Qantas Airways Limited · ASX:QAN
Qantas Airways — Investor Presentation (May 2007)
17 slides from Qantas Airways's investor presentation, May 24, 2007
Slide 1: Qantas Airways Investor Briefing
Qantas Airways Investor Briefing May 24 2007 GANTAS Introduction . APA bid protracted and difficult + Continuity and stability now essential + Executive Management commitment + Orderly Board renewal GANTAS ‘Page? Page 1
Slide 2: Introduction
Introduction - Brand remains strong despite publicity surrounding bid . Staff have performed superbly despite “spotlight” + Some concerms across company on job security and future + Staff roadshows underway GANTAS bane Board on 17th May Endorsed Key Strategies + Grow and defend domestic flying busin
Slide 3: Key Strategies and Capital Management Review
Key Strategies « Key strategies are those that Airline Partners Australia endorsed + APA also proposed much more aggressive capital management + Qantas will now conduct an extensive review of existing capital management strategies GANTAS ane Capital Management Review Alternatives to be considered in
Slide 4: Operating Environment
Operating Environment The current operating environment is favourable: + Strong global and Australian economies + Capacity has been constrained + Yields and loads good + — Net benefit from stronger $A + Forward bookings positive GANTAS bane Operating Environment While this environment is expected to
Slide 5: Strategic Priorities
Strategic Priorities Specifically, our focus over the next 12-18 months will be: + Capital Management + Further enhancing Two Brand Strategy - Expanding the Jetstar footprint + Further leveraging the Frequent Flyer Program + Developing an integrated freight business + Introducing the A380 and B787 a
Slide 6: Strategy Working Domestically
Strategy Working Domestically . Group market share March year-to-date 66.9% + Qantas + QantasLink 51.9% + Jetstar 15% GANTAS Pods Domestic Strategy - Qantas + Capacity at record levels + Share on key routes at ~60% and above + Yield premium at ~35% + Customer satisfaction at an all time high + Beate
Slide 7: Domestic Strategy - Jetstar
Domestic Strategy - Jetstar + Lowest cost operator « Network expanding + High market awareness and appeal to leisure travellers « Product enhancements ~ assigned seating, improved airport experience GANTAS Pode Domestic Challenges Challenges + Tiger entry + Virgin Blue expansion Response + 65% line
Slide 8: Qantas International
Qantas International + Strong structural positions on key routes +« #6 new routes (6 new destinations) launched in past 2.5 years + Exited loss-making routes + Consistently excellent Skytrax ratings + High customer satisfaction levels + Lounge upgrades, new in-flight amenities GANTAS Pode Qantas Int
Slide 9: Jetstar International
Jetstar International + Successful international launch + Performance ahead of business case + 6 ports launched by end March + Customer feedback exceeding expectations + Expanding Japan (NGO in August and NRT in 2008} + Malaysia (KUL} from September 2007 (subject to regulatory approval) . Group laun
Slide 10: Asian Value-Based Airlines
Asian Value-Based Airlines + Jetstar Asia - Improved result forecast for 2067/08 ~ Greater coordination with Jetstar Australia + Pacific Airlines - Vietnam offers attractive demographics and growth ~ Completion target for end July 2007 ~ Harmonise operations with Qantas Group standards ~ Assist with
Slide 11: Frequent Flyer Program
Frequent Flyer Program . 4.9 million Qantas Frequent Flyer Members . Average approx. 28,600 new members per month . 23 airline partners/150 non-airiine partners . Over 3 million seats redeemed per year QANTAS hoe Frequent Flyer Program + Review commenced in mid 2006, now moving to implementation dur
Slide 12: Freight
Freight «Valuable set of strategic freight assets + Progressing plans to create an integrated Asia Pacific freight and logistics company ~ finalising a small strategic acquisition in Asia - developing joint ventures Star Track Express and Australian air Express with Australia Post ~ Looking at intra
Slide 13: Aircraft and Product
Aircraft and Product A380, 787 due to arrive in same month (August) next year . Massive operational task - milestone for Qantas and Jetstar + 15-20% cost/ASK advantage will drive improvement in operating margins before financing costs + Decisions to be made over next 12 months - Firm up additional B
Slide 14: Qantas Holidays
Qantas Holidays + Largest travel wholesaler in Australia + Valuable brand + Wholesaling market undergoing significant changes + Fransitioning business mix from general wholesale to on-line direct + First roll-out of new product to commence first quarter of 2007/08 GANTAS Poe Sustainable Future Progr
Slide 15: Sustainable Future Program
Sustainable Future Program + Focus on further efficiency improvements as we grow + Investigate new approaches + Focus on linkages between businesses and reducing complexity - Consolidate - Streamline ~ Review appropriate ownership structures GANTAS Po ee Engineering + Transformation started 2005 to
Slide 16: Catering
Catering + Restructuring progressing ahead of plans + Separation of Qantas/client work in Sydney . Standardisation and simplification of processes . improved demand forecasting . Reduction of overheads and support function + On track to deliver EBIT improvement of $15m upon completion GANTAS Poe Fli
Slide 17: There Are Always Challenges
There Are Always Challenges . End-of-line carrier constraints + Government ownership of airlines + Industry consolidation + — Price of oif and jet fuel + Uneven playing field + Qantas Sale Act GANTAS ued However, We Are Well Positioned . Qantas is a world class airline group + Successful and unique