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Air Berlin PLC | Dusseldorf / Cologne 29 November 2012 | Roadshow Bankhaus Lampe
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Second largest airline in Germany (in terms of fleet size)
35.3 million passengers (2011)
170 destinations in 40 countries (Oct. 2012)
9.300 employees (2011)
158 aircraft (Sept. 2012); average age 5.2 years
4.23 billion Euro business volume (2011)
manifold cooperations with other airlines:
strategic partnership with Etihad Airways, oneworld® membership, codeshare agreements
2
airberlin in a nutshell:
Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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The airberlin story
PAX in m per year .
3
Phase 1: Charter carrier
Phase 2: Mallorca /
Euro-Shuttle
Phase 3: Scheduled Business
Phase 4: International Connectivity
1992 – 1997 1998 – 2005 2006 – 2011 from 2011
1.6 1.4 1.1 1.0 0.5 0.8
Organic Growth Organic Growth IPO in 2006/ Acquisitions Alliances & Codeshare
Founded 1978 under US-law from Kim Lundgren (former PanAm Pilot) due to the status of West - Berlin
Licensed under German law in 1991 as Air Berlin GmbH & Co. Luftverkehrs KG
Codeshare with Etihad Airways
Codeshare with American Airlines, British Airways, Finnair, S7, Iberia, Royal Jordanian, Bangkok Airways, Pegasus, Hainan Airlines, JAL
Air Berlin PLC | Roadshow Bankhaus Lampe Nov „12
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airberlin strategic development – transformation process
Etihad Airways and oneworld: airberlin’s development towards a full
service airline
4
HYBRID CARRIER FULL SERVICE AIRLINE
Cu
sto
mer
Ser
vice
Timeline
Global network (from America to Asia) alliance member
Global positioned frequent flyer program (topbonus)
Full service airline (lounge, priorities, etc.)
BUSINESS
LEISURE LOW COST
Stand-alone airline (cooperation with NIKI)
135 destinations (mainly Europe)
Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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Two complementary networks now combined
Etihad Airways’ and airberlin’s combined network
strategy enables a wider network reach and market
growth
Asia/Pacific
North America
Caribbean
Central- & South Africa
Australia
Central America
DUSBER
Russia
India
Europecovered by AB
AUH
Northern Africa
AB operated
EY operated
Jointly operated
Middle East
Asia/Pacific
North America
Caribbean
Central- & South Africa
Australia
Central America
DUSBER
Russia
India
Europecovered by AB
AUH
Northern Africa
AB operatedAB operated
EY operatedEY operated
Jointly operatedJointly operated
Middle East
Source: PaxISplus of airline
5 Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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Financial Performance [EUR m] – Q3 2012 & 9M 2012
6
EBITDAR EBIT Net result Revenue
30.2 101.2 96.8
279.5 269.3
1,395.1 1,375.5
+120.6% +4.5%
+3.8%
+1.4%
66.6
Despite reduction in capacity, increase in revenue is achieved from slightly higher seat load factor and increase in yield
Revenue growth and cost initiatives help to improve EBITDAR performance despite higher fuel cost of EUR 35 m in Q3 and EUR 99 m in the first 9 months
Due to higher leasing cost, EBIT proportionally does not develop in line with EBITDAR
Net result more than
doubled compared to
the previous year
quarter and increases
by 23.6% for the first 9
months
Q3/12
Q3/11
-123.7
434.8 385.9
3,343.2 3,273.3
+23.6% +37.4%
+12.7%
+2.1%
-102.5 -134.3 -77.5
9M/12
9M/11
Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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1) Total revenue
Topline development – Q3 2012 & 9M 2012
7
Revenue1) per ASK [EUR ct.]
+2.7%
Q3/12
7.61
Q3/11
7.41
+6.0%
Q3/12
121.79
Q3/11
114.86
Yield [EUR]
+6.7%
Q3/12
130.47
Q3/11
122.24
Revenue1) per Guest [EUR]
+3.2%
9M/12
7.05
9M/11
6.83
+7.8%
9M/12
114.14
9M/11
105.91
+7.7%
9M/12
127.36
9M/11
118.27
Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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1) Total revenue
Operational development – Q3 2012 & 9M 2012
8
Guests [m] SLF [%] Capacity [m]
+1.39%p
+0.40%p
80.03
78.64
84.54
84.14
-6.8%
-5.4%
32.80
35.19
12.65
13.37
Q3/12
9M/11
26.25 9M/12
27.68
-5.0%
-5.2%
10.69
Q3/11 11.25
Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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Development of Expenses [EUR m] – Q3 2012
9
Personnel expenses Net cost of leases & depreciation [EUR m]
Higher than last year driven by
FTE increase
+4.4%
Q3/12
126.7
Q3/11
121.4
+4.9%
9M/12
369.5
9M/11
352.4
+6%
-15%
160.9 152.0
17.5 20.5 Q3/12
Q3/11
+3.4%
178.4 172.5
+2%
-13%
Leases
457.1 446.6
Depreciation
55.1 63.0 9M/12
9M/11
+0.5%
Cost of a/c
ownership
512.2 509.6
Q3/12
Q3/11
9M/12
9M/11
Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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airberlin fleet – as of September 30th 2011/2012
10
Fleet development [number of aircraft]
10
10
15
14
72
69
Q3/11 170 7 66
158
-7.1%
-12
Q3/12 7 58
A320 family
Q400
E190
B737 family
A330 family
Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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Balance sheet structure
[EUR m]
11
2,264
Net debt: 813
B/S as of Dec 31, 2011
89%
11%
10%
24%
66%
Fixed assets
Other current assets
Liquid assets
Equity
Debt
Net debt: 853
B/S as of Sep 30, 2012
8%
9%
34%
57%
92%
Fixed assets
Other current assets
Liquid assets
Equity
Debt
2,385
Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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* as of 28 Sep 2012 / 30 Sep 2011
Dollar hedging profile and FX rate development, 2012/13 vs. 2011/12
Dollar hedging 2012/13
0
10
20
30
40
50
60
70
80
90
100
Sep Aug Jul Jun May Apr Mar Feb Jan Dec Nov Oct
FX rate development *[USD/EUR]
Hedging rate 2011 (as of 09/30/2011)
Hedging rate 2012 (as of 09/28/2012)
Jun May Apr Mar Feb Jan Dec Nov Oct
1.50
1.45
1.40
1.35
1.30
1.25
Sep Aug Jul
88 28
Hedging profile [%]
Hedge rate 2011
Market / Forward rate
Current Hedge rate
12
54 73
2011/12 2012/13 2011/12 2012/13
Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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* as of 28 Aug 2012 / 30 Sep 2011 // 1) excl. differentials
Fuel hedging profile and fuel price development, 2012/13 vs. 2011/12
Fuel hedging 2012/13
0
20
40
60
80
100
120
Sep Aug Jul Jun May Apr Mar Feb Jan Dec Nov Oct
Price1) development *[USD/t]
Hedging rate 2011 (as of 09/30/2011)
Hedging rate 2012 (as of 09/28/2012)
Jul Jun May Apr Mar Jan Dec Nov Oct
1,080
Feb
1,040
1,020
1,000
980
1,060
940
540
Sep Aug
960
88 16
Hedging profile [%]
Hedge price 2011
Market / Forward price
Current Hedge price
13
44 63
2011/12 2012/13 2011/12 2012/13
Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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[EUR m]
EBIT improvement now > EUR 230 m in 2012 with increasing impact in
the course of the year
14
≈ 30% Share of Total ≈ 26%
2012
>230
Q4
>60
Q3
>70
Q2
>50
Q1
>50
Implementation
Realization
Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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EBIT values without effects from cost avoidance
[EUR m]
Contribution to full year EBIT improvement of more than EUR 70 m in
the third quarter of 2012
15
SHAPE & SIZE
profitability
improvement in
Q3/12
> EUR 70 m
Q3 2012 Shape & Size performance
Yield
& Rev.
mgmt
Alliances
Cost
initiatives
MRO
6
Profitability
Improvement
EUR 2
3 4
5
1 Process
improvement
Network
reduction &
productivity
> 1.6
> 22.2
> 17.3
1 Enhanced yield development
2 Codeshare effects from partnership with
Etihad Airways and oneworld
3 Aircraft sourcing and improvement of
network productivity
4 Reduction of maintenance cost
5 Several cost measures
Q3
Q3
Q3
> 17.0
Q3
> 7.9
Q3
> 4.0
Q3
Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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Multiple difficulties affect airberlin‘s business
Present economic challenges and Shape & Size
16
Shape & Size
Goal:
Operating
improvement of
230m in 2012
• Cost reduction
• Increase in
revenue and
yield
• Adjusting the
network with
partners
• Focus on hubs
and profitable
routes
High oil prices
Strong competition
(Low-Cost-Carriers)
Aviation tax
Emission trading (only
European airlines!)
High and increasing
production costs
BER - Airport delay;
European debt crisis -
weakness in consumer
confidence
Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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2012 2011 2013 2014
The efficiency program Shape & Size has accounted to operational improvement with more than EUR 170 m
and could offset rising fuel prices
Though the constantly worsening economic environment as well as other external factors such as aviation
tax, fuel price, BER opening delays and changing consumer behavior, claims for the implementation of
turnaround
Shape & Size is a continuously moving forward successful efficiency program, but it cannot compensate for
all negative influences which the airline will be facing in 2013
Turbine challenges status quo business assumptions and adapt business model to “lean and smart”
principles
Turnaround program Turbine is set to achieve our goal for 2013 to reach
a positive net result
17
SHAPE & SIZE – Internal continuous improvement; well embedded in the organization 1
TURBINE
Structural changes to refocus
business and operating model
2
Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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Turbine for long-term sustainability
airberlin requires structural changes towards a business model with
less fragmentation, more efficient operations and a lower cost base
18
Process & levers TURBINE 2013
Turbine`s major objective is to reduce costs
and apply efficient operational principles
while maintaining core brand attributes
Structural change to regain competitiveness
Challenge status quo business assumptions
and adapt business model to “lean and
smart” principles
Significantly lift operating performance
(RASK / CASK)
Develop Master Turnaround Plan by the end
of 2012
Building upon airberlin`s core brand
attributes (value for money, innovativeness,
service with heart)
Turbine sharpens our customer offering,
especially for high-value customers
Implement changes throughout 2013
The program is addressing all elements of the
operation, e.g.:
Where airberlin flies
Number and types of aircraft in the fleet
How airberlin routes aircraft and crew around its network
Ground processes supporting flights
Organizational setup and responsibilities
IT and systems supporting the head office
Commercial steering model (scheduled / tour operator)
Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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(1) 2012 data based on extrapolation from figures related to the period between 1 January and 31 August 2012.
topbonus member base
19
topbonus has a growing and attractive member base
Member base expected to grow to 3.1m members by year end 2012
Strong historical growth rates with a CAGR of 14% from 2010 to 2012
Number of members (in Mio.)
(1)
Status levels of members
Differentiation of members in standard, silver, gold and platinum
Status levels attractive for members
Higher revenue generated with premium members
airberlin intends to monetize topbonus
2.4
2.8 3.1
2012 2010 2011
Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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(1) Expected new oneworld alliance members
(2) Denotes coalition partner
topbonus has a reputable and significant partner network with more than 120 partners
topbonus partner network
20
Air travel Hotels Car rental Finance & insurance
Newspapers
Co-branded credit cards
Other partners
(1)
(1)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
(2)
oneworld alliance
Earn + burn Selected earn partners
(1)
Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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Transaction benefits for airberlin and topbonus
Transaction rationale
21
Fully consistent with strategy of enhancing attractiveness of topbonus
Monetization of topbonus
Creating visibility of value contributed by topbonus
Strengthening of equity and reduction of financial leverage
Ability to participate in future development of topbonus
Highly compelling strategic logic evidences by precedent transactions
Separation as enabling event for topbonus to develop its full potential
Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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Back up
Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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Cancelled Long-Haul connections to North America
Modifications of airberlin‘s network, starting 14 Januar 2013 (1)
DUS
LAS
SFO
YVR
IATA Code Destination
DUS Düsseldorf
LAS Las Vegas
SFO San
Francisco
YVR Vancouver
23 Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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Cancelled
Short-Haul
Connections
Modifications of airberlin‘s network, starting 14 Januar 2013 (2)
TXL
OTP
VIE
SOF
PMI
SCQ
MAD
BCN
VRN BEG
HAJ
MUC
DUS
IATA Code Destination
BCN Barcelona
BEG Belgrad
HAJ Hannover
MAD Madrid
MUC München
OTP Bukarest
PMI Mallorca
SCQ Santiago de
Compostela
SOF Sofia
VIE Wien
VRN Verona
24 Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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Reductions of frequency in Spanish
domestic traffic
Modifications of airberlin‘s network, starting 14 Januar 2013 (3)
OVD
OPO
LIS
SVQ
PMI
AGP
ALC
IATA Code Destination
AGP Malaga
ALC Alicante
LIS Lissabon
OPO Porto
OVD Asturias
SVQ Sevilla
25 Air Berlin PLC | Roadshow Bankhaus Lampe Nov '12
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