A350 Appraiser Briefing

Airbus Africa Market Overview Hadi Akoum

Vice President Sales Africa

Sun City, November 15th 2005

Airbus todayAirbus today Today’s Today’s ChallengeChallenge

CPT

LHR

JNB

FRA

LAD

LIS

MRU

CDG

MPMWDH

RUN

MRS

LYS

AMS

MAD

ZRH

TNR

MXPVIE

MUC

FCO

TLS

DUS

ATH

LUNHRE

BRU

BCN

GVA

MAN

IST

Africa Market Africa Market Situation

Consolidation Consolidation & &

FragmentationFragmentation

Africa Market Africa Market ForecastSituation Forecast

The Airbus fly-by-wire product line

12 models5,659 aircraft sold to211 customers

12 models5,659 aircraft sold to211 customers

4,023 delivered271 2005 deliveries4,023 delivered271 2005 deliveries

Data to end September 2005

Order evolution

% share of gross unit orders: 1995 – end December 2004

0

20

40

60

80

100

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Boeing43%

Airbus18%

Boeing82%

Airbus57%

Cumulative net orders in Africa

0

20

40

60

80

100

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

% cumulative share of unit orders

Airbus30%

Airbus56%

81 new aircraft

Boeing44%

63 new aircraft

Boeing70%

Delivery trend since 1999

294 311 325 303 305 320 360

620489 527

381281 285

320

0

200

400

600

800

1000

1999 2000 2001 2002 2003 2004 2005E

Airbus

32%

53%

Airbus’ delivery share

AnnualDeliveries

800852

684586

914

605680

Boeing

2005Africa

Market Situation

2004 traffic well above 2000

Passenger – RPKs : 2004 vs. 2000

Africa Int’l+16%

Africa Int’lAfrica Int’l+16%+16%

Asia/Pacific Int’l+8%

Asia/Pacific Int’lAsia/Pacific Int’l+8%+8%

Europe+7%

EuropeEurope+7%+7%

Latin America Int’l+5%

Latin America Int’lLatin America Int’l+5%+5%

US - Canadasame

US US -- CanadaCanadasamesame Middle East Int’l

+55%Middle East Int’lMiddle East Int’l

+55%+55%

Source: ATA (North America), AEA (Europe), AAPA Int’l (Asia/Pacific), IATA Gabi (Latin America, Africa & Middle East)

Today’s passenger traffic well above 2004 level

Passenger - RPKs - 1st half 2005 vs. 1st half 2004

Asia/Pacific Int’l+7%

Asia/Pacific Int’lAsia/Pacific Int’l

+7%+7%

Europe+6%

EuropeEurope

+6%+6%

Latin America Int’l+13%

Latin America Int’lLatin America Int’l

+13%+13%Africa Int’l

+12%Africa Int’lAfrica Int’l

+12%+12%

North America+6%

North AmericaNorth America

+6%+6% Middle East Int’l+15%

Middle East Int’lMiddle East Int’l

+15%+15%

Expected 2005 growth: ~7%Expected 2005 growth: ~7%Source: ATA (North America), AEA (Europe), AAPA Int’l (Asia/Pacific), IATA Gabi (Latin America, Africa & Middle East)

Africa total traffic doubled in last 10 years

0

4,000

8,000

12,000

16,000

20,000

24,000

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

Europe Internal Africa Middle EastAsia/Pacific North America South America

Traffic in million of ASK*

1993-2004: +100%

*: Available Seat KilometreSource: September ASK* traffic from OAG

Africa, a growing share of international tourist arrivals

2003 World total2003 World total691 millions691 millions

Middle East4.2%

Asia / Pacific17.2%

Americas16.4%

Europe57.7%

Africa4.5%

Middle East2.2%

Asia / Pacific12.7%

Americas20.3%

Europe61.5%

Africa3.3%

1990 World total1990 World total457 millions457 millions

Source: World Tourism Organization

China’s Approved Destination Status (ADS)

China, a new tourism source for AfricaChina, a new tourism source for Africa

ADS for 11 African countries- Egypt- Ethiopia- Kenya- Mauritius- Morocco- Seychelles- South Africa- Tanzania- Tunisia- Zambia- Zimbabwe

Chinese tourism to South Africa booming

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

2002 2003 2004

Number of Tourists

Chinese tourism to South Africa has grown 70% in three years

African airlines have maintained their competitive position on International markets

0

4,000

8,000

12,000

16,000

20,000

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

0%

10%

20%

30%

40%

50%

Europe Middle East Asia/PacificNorth America South America % African carriers

African carriers share Traffic in million of ASK*

*: Available Seat KilometreSource: September ASK* traffic from OAG

Europe-Africa load factor at historic highYearly rolling average load factor

64%

68%

72%

76%

80%Load factor in %

2004

2005

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

1992

Source: AEA

Africa traffic drivers

•• Sustained development of tourismSustained development of tourism

•• Population concentratedPopulation concentrated

•• Very limited road network and no rail substituteVery limited road network and no rail substitute

•• Strong economic and trade growthStrong economic and trade growth

•• Higher propensity to travel as economy developsHigher propensity to travel as economy develops

•• International markets to continue their strong growthInternational markets to continue their strong growth

•• Development of new markets with emerging Development of new markets with emerging economies (China, India, Brazil)economies (China, India, Brazil)

Africa MarketForecast

Top 10 Africa fastest growing markets

5.1 4.9 4.9 4.8 4.8 4.7 4.7 4.5 4.5 4.4

0

1

2

3

4

5

6

Average annual RPK growth rate (% p.a.)2004 - 2023

Afr

ica

-Chi

na

Afr

ica

-USA

Afr

ica

-Mid

dle

East

Afr

ica

-CIS

Afr

ica

-Can

ada

Afr

ica

-Wes

tern

Eur

ope

Afr

ica

-Jap

an

Afr

ica

-Sou

th A

mer

ica

Afr

ica

-Eas

tern

Eur

ope

Afr

ica

-Aus

tral

ia/N

ZSource: GMF 2004

Top 10 Africa fastest growing sub-markets

5.9 5.85.5

5.1 5.1 5.1 4.9 4.9 4.8 4.8

0

1

2

3

4

5

6

Average annual RPK growth rate (% p.a.)2004 - 2023

Sout

h A

fric

a -C

hina

Sout

h A

fric

a -W

este

rn E

urop

e

Dom

estic

Nor

th A

fric

a

Nor

th A

fric

a –

Wes

tern

Eur

ope

Sout

h A

fric

a -U

SA

Nor

th A

fric

a –

Mid

dle

East

Afr

ica

Sub

Saha

ra -

CIS

Nor

th A

fric

a -S

outh

Afr

ica

Nor

th A

fric

a -C

anad

a

Afr

ica

Sub

Saha

ra –

Mid

dle

East

High fuel price will accelerate retirement of old and mid generation aircraft

Current passenger fleet in active service by aircraft generation

11,7541,1495,1625,443WORLD

2820108174Pacific

42270137215Middle East

485201119165Africa

771236281254Latin America and Caribbean

2,3322069731,153Asia

3,158861,3001,772Europe

4,3043502,2441,710North America

TotalOldMidNew

Source: Airclaims.Includes: Western-built jets passenger (>100 seats)

8%

3%

9%

31%

41%

17%

0%

Trends in air transport: Increase in fuel cost

Change is a must!

Fuel price is constantly rising

70$ per barrelworld wide and

90$ per Barrel in Africa

707

727

747737OG

DC-10

DC-8

DC-9MD-80

Average Age: 21 years

102

74

2612

12

822

34

295 aircraft in total

The African airlines will take delivery of 641 passenger aircraft

0

200

400

600

2003 2023

GrowthGrowth

Fleet size

StayStay

392392

701701

309

332

60

641 aircraft641 aircraft

=> US$ 60 billion => US$ 60 billion ReplacedReplaced

Source: GMF 2004

African airlines passenger aircraft demand

17

183

441

0

200

400

600

Single-aisle Twin-aisle Large Aircraft

Number of aircraft

Source: GMF 2004

Consolidation &

Fragmentation

Growth by both fragmentation and consolidation

CONSOLIDATIONCONSOLIDATION

• More cost-effective• Hub dominance• Global network• Linking major hubs

FRAGMENTATIONFRAGMENTATION

• Hub by-passing• Market development• Frequency on thin routes• The business traveller’s

• The logic behind alliancespreference

The real world: fragmentation The real world: fragmentation andand consolidationconsolidation

All but 1 forecaster anticipate aircraft size to increaseSurvey among top 12 industry forecasters (manufacturers, suppliers)

Question: Will average seats per aircraft reduce of increase over next 20 years

Reduce

Increase

Number of forecasters

11

1

Example: Southern Africa to Europe, an Airbus aircraft for every market

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MAN

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2014

CPT

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MXPVIE

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Hub to Hub Hub to Point

VLA routes 350-400-seater routes250-300-seater routes

The lowest costs

• 35% higher capacity

Direct operating cost per seat

6 000nm sector

747-400

-15%DatumDatum

A380-800

• Lower fuel burn• Reduced maintenance costs

• Light weight materials• Fuel efficient engines• New systems

Driving down costs with technology

Meeting passenger expectations Airline criteria of choice on US int’l flightsWhat is your main reason for flying on this airline?

5% 4% 4%1% 1%

7%

14%17%

11%

33%

3%

0%

10%

20%

30%

40%

Price

Convenient schedule

Frequent flier

Non-Stop flights

Previous g

ood experience

Other

Safety reputation

Loyalty to ca

rrier

Employer policy

In-flight se

rvice

On-time re

putation

% of respondents

Source: US Commerce Department Survey (ITA ), 2004

Strong market confidence from 16 customers

5 A380 5 A380F

5 A380

2 A380

15 A380

10 A380

12 A380

6 A380

4 A380

6 A380

10 A380F

10 A380

41 A380 2 A380F

6 A380

10 A380F

159 firm orders & commitments from

16 Customers

159 firm orders & 159 firm orders & commitments from commitments from

16 Customers16 Customers

5 A380

5 A380

Today’s challenge

Today’s Challenge

Some trends in air transport…

1.- Declining yields

2.- Increase of fuel price

3.- New standard of cabin comfort

PASSENGERS EXPECTATIONS:

… MORE COMFORT @ A LOWER PRICE

AIRLINE SITUATION:

… INCRESING COST ENVIRONMENT

Trends in air transport: Declining yields

“While the load factors may look – and indeed are – remarkably high, they

highlight the airlines’ dilemma in the current operating climate. Our problem is

that our break even load factors are HIGHER still”

Ulrich Schulte-Strathaus

AEA General Secretary

Trends in air transport: Declining yields

0

5

10

15

Eur./MiddleEast -

SoutheastAsia

Eur. -Souther

Africa

North andMid Pacific

NorthAtlantic

Eur./MiddleEast -

NortheastAsia

Within FarEast

Eur. -Northeast

Asia

Eur. - MiddleEast

Eur. -Western

Africa

Within Eur.

YieldCost

EUROPE-SOUTHER AFRICA MARKETThe lowest unit cost

BUTOne of the lowest average yield

&One of the lowest margins “yield-cost”

Trends in air transport: Declining yields

“In the present ultra-competitive environment, it is unlikely that there is significant scope for a recovery in the yields. The prescription for next yearsmust be a renewed assault on cost”

Ulrich Schulte-Strathaus

AEA General Secretary

African Airlines operating cost

Average unit cost ($ per achieved ton km)

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70 Avg Efficient world wide Airline Avg Efficient African Airline Avg non efficient African Airline

Flight C

r

Fuel &

ment In

suuipmen

t Rpmen

t Main

teon &

Amorti

Airp

ort Cha

gation C

haStat

ion Expe

ssen

ew Oil

Flight E

quip

rance

Flight E

q

ental

Flight E

qui

nance

Deprec

iati

zatio

n

Landing &

rges

Air Nav

i

rges

nses

Pa

ger Se

ales &

Pro &

Adminisrvi

ce

Ticketi

ng, S

motion

Genera

l

trativ

e

Trends in air transport: Increase in fuel cost

20

30

40

50

60

70

80

Q1Q2Q3Q4 Q1Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2Q3 Q4 Q1 Q2 Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4

US$ per barrel (WTI)

Base case

High-price scenario

Low-price scenario

History Forecast

2003 20042002 200720062005 2008

Source: Global Insight, August 2005

Block fuel consumption per seat

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

datum

+42%

Old generation

Block fuel per seat difference %

Mid generation

+21%

A320 family

500 nm sector, 2 class seating

New-generation single-aisle 40% more fuel efficient

The value of youth…

A319-100 737-200 A320-200 727-200A500 nm sector( 1.5h ) Mature 20 years old Mature 20 years old

124 108 150 149Seats

[ Cash Operating Cost $ / trip]

2033 2491 2142 4118Fuel429 1214 460 3936Airframe maintenance

Engine maintenance 306 650 339 990Line maintenance 125 562 132 1496Flight crew 672 672 672 940Navigation 335 311 352 375Landing fees 490 401 562 661

Total COC [$ / trip] 4,390 $ 6,302 $ 4,659 $ 12,516 $

Extra cost per trip Datum + 1,911 $ Datum + 7,856 $

Extra cost per month Datum + 319,485 $ Datum + 1,313,321 $

Airbus standard assumptions Fuel price US$2 per gallon

With the world’s favourite cabin!

Survey conducted between March and May 2003

69,308 completed passenger questionnaires

As an airline passenger, which single aisle aircraft do

you prefer?

Boeing737 NG

43%

AirbusA32057%

Share of respondents preferring type

With the world’s favourite cabin!

Spacious cabin

More bin volume

Big galleysUp to 25” aisle

The value of youth…

A330-200 767-300ER MD-11ER3000 nm sector

( 7 h) New 10 years 15 years

246 214 295Seats

[Cash Operating Cost $ / trip]

22624 20470 28763Fuel4086 7246 10226Airframe maintenance2685 3786 8283Engine maintenance935 1848 2756Line maintenance7473 7473 7473Flight crew2901 2623 3224Navigation1760 1430 2188Landing fees

Total COC [$ / trip] 42,463 $ 44,876 $ 62,914 $

Extra cost per trip Datum + 2,413 $ + 20,450 $

Extra cost per month Datum + 128,873 $ + 1,092,391 $

Airbus standard assumptions Fuel price US$2 per gallon

New PSU unit

• LED technology

• Less maintenance

• More illumination, reflected from hidden light sources

New lighting

• LED lighting with increased control capability

• Nicer• Brighter• Less removable items

New Toilet design

• Smoothened overhead bin doors and hand grips

• Uninterrupted handrail

New lining

• Softer lining

With The New Cabin

A330 customers in 2005

Northwest 8 aircraft China Southern 10 aircraft

Air China 20 aircraft

GECAS 2 aircraft

Qatar 2 aircraft

553 orders, 47 customers, 54 operators553 orders, 47 customers, 54 operators42 firm orders in 200542 firm orders in 2005Backlog of 184 aircraftBacklog of 184 aircraftData to end September

What is next?

A380 InnovationA380 Innovation

A330 experienceA330 experienceTechnologies reduce fuel consumption Technologies reduce fuel consumption by 25% over by 25% over currentcurrent technology aircrafttechnology aircraft

A350 competitive highlights

A350-900 787-9 777-200ER

300 265 295

7500nm 8000nm 7700nm

Datum +7% +30%Datum +11% +18%

QC 0.5 QC 0.5 QC 1QC1 QC 1 QC 2

Seats (3-class)

Full passenger load range (nm)

Block fuel / seatCash cost / seat

Noise classification Londonarrivaldeparture

Toulouse, 27th April 2005, 10:29 a.m.