thai

ANA

Asiana

Cathay

Qantas

United

Finnair

Tigerair

SpiceJet

Skywest

Cebu Cebu Air

Ryanair*

AirAsia X AirAsia

Air China Air

China East China

China Sthn China

Air Canada Air

Jet Airways Jet

Thai Thai AirAsia

Asia Asia Aviation

Japan Airlines Japan

Virgin Virgin

Air France-KLM Air

Malaysia AirAsia Malaysia

Alaska Air Group Air Alaska

Republic Republic Airways

Indonesia AirAsiaIndonesia

Garuda

Delta Air Lines Air Inc Lines Delta

Aer Lingus (Ireland) Lingus Aer

JetBlue Airways Corp JetBlue

Southwest Airlines Co Airlines Southwest Intl Consolidated Airline-DI ConsolidatedIntl Source: JP Morgan 9 STRONG ONLINE PRESENCE & LOW DISTRIBUTION COST

Hits from over 73% sales 240 from .com different countries

Over Over Annual conversion 168 mil 10 mil rate of average views average unique visitors 4.2% per month per month

8.0 3.1 179 1.4 10 CONSTANTLY INNOVATING

 Fully ticketless system 2002

 World’s first airline SMS booking 2003 system

 World’s first airline to offer a BIG comprehensive booking system for 2005 phones and wireless devices loyalty programme In-flight  News Skies, state-of-the-art 2010 booking system WIFI

 Malaysia’s first baggage self-tagging 2013 service

 First airline in Malaysia to provide 2014 Wi-Fi onboard aircraft Self e-boarding Bag-Drop  E- 2015  Self bag drop and Home bag tag pass AirAsia Mobile Home Baggage app Tag11 DIVERSIFIED MARKET

MARKET SHARE Malaysia > International 50% (#1) > Domestic 47% (#1)

Indonesia Thailand > International 25% (#1) > International 16% (#2) > Domestic 4% > Domestic 30% (#1)

Philippines > International 4% India > Domestic 9% > International 3% > Domestic 1%

*12 months data from PaxIS for period between Jun-14 and May-15 (by passengers flown). Market share covers airlines flying from respective countries to Asia and Australia markets only. 12 No Unions Equal Opportunity

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13 WE INVEST IN OUR PEOPLE, OUR GREATEST ASSETS!

14 2016 – A VERY GOOD START!

 Fuel price reached 12 year low in January 2016 • Good for airlines • Fuel is 42% of AirAsia’s cost  Rational market leads to improvement in fares  Chinese demand has recovered for Malaysia & Thailand • +21% YoY since May 2015 onwards for Malaysia  Weak regional currencies = Consumers trading down • Travel within the region instead of US & Europe  Strong load trends for the whole Group (above 80%)

LOAD 1Q15 A 2Q15 A 3Q15 A 4Q15 F 1Q16F 91% 83% 84% 82% 82% 82% 81% 83% 83% 83% 80% 80% 81% 81% 75% 80% 80% 82% 81% 75% 73% 77% 79% 76% 70%

15 AIRASIA – A LONG TERM STORY

Growing LCC Market Share in Asia 54% 57% 56% 45% 47% 41% 43% 37% 32% 29% 24% 26% 25% 18% 21% 21% 14% 16% 9% 11%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (Dec) ASEAN Asia Pacific 16 THANK YOU

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