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2009 Business Plan 0

Investor Relations

2009 Business PlanInvestor Relations

[Appendix] ‘08 Performance


Investor Relations

「ATW’s 2009 Airline of the Year」

5 Star Airlines

KCSI (Korean Industry Customer Satisfaction Index)NCSI (National Customer Satisfaction Idex) KS-SQI (Korean Standard Service Quality Index)

Continental Airlines

Japan Airlines

Southwest Airlines

Qantas Airways

Air France/KLM

Cathay Pacific

All Nippon Airways

Singapore Airlines

Asiana Airlines

Airline

1992

1993

1994

1995

1996

1997

1998

1999

2000

Year

British Airways2001

-2002

Lufthansa2003

Qantas Airways2004

Continental Airlines2005

KLM/Northwest Airlines2006

Delta Airlines2007

-2008

Lufthansa2009

AirlineYearAirline of the Year

The Nobel Prize in Aviation

Evaluation Factors

- Exemplary service

- Compiling safety record

- Development of new market

& innovative service

- Leading application of new

technology in aviation industry

- Financial stability & consistent profitability

Honored Airlines

Airline of the Year

Top Customer Satisfaction CompanyAirline of the Year


Investor Relations

Leading Global Airline Pursuing Customer Satisfaction

Safety Service

Profit-oriented Management Entry to World’s Top 10 Profitable AirlinesEntry to World’s Top 10 Profitable Airlines

Management Vision

“A Beautiful Company”

Core Competence

Infrastructure

Customer Satisfaction

Greening Management


Investor Relations

41

5666

72

60

18 22 2114 19

30 26 2631

99.6

'95 '97 '99 '01 '03 '05 '07 09(E)

WTI

771 805

951

1,399

1,1311,192

1,145

1,024956 929

1,1031,2001,189

1,2911,255

'95 '97 '99 '01 '03 '05 '07 09

(E)

F/X Rate

Major External Indices

-30.9%85.2123.3Jet Fuel

($/BBL)

-39.8%6099.6WTI

($/BBL)

2009(E) Changes2008

Oil Price

2009 Business Plan

(Unit : $/BBL)

8.8%1,2001,103Market Rate

(￦/$)

13.7%1,2001,055Accounting Rate (￦/$)

2009(E) Changes2008

F/X rate

(Unit : ￦/$)


Investor Relations

Fleet Operation Plan

67

8

30

5

10

8

7

29

24

5

2009(E)

-1

-1

+2

-

-

+2

-

-2

-

-2

Changes

10B777

6A330

7B767

31Narrow Body

24A320/321

9Freighter

28Wide Body

5B747

7B737

68

2008

Total

A/C Type

(as of Dec. 31, 2008)Fleet Plan

A/C Type & Delivery

- 30 A350 XWB(800/900/1000)

- Delivery from 2016 to 2022

A350 Specialties

- Mid/long haul A/C with 270~350 seats

- Cost saving due to lightweight airframe built

from new composite materials

- Eco-efficient aircraft with reduced emission &

lower noise

Introduction of New Generation Aircraft

U.S.A.U.S.A.EuropeEuropeAsia

2009 Business Plan

※ - B737 Lease to Air Busan

3 in 2008 (Oct., Nov.), 2 in 2009 (Apr., May.)

- 2 A330 Delivery (Apr., Dec.)

- 1 B747-FRT Return (Apr.)


Investor Relations

996

927

986 979

825

2005 2006 2007 2008 2009(E)

Air Freight

Trends of Air Traffic Demand

Cargo

[Unit : thousand person] [Unit : thousand Ton]

16,10317,765

19,77318,887 18,278

10,08011,610

13,32511,996

11,180

6,023 6,155 6,448 6,891 7,098

2005 2006 2007 2008 2009(E)

TTL Outbound Inbound

-3.2%

-15.7%

-6.8%

+3.0%

[Source : Korea Tourism Organization, Korea International Trade Association, Asiana Airlines, Inc.]

-4.5%

-10.0%

+6.9%

-0.7%

2009 Business Plan

International Passenger


Investor Relations

Flexible adjustment of routes and schedules

(by quarter, not semi-annually)

- Suspension and decrease of flights in

unprofitable and weak demand routes to

CHN & SE Asia (total 405 flights)

- Addition of flights in high profitable routes

(ex. Haneda)

Fleet reduction

- Lease-out of 2 B737 to Air Busan

※ 68 A/C in 2008 → 67 A/C in 2009 (at the year-end)

Completion of cabin upgrade in 2008

- Upgrade of seats and in-flight facilities with all fleet

Passenger

Countermoves to Slow Market Demands (I)

U.S Visa exemption program

- +3/W to LAX, +1/W to SEA, +1/W to SFO (’08. 11.)- Considering daily flight operation to NYC (currently 4/W)

Increasing revenue from US (15.7% in ’08→23.1% in ’13)

Improvement of profitability in short/mid haul routes- Focus on golden triangle routes connecting KOR, JPN & CHN

- Development of new profitable routes in JPN & CHN (ex. Shizuoka, Ibaraki, Mudanjiang)

Boost of inbound demand (by weak Korean Won)- Specialized marketing

(ex. shopping tour packages, health tour packages)- Attraction of inbound demands from JPN & CHN

by operation of new layover flights

◆Increasing inbound passengers (46% in ’08→50% in ’09)

Restructuring

2009 Business Plan

Outbound : Recovery of traffic demands thanks to exemption of fuel surcharges,

stabilized exchange rate & economic turnaround later this year

Inbound : Attraction of tourists from the countries with strong-currency

Improvement of Profitability


Investor Relations

One B747 Freighter Return (total freighters 9 8)- Service out from Feb. 17 (return in April)- Decrease of 3 flights to US & 1 to EUR

weekly 55 flights 51 flightsCost Reduction- Reduction of handling charges- Common use of Cargo Terminal with

alliance carriers (ex. Osaka terminal..etc.)

International Cargo- Attract international regular material serviced by

Korea Express Express Delivery - Door to Door Service - Specialized Service by regions (KOR, CHN, JPN)International Logistics- Building additional RFS (the best Road

Feeder Service) Network in western US & EUR- Cooperation with related business (storage, customs)

Cargo

Countermoves to Slow Market Demands (II)

Increase of capacity in high profitable routes & development of new routes - Strategic & positive marketing in North America with open sky contract - Development of beyond routes, CHN via EURDevelopment of higher value-added commodities- Promotion of Mail, Cyber Express, YIM & Special Care Cargos

Improvement of Profitability

Synergy with Korea ExpressRestructuring

2009 Business Plan

Reduction of capacity by return of a freighter

Development of new routes and maximization of synergy with Korea Express


Investor Relations

Projected Business Performance

Cargo

2009(E)20082007

RTK(mil.km) Yield(Won)

3,577

3,340 3,165

-5.2%

250.4

325.8352.3

1,732 1,7991,520

154.4 168.5177.6

2009(E)20082007

Domestic Passenger

RPK(mil.km) Yield(Won)

-15.5%

International Passenger

2009(E)20082007

RPK(mil.km) Yield(Won)

+6.8%

21,74922,722

24,257

86.197.9

98.7

2009 Business Plan


Investor Relations

Revenue

(Unit : KRW billion)

Income Statement

RevenueOperating ProfitOperating Profit Ratio


4,262

-52.7

4,500

280

2008 2009(E)

Turn to black

280-52.7Operating

Profit

5.6%4,5004,262Revenue

2009(E) Changes2008

20.6%327271A/C Rent

-1.6%260264Depreciation

1.0%486482Payroll

-20.0%1,2591,574Fuel

2009(E) Changes2008

Turnaround to Black

-1.2%

6.2%

2.5%1,1691,140- Cargo

13.7%460405- Others

5.7%2,8712,717- Pax

5.6%4,5004,262Revenue

2009(E) Changes2008

Major Cost

2009 Business Plan



Investor Relations

477 484 516429

606 694 748 752 805932 996 927 986 825979

'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09(E)

7,572 8,333 8,450 7,3179,001

10,830 11,232 12,471 11,83914,644

16,10317,765 19,773 18,27818,887

'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09(E)

1,168

526

2,673

1,701

859

2,148

521

1,579

576

1,2701,716

-47 -527

2,800

822

'95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09(E)

Demand & Operating Profit

Operating Profit

International Travelers

[Unit : hundred million Won]

[Unit : thousand person]

Air Cargo [Unit : thousand Ton]

IMF 911 SARS Financial Crunch

[Source : Korea Tourism Organization, Korea International Trade Association, Asiana Airlines, Inc.]

-15.7%

-3.2%

-16.8%

-13.4%

5.3%

6.2%

Rate of operating profit

2009 Business Plan


Investor Relations

Liquidity Boost

Debt Repayment

Stake Sale Capital Reduction of Korea Express

- Asiana hold 9,624 thou. shares- Reduction ratio : 43.22% - KRW 711.3 billion Cash-in - Due on May 14, 2009

- Kumho Life Insurance (13.7 mil. shares/23.14%)

- Daewoo E & C (9.1 mil. shares/2.81%)

[ 2008 ]- KRW 4 trillion- 662.2% of debt ratio

[ 2009 ]- Less than KRW 3 trillion- About 400% of debt ratio

Financial Restructuring 2009 Business Plan


Investor Relations

2008 Financial Results

Balance Sheet

Income Statement

--333 -227 106 131 Net Income

1910.3%172 181 9 -27 Hedge

--238 -247 -10 94 F/X

80.1%101 225 125 129 Interest Exp.

--155 -212 -57 14Non-op. Profit

--224 -53 172127 Op. Profit

16.7%611 4,262 3,651 3,452Revenues

%Changes200820072006

-388.4%p662.2%273.8%277.6%Debt Ratio

-28.8%-318786 1,104 1,016 Shareholder’s Equity

83.6%1,8314,0202,1892,068Debt

72.1%2,1815,2043,0232,821Liabilities

45.1%1,8635,9904,1273,837Assets

%Changes200820072006


[Appendix] 2008 Performance


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