Grupo Aeromexico, S.a.b. De C.v. · BMV:AERO
Grupo Aeromexico, S.a.b. De C.v — Investor Presentation (June 2014)
21 slides from Grupo Aeromexico, S.a.b. De C.v's investor presentation, June 2014
Slide 1: Enhancing Value: Above & Beyond (June 2014)
ENHANCING VALUE 7 @ ABOVE & BEYOND a Ze
Slide 2: Aeromexico: Mexico's Premium Revenue Carrier
AEROMEXICO: MEXICO’S PREMIUM REVENUE CARRIER Leading airline in Mexico Only Full Service Carrier / Two-class Service and Hub and Spoke Model Strongest position in slot constrained Mexico City airport 80 destinations in 20 countries, over 600 daily flights Enhanced strategic alliances with Delta Air
Slide 3: Grupo Aeromexico: Investment Highlights
GRUPO AEROMEXICO: INVESTMENT HIGHLIGHTS Only Full Service Premium Revenue Carrier in Mexico with highest domestic and international Market share among national carriers Strong Brand with Strategic Alliances Strengthening Mexican Economy & Attractive Long Term Growth Strong Growth Potential in Mexico
Slide 4: Strengthening Mexican Economy
STRENGTHENING MEXICAN ECONOMY Growth Opportunities for Mexican Economy(1) Air Traffic Penetration +0.8%-1.7% GDP growth Flights Per Capita for Middle & Upper Class Population (>$15K) 6.0% 5.0% 2.4 4.0% 3.0% 1.4 2.0% 0.8 0.6 0.6 1.0% 2014 E 2015 E 2016 E 2017 E 2018 E 2019 E Mexico China Brazil Europ
Slide 5: Uniquely Positioned to Deliver Profitable and Sustainable Growth
OUR FLIGHT PLAN PROFITABLE AND SUSTAINABLE GROWTH PRODUCTIVITY & OPERATIONAL COST CONTROL EXCELLENCE STRATEGIC PARTNERSHIPS FINANCIAL STRENGTH AND COMMERCIAL RISK PROFILE VALUE CREATION Uniquely Positioned to Deliver Profitable and Sustainable Growth 5
Slide 6: Operational Excellence
OPERATIONAL EXCELLENCE On-Time Departure (within 15 minutes) Mishandled Baggage Complaints 95.4% Per 1,000 90.7% 87.7% 86.4% 85.8% passengers 83.1% 80.6% 78.8% 78.0% 73.5% Airline Ranking Rank US Operations YTD Dec-13 1 Virgin America 0.97 2 Jetblue Airways 1.91 3 Frontier Airways 2.15 4 Delta Air L
Slide 7: Commercial Value Creation: Strengthening Our Network
COMMERCIAL VALUE CREATION: STRENGTHENING OUR NETWORK Improving Connectivity Securing Position in Mexico City Market Solidify Position with Shuttle Product • Create sustainable defendable and highly • Increase from 4 to 12 connecting banks • Launch of a shuttle product “Aeropuente” in profitable posi
Slide 8: Strong Growth Potential in Mexico City Despite Slot Constraints
STRONG GROWTH POTENTIAL IN MEXICO CITY DESPITE SLOT CONSTRAINTS Average Seat Today Configuration 50 E-145* 84% of 2013 81 E-170 / 175 operations in Mexico City were performed 99 with regional jets E-190 (E145/170/190) and +56% Seat 737-700 737-800 Count 124 737-700 Up-gauging 160 737-800 188 767’s F
Slide 9: Commercial Value Creation: Balanced Revenue Management Strategy
COMMERCIAL VALUE CREATION: BALANCED REVENUE MANAGEMENT STRATEGY New Revenue Management Strategy that aims to maximize RASK, increasing load factor with more competitive Yields. • Competitive pricing with better segmentation to drive volume while protecting yields • Capturing marginal VFR and leisure
Slide 10: Commercial Value Creation: Positive Momentum
COMMERCIAL VALUE CREATION: POSITIVE MOMENTUM Passenger traffic and load factor increased in 2013, ending the year strongly. Strong 2014 performance, with passenger traffic growth of almost 20% and load factor increase of over 500 bps YoY. 25.0% 21.8% 20.0% Passenger Traffic 18.8% 18.3% 18.7% 16.9% 1
Slide 11: Commercial Value Creation: Meriting Revenue Premium Over Competitors
COMMERCIAL VALUE CREATION: MERITING REVENUE PREMIUM OVER COMPETITORS Aeromexico’s full-service model and broad international network allow it to realize premiums over competitors. RASK – Stage Length Adjusted USD cents USD cents 1Q14 2013 8.06 7.58 44% 55% 5.61 4.88 Aeroméxico Volaris Aeroméxico Vol
Slide 12: Commercial Value Creation: Positive Momentum (Market Share)
COMMERCIAL VALUE CREATION: POSITIVE MOMENTUM Market Share Trend 39.6% 39.8% 38.9% 38.1% 38.2% 38.5% Domestic 36.0% 35.4% 35.3% 34.6% 35.8% 37.3% 33.6% 32.3% 34.1% 35.3% 29.4% 29.7% 27.7% 25.8% 25.6% 24.9% 24.8% 25.5% 25.0% 25.9% 24.7% 25.7% Total 24.2% 23.7% 21.6% 23.9% 18.3% 16.1% 18.1% 16.3% 15.3%
Slide 13: Solid Financial Profile
SOLID FINANCIAL PROFILE Aeromexico has proven its ability to cut costs and operate at a world-class level. Management focus on improving productivity has allowed Aeromexico to reach top industry performance. CASK (Stage Length Adjusted) (1) EBITDAR Margin USD Cents 12.0 27.4% 10.1 9.9 9.6 9.6 23.8%
Slide 14: Productivity and Cost Control Initiatives
PRODUCTIVITY AND COST CONTROL INITIATIVES Strong pipeline of cost reduction initiatives. Operational , Administrative & Labor Costs Fleet Strategy Sales Efficiencies • Restructuring and Integration of • New contracts with pilots, flight • Fleet Renewal AM/AM Connect attendants and ground staff • Bal
Slide 15: Productivity and Cost Control Initiatives: Fleet Strategy
PRODUCTIVITY AND COST CONTROL INITIATIVES: FLEET STRATEGY Fleet Plan renewal provides CASK efficiencies, maintaining flexibility and reducing ownership cost. Fleet Plan Estimated CASK Reduction (1) Today 2018 EJ170 & ERJ145 B737-7 B737-8 B767 B787 E190 100 100 100 E-145 (14%) (19%) (16%) E-170/190 8
Slide 16: Operational Excellence: Fleet Strategy
OPERATIONAL EXCELLENCE: FLEET STRATEGY Aeromexico’s fleet is becoming more flexible and efficient, while remaining among the youngest in the world. Evolution of our Fleet Average Fleet Age (1) Years Aircraft Type 4T12 4T13 4T14 17.5 E-145 38 30 21 Americas E-170/175/190 22 27 39 Mean: 14.6 Total Reg
Slide 17: Solid Financial and Risk Profile: Comprehensive Risk Management
SOLID FINANCIAL AND RISK PROFILE: COMPREHENSIVE RISK MANAGEMENT Fuel Hedging Strategy Economic Cycle • Over 50% of expected fuel consumption for the next 12 months is hedged • Fuel surcharges complement Grupo Aeromexico’s hedging strategy Reduced Exposure Currency 55% Revenues in US dollars Reduced
Slide 18: Solid Financial Debt Profile
SOLID FINANCIAL DEBT PROFILE Debt Maturity Profile (1) USD millions Adjusted EBITDAR 2013: USD 622 M 11.7% 9.3% 11.5% 14.6% 52.9% 129 228 43 41 63 26 36 36 37 35 2014 2015 2016 2017 2018+ Benchmark Financial Net Debt / Adjusted EBITDAR (2) 6.5x* 5.8x 5.2x 4.2x 4.07x * 3.6x 3.2x 2.3x 0.9x Volaris GOL
Slide 19: Solid Financial Profile: 1Q14 Highlights
SOLID FINANCIAL PROFILE: 1Q14 HIGHLIGHTS Operating Margin 1Q14 2013 0.3 Aeroméxico Volaris 6.0 2.4 -17.6 Aeroméxico Volaris Adjusted EBITDAR Margin 1Q14 2013 20.7 21.6 14.2 5.8 Aeroméxico Volaris Aeroméxico Volaris 19 Source: First Quarter 2014 and Full Year 2013 Financial Statements and Company Fil
Slide 20: Strong Brand with Strategic Partnerships
STRONG BRAND WITH STRATEGIC PARTNERSHIPS Strategic alliances have contributed to Aeromexico’s increased connectivity and premium product. Only Mexican carrier in an international alliance. Delta Alliance Club Premier Loyalty Program • Delta invested USD $65mm in Aeromexico (1) • Strategic Partnershi
Slide 21: Thank You
Thank You Investor Relations Contact Information investor.relations@aeromexico.com Tel (+52) 55 9132 4257 Luz Montemayor lmontemayor@aeromexico.com Daniel Frias dfrias@aeromexico.com DISCLAIMER This presentation is neither an offer for sale nor a request to buy any securities. Such offer or request