May 2014

Paving the Way for Future Growth in Global Air Travel

Coskun KILIC, Chief Financial Officer, Turkish Airlines

May 2014

2014 World Aviation Market Size: 745 Billion $

Source: IATA (2013), Boeing CMO (2013)

Global Transfer Market

265 Bn $ (2014)

340 Bn $ (2019)

THY Potential Transfer Market

117 Bn $ (2014)

150 Bn $ (2019)

ME

FE 124 19

11

93

130

8

AF

NA

EU

10.0%

50.1%

3.8%

10.2%

22.4% 3.6%

60% of Global International Pax is Carried by European and Middle Eastern Airlines

May 2014

Source: IATA (2013), ICAO Annual 2012

Gulf Carriers

May 2014

Turkish Airlines European Carriers ALL - 2014 ALL - 2019

Airline Networks Aiming the Same Transfer Market

Gulf Carriers

Source: OAG

May 2014

What Differentiates is «Who has a real base?» (p2p traffic)

UK

GDP (bn $) 2,536

Population (mn) 63

PAX/Population 3.2

LHR Tranfer Ratio 25%

Source: DHMI, MIDT, UN Population Division

FRANCE

GDP (bn $) 2,737

Population (mn) 64

PAX/Population 2.1

CDG Tranfer Ratio 31%

GERMANY

GDP (bn $) 3,636

Population (mn) 83

PAX/Population 2.2

FRA Tranfer Ratio 46%

TURKEY

GDP (bn $) 827

Population (mn) 75

PAX/Population 1.3

IST Tranfer Ratio 47%

QATAR

GDP (bn $) 17

Population (mn) 2

PAX/Population 8.4

Doha Tranfer Ratio 69%

UAE

GDP (bn $) 396

Population (mn) 9

PAX/Population 6.4

LHR Tranfer Ratio 53%

Abu D. Transfer R. 67%

PAX/Population Ratio

N. America 2.3

Europe 1.1

Middle East 0.6

L. America 0.4

Asia 0.3

Africa 0.1

World 0.4

May 2014

May 2014

New Hubs Carriers Will Emerge in Asia and Carry 34% of all World Traffic.

Increase in Middle Income Class

Emerging Hubs

Source : OECD

2009 2030

(mn) % (mn) %

N. America 338 18% 322 7%

Europe 664 36% 680 14%

Central/South America 181 10% 313 6%

Asia-Pacific 525 28% 3,228 66%

Sub-Saharan Africa 32 2% 107 2%

MENA 105 6% 234 5%

World 1,845 100% 4,884 100%

CHINA

GDP (bn $) 9.181

Population (mn) 1.386

PAX/Population 0.2

INDIA

GDP (bn $) 1.893

Population (mn) 1.252

PAX/Population 0.1

2009

2030

May 2014

The Number of Main Aviation Centers for Long-haul Traffic will More Than Double

(*): Cities with more than 10,000 daily round trip long-haul passengers

2013 (42 cities)

2031 (92 cities)

92 Aviation

Mega-cities (2031)

Turkish Airlines Flies to 207 International Destinations in 105 Countries: #1 in the World

May 2014

Today Planned

Europe & CIS 96 +11

Middle East 33 +2

Africa 38 +12

Far East 31 +2

America 9 +7

TOTAL 207 +34

2002 THY Network

Planned Destinations (5 years)

2003 - 2014 Destinations

21,7

15,8

8,2

8,48

6.5

5,3

3

7

11

15

19

23

Short-Medium Haul Long Haul

May 2014

(*): Base Year for Exchange Rate: 2012

Base Year for C.P.I.: 1991

Average Stage Lenght: Short-Medium Haul: 1100 km, Long Haul: 6500 km

Passenger Yields are Falling as the Industry is Reshaping

Airline Passenger Yields*

Short/Medium Haul (NB)

Network Carriers capacity

expansion

1 LCC capacity expansion

3 Long Haul (WB) Network

Carriers capacity expansion

2

USD/RPK

Source: AEA S.T.A.R / 2013

May 2014

RASK vs Stage Lenght (2013)

km

Usc

THY

EU Average

LCC Average ME Average

US Average

Asia Average

4

5

6

7

8

9

10

11

12

13

0 1.000 2.000 3.000 4.000 5.000 6.000

May 2014

CASK vs Stage Lenght (2013)

km

Usc

THY

LCC Average

ME Average

EU Average

US Average

Asia Average

4

5

6

7

8

9

10

11

12

13

0 1.000 2.000 3.000 4.000 5.000 6.000

May 2014

Turkish Airlines Targets for the Next 5 Years

18% Average EBITDAR Margin with 10% Average Annual Revenue Growth

22% 19%

17% 16%

13% 12%

LCC Average THY MEAverage Asia Average US Average EU Average

2013 EBITDAR Margin Comparison

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

7,0%

8,0%

9,0%

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

May 2014

Center of Aviation is Shifting East and Changing Balances

Global Market Share Trends (in ASK)

4.8% 4.6% 3.6% 3.4% 2.9% 2.6% 2.5% 2.4% 2.3% 2.2% 1.8% 1.8% 1.7% 1.7% 1.6%

Source: 2002 ICAO, 2003- 2013 IATA, sorted by the highest 12M ASK values

May 2014

Turkish Airlines Will Be Financing 255 Aircraft in the Next 8 Years

7 14 11

3

3

18 34

6

47 40

62

10

10

32

45

9

47

40

62

10

2014 2015 2016 2017 2018 2019 2020 2021

Wide Body Narrow Body

47 55 68 79 80 80 79 76 76

193 201 207

237 232 262

294 341 349

249 263 282

323 319 349

380

424 432

Today 2014 2015 2016 2017 2018 2019 2020 2021

Wide Body Narrow Body Cargo

Year End Fleet Aircraft Orders

Tax Leveraged Product

Bank Loan

Jolco

Operating Lease

Owned

Sukuk

Corporate Bond

EETC

May 2014

Further Diversification is Key to Future Aircraft Financing

TODAY FUTURE

USD 44%

EUR 38%

JPY 18%

Tax Leveraged Product

23%

Bank Loan 20%

Jolco 18%

Operating Lease 23%

Owned 16%

May 2014

Thank You COSKUN KILIC , CFO

TURKISH AIRLINES

Tel: +90 (212) 463-6363 x-13630

E-Mail: ir@thy.com