Capital A Berhad · MYX:CAPITALA
Capital A Berhad — AirAsia — Q3 2006 Earnings Presentation
19 slides from Capital A Berhad's earnings presentation, May 30, 2006
Slide 1: Third Quarter 2006 Results
“Now Everyone Can Fly” Third Quarter 2006 Results 30 May 2006 Disclaimer Now Everyone Can Fly Information contained in our presentation is intended solely for your personal reference and is strictly confidential. Such information is subject to change without notice, its accuracy is not guaranteed an
Slide 2: 1. Highlight & Events
CONFIDENTIAL Now Everyone Can Fly 1. Highlight & Events We’ve come a long way…………………. Now Everyone Can Fly After 4 years of hard work, we have made LCC a way of life in Asia Huge barriers overcome and most hard work is now behind us Despite the obstacles, PEOPLE support AirAsia 3 2
Slide 3: Key Highlights; Dominating ASEAN
Key Highlights Now Everyone Can Fly End of subsidies, level playing field begins 1 Aug Strong profitability, EBITDAR margins 27% Disciplined cost control, US2.14 cents / ASK Ancillary income, at 8.5% revenue and still growing Net Income of RM22.8 million – on the back of 23% revenue growth Strong gr
Slide 4: Consistent passenger growth; Standardized New Fleet – Airbus A320
Consistent passenger growth Now Everyone Can Fly Passengers Flown by AirAsia Group (‘000) oY th Y row 43 %g 6,522 6,289 4,557 2,839 1,481 611 291 M ar-2001 Jun-2002 Jun-2003 Jun-2004 Jun-05 9mth-05 9mth-06 There is no stopping the LCC phenomenon 6 Standardized New Fleet – Airbus A320 Now Everyone Ca
Slide 5: 2. Updates on Malaysia
Continuous Improvement Now Everyone Can Fly Benefits of Airbus A320 – high service level – higher reliability Benefits of LCT – simple operations Task force initiated – target 90% reliability 8 CONFIDENTIAL Now Everyone Can Fly 2. Updates on Malaysia - Low Cost Terminal - Domestic Rationalization 5
Slide 6: Our New Home = Low Cost Terminal; The Benefits of the LCT
Our New Home = Low Cost Terminal @ Red Fort Now Everyone Can Fly Malaysia unveils Low Cost Terminal – launched at 23 March 2006 – design capacity 10 million, upgradeable to 15 million – Low cost terminals to be built at Kota Kinabalu and Kuching – Other cities joining the LCC phenomenon (Singapore,
Slide 7: Power In – Power Out; Our Culture
Power In – Power Out Now Everyone Can Fly No truck and pushback required Less manpower and save cost Improved efficiency Aircraft powers itself to runway Reduce cost Saves time Perfectly safe Reduces complexity Improves efficiency 12 Our Culture = Everyone’s Equal Now Everyone Can Fly Open concept p
Slide 8: Domestic Rationalization; Implications for AirAsia
Domestic Rationalization Now Everyone Can Fly “The two airlines are competing for different purposes. AirAsia is competing to be the best in the LCC segment and MAS as a full service segment. Both airlines can be champions in their respective market” Datuk Seri Abdullah Badawi – PM of Malaysia Gover
Slide 9: 3. Results Commentary: Operational Statistics
CONFIDENTIAL Now Everyone Can Fly 3. Results Commentary Operational Statistics Now Everyone Can Fly Strong passenger growth – 42% growth Capacity growth reflects new routes – 40% growth in ASK Cost control – 2.14/ASK US cents, 1 rise YoY – 1.16/ASK US cents ex fuel, 16% rise YoY Lower fares and yiel
Slide 10: Operational Statistics – Malaysia and Thailand
Operational Statistics – Malaysia Now Everyone Can Fly %& ' $ # " ! ! 18 Operational Statistics – Thailand Now Everyone Can Fly %& ' $ # " ()* ! ! 19 10
Slide 11: Operational Statistics – Indonesia; Profitability – Malaysia
Operational Statistics – Indonesia Now Everyone Can Fly %& ' $ # " + ,- ! ! 20 Profitability – Malaysia Now Everyone Can Fly " $ "5 $ 6 3143 3 1 033 $ 2/ 3$ /$ 0/$ ./$ , + ! 1 200 . 144 ..$ 33/$ ./ 4$ Respectable profit margins given the environment Profit margin reduced due to yield erosion – incre
Slide 12: Profitability – Thailand; Robust cash generation
Profitability – Thailand Now Everyone Can Fly " $ ()*5 $ 6 4 1 444 3.14. 2$ 3/ 3$ 3/ 2$ / 2$ /$ , + ! .31 232 31 43 $ /$ /$ Improved profit growth and margins due to:- – increased business scale – high load factors – improved unit cost (positive recoveries from fuel surcharges) 22 Robust cash genera
Slide 13: Ancillary Income Progress
Ancillary Income Progress Now Everyone Can Fly ' ' 7+ ! $ 6 0/ 4/ 2/ / / ./ 3 . 3 Plenty of scope for growth - strong growth opportunities: car rentals, in-flight advertising - cargo contributions Insurance launched 26 April 2006 - 69k policies sold in one month - despite any official launch or prom
Slide 14: Cost Management; Operating Expenses – 9 months
Cost Management Now Everyone Can Fly Cost / ASK (US cents) ! 3 .4 0 " #$ %&' 2 .90 2.4 7 2.4 1 2 .42 2 .3 5 2 .19 2 .14 1.9 6 1.7 2 1.3 8 1.24 1.11 1.16 Malaysian Operations Superior cost containment despite fuel price impact 26 Operating Expenses – 9 months Now Everyone Can Fly %& 9:& $ 6 () 0! 8 0
Slide 15: Cost / ASK changes; Fuel Updates
Cost / ASK – what changed from last year to this year? Now Everyone Can Fly 2.14 (Q3:2006) vs. 2.12 (Q3:2005) {1% cost increase} & 8 $ Good $%&'-#1 , ' $%&'%* +4-* 5&* &+6 &*, & -0 0+ (* & -0 04, *&1 3 &* -,#+ 4-* 5& %&/, 7/ * &,#&* #-,#-' Bad (-, #&#-#+ & 8&-69+ 4&+ : 0-, *+* -0 $&;&*' &-&1-, *+* -
Slide 16: 4. Peer Group Comparison: High Aircraft Utilization
CONFIDENTIAL Now Everyone Can Fly 4. Peer Group Comparison High Aircraft Utilization Now Everyone Can Fly 31 16
Slide 17: Fuel Consumption; Cost Control
Fuel Consumption Now Everyone Can Fly Good fuel consumption mainly from higher stage length – Airbus A320 will help to reduce fuel consumption 32 Cost Control Now Everyone Can Fly Second to none unit cost with prospect to improve further – Airbus A320 will help to reduce cost 33 – low cost terminal
Slide 18: Ancillary Income; Profit Margin
Ancillary Income Now Everyone Can Fly Ancillary Income % Revenue $ / pax AirAsia 8% 3.21 GOL 4% 3.35 Ryanair 16% 9.06 EasyJet 7% 5.45 WestJet 13% 15.40 Air Tran 4% 2.75 SoutWest 4% 3.45 Average 8% 6.10 34 Profit Margin Now Everyone Can Fly Profitability Margin % EBITDAR Net Income AirAsia 27% 11% GO
Slide 19: Load Factor; AirAsia - Concluding Remarks
Load Factor Now Everyone Can Fly Load factor performance ranks us among the top-tier 36 AirAsia - Concluding Remarks Now Everyone Can Fly World’s lowest cost carrier Level playing field LCC accepted – dedicated terminals, people, destinations all in 4 years Airbus will transform AirAsia Software dea