Grupo Aeromexico, S.a.b. De C.v. · BMV:AERO
Grupo Aeromexico, S.a.b. De C.v — Investor Presentation (April 2014)
25 slides from Grupo Aeromexico, S.a.b. De C.v's investor presentation, April 2014
Slide 1: Enhancing Value Above & Beyond - April 2014
ENHANCING VALUE 7 @ ABOVE & BEYOND ae te
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 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 City De
Slide 4: Only Premium Revenue Carrier in Mexico
ONLY PREMIUM REVENUE CARRIER IN MEXICO Unique advantages in our product and to serve Business Passengers: First Choice for Business Travel in Mexico Strategic Partnerships and Alliances SkyTeam connects Aeromexico’s passengers to the rest of the world Business Class Seats Global Alliances
Slide 5: 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% 1.0% 0.8 0.6 0.6 2014 E 2015 E 2016 E 2017 E 2018 E 2019 E Mexico China Brazil Europ
Slide 6: Uniquely Positioned to Deliver Profitable and Sustainable Growth
OUR FLIGHT PLAN PROFITABLE AND SUSTAINABLE GROWTH PRODUCTIVITY & OPERATIONAL COST CONTROL EXCELLENCE STRATEGIC PARTNERSHIPS FINANCIAL STRENGHT AND COMMERCIAL RISK PROFILE VALUE CREATION Uniquely Positioned to Deliver Profitable and Sustainable Growth 6
Slide 7: 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 8: Commercial Value Creation: Strengthening Our Network
COMMERCIAL VALUE CREATION: STRENGTHENING OUR NETWORK Network Strengthening and Optimization: Improving Connectivity Securing Position in Mexico City Market Solidify Position with Shuttle Product • Create sustainable defendable and highly • Slot portfolio gives Aeromexico strong • Launch of a shuttle
Slide 9: Strong Growth Potential in Mexico City Despite Slot Constraints
STRONG GROWTH POTENTIAL IN MEXICO CITY DESPITE SLOT CONSTRAINTS Today Average Seat Configuration 50 E-145 81 E-170 / 175 99 737-800 +56% Seat Count E-190 124 Up-gauging 737-700 160 737-800 188 767’s Further opportunities for widebody up-gauging 243 787’s 787’s 273 777’s And enhancing better product
Slide 10: 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 11: Commercial Value Creation: Positive Momentum
COMMERCIAL VALUE CREATION: POSITIVE MOMENTUM Passenger traffic and load factor increased significantly in 2013, ending the year strongly. Strong 2014 start, with passenger traffic growth of almost 20% and load factor increase of over 500 bps YoY: 21.8% Passenger Traffic 18.8% 18.3% 16.9% Monthly Var
Slide 12: 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 4T13 2013 8.06 8.03 29% 44% 29% 55% 6.27 6.21 5.61 5.19 Aeroméxico Inte
Slide 13: Commercial Value Creation: Positive Momentum
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% 29.4% 29.7% 27.7% 25.8% 25.6% 24.9% 25.5% 25.0% 25.9% 24.7% 25.7% Total 24.2% 23.9% 23.7% 21.6% 18.3% 18.1% 16.3% 15.3% 16.1% 16.0% 16.0%
Slide 14: 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% 2
Slide 15: Productivity and Cost Control Initiatives
PRODUCTIVITY AND COST CONTROL INITIATIVES Strong pipeline of cost reduction initiatives: Operational & Administrative Labor Costs Fleet Strategy Processes • Restructuring and Integration of • New contracts with pilots, flight • Fleet Renewal AM/AM Connect attendants and ground staff • Balance betwee
Slide 16: Productivity and Cost Control Initiatives
PRODUCTIVITY AND COST CONTROL INITIATIVES Implementing process efficiencies: Operational Processes • OCC Restructuring and Integration of AM /AM Connect • Re-engineering of Maintenance Processes • MRO Facility in Queretaro will provide reduced maintenance costs Administrative Processes • ERP • Share
Slide 17: Productivity and Cost Control Initiatives: Labor
PRODUCTIVITY AND COST CONTROL INITIATIVES: LABOR 2013 Pro-forma Labor Expenses (1) Ps. Million 21.2% of Revenues 16.1% of Revenues • New market-based contracts for Potential savings of new entrants Ps. $2 billion equivalent to +5bps increase in • Improved productivity Operating Margin 17 (1) Illustr
Slide 18: 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 86
Slide 19: 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 Regi
Slide 20: Solid Financial and Risk Profile
SOLID FINANCIAL AND RISK PROFILE Sales (1) Adjusted EBITDAR and Margin (1) Ps. million $10,000 Ps. million 39,850 $9,000 7,889 8,248 39,228 7,369 35,622 $8,000 5.4% 5.1% 2.7% 4.7% 5.7% $7,000 7.2% $6,000 $5,000 22% $4,000 21% 19% 90.1% 89.9% 89.1% $3,000 $2,000 $1,000 $0 2011 2012 2013 2011 2012 201
Slide 21: 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 22: Solid Financial Debt Profile
SOLID FINANCIAL DEBT PROFILE Debt Maturity Profile (1) Adjusted EBITDAR 2013: USD 622 M 11.7% 9.3% 11.5% 14.6% 52.9% 129 USD millions 228 43 41 63 26 36 36 37 35 2014 2015 2016 2017 2018+ Benchmark Financial Net Debt / EBITDAR 9.1x 6.1x 5.0x 4.7x Average: 4.4x 3.7x 3.2x 2.3x 1.1x 22 (1) Information
Slide 23: 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 24: Thank You
Thank You Investor Relations Contact Information investor.relations@aeromexico.com.mx Tel (+52) 55 9132 4257 Luz Montemayor lmontemayor@aeromexico.com.mx Daniel Frías dfrias@aeromexico.com.mx DISCLAIMER This presentation is neither an offer for sale nor a request to buy any securities. Such offer or
Slide 25: Aeromexico 1Q14 Snapshot
Aeromexico 1Q14 snapshot CASK excluding fuel Challenging environment in multiple fronts: (mexican pesos) • Sluggish Mexican Economy. • Significant Capacity Expansion in the Mexican airline industry. • Negative Calendar Effects (Holly week). Nevertheless: • We achieved a 6.6% top line growth in the f
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