The AirAsia Story ICAO/CAAC Symposium on Low Cost Carriers

5th November 2013

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Malaysia AirAsia

2001

Thailand AirAsia

2003

Indonesia AirAsia

2005

AirAsia Philippines

2010 2013

0.3 1 2 3 6

9

14

18

23 26

30

35

44

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

AirAsia passengers carried

million

2

acft in

2001

AirAsia India

Largest

ASIA’s LOW

COST CARRIER

Fastest

PASSENGER GROWTH

Globally recognised

BRAND

>120

aircraft in

2013

12 year achievement

2

3

More than Just an Airline Ancillary - Leveraging on our strong brand, extensive network, large number of passengers and the number one travel website in Asia

Building a recognisable consumer brand through the following:

• Minimal cost – use existing network, belly space, existing infrastructure

• Provides recovery to spike in oil prices & competitive pressures

4

Disciplined Cost Structure

4.40

5.33 4.67 4.50 4.72

5.36 5.68

7.14 7.26 7.27 7.29 7.93 7.94 7.98

9.12 9.22 9.22 9.27 9.41 9.45 9.90 9.93

10.25 10.51 10.63 11.24

13.05

15.08

16.08

18.95

MA

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thw

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Airlines’ CASK in 2012 USD cents

LCC competitor CASK FSC competitor CASK

4

5

6 Ingredients of

AirAsia’s Success

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6

People – our BIGGEST asset - Right talent for the right job

1

Over 10,000 staff

Experienced, loyal, stress-tested management team

No unions

Deep senior management structure

Can-do attitude

Equal opportunities

6

Invest in people – our biggest asset

Kaew

Ramp Boy

IT Supervisor

People Development 1

7

8

Smart Sport Partnerships - Build brand to maximise reach

2

9

Simple Business Model - Consistent execution and delivery

3

3.9 6.5

10.9 11.4 12.7

AirAsia SIA Cathay Thai MAS

Average aircraft age (years)

Same aircraft specification

• Single aircraft type A320

• Once class configuration

Young fleet lower

maintenance

Repeatable operations processes

• 25 mins turnaround

• 13-14 hours aircraft

utilisation per day

9

10

Social Media & Digital Marketing - Customer engagement at no cost

4

10

11

Invest in Technology - Platforms and apps for low-cost distribution

5

11

12

Continuous Innovation - New ideas, new ways

6

Self-service kiosks

for check-in

Automation

askAirAsia one-stop information portal

New route development

• First LCC in Bandung

• Previously not well-known

to tourists, now a favourite

for Msians, Thais, Indians

• 52K pax in 2004 to 305K

in 2011

• Alternative to Hong Kong

• Pax carried grew:

‒KUL-MFM: 5K in 2004 to

308K in 2012

‒DMK-MFM: 58K in 2004

to 419K in 2012

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Future of Air travel

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Asia will lead air traffic growth in the future

0 1000 2000 3000 4000 5000

Africa

CIS

Latin America

Middle East

North America

Europe

Asia-Pacific

2011

2031

World Traffic RPK billions

% of 2011 World RPK

20 year growth

% of 2031 world RPK

28% 5.4% 32%

27% 4.1% 24%

27% 3.3% 20%

7% 7.3% 11%

5% 5.9% 6%

3% 5.4% 4%

3% 5% 3%

CIS = Common wealth of independent states. Former Soviet Republics

Source: AirBus Global Market Forecast

Air traffic will double in the next 15 years

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310m

610m

500m

Asia is a demographic heavy hitter

Half the world’s

population lives

in this circle

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Note growth numbers based on domestic & international forecast passenger growth numbers from IATA

Source: Euromonitor; Lit search

Asian countries

High growth

>7%

Medium growth

~4-7%

Lower growth

~2–4%

Majority of Asian aviation markets are in

early stages of development

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DOMESTIC INTERNATIONAL

*Excludes passenger flow to and from the Middle East

Source: OAG; AirBus Global market forecast; Bain analysis

LCC penetration is expected to increase

across Asia

LCC will the fastest growing airlines of the future

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Simple terminal design

• Basic airport amenities

• No necessity of premium lounges,

multiple class check-ins

• Common waiting area in departure

hall

Airport operations

• No aerobridges; Front and back door

steps to allow quick boarding

• Simple & manual baggage handling

process

Landing & parking charges

• Lower landing and parking charges

translating to lower fares for

passengers

LCC success needs low cost airports Simple terminal design low operating cost

reduce airport charges

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Source: MAHB – Malaysia Airport Authority

LCCT helped create a new segment market that

flies regionally for leisure and visiting friends

and families

Low cost airport hub Airport gains from high traffic growth higher revenue

MAHB earned USD59m more in airport tax

revenue within a similar period after the PSC was

reduced to USD8

15 16 18 21 23 20 19 17 17 19 20 21

5 8 10 1315

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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

KLIA PAX movement, 2001 – 2012 Million

Main Terminal Building (MTB)

LCCT

CAGR

MTB = 12%

LCCT = 26%

MTB = 1%

24.2 26.4 27.5

29.7

34.1

37.6 39.8

0

10

20

30

40

50

60

70

80

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

PSC = USD14 PSC = USD11

(Eff 26 Mar 06) PSC = USD8

(Eff 1 Jun 07)

1 Jan 04 – 31 May 07 (3.4 yrs)

Revenue: USD32m

1 June 07 – 31 Dec 10 (3.6 yrs)

Revenue: USD91m

PSC = USD12 (Eff 15 Sep 11)

KLIA LCCT airport tax revenue earned by MAHB, 2002 – 2012 USD Million

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KLIA Example

Thank You

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