Strapped for Cash: how airlines can survive the winter season 2.9.20 MAKE SMARTER MOVES SPEAKERS SPEAKER SPEAKER MODERATOR MODERATOR DATA EXPERT DATA Edward Clayton John Grant Mark Clarkson Becca Rowland Partner, PwC Malaysia Senior Analyst EVP Product Management Partner, MIDAS Aviation OAG OAG Becca is a partner in an With a wealth of experience Mark has almost 20 years’ Edward Clayton has over 30 aviation consultancy across the global aviation industry experience across years of experience in aviation. providing meaningful industry, John provides Airports, Air Service He worked for British Airways, insight and analysis to expert commentary on Development consultancy HOCHTIEF AirPort (now clients around the world. market developments for and product management. AviAlliance), and Booz Allen She works closely with OAG, making connections At OAG, he is responsible Hamilton before moving to PwC OAG on their data between what the data is for Product Management where he is a Partner in the analysis and publications. Malaysia/Vietnam Advisory telling us and the trends focussed around Schedules team and continues to carry out and events occurring in the and OAG’s Analyser numerous aviation projects in sector. platform. SE Asia. MAKE SMARTER MOVES © 2020 OAG. Aviation Worldwide Limited. All rights reserved STRAPPED FOR CASH: HOW AIRLINES CAN SURVIVE THE WINTER SEASON We aim to consider Update on the latest position regarding frequency and capacity How far will airline subsidies and state support go? What happens after the CARES Act? Prospects for consolidation. Followed by your Questions and Answers MAKE SMARTER MOVES SLOW PROGRESS GETTING BACK TO 2019 FLIGHTS 17 August 2020 Globally, scheduled flights are down by 47% compared to the same week last year Seats are at 58.4m having peaked in the summer at 60.0m in week of 3-9 August MAKE SMARTER MOVES © 2020 OAG Aviation Worldwide Limited. All rights reserved COVID-19 IMPACT ON GLOBAL AVIATION Scheduled Flights by Month & Week for selected markets Month/Week compared with equivalent month/week in previous year January February March April May June July 03-Aug 10-Aug 17-Aug 24-Aug 31-Aug Africa -3.8% -3.7% -20.8% -61.0% -70.9% -70.1% -67.4% -62.8% -58.1% -58.2% -57.8% -56.4% Europe -3.0% -2.3% -36.0% -89.0% -89.0% -81.7% -63.8% -54.0% -53.7% -53.7% -54.2% -56.8% Asia 5.0% -22.6% -27.9% -53.9% -47.9% -41.5% -36.1% -33.2% -33.5% -32.5% -33.4% -32.0% Latin America 2.6% 2.8% -11.8% -69.6% -74.3% -70.6% -66.6% -63.9% -65.2% -64.9% -64.9% -58.6% North America 1.7% 1.1% -7.1% -59.7% -73.1% -66.0% -52.1% -50.1% -49.8% -49.3% -47.4% -48.3% Middle East -1.8% -2.1% -27.3% -63.1% -78.6% -65.4% -62.8% -59.5% -61.0% -62.7% -62.0% -56.5% South West Pacific -2.4% -2.9% -17.2% -81.0% -80.2% -71.0% -64.4% -63.3% -64.0% -63.4% -64.1% -62.5% GLOBAL 1.5% -7.8% -21.5% -65.9% -69.1% -62.6% -52.2% -47.9% -47.9% -47.5% -47.4% -47.0% Source: OAG Analyser MAKE SMARTER MOVES © 2020 OAG Aviation Worldwide Limited. All rights reserved ASIA PACIFIC CHANGES BY COUNTRY Scheduled Flights by Month & Week for selected markets Month/Week compared with equivalent month/week in previous year Countries January February March April May June July 03-Aug 10-Aug 17-Aug 24-Aug 31-Aug ALL 1.5% -7.8% -14.5% -65.9% -68.9% -64.1% -53.8% -47.9% -47.9% -47.5% -47.4% -47.0% China 5.1% -54.2% -38.7% -42.3% -27.9% -19.6% -17.2% -10.8% -10.5% -8.0% -6.6% -6.2% Japan 2.6% -2.9% -15.7% -39.4% -46.4% -44.2% -37.1% -26.8% -27.5% -32.0% -35.8% -37.7% South Korea 2.2% -11.3% -49.2% -56.4% -49.1% -49.2% -48.3% -41.5% -41.1% -40.2% -40.2% -43.8% India 3.2% 7.0% 8.5% -82.3% -59.5% -65.6% -52.7% -58.7% -60.8% -58.8% -60.5% -56.1% Thailand -3.8% -11.6% -28.3% -93.1% -90.4% -79.3% -67.0% -62.7% -63.2% -62.3% -61.5% -56.3% Malaysia 8.3% -2.7% -28.4% -78.8% -85.5% -82.1% -70.6% -63.9% -66.8% -66.3% -68.7% -60.4% Vietnam 27.9% 11.3% -14.6% -78.1% -50.3% -20.6% -8.6% -33.7% -49.7% -64.6% -72.8% -65.7% Australia -2.0% -2.5% -5.9% -84.8% -86.2% -83.2% -77.4% -75.7% -76.1% -75.1% -74.7% -74.1% Philippines 12.2% 3.0% -13.9% -85.0% -89.8% -83.4% -88.2% -84.1% -90.6% -86.2% -85.8% -83.2% Hong Kong -10.1% -46.9% -77.4% -93.4% -90.2% -89.9% -91.0% -91.5% -91.6% -91.1% -90.8% -89.4% Singapore 0.1% -15.8% -42.9% -93.5% -96.5% -95.2% -93.7% -92.7% -91.8% -92.2% -94.3% -93.8% Source: OAG Analyser MAKE SMARTER MOVES © 2020 OAG Aviation Worldwide Limited. All rights reserved TRAVEL RESTRICTIONS Sherpa data Current entry status by Country • Few country pairs exist where no travel restrictions exist in either direction Source: OAG & Sherpa MAKE SMARTER MOVES © 2020 OAG Aviation Worldwide Limited. All rights reserved GLOBAL CAPACITY TO YEAR END More capacity to be removed Source: OAG Analyser MAKE SMARTER MOVES © 2020 OAG Aviation Worldwide Limited. All rights reserved GLOBAL CAPACITY PROJECTIONS Based on past 5 weeks growth, year end is -50% vs 2019 • Depending on whether growth to end of year is modelled on past 20, 10 or 5 weeks, year ends at between -8% and -50% vs 2019 • Slowest growth sees a further 350m seats come out of the schedule in 2020 Source: OAG Analyser MAKE SMARTER MOVES © 2020 OAG Aviation Worldwide Limited. All rights reserved OUTLOOK FOR SEPTEMBER CAPACITY Half of September seats removed since 20 July • By 31 August only 41.3m seats scheduled for September • 6 weeks previously this was 82.8m Source: OAG Analyser MAKE SMARTER MOVES © 2020 OAG Aviation Worldwide Limited. All rights reserved AIRLINES TAKING OUT CAPACITY FOR SEPTEMBER Significant seat reductions coming out in just 4 weeks • 94m seats removed between 03 Aug and 31 Aug for September • 27 airlines reduced September seats by over 1m between the beginning and end of August. Source: OAG Analyser MAKE SMARTER MOVES © 2020 OAG Aviation Worldwide Limited. All rights reserved ISHKA VULNERABILITY MATRIX Ishka Airline Credit Profiles & Ishka Insights as of Week of 10th Aug 2020 Aeroflot Asiana American Tianjin LATAM Avianca Air Europa FlyDubai Korean Air GOL Norwegian S7 GoAir Sriwijaya Air TAP Cathay THAI PIA SAS Aeroméxico Virgin Garuda Virgin- T’way Air India Interjet Atlantic High Malaysia Australia Kenya Icelandair Lion Air Grp AirAsia/ Airlines Hainan/ Ural Airlines El Al PAL HoldingsAirAsia X Rossiya Lucky/ Volaris SpiceJet SAA Air China Qatar RAM Allegiant United (UAL) British Air Transat Viva Aerobus AF-KLM Airways Sichuan Airways Azul Bamboo VietJet JetSMART China THY Airlines Frontier flynas Eastern Vietnam Air Macau Hawaiian SunExpress SmartLynx WestJet China Airlines Gulf Air Moderate Jet 2 Aegean Sky (Chile) Copa Risk Profile Southern TUI Group Transavia SkyWest, Delta Ethiopian airBaltic Grupo Viva RJ Inc. Spirit Airlines Etihad Pobeda Sun Country Air New Saudia Qantas IAG Air Canada WizzAir Zealand SIA Group Southwest easyJet Cebu Pacific Financial Emirates China Alaska Air ANA IndiGo Low Finnair Airlines EVA Airways JAL Pegasus Lufthansa JetBlue Ryanair Moderate - support available but with Low – no known explicit High – explicit support available conditions/limited support support available or package in or expected to made available available/limited fiscal ability of state to the works support MAKE SMARTER MOVES © 2020 OAG Aviation Worldwide Limited. All rights reserved Government/Shareholder Support STATE OF STATE SUPPORT 20 airlines received or requested support >US$100 per seat flown this year Top 10 Airlines by Support per Seat Flown Jan-Aug 2020 Top 10 Airlines by State Support State support State support State support State support Airline Seats Airline Seats (USD millions) per seat (USD m) per seat Singapore Airlines $8,700 6,613,702 $1,315 Lufthansa Group $12,057 32,445,074 $372 Cathay Pacific $3,900 6,791,720 $574 Air France-KLM $11,650 34,841,151 $334 Alitalia (*tentative) $3,540 8,990,605 $394 Singapore Airlines $8,700 6,613,702 $1,315 Air Mauritius $225 597,763 $376 American Airlines $5,800 111,687,961 $52 Lufthansa Group $12,057 32,445,074 $372 Delta Air Lines $5,400 91,514,966 $59 El Al $400 1,173,707 $341 United Airlines $5,000 70,661,989 $71 Air France-KLM $11,650 34,841,151 $334 Cathay Pacific $3,900 6,791,720 $574 Fiji Airways $203 619,507 $327 Alitalia (*tentative) $3,540 8,990,605 $394 Condor $597 2,230,581 $268 Southwest Airlines $3,300 107,721,372 $31 TAP Air Portugal $1,400 5,587,998 $251 ANA Holdings $3,250 40,478,335 $80 Source: OAG Analyser MAKE SMARTER MOVES © 2020 OAG Aviation Worldwide Limited. All rights reserved COST CUTTING INCLUDES AIRLINE JOBS Around 190,000 airline job losses announced so far EMPLOYEES PER 10M ASK 0 1 2 3 4 5 6 United Airlines Lufthansa Group Air Canada British Airways Emirates Qatar Airways WestJet Air France Qantas SAS American Airlines Norwegian easyJet Air New Zealand Virgin Atlantic Alaska Airlines Wizz Air MAKE SMARTER MOVES © 2020 OAG Aviation Worldwide Limited.