Board Presentation 2006

Group 8 Dickson CHAN / Michelle CHONG / Belle KWOK / Kevin LI / Jonathan WONG

Presentation Outline

Introduction

Business model (comparison with similar airlines)

Market Share Estimate

Key Performance Indicators (Profit / Loss)

Fleet Planning

Summary

IntroductionOrganisational Structure

Introduction

Our ObjectivesProvide at least one daily frequency between our destinations

To achieve average load factor of 70% in our first year

To become profitable within our first year

Mission Statement

To become the preferred airline in the premium business travel market sector in Australia and the World

• Delivering Safe, efficient and reliable air services• Innovative and personalised customer care

Product and Services

All Business Class cabin

60 passengers

Introduction

Product and Services

2-2 configuration

61 inch seat pitch

22.9” inner seat width

Introduction

Introduction

Sydney (SYD)Melbourne (MEL)

Hong Kong (HKG)

London (STN)

HKG/SYD:

8 per week

HKG/MEL:

7 per week

HKG/STN:

12 per week

Network / Frequencies

Frequencies

Business ModelDeveloping the business model…

EOS

premium business/first class service

Maxjet:

low fare business class service

Privatair

Service operated on behalf of Lufthansa, KLM and Swiss International

Business ModelWe are different from Ozjet...

- Domestic: Network and Frequency

- Fuel-inefficient 1970s aircraft

- High cost of maintenance

- Lack of travel agent support

- High break-even seat factor

- International: Comfort

- Fuel-efficient (newest generation of 737)

- New airframe, low maintenance costs

- Ticket distributions on GDS

- Better break-even seat factor

Market Share Estimate

14.3%

15.6%

15.5%

29.7%

24.2%Total Market Share

10.2%13.3%13.5%21.3%22.4%Capacity Share (30%)

16.0%16.7%16.3%33.3%25.0%Frequency Share (70%)

102,60074,70060,20032,70036,600

Forecasted NS06 Total Business Class Passenger

Traffic

Hong Kong/

LondonSydney/ London

Sydney/ Hong Kong

Melbourne/

London

Melbourne/ Hong

Kong

Routes

Yield (per route)

Unit Cost (per route)

Breakeven

Actual Seat Factor

Utilisation

Profit / Loss

Key Performance Indicators

Key Performance Indicators

14.7Aircraft Utilisation

(hours/day)

18.818.918.818.618.818.6Unit Cost

(cents/ASK)

28.833.724.731.124.731.1Yield (cents/RPK)

66.9%56.2%76.0%59.8%76.0%60.0%Breakeven Seat

Factor

-~40~35~35~25~30Allocated Capacity (one-way seats/day)

75.9%65.0%78.5%62.5%82.4%62.3%Passenger Seat

Factor

637.3112198.168.6164.865.6

Expected Revenue Passenger Km (million RPKs)

839.5172.3252.3109.7199.9105.3Available Seat Km

(million ASKs)

System-wide (NS06)

Hong Kong/

LondonSydney/ London

Sydney/ Hong Kong

Melbourne/ London

Melbourne/ Hong Kong

Key Performance IndicatorsProfit / Loss - NS06 (1)

21.114.61.60.93.20.8

Profit/Loss beforeinterest and tax(A$ million)

(157.5)(32.6)(47.3)(20.4)(37.5)(19.6)Operating Expenditure (A$ million)

178.647.24921.340.720.4Passenger FlightRevenue (A$ million)

System-wide

Hong Kong/

LondonSydney/ London

Sydney/Hong Kong

Melbourne/ London

Melbourne/

Hong Kong

Key Performance IndicatorsProfit / Loss – NS06 (2)

8.9%7.8%6.9%11.8%Gross Profit Margin

110.3%108.9%109.5%113.4%Operating Ratio

QantasCathay Pacific

British AirwaysSkyways

Fleet Planning

Boeing BBJ2 Range

With 7 auxiliary fuel tanks - 10,460km

Mission RequirementsRoute Distance (km)Sydney / Hong Kong 7372Melbourne / Hong Kong 7387London Stansted / Hong Kong 9582

Future Mission RequirementsBrisbane / Hong Kong 6930Perth / Hong Kong 6007Paris / Hong Kong 9607Frankfurt / Hong Kong 9171

Boeing BBJ2 Range Capability Chart

Mission Requirements

Fleet Planning(2008-2012) Forecast

717,500Stansted / Hong Kong

368,010Sydney / Hong Kong

322,664Melbourne / Hong Kong

ASK (000s)

2006Annual ASKs PRODUCED

953,864900,737850,71

8803,751759,780Stansted / Hong

Kong

475,218434,921399,41

2368,694368,010Sydney / Hong Kong

512,629461,726415,11

5372,728334,494Melbourne / Hong

Kong

20122011201020092008

ASK (000s)Annual ASKs required

Note: Cells highlighted in Yellow indicates that the current ASKs would not meet the ASK requirements of that year

Fleet Planning

Boeing 767-200ER

102 seats / 2-2-2 configuration (similar to Maxjet)

max range 12,223km

Capable of carrying FRT

10 tonnes on SYD-HKG

3.7 tonnes on STN-HKG

Aircraft Evaluations

Figure: Boeing 767 family Range Capability Chart

Business model proven in the Trans-Atlantic market

Applying this model on our market, avoiding Ozjet’s mistakes

Profit of $21.1 million AUD (NS06, before interest and tax)

Operating Ratio: 113.4%, Gross Profit Margin at 11.8%

Breakeven SF (66.9%); PAX SF (75.9%)

Aircraft Utilisation: 14.7 hrs per day

Fleet Planning: Acquiring additional BBJ2s for new routes 2 x 767-200ERs for London to Hong Kong

Summary