CONNECTING THE REGION REGIONAL AUSTRALIA-ASIA CHAMBERS FORUM

29th April 2016, Darwin

Tony Fernandes Founder &

Group CEO of AirAsia

Kamarudin Meranun Founder &

Group CEO of AirAsia X

INTRODUCED THE FIRST LOW-COST CARRIER IN ASIA PACIFIC

• To enable “Everyone to Fly” with its disruptive business model

• Started AirAsia in 2001 with 2 A320 aircraft, serving only short-haul routes

• Expanded rapidly and subsequently ventured into the long-haul low-cost segment using A330 aircraft, allowing “Everyone to Fly Further”

• Launched AirAsia X in 2007 with inaugural flight to Australia (Gold Coast)

HUMBLE BEGINNING

INTRODUCTION

2

WITH MORE THAN 14 YEARS OF ACHIEVEMENT

247routes

Extensive network of

over 120 destinations in 24 countries

The Group is the Largest Low-Cost Airline in Asia Pacific

with 22hubs

Large fleet of Carried/ Connected

passengers since inception

over330million

200aircraft

INTRODUCTION

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AirAsia Berhad (Malaysia - Listed)

AirAsia Japan

AirAsia India

AirAsia Philippines

Indonesia AirAsia

Thai AirAsia (Thailand -Listed)

AirAsia X Berhad (Malaysia -Listed)

Indonesian Shareholder

Thai Shareholder

Indonesia AirAsia Extra

Thai AirAsia X

49%

40%

49%

45%

13%

49%

51%

51%

49%

49%

Short-Haul (<4 hours flight)

Mid to Long-Haul (>4 hours flight)

INTRODUCTION GROUP STRUCTURE

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Bali

Hong Kong

Sydney

Taipei

Bali

Singapore

Kolkata Tokyo

Bangkok Jeddah

Seoul

Bali

Auckland

Taipei

Xi’an

New Delhi

Kathmandu

Hangzhou

BUSINESS

OVERVIEW Shanghai

Pioneered in the long-haul low-cost sector with an unconventional business model that focus on growing the underserved markets. AirAsia X has grown to be a leading long-haul low-cost carrier across key emerging markets

Disrupting the status quo by being innovative with our operations and products

We are the first low-cost carrier to introduce Premium Flatbeds (voted as the World’s Best) yet managed to remain as the World’s Lowest Unit Cost Long-Haul Airline, CASK of US3.53cents in 2015, 50% lower than 10 largest Full Service Carriers in Asia Pacific

Our competitive advantage :

• Strong Feeder Network & Brand Advantage from AirAsia Group ‐ Wide network across Asia and Australia with feeder traffic from AirAsia through Fly-thru, providing

seamless travel and convenient access for passengers to connect within our routes ‐ Capitalizing on the Multi-Hub Model, i.e. Thai AAX and Indonesia AAX, to drive geographical spread ‐ Tap on AirAsia’s globally-recognized brand and existing customer base-award-winning airline ‐ Economies of scale – strong bargaining power

• Proven Demand Stimulation in Routes AirAsia X Served

• Strong Market Position in Core Countries among LCCs ‐ Market leader in core countries - achieved 69% in China, 57% in Japan, 49% in Australia, 46% in

Taiwan, and 32% in South Korea

• Innovative & High Margin Ancillary Revenue Model ‐ Top 5 airline for highest ancillary revenue per passenger

AIRASIA X

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A GROWING NETWORK

IN ASIA-PACIFIC &

BEYOND

EXTENSIVE NETWORK

S.KOREA(2) CHINA(15)

Fly-thru AirAsia X and AirAsia

AUSTRALIA(5)

NEW ZEALAND(1)

HONG KONG(1)

VIETNAM(3)

NEPAL(1)

S.ARABIA(1)

SINGAPORE(1)

LAOS(2)

MALDIVES(1) BRUNEI(1)

BANGLADESH(1)

MYANMAR(2)

THAILAND(22)

CAMBODIA(2) PHILLIPINES(9)

INDIA(14)

JAPAN(3)

SRI LANKA(1)

MALAYSIA(15)

TAIWAN(2)

From Australia

INDONESIA (17)

Operates in Asia Pacific, the largest

and fastest growing aviation market

in the World

(X) No. of routes

Asia Pacific is expected to be the main contributor of global passenger traffic growth over the next 20 years, accounting for 39% of total aircraft demand as forecasted by Airbus

*Map for illustration purposes only

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EXTENSIVE NETWORK

AUSTRALIA CHINA

Darwin Gold Coast Melbourne Perth Sydney

Beijing Changsa Chengdu Chongqing Guangzhou Guilin Hangzhou Kunming Nanchang Shanghai Shantou Shengyang Shenzhen Wuhan Xi’an

HONG KONG

Hong Kong

INDIA

Bengaluru Chandigarh Chennai Goa Guwahati Hyderabad Imphal Jaipur Kochi Kolkata New Delhi Pune Tiruchirappalli Visakhapatnam

INDONESIA

Babullah airport Bali Balikpapan Banda Aceh Bandung Jakarta Lombok Makassar Medan Padang Palembang Pekanbaru Pontianak Semarang Solo Surabaya Yogyakarta

JAPAN

Osaka Sapporo Tokyo (HND) Tokyo (NRT)

LAOS

Luang Prabang Vientiane

MACAU Macau

MALAYSIA

Alor Setar Bintulu Johor Bharu Kota Bharu Kota Kinabalu Kuala Lumpur Kuala Terengganu Kuching Labuan Langkawi Miri Penang Sandakan Sibu Tawau

MALDIVES

Male

MYANMAR

Mandalay Yangon

NEPAL

Kathmandu

NEW ZEALAND

Auckland

PHILIPPINES

Cagayan de Oro Cebu Clark Davao Kalibo Manila Puerto Princesa Tacloban Tagbilaran

SAUDI ARABIA Jeddah

SINGAPORE

Singapore

THAILAND

Bangkok Buri Ram Chiang Mai Chiang Rai Hat Yai Khon Kaen Krabi Loei Nakhon Phanom Nakhon Si Thammarat Nan Narathiwat Pattaya Phuket Roi Et Sakon Nakhon Surat Thani Trang Ubon Ratchathani Udon Thani

SOUTH KOREA

Busan Seoul

SRI LANKA

Colombo

TAIWAN

Kaohsiung Taipei

VIETNAM Da Nang Hanoi Ho Chi Minh City

COVERING 247 ROUTES, 122 DESTINATIONS, 24 COUNTRIES

BANGLADESH

Dhaka BRUNEI

Brunei

CAMBODIA

Phnom Penh Siem Reap

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POTENTIAL EXPANSION

India AAX

Japan AAX

Thai AAX

Malaysia AAX

Indo AAX

POTENTIAL LONG-HAUL HUBS IN INDIA AND JAPAN WILL PROVIDE PLATFORMS TO EXPAND INTO EUROPE, AFRICA, AND NORTH AMERICA

To North

America and

Hawaii

To Europe

To Africa

Passengers traffic expected to grow approximately 500 million in Asia Pacific and 300 million in Europe by 2020 Upside from high population growth

Australia

Potential Market Size of over 4 billion population

*Map for illustration purposes only 10

MARKET STIMULATION AUSTRALIA

0

15

103

127

190 188

164 169

214

Comparable years: 2007 2008 2006*

*Year before AirAsia X’s launch Source: Australia Tourism Statistics & Malaysia Airport Passengers Movement Data

CAGR : 46% (2007-2014)

• We are the only airline to have direct flights from Kuala Lumpur to Gold Coast

• Launched Auckland to further boost travel demand between Australia and New Zealand

2009 2010 2011 2012 2013 2014

GOLD COAST

Thousands of AAX passengers to and from KUL annually

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• Australia is our first core market with Gold Coast as an inaugural destinations in Nov 2007, in line with our strategy to stimulate growth in underserved secondary market

• Proven demand stimulation in Gold Coast route, connected/ carried 1.4 million passengers since inception

AUSTRALIA • Due to positive response, we continued with our expansion into Australia by

introducing Perth, Melbourne, Sydney • Over 30% of AirAsia X Group’s seat capacity is to Australia • Connected/ Carried total of 7 million passengers since inception

MARKET STIMULATION

12

15 158

535

752

710

864

1,118

1,488

2007 2008 2009 2010 2011 2012 2013 2014

CAGR: 93% (Inception - 2014)

AUSTRALIA

Thousands of AAX passengers to and from KUL annually

ASIA

0

203

0

229 209

415

231

647

Chengdu Tokyo (Haneda) Seoul Beijing* Launch: 2009 2010 2010 2009

*AAX launched Beijing via Tianjin in 2009, and moved to Beijing in 2012 Source: Malaysia Airport Passengers Movement Data

>+100%

2014

Year before AAX launch

• Stimulated traffic in Asia: Chengdu, Beijing, Tokyo, Seoul, Osaka, Hangzhou, Kathmandu

• Connected/ Carried total of 11 million passengers in Asia since inception • More than 3 million AAX passengers connected between Asia and Australia in the

past 2 years • Expect passengers number to grow with introduction of new routes and improved

flight schedules, enabling seamless flight connections

MARKET STIMULATION

Thousands of passengers to and from KUL annually

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>+ 100%

>+100%

>+100%

MARKET SHARE OF LOW COST CARRIERS FROM SOUTHEAST ASIA TO KEY MARKETS IN NORTH ASIA & AUSTRALIA

AA & AAX Group 69%

AA & AAX Group 57%

AA & AAX Group 49%

AA & AAX Group 46%

AA & AAX Group 32%

Jetstar 4%

Jetstar 14% Jetstar 37%

Jetstar 10%

Tig-Scoot 16%

Tig-Scoot 5%

Tig-Scoot 13%

Tig-Scoot 33%

Cebu 5% Cebu 20%

Cebu 11%

Cebu 17%

Others 6% Others 4%

Others 50%

China Japan Australia Taiwan South Korea

AA & AAX Group Jetstar Tiger-Scoot Cebu Others

Tig-Scoot 1%

Notes: - AA & AAX Group: AAB, TAA, IAA, PAA, AAX, TAAX, and IAAX - Tig-Scoot: Tigerair and Scoot - Jetstar: Jetstar and Jetstar Asia - Others in South Korea: mainly includes Jeju Air, Jin Air, Eastar Jet, T’way Air, and Air Busan - Others in China: mainly refers to Spring Airlines - Others in Japan: mainly refers to Spring Japan

Source: IATA PaxIS Report, for 2014

Cebu 1%

MARKET POSITION

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PASSENGER PROFILE

Korea

Japan

Australia

China

Malaysia

TOP 5 PASSENGERS BY NATIONALITY

354 382 397

497

666

2010 2011 2012 2013 2014

AUSTRALIAN PASSENGERS

CAGR : 17%

(2010-2014)

Thousands of Australian passengers to and from KUL annually

BRANDING &

MARKETING

INNOVATIVE PRODUCTS

ENHANCING EXPERIENCE

First Low-Cost Carrier transit services Top Fly-thru:

Australia Thailand, Indonesia, China, India

Co-Brand with Credit Cards, Loyalty and Forex Cards

Fly-Thru

Meal Selections

TOP 5 GLOBAL AIRLINES for Ancillary Revenue Per Passenger (US$) 2014

56 52 50 45 43

Jet2.com Sprit Qantas Allegiant AirAsia X

Value Added Product

World Travel Awards 2 years in a row 2013, 2014

Best Asian Low-Cost Carrier TTG Travel Awards 8 years in a row 2008, 2009, 2010, 2011, 2012, 2013, 2014

Euromoney Best Managed Companies 2014 2 years in a row 2013, 2014

Business Traveller Asia-Pacific 2 years in a row 2013, 2014

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Source: IdeaWorksCompany

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CAMPAIGNS AUSTRALIA

Social media campaign

#SydneyWithLizzy Elizabeth tan, famous Youtube singer, a collaboration with NSW tourism People campaign: Supporting Australian talent

Sponsored Australia’s designers, Flew Saveus to Kuala Lumpur to showcase their 2015 fall winter collection at KL Fashion Week

Brand campaign in local events

Regional tactical campaign to spur travel demand

RENOWNED CELEBRITIES

PARTNERSHIP

Taylor Swift, Official Airline for ‘The Red Tour’

Manny Pacquiao, Official Airline Park Ji Sung ,Global Brand Ambassador

David Foster, Ambassador for Premium Seat

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TRAVEL FAIR/ ROADSHOWS

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CONSUMER ENGAGEMENT

Malaysia, AirAsia Travel Fair Australia, Flight Centre Travel Expo

Japan, JATA Thailand, Songkran Roadshow

BRAND AMBASSADOR, ALLSTARS

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PEOPLE

Over 10,000 ALLSTARS across Asia–Pacific

First airline in Malaysia to hire female pilots

Capt. Norashikin Onn

Gender Equality Embrace Diversity

Allstars from around the World, over 24 nationalities

Developing People

Pilot

Dispatch

Kugan Tangiisuran

“Dream Big, Believe the unbelievable, Never take No for

an answer”

OUTLOOK

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OUTLOOK

The airline industry in Asia-Pacific is poised for further growth as liberalisation and bi-literal air service agreements increases, especially in ASEAN, removing the monopolistic barriers and allows stimulation in regional trade , tourism and creating jobs opportunity.

Increasing visa waivers and easing regulations across the regions encourages intra-region travel. For instance: (i) Australia eased visa rules for China and India, (ii) Malaysia introduced visa waiver for China and e-visa for India, and (iii) Indonesia introduced free visa to multiple country, including Australia.

This will provide huge catalyst for Asia and Australia, as China, India and Malaysia combined, contributed the largest Asian tourist arrivals to Australia. For education tourism alone, China, India and Malaysia represented about 42% of all international students in Australia.

We intend to bridge the gap in the region, enabling easy access for business, education and holiday travellers by:

i. Introducing new destination pairings and unique routes - Commenced New Delhi and Auckland in early 2016 to enable connections for Australia, New Zealand, and India

ii. Increase flight frequency on existing high traffic routes, i.e. Australia and China iii. Explore opportunities in underserved market to stimulate new market demand, i.e.

Iran, China (secondary market) iv. Intensified marketing campaigns to spur travel demand in both Asia and Australia

region 23

THANK YOU