Investor Presentation 05 January 2011

8/2/2019 Investor Presentation 05 January 2011

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Discussion Document

*

1* Updated 28 February 2011


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Agenda

n an acro- conom c an v a on n us ry u oo

Competitive Landscape

Kingfisher Airlines: Overview

4


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India is one of the fastest growing aviation markets in theworld

Indian Aviation traffic has grown at a CAGR of ~ 20% over the last 6 years (2.3 times GDP growth)

Various leading agencies have forecasted growth to continue over the next 15-20 years

CAPA Forecast

Airbus & Boeing predict that India will be the highest growth market in the world over the next 20

years, ahead of China

Centre for Asia Pacific Aviation CAPA ex ects domestic traffic to ex and at 14.8% CAGR throu h

5Source: DGCA, Research & analyst reports; Airbus Website, Boeing Website;CAPA Aviation Outlook Report

2020

* Based on average GDP growth of 8% & 2.0x multiplier and based on average GDP growth of 8% & 1.6x multiplier


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Current low air travel penetration & emerging marketconditions provide great potential for growth

Despite the growth, penetration in India is

amongst lowest in the world

Coupled with market conditions, this is

expected to ensure continued growth

Increasin GDP & er ca ita income

3.2

3

3.5

Indias GDP growth rate expected to be at 7-9%

Rapid emergence of large middle class

2.3

1

1.5

2

2.5 2025, with a 4 fold increase in spending power

Significant rise in working population & spend.

0.20.07

0

0.5

US UK Brazil China India

and working in the next 15 years

Increased urbanization

Seats deployed per capita

Favorable government Stance

Visible impact of aviation growth on GDP has led

6

Source: National Council of Agriculture & Economic Research, RBI, UN projections,Public sources, OAG 2008


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Massive infrastructure investment by the government tosupport the growth

20102004 2015(92 Airports )(45 Airports) (125+ airports)

\\

\\

The Vision 2020 statement announced by the Ministry of Civil Aviation, Government of India, envisages creating

infrastructure to handle 280 million passengers by 2020

New domestic airports added New domestic airports proposed

over the next five years

Over the next five years, investments in aviation infrastructure are expected to be over USD 9 billion

It is expected that this will further support the spread of traffic outside the top 6 cities, which today account for ~90% of

7Source: AAI

revenue

Delhi & Mumbai, which accounted for 85% of traffic few years back have already dropped to 60%


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Accelerating demand coupled with modest supply is expectedto keep the domestic aviation industry on a profitable trajectory

The traffic growth through FY2014/15 is forecasted at 16.7% per annum

The capacity growth through FY2014/15 is forecasted at 13.5% per annum

8Source: CAPA Aviation Outlook Report

No new airline licenses have been granted for several years at a national level


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Agenda




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The Indian competitive landscape has evolved withseveral new entrants over the last five years

Airline OwnershipAverage

age of fleet(Years)

Years OfOperation

AircraftDomesticRoutesWide

BodyNarrowBody

TurboProps

group(Airbus A320) (ATR)

NACIL > 7 67 32115

(Airbus A320 &

Boeing 737)

13*(ATR,CRJ,DO)

186

Jet Airways 5 17 15 53(Boeing 737)

14(ATR)

171

18 6.(Boeing 737) (CRJ)

Interglobe Aviation 2 4 28(Airbus A 320)

108

Sun Group 2.5 5 24(Boeing 737)

88

10

10

.(Airbus A 320)

Source: Airline website, DGCA and PAX-IS* Includes ATR and CRJ aircrafts registered under Airline Allied Services Limited


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KFA is the only major network carrier to have gained marketshare over these five years

Market Share Evolution

4%1%

12.4%

4%

Paramount

AI

27%

5.3%

14.3%

Indigo

Go AirS211%

7.4%

17.7%

Alliance Air

Air India

36%18.1%

Jetlite

Jet Airways

5%

23%12%Air Deccan

Kingfisher

KFA*

11Source: DGCA

-

25.2 Mn 45.3 MnMarket Size

* KFA share in FY10 includes Air Deccan post-merger


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Agenda




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KFA entered the Aviation Industry with a world class product& became the market leader in three years of operation

Deccan first

KFA airlines undertakes

integration into Deccan toKFA declares operating

Domestic recession

flight

Sep 2007

become Indias largest

domestic carrier

Jun 2010 Oct 2010

Half of FY11accelerates post 26/11

Sep 2008May 2005

August 2003

UB group

Aug 2008

KFA named one of 6 five star KFA invited to KFA debt recast

Dec 2008 Sep 2010

KFA first flight

acquiredcontrolling stake

in Air Deccan

airlines in the world

KFA Starts international

operations

ecome amember of

oneworld

alliance

Reserve Bank of

India

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Kingfisher Airlines Investment Highlights

Strong Parentage -UB Group

1

Indias FavoriteMulti-Product

25

KFA

Widest DomesticNetwork

Global Alliance &Loyalty Program

34

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1. UB Group has successfully created a leadership positionacross consumer businesses in India

other consumer company in India

UB Group has leveraged its understanding of the Indian consumer to successfully build brands

2nd largest spirits company in the world

across multiple consumer segments from mass market to premium

United Spirits Ltd.

No. 1 SpiritsCompany in India

arges sp r s company n n a

Market share in excess of 55% in first line brands

Key brands - Dalmore, Jura, Whyte & Mackay, Black Dog, Antiquity,Signature, Royal Challenge, McDowell's No.1, Romanov

Undisputed leader of the Indian beer industryUnited Breweries

Key brands - Kingfisher Blue, Kingfisher Premium, Kingfisher Ultra,Kingfisher Draught & London Pilsner

Ltd.No. 1 Beer

Company in India

15

UB Group has been a game changer in the spirits industry, working at the forefront

with key stakeholders to shape policy for the industry


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2. Kingfisher Airlines Indias most awarded airline

794Kingfisher

KFA has won more than 40 awards for its superiorquality and service

One of the 6 airlines in the world to receive SKYTRAX

Indias Favorite Airline

761

773

786

Indigo

Spicejet

Jet Airwaysin 2010

Best Airline Seat - Economy Class by SKYTRAXWorld Airline Awards in 2010

736

745

752

Air India

Jet Lite

Go Air Rated the Best Airline in Central Asia at the SKYTRAXWorld Airline Awards in 2009

India's top rated Domestic Airline- Full Service forKin fisher Airlines in 2009*

700 720 740 760 780 800

India's top rated Domestic Airline- Low Cost forKingfisher Red in 2009*

Indias favourite airline as per the recent HT-MARS

Note: Score on 1000, higher scores indicate greater satisfaction

Source: Hindustan Times MARS Consumer Satisfaction Survey

consumer survey in 2009Awarded for the best frequent flyer program

Best Program of the Year and Best Elite Program

16

the FTA awards 2010

Source: * by Economic Travel Awards


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3. Widest domestic reach

*

59 destinations*

333 flights a day* With 59 domestic destinations

to offer KFA has the widest

reach in India

leisure destinations in the

country covering > 98% of the

addressable passenger base

14 unique destinations not

serviced b an other airline

17

KFA serves more destinations than any other carrier in India

*As of 31stDec 2010


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- -

4. Global alliance & loyalty Program

oneworld is the worlds most profitable global alliance, bringing together the leading airline carriers -American Airlines, British Airways, Cathay Pacific, Qantas, Finnair

oneworld is a quality focused alliance that has been voted the best airline alliance for eight years in a row

oneworld serves 800 airports in 150 countries through 9,000 daily flights & is the only alliance with member

Joining hands with oneworld would generate significant opportunities for KFA

Entry into the alliance would generate revenue enhancement opportunities of upto 5%

The entry will enable KFA to fulfill global expansion plans in a focused manner with calibrated investments

oneworld is the best global alliance for KFA as provides for flexible membership structure with lowparticipation costs & control of own commercial strategy no interference with bilateral agreements withcarriers outside alliance

18

KFA integration with oneworld already underway; British Airways codeshare already commenced Implementation expected to be completed by December 2011


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5. Multi-product offering across price points

Business class category for high end business &

premium consumers

Only Indian airline to offer valet service

the Indian consumer

Kingfisher is a network carrier whichKF

Only Indian airline to offer stand up bar & lounge for

international passengers

different consumer segments India does not present significant cost

(3%)

Full service economy with in-flight entertainment

Best Airline Seat - Economy Class Passenger Choice

award by SKYTRAX World Airline Awards for 2010

KF

Class

the rest of the world

All carriers are point to point

Secondary airports do not exist

Only airline to offer in-flight entertainment across the

fleet

(22%) Labour costs are low

KFA has the flexibility to shift capacity

between services based on demand as

An all-economy variant aimed at value consciousconsumers

KFRed(75%)

demonstrated by a 30% move to

Kingfisher Red during the recession

With the resurgence of premium demand

19

in 2010, some of this capacity will be

moved back


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KFA is led by a very experienced aviation team

a rman anag ng

Director

Dr. Vijay Mallya

CEO

Sanjay Aggarwal

Sanjay was the CEO of SpiceJet in

India rior to oinin KFA. He wasresponsible for the successful

turnaround of the airline. He has 21years of experience in aviation &

hospitality

Currently leading

Operations &

Engineering

Hitesh PatelEVP

Rajesh heads Guest

In-Flight &

Services

Rajesh VermaEVP

Mr. A Raghunathan is a

Finance

A RaghunathanCFO

Manoj has over 18 years

Commercial

Manoj ChackoEVP

operations and

engineering at KingfisherAirlines, Mr. Patel hasover 27 years of work

experience in the airlineindustry

Services, In Flight

Services & Securityfunctions at KingfisherAirlines & has 18 years of

experience in the airlineand hospitality industries

qualified Chartered

Accountant with over 30years of work experiencein finance and accounts

of experience in Indian and

international airlines andtravel services

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Agenda




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The Kingfisher Turnaround Story

Kingfisher Airlines has become the largest airline in the Indian skies by number of routes ina short span of seven years (starting with Air Deccan in 2003 and subsequent integration oferstwhile Kingfisher with Air Deccan)

The pace of growth was accompanied by challenges for the company given the integrationof Deccan airlines, an astronomic rise in fuel prices & the economic slowdown

Given these challenges, the company did not deem it appropriate to raise capital over thelast 1-2 years

The economic environment is now buoyant with strong demand in the aviation industry

ng s er operat ons ave sta ze t roug var ous turnaroun n t at ves;margins have improved from -32.9% in FY09 to +4.5% in H1 FY11

22

e t recast as een approve , an equ ty n us on s now un erway av ng een approveby our shareholders


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Kingfisher Market Performance Domestic

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Kingfisher has consistently increased load factors since Q2FY09 & maintained a steady effective market share

Domestic

68%70%

72%

76% 74%

81% 82%

75%73%

80%

70%

75%

80%

Load Factor

54%

61%

66%

67%

61%

62%

65%

70%68%

55%

60%

65%

50%

Q1FY09 Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY11 Q2FY11

KF LF% Industry LF% excluding KF

1.04

1.15

1.10

1.15

1.20

ec ve ar e s areMarket share/Capacity share

1.01

0.91

0.99 1.011.00 1.00 1.01 .

0.80

0.85

0.90

0.951.00

.

24Source: DGCANote: Market share/capacity share calculated on a RPKM/ASKM basis


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Despite a significant reduction in capacityDomestic

4,500

First mover to rationalizeindustry capacity post Deccan merger

Capacity

4,201

3,5983 534

4,000

Second round of capacity rationalization

to balance demand supply

Aircraft grounded due to technical

3,392

3,253

2,830 2,776

2,950

2,8613,000

3,500

AS

KM(mn)

2,3322,500

2,000


Aircraft utilization has been enhanced by > 10% to offset capacity loss due to grounded aircraft

25Source: DGCA

Current utilization of the Airbus A320 family stands at 12.2 hours & of the ATR family stands at 11.04

hours


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Kingfisher has shown a steady revenue growth over the lastfew years and has managed to outpace competition

Domestic

FY09 FY10 Q1 FY11 Q2 FY11

Pax RASK 3.27 3.61 4.26 4.13

YOY % 19% 10% 22% 25%

4.50

3.50

3.72

3.48

3.863.79

4.264.13

3.74

4.09 4.07

3.67 3.73

3.70

3.90

4.10

4.30

.

3.193.27 3.31

3.35

2.75

3.70.

3.23

2.70

2.90

3.10

3.30

3.50

2.50Q1FY09 Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY11 Q2FY11

KFA Jet+Jetlite

26Note: Jet+Jetlite data is provided in the investor reports on the websiteJet+Jetlite Pax Revenue = RRPK*RPK


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This growth has been driven by the preference for Kingfisherspremium product and its wide domestic network

*

Domestic

4.5

5.0

5.5

6.0Quarter-wise YoY growthpercentage

2.5

3.03.5

4.0 11%

The Kingfisher Full service product (~25% capacity) has seen strong YoY RASK growth with the economic recovery;First Class LF has increased by 9 percentage points in Q1 FY11 over Q1 FY10

Quarter-wise YoY growthpercentage

KFA Exclusive Routes: RASK

4.5

5.0

5.5

6.0

33%23%

34%

2.5

3.0

3.5

4.0

27Source: PaxIS October Schedule, KFA MIS

Kingfishers widest network has yielded results with exclusive routes (~10% capacity) growing at a fast pace


* KFA Full Service includes KFF and KFC


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leading to a significant improvement in operatingperformance

Domestic

4.004.68 4.975.00

6.00

Total RASK

.

-

1.00

2.00

3.00

.

INR

149 96200

400EBITDA

FY09 FY10 Q1FY11 Q2FY11

EBITDA CASK

(266)

(600)

(400)

(200)

-


s.

incrs

4.36

4.23

4.56

4.30

4.40

4.50

4.60

R(1,292)(1,400)

(1,200)

(1,000)

.

3.90

4.00

4.10

4.20


I

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As a result, Kingfisher has steadily bridged the financialperformance gap on domestic operations as compared to peers

All Figures in INRDomestic

1.61

1.60

1.70

ax on- ue

2.092.10

2.30

Pax RASK/Non-Fuel EBITDAR CASK**

1.29

1.25

1.29

1.51

1.33

1.30

1.40

.

1.64 1.621.70

1.511.60

1.84

1.641.50

1.70

.

1.21 1.22

1.10

.


KF Jet + Jetlite*

1.10

1.30


KF Jet + Jetlite*

KFA (Rs Cr) FY09 FY10 Q1 FY11 Q2 FY11

EBITDAR Margin -5% 13% 24% 24%

EBITDA Margin -25% -6% 11% 8%

Jet+Jetlite* (Rs Cr) FY09 FY10 Q1 FY11 Q2 FY11

EBITDAR Margin 2% 23% 21% 17%

EBITDA Margin -9% 5% 11% 6%

Pax RASK 3.27 3.61 4.26 4.13

Non-Fuel EBITDA CASK** 2.70 2.95 2.65 3.21

Non-Fuel EBITDAR CASK** 2.00 2.22 2.03 2.43

Pax RASK 3.89 3.38 3.73 3.23

Non-Fuel EBITDA CASK 3.10 2.62 2.47 2.42

Non-Fuel EBITDAR CASK 2.57 2.11 2.02 1.97

29**CASK adjusted to Lease impact of AOG for KFAEBITDAR & EBITDA margins calculated on Total Revenue for both carriers

KFA EBITDA margin for domestic operations in the current fiscal is higher than Jet+Jetlite (9.8% vs 8.5%)

*Source: Jet+Jetlite published financials


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The improvement has been driven by several revenue and costinitiatives, though slowed by unexpected aircraft grounding

*

Domestic

FY09 FY10 H1FY11

Pax and AncillaryRevenue

5,137 4,522 2,362

-4.0%+18% +1.4%

+4.6%

0%

5%

10%

15%

Other Operating

Income6 22 51

Other Income 58 181 86

Fuel Cost 2 476 1 505 746

-10.4%

+5%

-25%

-20%

-15%

-10%

-5% FY09 Rev Cost FY10 Rev Cost Fuel price H1FY11

Non-Fuel Cost 2,977 2,623 1,150

Rentals 1,040 864 358

EBITDA -1,292 -266 245

-26.4% +11%-30%

+1.0%+11.7%

+6.2% -3.2%15.0%

20.0%

Proforma (Without AOG)**

EBITDA Margins -24.8% -5.6% 9.8%

EBITDA withoutOther Op. andNon-Op. Income

-26.4% -10.4% +4.6%

-6.5%+5%

+14.2%

-

-5.0%

0.0%

5.0%

.

FY09 Rev Cost AOG FY10 Rev Cost AOG FuelPrice

H1FY11

Aircraft grounding issue has impacted theairline since April 2009

An average of ~10 AOGs in FY10 and ~8

AOGs in H1 FY11 have been impacted -26.4%

+11%

+4%

-

-25.0%

-20.0%

-15.0%

.

30

-ve impact on EBITDA +ve impact on EBITDA EBITDA Margin for the period

* Account groupings for FY 09 & FY 10 are adjusted basis H1 FY11** Assumed KFA ran full capacity with the same RASK and same variable CASK** Fixed CASK declined since apportioned over a higher ASKM base

- .


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Kingfisher Market Performance International

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Kingfisher has deployed international capacity onsome of the most lucrative International routes

1,257

1,400

Top 10 international markets fromIndia The total international traffic to and from India

has shown a CAGR of 14% between FY05-FY10 ( total growth of 68%)

845808

708 699 697800

1,000

1,200

(PPDE

W) The total international traffic to and from India for

Indian carriers has grown by 19% between H1FY10 and H1 FY11

608 585 573 559

200

400

600

Ma

rketSize Indian carriers currently account for ~40% of

flights on international routes from India

Other industry players have grown theinternational business and mar ins si nificantl -

0

9W revenue increased by 3 times and EBITDARmargin by 16 percentage points between FY07and FY10

Kingfisher has deployed capacity on 8 out ofthe10 largest international routes from India

Indicates Kingfisher presence

onewor as se e grow pa or n o

key international markets with enhancedconnectivity and traffic sources from worldslargest airlines British Airways, Qantas, CathayPacific, American Airlines, etc.

32Market Size based on PAX-IS plus data for Apr 09-Mar 10.PPDEW = Pax per day each waySource : DGCA, PAXIS, 9W investor presentation

f


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In a short span of time KF has managed to establish astrong market presence in these markets

International

CP Market share Capacity ShareFlight commencement

dateMetal

BOMHKG 42% 29% Sep 09 A330

ug

DELHKG 27% 21% Apr 10 A330

BLRDXB 19% 17% Jun 09 A320

BOMSIN 18% 15% Sep 09 A330

BOMLHR 15% 13% Jan 09 A330

DELDXB 12% 7% Apr 10 A320

DELLHR 12% 13% Mar 10 A330

DELKTM 11% 13% Apr 10 A320

DELBKK 11% 9% Apr 10 A320

BOMBKK 10% 11% Apr 10 A320

MAACMB 9% 11% Jan 09 A320

BOMDXB 5% 5% Apr 10 A320

KFA has already exceeded fair share of the local O&D markets in 8 out of 14 routes it operates vs. itscapacity share

33Market share and capacity share based PAX-IS plus data for Aug10 for local O&DBusiness Class passenger s flown data does not include First Class

Indicates Market share/Capacity share >1

Indicates Market share/Capacity share


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And ramped up capacity in a calibrated manner

International

Additional utilization of A320 capacity

Capacity Deployed

Addition of A330 capacity to LHR &A320 capacity to BKK,DXB & KTM

1,316

1,425

1,200

, ,DXB, CMB & DAC

AS

KM(mn)

610 648

772 792 780800

Launch of wide body A330o erations to London

322400

Addition of A330 capacity toWithdrawal of BLR-LHR-

0

Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY11 Q2FY11

HKG & SINBLR operations

34

Th i t f th KF d t h l d t


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The growing acceptance of the KF product has led toa significant growth in business

International

66% 69%71% 72%

76% 74%

66%

65%71% 69% 71% 72% 72%

74% 73%60%

70%

80%

Load Factor

29%

46%

0%

10%

20%30%

40%


KF LF% Indian Carriers LF% excluding KF

Total RASK

1.251.61

2.01 1.892.41 2.42

2.80 2.88 2.983.04 3.18 3.12 3.13 3.10

.

1.00

2.00

3.00

.

INR

Kingfisher Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY11 Q2FY11

0.75 ..

0.00


KFA Jet Airways

35KFA International Operations started in Sep089W income through sale & leaseback of aircraft was Rs 718 Cr in FY10 & Rs 240 Cr in H1 FY11

No of flights 56 184 640 831 1,192 1,288 1,268 2,229 2,472

Source: DGCA, Jet+Jetlite published financials


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and an improving operating performance

International

1.83

2.41 2.422.50

3.00

Total RASK

(51) (53)(100)

(50)

-


EBITDA1.09

-

0.50

1.00

1.50

.

INR

EBITDA CASK (400)(350)

(300)

(250)

(200)

Rsincrs

-


5.93

3.262.79 2.79

3.00

4.00

5.00

6.00

.

INR

(451)(430)

(500)

(450)

-

1.002.00


36


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The movement relative to peers has also been positive

All Figures in INR International

1.54

1.371.46 1.461.60

1.80

Pax RASK/Non-Fuel EBITDA CASK

1.651.57

1.66 1.681.80

2.00

Pax RASK/Non-Fuel EBITDAR CASK

1.21 1.20

0.60

0.80

1.00

1.20

.

1.01

1.71 1.73

0.60

0.80

1.001.20

1.40

1.60

0.24

.

-

0.20

0.40


KF Jet Airways

0.36

-

0.20

0.40


KF Jet Airways

KFA (Rs) FY09 FY10 Q1 FY11 Q2 FY11

EBITDAR Margin -301% -37% 4% 5%

Jet Airways (Rs. ) FY09 FY10 Q1 FY11 Q2 FY11

EBITDAR Margin 2% 18% 23% 26%

arg n - - - -

Pax RASK 1.09 1.51 1.96 1.97


arg n

Pax RASK 2.24 2.21 2.21 2.33


37Source: Estimated from Jet Airways published financialsEBITDA & EBITDAR Margins calculated onTotal Revenue for both carriers

- . . . . - . . . .


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Unexpected aircraft grounding & recovery plan

Of the 66 aircraft currently in our fleet, 34 are Airbus A320 model aircraftwhich use the V2500 engine supplied by IAE International Aero Engines AG(IAE). In February 2010, the United States Federal Aviation Administration(the FAA) issued a notice proposing adoption of a new Airworthiness

rec ve n respec o s ress corros on an crac ng o e eng ne rumexperienced in certain IAE V2500 engines. In November 2010, the FAA

issued such Airworthiness Directive, which prescribed mandatory actionscovering all V2500 engines in service. We have experienced these technicalroblems with our IAE V2500 en ines, which have reduced the eriod

between maintenance work for our A320 fleet to approximately 10,000 hours.

We have made arrangements with IAE to perform maintenance and supportwork on our existing fleet of engines, including undertaking those measuresidentified b the FAA and other su ort work desi ned to im rove on-winperformance. By 31 December 2010, we had re-introduced seven aircraft backinto service. We currently estimate, however, that we may not be able tointroduce the remaining seven grounded aircraft back into service and returnto operating at full capacity until 30 April 2011.

Fleet recovery schedule is as follows:

Sep' 10 Oct '10 Nov '10 Dec '10 Jan '11 Feb '11 Mar '11 Apr '11

Airbus 320 Family

38

Operating fleet in

period 20 23 25 26 28 30 32 34

Kingfisher has further planned multi-pronged initiatives for cost-


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g s e as u t e p a ed u t p o ged t at es o costcutting, revenue enhancement & capital re-structuring

Rationalizin Distribution Channels Debt Re-schedulementOne World Alliance

Key Revenue EnhancementInitiatives

Key Cost Reduction Initiatives Capital Recast

Reduction of S&D costs by reviewing distributionchannels, negotiating GDS contracts

Renegotiating Vendor Agreements

Additional airport & fuel discount*

*

RBI has approved debtrecast program of Kingfisher

Airlines

Key Highlights of program

Conversion of debt to equity

Membership with oneworldAlliance to drive inbound

domestic passenger growth

Compliance Audit

Focus on reduction in IT abuse/

E&M costs to reduce with new vendor

Renewal of operating leases at a discount toexisting rates

Head Count Rationalization

Lower interest rate

Moratorium on repayment

Equity Infusion

Received shareholders

Increase Baggage Revenue

Improve excess baggage feeenforcement

fraud & loss of revenue in theform of fare & ancillary fees

Replacement of high cost expat pilotsapprova o ra se a onacapital through equity basedsecurities

Promoter fund infusion

Co-branded Credit Cards

Re-negotiate King Club Amexco-brand card contract;introduce King Club ICICI co-brand card

Control Discretionary Spend

Reduce rentals, costs of transportation, localconveyance and communication

Kingfisher Express DTD Cargo Express service to

tap under penetrated air-cargodelivery service

, ,centres)

Operational Efficiency

Reduce fuel consumption for Airbus & ATRoperations

- -

39

- -checks, controlled redelivery)

* - Subject to capital raising

KFA D b R h b i l d ( / )


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KFA Debt Recast has been implemented (1/2)

Followin are the hi hli hts:

Consortium of lenders formed whereby security & cash flow is pooled.

Term loans of 9 year gate to gate maturity 2 year moratorium on principal repayment Ballooning repayment over a period of 7 years (See slide 44 for repayment schedule)

Rs. 750.10 Crs of term loans converted into Compulsorily Convertible Preference Shares (CCPS). . ,

time when the Company undertakes any GDR issue, or (b) March 31, 2011 or such later date asmay be mutually agreed, not later than 18 months from the date of allotment of CCPS at aconversion price to be determined as per SEBI Regulations.

s. . rs o erm oans conver e n o umu a ve e eema e re erence ares oRs.10 each at a coupon rate of 8% with a maturity of 12 years.

Reduction of interest rate on Term loan with effect from July 1, 2010 and Working Capital loan/PDP loan with effect from October 1, 2010 to 11.1% (approx) from current average of 14% perannum.

Rs. 297.4 Crs of Working Capital converted into Working Capital Term Loan (WCTL).

40

KFA D bt R t h b i l t d (2/2)


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KFA Debt Recast has been implemented (2/2)

Existing lenders have sanctioned additional Rupee Term Loan (RTL) and non fund based limitsamounting to Rs. 1,212 Crs out of which Rs. 768 Crs is RTL and Rs. 444 Crs is non fund based(Some of the above amounts have been disbursed). Additional RTL will be of 5 years tenor with a 2year moratorium on principal repayments (See slide 44 for repayment schedule)

Interest payment for the period from July 2010 to March 2011 funded by the banks and converted

into a Funded Interest Term Loan (FITL). The total FITL for the period amounts to Rs. 349.88 Crs.Out of this Rs.101.46 Crs has been converted into CCPS.

The following Promoter loans / capital have been converted:

Rs. 648 Crs of Promoter loans converted into CCPS of Rs. 10 each at a coupon rate of 6%,

to be converted into equity shares not later than 18 months from the date of allotment of thea a convers on pr ce o e e erm ne as per egu a ons.

Rs. 97 Crs of Redeemable Non Convertible Preference Shares converted into CCPS of Rs.10 each at a coupon rate of 6%, to be converted into equity shares not later than 18 monthsfrom the date of allotment of the CCPS at a conversion price to be determined as per SEBIRegulations.

41

C i f I t C t D it (ICD )


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Conversion of Inter Corporate Deposits (ICDs)

Rs. 709.31 Crs of ICDs converted into Optionally Convertible Debentures (OCDs) of Rs. 100 each ata coupon rate of 8%. The OCD holders have undertaken to convert the OCDs into equity sharessimultaneously with the raising of further capital by the Company by way of GDRs or any otherequity-based securities provided that the conversion does not trigger an open offer under SEBIs

a eover egu a ons.

42

KFA Debt : Post Debt Recast


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KFA Debt : Post Debt Recast

Particulars

(in Rs. Crs)

Debtbeforerecast

Conversion of debt Additional LoanDebt post

recastto CCPS To CRPS to OCDS to WCTL FITL RTL

WorkingCapital

590.5 (297.40) 293.10

Term Loan 4,263.49 (750.10) (553.10) 297.40 248.42 768.30 4,274.40

. .

Promoter loan 656.30 (648.00) 8.30

Intercor orate 1 137.32 709.32 428.00deposit (ICD)

sub total 6,814.0 (1,398.10) (553.10) (709.32) - 248.42 768.30 5,170.2

Other shortterm loan

75.20 75.20

Hire Purchase 86.15 86.15

Finance lease 675.73 675.73

43

Grand total 7,651.12 (1,398.10) (553.10) (709.32) - 248.42 768.30 6,007.30

Working Capital represents sanctioned fund based limits

Repayment Schedule for Term loan and Additional RTL


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Repayment Schedule for Term loan and Additional RTL

Particulars % of principal for termloan

% of principal foradditional RTL

FY 2012-13 5% 10%

FY 2013-14 7.50% 25%

FY 2014-15 7.50% 40%

FY 2015-16 15% 25%

FY 2016-17 15%

FY 2017-18 20%

-

FY 2019-20 10%

Total 100% 100%

44

FY 2012-13 repayment starts in October

Changes in Government policies expected to present furtherid


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upside...

Declared Goods status for ATF would result in lower uniform taxation on fuel

consumers.

FDI policy is expected to allow foreign airlines to take equity stake in domestic carriers in

the near future as the Ministry of Civil Aviation moved a proposal in 2009 to allow foreign

airlines to ac uire 25 ercent e uit of the 49 ercent FDI ca in domestic airlines.

45

Gl


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Glossary

9W Jet Airways GDP Gross Domestic Product

AAI Airports Authority of IndiaAirbus The Airbus Company

AOG Aircraft on Ground

ASKM Available Seat Kilometer

ATF Aircraft Turbine Fuel

GDR Global Depository ReceiptGDS Global Distribution System

IAE International Aero Engines

ICD Inter Corporate Deposit

INR Indian Rupee

ATV Average Ticket Value

Boeing The Boeing Company

CAGR Compounded Annual Growth Rate

CAPA Centre for Asia Pacific Aviation

ng s er r nes

KFC Kingfisher Class (Economy class)

KFF Kingfisher FirstKFR Kingfisher Red

LCC Low Cost Carrier

CCPS Compulsorily Convertible Preference Share

CRJ Canadair Regional Jet

CRPS Cumulative Redeemable Preference Shares

CRS Crores of Indian Rupees

DGCA Directorate General of Civil Aviation

OAG Official Airline Guide

OCD Optionally Convertible Debenture

Pax Passengers

Pax-IS Passenger Intelligence Services (by IATA)

PDP Pre - Deliver Pa ment

DTD Door - to- Door

E & M Engineering & Maintenance

EBITDA Earnings before Interest Tax

Depreciation & Amortization

EBITDAR Earnings before Interest Tax

RASK Revenue per Available Seat Kilometer

RBI Reserve Bank of India

RPKM/RPK Revenue Passenger Kilometer

RRPK Pax Revenue per Revenue Passenger Kilometer

RTL Rupee Term Loan,

EBIT Earnings before Interest & Tax

EBT Earnings before Tax

FAA Federal Aviation Administration (U.S.)

FITL Funded Interest Term Loan

FDI Forei n Direct Investment

SEBI Securities and Exchange Board of India

S & D Selling & Distribution expenses

S2 Jetlite

UB United Breweries Ltd.

UDF User Development Fee

46

FSC Full Service Carrier

FY Financial year ending March

USD US Dollars

WCTL Working Capital Term Loan


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Appendix (Supplement)

47

Appendix of miscellaneous information (1)


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I. Fleet Plan FY 11-16

11 12 13 14 15 16

M A M J J A S O N D J F M FY A M J J A S O N D J F M FY A M J J A S O N D J F M FY A M J J A S O N D J F M FY A M J J A S O N D J F M FY

A320 34 3 3 40 1 1 1 1 1 1 46 1 1 2 2 2 1 1 2 58 1 1 1 1 2 1 1 66 1 1 1 1 2 1 1 74

ATR 27 1 28 1 1 1 1 32 1 1 1 1 36 1 1 1 1 40 1 1 1 43

A330 5 1 1 7 1 1 1 10 1 1 1 1 14 1 1 1 1 18 1 1 20

Total 66 3 1 4 1 75 1 1 1 2 2 2 2 1 1 88 1 1 1 1 2 2 3 3 1 2 1 2 108 1 1 1 2 2 1 1 1 3 2 1 124 2 1 2 1 1 2 2 1 1 137

FromMarket

Source: Company

48



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II. Plan Cost Initiatives

Besides higherInternationalASKMgrowth/biggergauge/longerstagelength;320fleetreconfiguration;vendor

discountspostrecapitalization;othersignificantdriversofCASKcontrolinFY12overFY11,andFY13overFY12

are:

1) IntroductionofFoodforPurchaseonourlowcostKingfisherRed domesticnetwork,effectiveJan11.

Current yt eCompanyo erscomp imentary oo ona omestic ig ts.KFRcompriseso 65%to75%

ofourdomesticcapacity.

2) Wealso

have

aplanned

phase

out

of

expat

pilots

expected

evenly

in

FY12

and

FY13.

3) SevenofourA320leasesareupforrenewalinFY12,andanotherseveninFY13.TheFY13renewalsare

somewhatfrontloadedthuswithgreaterfullyearbenefits.Theserenewalsareplannedat20%below

thecurrentcontractedrentals.

4) Finally,weseeopportunities inchannelshifttoamorecosteffectiveS&Dstructure.For1HFY11,86%of

oursaleswerethroughtravelagencies,and14%weredirect(KFAticketoffices,callcenters,or

flykingfisher.com).

5) Ourdomesticfleetreconfigurationisestimatedtohaveanimpactofloweringourdomesticunitcostsby

2%to2.5%onayearlyrunrate.

PostFY13,thePlanexfuelCASKlevelsoffdespitecontinuingstrongerInternationalgrowth.InFY13,YoY

lannedInternationalASKMS rowthis46%;andafurther36%and30% rowthres ectivel inFY14,andFY15.

Whereas,domesticASKMSgrowthFY1315isplannedat22%peryear.

Allourfutureaircraftinductionsareexpectedtobeoperatingleases,andallbigmaintenanceisoutsourced.

Moreoframpsidegroundhandlingislikelytobeoutsourcedtoairportorgovernmentmandatedoperatorsper

thegovernmentsecuritydirectives.

49

Source: Company



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III. International vs. domestic operations

Historical break up of fleet, ASKMs and RPKMs for international and domestic operations and domestic vs. internationalyields

Domestic operations FY09 FY10 H1FY11

ASKMs (Million) 14,900 11,810 5,194

RPKMs (Million) 9,582 8,586 4,236

Passengers traveled 11,142,226 10,526,121 5,226,319

Passenger revenues(Million) 48,703 42,584 21,825

ATV 4,371 4,046 4,176

Total no. of flights 154,912 133,352 59,296A320 80,000 63,819 26,173

ATR 74,912 69,533 33,123

International operations FY09 FY10 H1FY11

ASKMs (Million) 932 2,991 2,741

RPKMs (Million) 550 2,039 2,065

Passengers traveled 87,949 537,311 595,522

Passenger revenues(Million) 1,018 4,522 5,375

ATV 1,1570 8,416 9,026

Total no. of flights 880 4,579 4,701

A320 252 2,082 2,610

ATR 638 362

A330 528 1,859 1,729

Total Operations FY09 FY10 H1FY11

Total year end fleet

A320 * 39 34 34

ATR * 33 28 27

A330 5 5 5

Total 77 67 66

50

ource: ompany


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V. Unit Fuel Rate and Other Income

Rate Rs./liter FY10 1QFY11 2QFY11

UnitFuelRate

ota . . .

Domestic 35.08 39.77 39.01

International 26.12 28.91 28.37

Rs in Lakhs. Q1 Q2 H1

Particulars FY11 FY11 FY11

OtherIncome

Cargo 12,809 10,045 22,854Excess Baggage, Rebooking Charges /Cancellation 3,628 3,843 7,471

Operating Income(exc Pax) 16,437 13,888 30,325

Other Income-Non operating 4,418 13,294 17,711

Source: Company

52



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VI. King Club Membership Trend

Trendin

number

of

King

Club

members.

Proportion

of

passengers from

King

Club

members.

EndofFYmembercountFY 09: 9,89,783

FY 10: 12,53,802

FY 11 (1st

half): 14,60,203

Pax contribution 1H-FY11 domestic and international combined

KFF 70%

KFC 30%

KFR 25%

53

Source: Company



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ppe d o sce a eous o at o ( )

VII. Domestic KFF, KFC and KFR segmentation

Differences in cost/ASKM between Kingfisher and Kingfisher Red

Domestic1HFY11*

%higher

KFCAirbus/KFRAirbusCASK 12.5%

Difference in average pricing between Kingfisher red, Kingfisher class and Kingfisher first

*InternalCompanyAnalysis

omes c

KFF320ATV 17,662

KFC320ATV 5,235

KFR320ATV 4,134

KFRATRATV 3,509

*InternalCompanyAnalysis

54

Source: Company



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pp ( )

VIII. Seniormanagementandpilotdatafor12monthsending30thSep10.TherehavebeennodeparturesatSVPand

Pilots*

EVPlevels

for

the

period.

There

have

been

more

hiring

at

GM

and

VP

levels

than

exits,

and

many

of

these

new

hires

have

comefromFSCandLCCcompetition.Kingfishercontinuestobeastrongemployerbrandandtheinterestinseeking

employmentwiththeCompanystaysstrongasshownbythisdata.

es gne ur ng c ep

Headcount on Sep 10 697

Attrition 9%

* For Indian Pilots only- excludes expatriate pilots The totalno. of pilots employed by the company was 782 as on 30 th

Sep 10

Sr. Mgmt (GM & Above)

Headcount as on Sep 10 66

Joined between Oct 09 & Sep 10 13

Resigned between Oct 09 & Sep 10 10

Note: The 12 Senior Managers in the company have beenin place for an extended period

AdditionalNotesonPilotAvailability:

AsignificantnumberofAirForcepilotsinIndiajointhecommercialindustry.KFAhasrecruitedsome4045oftheminthe

past.However,

it

requires

significant

training

and

transition

before

they

can

take

command

on

the

commercial

aircraft.

It

takesabout1to1.5yearsforthemtobeATRcaptains,andlongerfor320s.Theyjoinascopilotsandneedatleast500hrs

beforetransitioningascaptains.

55

Source: Company

Investor Presentation 05 January 2011

Documents

Transcript of Investor Presentation 05 January 2011