Civil Aviation SEA 2016 July 26-28, Bangkok

India and ASEANAviation BoomPresentation by Suresh Nair

General Manager-India, Sri Lanka, Nepal & Bangladesh-AirAsia Berhad

Passengers3.5 billion

Fleet Size27,000

Airline RevenueUS$742 bn

Average Return Fare

US$407

Freight Volume51.3 mn tonnes

Value of Trade Carried by Air

US$6.4 trillion

Fuel SpendUS$180 billion

Fuel Consumed290 billion

litres

Fuel Share of Operating Costs

27.4%

Global Aviation in Numbers in 2015

Source: CAPA, IATA

“Asia has become one of the biggest Aviation markets in the world. At last count a billion passengers travel to/from and within the region each year. More than 100 million new passengers are projected to enter the market annually for the foreseeable future”

- Boeing Airplane Company

LCC Market

• LCCs have generated an average annual growth rate of 24.5 percent• LCCs are flying nearly 20,000

weekly flights• Asia is Largest Travel market in the

world, Growing at 6.1% annually

Key Growth Markets

During the first 11 months of 2015 India was the fastest growing major aviation market in the world, followed by China.

The other two BRICs, Russia and Brazil, are facing recessionary economic conditions which is stifling traffic growth in Brazil in particular.

Traffic within Europe has been quite strong relative to its economic growth.

The US market is seeing slow growth low single digits as airlines maintain capacity discipline and increase fares.

Source: CAPA, IATA

India expected to emerge as 3rd largest aviation market before FY2025

FY2015 FY2020 FY2025 FY25v15Domestic (mn) 70 129 218 3.1x

International (mn) 51 82 120 2.4x

Inbound (mn) 8 12 15 2.0xOutbound (mn) 18 30 45 2.5xFleet 394 663 1084 2.8x

But subject to addressing challenges: Continued liberalisation of policy and regulation Ensuring that safety, security and their oversight remains paramount Availability of skilled resources – rapid growth will result in shortages Investment in airport and airspace capacity – India could face a capacity crisis without

construction of 50 new airports over the next decade.

India Annual Domestic Passenger Traffic FY05 to FY15

Source: CAPA, DGCA

Period DomesticPassengers

(source DGCA)

InternationalPassengers

(source AAI)

5 Year CAGR FY05-10 18.5% 12.1%

5 Year CAGR FY10-15 9.1% 8.1%

10 Year CAGR FY05-15 13.7% 10.1%

India Annual International Passenger Traffic FY05 to FY15

Over the last 10 years Domestic traffic is up 3.5x International traffic is up 2.6x

Source: CAPA, Airports Authority of India

Source: Domestic traffic is sourced from DGCA, however international traffic is sourced from Airports Authority of India as the DGCA has not released total international traffic data for FY2015.

FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 -

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

International passengersY-o-Y growth

FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY150

10000000

20000000

30000000

40000000

50000000

60000000

70000000

80000000

-20%

-10%

0%

10%

20%

30%

40%

50%

Domestic passengers Y-o-Y growth

Traffic Growth in India since FY2005

8

The number of domestic passengers added in the last 10 years is around 3x greater than the number of passengers added in the previous 50 years.

FY54-64 FY64-74 FY74-84 FY84-94 FY94-04 FY04-14 -

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

50,000,000 Annual domestic passengers added over a ten year period

Source: CAPA, DGCA

Growth in the last decade is unprecedented

Source: CAPA, OAG

India

China

Russian Federation

Japan

United States

Turkey

Thailand

South Korea

Canada

Malaysia

Italy

France

Germany

Spain and Canary Islands

United Kingdom

Netherlands

Switzerland

Hong Kong

Singapore

United Arab Emirates

0.00 5.00 10.00 15.00 20.00 25.00

0.04

0.09

0.46

0.67

0.71

1.00

1.09

1.34

1.62

1.80

1.95

2.15

2.76

3.40

3.74

4.35

7.02

11.01

13.31

21.30

India

Philippines

China

Mexico

Russian Federation

Indonesia

United Kingdom

Germany

Thailand

France

Italy

Turkey

Brazil

Spain and Canary Islands

Malaysia

Japan

Canada

United States

Australia

Norway

- 1.00 2.00 3.00 4.00 5.00 6.00

0.07

0.30

0.34

0.36

0.38

0.41

0.42

0.43

0.43

0.49

0.59

0.64

0.65

0.81

1.04

1.18

1.57

2.59

3.50

5.24

Ranking by International Seats per capita of 20 largest markets

Ranking by Domestic Seats per capita of 20 largest markets

But we have only just scratched the surface. India remains highly under-penetrated. The upside potential

is massive

India’s order book reflects strong fundamentals

Ratio of Aircraft on Order to In Service Fleet

Africa

North America

Latin America

Europe

Asia Pacific

Middle East

UAE

India

0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2

India’s growth prospects are reflected in its strong aircraft order book. There are 720 aircraft on order relative to 412 aircraft in service.

That ratio of around 1.75 is one of the highest in the world, even higher than the UAE.

And there could be a further 250-300 orders in the pipeline from AirAsia, Indigo, Spicejet and Vistara.

Indian Tourists to ASEAN1. In 2015 1.5 Million Tourists

Travelled to Thailand from India2. More than a Million to Singapore3. 700000 to Malaysia4. 262,000 to Indonesia5. And More Than 100 Thousand to

Other Destinations in ASEAN

• 300 Million middle class and upper middle class Indians have the capability to travel abroad

• 30 Million People of Indian Origin all over the World with a Substantial number in Malaysia, Singapore and Indonesia

• 23 Million Indians travel everyday on Indian Railways in India

Why the time is ripe for Aviation Boom in the India ASEAN Region

– New Indian Government Initiatives like “Make in India” and the New Aviation Policy and aggressive tourism promotion is expected to increase international air travel into India and out of India specially to ASEAN Region

– The Visa on Arrival facility being offered to more and more nationalities including nationals of Singapore, Vietnam, Cambodia etc..will boost inbound tourism into India

And above all…

ASEAN Open Skies• 18 Non Metro Airports which are also tourist centers in India

including Kochi , Ahmedabad , Trivandrum , and Bodhgaya have been declared as open sky from ASEAN countries

• These airports plus another 17 more have been upgraded by the Airport Authority of India to state-of-the-art status.

• Extension of this policy to cover all countries would greatly boost tourist potential of India and enhance opportunities for airlines to bring in business and leisure passengers

• Some Airlines from ASEAN has made good use of this policy which benefited airports including Trichy, Kochi, Ahmedabad , Visakhapatnam and Trivandrum

•

PatnaLucknow Guwahati

Gaya

Varanasi

Bhubneshwar

Khajuraho

Aurangabad

Goa

Jaipur

Port Blair

Kochi

Thiruvanthanpuram

Calicut

Amritsar

Vishakhapatnam

Ahmedabad

Trichy

Inbound Potential

• Incredible India ! TajMahal, Himalayas, Kerala, Rajasthan, Goa and the list goes on….

• The 25 million Indian diaspora- People of Indian origin living all over the world including Singapore, Malaysia, Hong Kong and Fiji form a huge market for traffic into India

• Buddhist circuit- India is the home to 3 of the 4 holiest Buddhist shrines including Bodhgaya where Lord Buddha got enlightenment