1 1
December, 2014
AEROMEXICO: MEXICO’S PREMIUM REVENUE CARRIER
Business Lounges Business Class
Leading airline in Mexico
Only Full Service Carrier / Two-class Service and Hub and Spoke Model
Enhanced strategic alliances with Delta Air Lines and Club Premier
Strongest position in slot constrained Mexico City airport
84 destinations in 22 countries, over 610 daily flights
Solid Financial and Risk Profile with Focus on Profitability
2
Growth Opportunities for Mexican Economy(1) Air Traffic Penetration(2)
0.6 0.6 0.8
1.4
2.4
Mexico China Brazil Europe US
Flights Per Capita for Middle & Upper Class Population (>$15K)
Millions
Sources: (1) Criterios generales de Política Económica 2014, SHCP (2) IMF World Economic Outlook (3) INEGI (4) CONAPO
26% 20%
35%
25%
17%
30%
14% 17%
7% 8%
0%
20%
40%
60%
80%
100%
2010 2025E
Percent
D/E D+ C C+ AB
Favorable Demographics
Growing Middle Class (3) Favorable Demographic Trends (4)
Middle Class
6 4 2 0 2 4 6
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
90-95
6 4 2 0 2 4 6
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
90-95
Women Men
49mm 70 mm
(2010 – Demographics in Million) (2050 – Demographics in Million)
0%
1%
2%
3%
4%
5%
6%
2015E 2016E 2017E 2018E 2019E
Without Reforms With Reforms Difference
STRENGTHENING MEXICAN ECONOMY WITH STRUCTURAL REFORMS IN PLACE
3
Expected GDP Growth(1)
PRODUCTIVITY & COST CONTROL
STRATEGIC
PARTNERSHIPS
OPERATIONAL EXCELLENCE
COMMERCIAL VALUE CREATION
PROFITABLE AND SUSTAINABLE GROWTH
Uniquely Positioned to Deliver Profitable and Sustainable Growth 4
FINANCIAL STRENGTH AND RISK PROFILE
OUR FLIGHT PLAN
On-Time Departure (within 15 minutes)
Source: DOT Department of Transportation for YTD July 2014 data, unless otherwise noted.
Airline Ranking
Mishandled Baggage Complaints
Completion Factor
Per 1,000 passengers
Rank US Operations YTD July-14
1 Virgin America 0.98
2 Frontier Airlines 1.80
3 Jetblue Airways 2.09
4 Hawaiian Airlines 2.20
5 Aeroméxico 2.23
6 Alaska Airlines 2.48
7 Delta Air Lines 2.65
8 American Airlines** 3.77
- US Airways 3.74
- American Airlines 3.89
9 United Airlines 3.81
10 Southwest Airlines** 4.47
- Southwest Airlines 4.43
- Airtran Airways 4.94
11 Skywest Airlines 5.00
12 Expressjet Airlines 6.05
13 American Eagle Airlines 8.81
Attributes highly valued by business passengers
OPERATIONAL EXCELLENCE
Mainline Airlines Regional Airlines 5
Color
Scheme
241 95 35
143 145 146
0 91 147
0 174 239
196 22 28
0 54 94
• Create sustainable defendable position in
Mexico City with improved connecting banks
• Developing Monterrey Hub
• Using partners to create low cost virtual
network: New Gol Alliance
• Widebody product, unrivaled service with
B787 and consolidating markets: increase
frequencies in London
• Increase our presence in Central & South
America: new routes to Managua, Panama
and Medellin
Improving Connectivity Securing Position in Mexico City Market Solidify Position with Shuttle Product
• Increase connecting banks from 4 to 12
• Slot portfolio gives Aeromexico strong
potential for growth through upgauging
• Replacing E-145 in Mexico City
• Launch of a shuttle product “Aeropuente” in
Mexico City, Monterrey and Guadalajara
routes, with dedicated boarding gates
• Three largest domestic business markets,
which account for 20% of the domestic
business market
• Hourly flights with consistent two-class
product and improved onboard amenities
6
% of Connecting Passengers of Total*
21%
26%
30%
2010 2012 YTD September2014
c
Strategy Focus on Increasing Connectivity
Connecting Banks in Mexico City Airport
c Banks
COMMERCIAL VALUE CREATION: STRENGTHENING OUR NETWORK
Arrivals Departures
*Total connecting passengers, including Aeromexico and partner airlines.
Today Average Seat Configuration
767’s
777’s
787’s
E-145*
E-170 / 175
737-700
737-800
E-190
50
81
99
124
160
188
243
273
737-800 +56% Seat
Count
Up-gauging
Further opportunities for
widebody upgauging
787’s
*We expect to cease operations of E-145 in Mexico City in the following months; These aircrafts will be relocated mainly to MTY/HMO.
84% of 2013
operations in Mexico
City were performed
with regional jets
(E145/170/190) and
737-700
COMMERCIAL VALUE CREATION: STRONG GROWTH POTENTIAL IN MEXICO CITY DESPITE SLOT CONSTRAINTS
7
Color
Scheme
241 95 35
143 145 146
0 91 147
0 174 239
196 22 28
0 54 94
During June 2014 (first month of operation of Monterrey Hub) connecting passengers increased almost 3 times.
Driving Worldwide Connectivity and New Destinations in Monterrey
Monterrey has a geographical advantage for traffic flows between
North, Central and Eastern Mexico
• Strengthening presence in existing destinations and
connecting Mexico regions of Bajio, Northwestern and
Southeast as well as United States.
• 4 connecting banks structure implemented in 4 June
2014
• 23 direct flight destinations, 9 new destinations during
2014:
Los Cabos Puerto Vallarta Aguascalientes San Luis Potosi Cancun
Tokyo Houston Torreon
May September November December
New York
COMMERCIAL VALUE CREATION: STRENGTHENING MONTERREY HUB
8
Ancillary revenues add low cost incremental margin.
USD
Strategy for the future Ancillary Revenues per Passenger
Increase distribution of existing products through IT developments:
• Upgrades
• Aeromexico Plus: choice seat in front and exit rows in economy
• Excess luggage pre-payment
• Concierge
• Ground transportation
• Discount pass
9
Revenue Management Strategy focused on RASK
• Competitive pricing with better segmentation to drive volume while protecting yields
• Capturing marginal VFR and leisure passengers with competitive pricing in advance purchase
• Building state of the art data sources and tools
5.9
7.3 7.7
2012 2013 YTD September 14
COMMERCIAL VALUE CREATION: BALANCED REVENUE MANAGEMENT STRATEGY
Passenger Traffic Monthly Var % YoY
Load Factor (%)
10
Strong 2014 performance, with passenger traffic growth of 13.1% as of October and load factor increase of over 350 bps YoY.
COMMERCIAL VALUE CREATION: POSITIVE MOMENTUM
0.6% 1.0% 0.8% -1.3%
1.0%
-4.3%
-7.1%
0.4% 0.0% 1.3%
3.2%
7.5%
10.6% 10.5%
13.5%
16.9% 18.8% 18.3%
21.8%
16.7% 18.7%
8.9% 6.8%
12.3%
6.2% 6.8%
3.3%
74.8 71.3
74.1 73.2
75.5
79.0
86.2
79.4
75.1 76.3
78.6
80.6
80.1
77.6
79.9 79.8 78.8
79.5
84.6
82.3
78.4 79.2
78.6
Jan Feb March April May June July Aug Sep Oct Nov Dec
2013
2014
36.4%
23.7%
23.1%
Viva Aerobus 11.8%
Magnicharter 3.1%
Aeromar 1.6%
26.2%
14.2%
13.3%
Viva Aerobus 6.0%
Others 40.2%
16.7%
15.9%
15.3%
7.2%
Alaska 4.7%
5.1%
2.7%
Others 32.4%
Domestic International Total
25.2%
26.2%
Jan-Oct 13 Jan-Oct 14
1.0 pp
35.4%
36.4%
Jan-Oct 13 Jan-Oct 14
1.0 pp
Domestic
14.6%
15.9%
Jan-Oct 13 Jan-Oct 14
1.3 pp
International
Market Share YTD Oct 14
Aeromexico
s Market Share Growth (Var % YoY)
Total
Source: DGAC Regular Passenger Information (excludes charter)
COMMERCIAL VALUE CREATION: POSITIVE MOMENTUM IN MARKET SHARE
11
RASK YTD September 14– Stage Length Adjusted
USD cents
Aeromexico’s full-service model and broad international network allow it to realize premiums over competitors.
COMMERCIAL VALUE CREATION: MERITING REVENUE PREMIUM OVER COMPETITORS
11.83 11.26
10.48 10.07 9.77 9.67
9.20 8.70
7.71 7.49 6.60 6.58
5.40
USD cents
Domestic Industry International Industry
(1) Stage length adjustment @ 1,000 miles. Ancillary businesses excluded for U.S. Carriers and Grupo Aeromexico. Source: Third Quarter 2014 Companies Financial Statements. Available information, YTDJune14, for Gol, Avianca, LATAM, Copa and Alaska Airlines Aeromexico, American Airlines, Delta and United include regional affiliates.
Low Cost Carriers Full Service Carriers
* * * * *
Aeromexico has proven its ability to cut costs and operate at a world-class level. Management focus on improving productivity has allowed Aeromexico to reach top industry performance.
Color
Scheme
241 95 35
143 145 146
0 91 147
0 174 239
196 22 28
0 54 94
CASK YTD September 14 (Stage Length Adjusted) (1)
COMMERCIAL VALUE CREATION: POSITIVE MOMENTUM IN COST PER ASK
10.95
9.59 9.57 9.39 9.35
8.01 7.77 7.52 7.52
6.63 6.38 6.36
5.52
Low Cost Carriers Full Service Carriers
(1) Stage length adjustment @ 1,000 miles. Ancillary businesses excluded for U.S. Carriers and Grupo Aeromexico. Source: Third Quarter 2014 Companies Financial Statements. Available information, YTDJune14, for Gol, Avianca, LATAM, Copa and Alaska Airlines Aeromexico, American Airlines, Delta and United include regional affiliates.
International Industry Domestic Industry
USD Cents
13
* * * * *
• New contracts with pilots, flight attendants and ground staff
• Restructuring and Integration of AM/AM Connect
• Maintenance Process Reengineering
• Increase fleet utilization
• ERP and Shared Services Centre
• Improving Distribution Costs
• Co-location in Airports
• Fleet Renewal
• Balance between Owned and Leased Aircrafts
• Unique Fleet Plan Flexibility
14
Strong pipeline of cost reduction initiatives.
Operational , Administrative & Sales Efficiencies
Fleet Strategy Labor Costs
PRODUCTIVITY AND COST CONTROL INITIATIVES
Owned: (21%)
USD 649mm
Leased: (79%)
USD $2.4bn Source: Aeromexico, Avitas Bluebook 1st Half 2014. Aeromexico estimates as of 2013. (1) B767-2 and B787 data for: Mex-Mad. B737-7 and B737-8 / ERJ145,
ERJ190 and ERJ170 data for Mex-Mty. (2) Fleet proportion of leased vs. owned depends on fleet value. (3) On July 2013, Aeromexico announced the pricing of an offering of USD$117.4 million of 2.537% secured notes guaranteed by the Export-Import Bank of the United States.
EJ170 & E190
ERJ145 B737-8 B737-7 B787 B767
100
84
77
100
86
100
81
E145 E170 E190 B737-7 B737-8 B767 B787
(16%) (19%)
(9%)
(14%)
Estimated CASK Reduction (1)
Today 2018
E-145
E-170/175/190
737 – 700’s/800’s
NG
767’s
787’s
777’s
E-170/190
737 – 800’s
NG/MAX
787’s
Fleet Plan
Leased vs. Owned
Fleet Plan renewal provides CASK efficiencies, maintaining flexibility and reducing ownership cost.
Leased Owned
Annual Cost of Financing
4% to 6% (2)
10%-12%
USD $122M– USD $183M cost savings due to ownership
Fleet Value: USD 3.05 billion(3)
Fleet Value
15
PRODUCTIVITY AND COST CONTROL INITIATIVES: FLEET STRATEGY
16
Fleet Type 4Q13 3Q14
ERJ145 30 26
E170/175 7 9
E190 20 27
Aeromexico Connect 57 62
B737-700 28 24
B737-800 19 23
B777 4 4
B787 3 5
B767 6 5
Aeromexico 60 61
Total Grupo Aeroméxico 117 123
PRODUCTIVITY AND COST CONTROL INITIATIVES: CURRENT FLEET
• Over 50% of expected fuel consumption for the next 12 months is hedged
• Fuel surcharges complement Grupo Aeromexico’s hedging strategy
Reduced Exposure
57% Revenues in US dollars 66% Costs in US dollars
Reduced exposure
Fuel Hedging Strategy
Total
17
Economic Cycle
Staggered Leases
Fleet 2015 2016 2017 2018 Total
Narrow Body Total 17 18 17 8 60
Wide Body Total 4 1 0 3 8
GAM Total 21 19 17 11 68
Currency
Aircrafts
Year
Fleet plan flexibility
Approximately:
SOLID FINANCIAL AND RISK PROFILE: COMPREHENSIVE RISK MANAGEMENT
0
50
100
150
200
250
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
8 25 34 34
239 42
26 21 18
90
2014 2015 2016 2017 2018+
Debt Maturity Profile (1)
USD millions
9.4% 9.5% 10.1% 9.6% 61.4%
Benchmark Financial Net Debt / Adjusted EBITDAR (2)
Adjusted EBITDAR LTM as of September 2014: USD 558 M
SOLID FINANCIAL DEBT PROFILE
18 (1) Information as of June 2014 (2) Last 12 months EBITDAR as of June2014. Source: Second quarter 2014 Financial Statements * Considers Adjusted EBITDAR
Low Cost Carriers Full Service Carriers
8.1x 7.1x
5.3x 4.8x 4.6x 4.4x
3.4x 2.9x
1.9x 1.1x
Interjet Volaris LATAM GOL Avianca AeroMexico United American Delta Copa
*
*
• Aeromexico has a 51% investment in PLM
• Value of PLM in Dec 2012 US$518 Million
• +3.6 million frequent flyer members
• Gross billings of USD $144M in 2013
• Dominant Frequent Flyer Program (“FFP”) in Mexican market
• Solid commercial alliances with financial institutions (i.e. Banamex, AMEX) and retailers (i.e. Soriana)
• Low capital requirements and stable cash flow generation
• Earn kilometers with 90+ commercial partners
(1) The transaction's implied price was $31.00pesos (equal to the IPO price), which is a 59.0% premium to the current trading price of $19.50 as of February 21, 2014. (2) Delta Master Trust is an entity which holds pension assets under various employee pension plans sponsored by Delta Airlines. (3) These derivative agreements were conducted on April 29, 2014 and May 7, 2014.
• In 2012, Delta invested USD $65mm in Aeromexico, equivalent to 4.17% of Grupo Aeromexico’s capital stock. (1)
• Delta Master Trust(2), increased its exposure to Aeromexico to approximately 4.53% through derivative agreements(3)
• Network-wide code sharing • 204 share codes 725 flights
• Join efforts in sales, marketing and customer experience
• JV-MRO facility in Querétaro
• Transborder upgrades
• Co-location Efforts in airports
Delta Alliance Club Premier Loyalty Program
Strategic alliances have contributed to Aeromexico’s increased connectivity and premium product. Only Mexican carrier in an international alliance.
19
STRONG BRAND WITH STRATEGIC PARTNERSHIPS
DISCLAIMER
This presentation is neither an offer for sale nor a request to buy any securities. Such offer or request may only be made through an offering memorandum containing the description of
the terms and conditions of such offer and shall include detailed information of the company and its management, as well as the financial statements of Grupo Aeromexico, S.A. de C.V.
(“Grupo Aeromexico”), in terms of the Securities Market Law (Ley del Mercado de Valores) (“LMV”) and the General provisions applicable to securities issuers and other securities market
participants (Disposiciones de carácter general aplicables a las emisoras de valores y a otros participantes del mercado de valores) (the “Provisions”).
The information contained herein is confidential and shall not be reproduced in whole or in part or shared with third parties without the previous consent of Grupo Aeromexico.
This presentation contains information obtained from diverse sources and, despite it contains truthful information, no representation is hereby made by Grupo Aeromexico as to the
accuracy, integrity and sufficiency of such information. Additionally, Grupo Aeromexico makes no representation in respect of the sufficiency or truthfulness of the assumptions,
estimations, projections, hypothetical behavior analysis or in respect of other financial information included in the results of the financial models contained or used herein.
The results contained herein may substantially vary. Nothing herein shall be understood or construed as a representation or warranty as to future performance of the securities referred to
herein.
The information included in this presentation has not been audited and it does not provide information on the company’s future performance. Aeromexico’s future performance depends
on many factors and it cannot be inferred that any period’s performance or its comparison year-over-year will be an indicator of a similar performance in the future.
Thank You Investor Relations Contact Information [email protected] Tel (+52) 55 9132 4257 Luz Montemayor [email protected] Daniel Frias [email protected]
YTD September % of
2014 Revenues
Passenger 35,255 35,509 27,690 88.4
Cargo 2,123 2,052 1,785 5.7
Others 1,850 2,289 1,850 5.9
Total Revenues 39,228 39,850 31,325 100.0
Labor 7,941 8,434 6,586 21.0
Fuel 13,063 12,906 10,589 33.8
Aircraft Communication & Traffic Services 4,531 4,733 3,876 12.4
Selling & Administrative Expenses 2,289 2,320 1,857 5.9
Maintenance 1,900 1,970 1,580 5.0
Travel Agent Commissions 1,385 1,158 933 3.0
Passenger Services 750 755 656 2.1
Rents 3,690 3,615 3,263 10.4
Depreciation 1,417 1,554 1,230 3.9
Total Expenses 36,966 37,446 30,570 97.6
EBIT 2,262 2,403 755 2.4
EBIT Margin 5.8% 6.0% 2.4%
EBITDAR 7,369 7,572 5,248 16.8
EBITDAR Margin 18.8% 19.0% 16.8%
Comprehensive Financial Result -1,395 -1,416 792
Other income, net 684 243 -37 -0.1
Other expenses -711 -1,174 -74 -0.2
Effects of associated companies 131 -12 162 0.5
Income Before tax 1,683 1,218 88 0.3
Tax 360 138 66 0.2
Net Income 1,323 1,080 22 0.1
Net Margin 3.4% 2.7% 0.1%
MXN millions 2012 2013
Audited information for 2012 and 2013
AEROMEXICO: CONSOLIDATED STATEMENTS OF OPERATIONS
As of September 30
2014
Cash and Cash Equivalents 1,856 3,057 4,003
Prepayments and Deposits 935 1,053 1,201
Other Currents Assets 4,760 4,512 4,836
Total Current Assets 7,551 8,621 10,040
Property and Equipment 11,912 14,241 14,657
Non-current Prepayment and Deposits 5,568 6,458 7,903
Other Non-Current Assets 2,702 2,976 3,172
Total Assets 27,733 32,296 35,772
Air Traffic Liability 2,845 2,442 2,569
Other Current Liabilities 7,838 9,545 11,653
Total Current Liabilities 10,683 11,987 14,222
Loans and borrowings 5,283 7,863 8,951
Other Non-Current Liabilities 1,646 1,779 4,260
Total Liabilities 20,457 24,071 27,433
Total Equity 7,276 8,225 8,339
2012 2013MXN millions
Audited information for 2012 and 2013
AEROMEXICO: BALANCE SHEET
AEROMEXICO: ADJ. EBITDAR RECONCILIATION
YTD September
2014
Net Income 1,323 1,080 22
Profit attributable to non-controlling interest 0 -0.2 0
Income tax expenses 360 138 66
Depreciation and Amortization 1,417 1,554 1,230
Effects from associated companies 131 -12 162
Other income (expense), net -711 -1,174 -829
EBITDA 3,679 3,957 1,985
Aircraft Leasing 3,690 3,615 3,263
EBITDAR 7,369 7,573 5,248
Dividends from equity accounted investees - 688 141
Adjusted EBITDAR* 7,369 8,261 5,389
MXN millions 2012 2013
*The adjusted EBITDAR metric is based on Grupo Aeromexico's EBITDAR including dividends and/or capital reimbursement generated by the subsidiaries and recognized under the equity method for the referenced period.
Audited information for 2012 and 2013
AEROMEXICO: OPERATING STATISTICS
YTD September
2014
Passengers (millions) 14.8 15.5 12.8
Total ASKs (millions) 30,724 32,496 26,897
Total RPKs (millions) 22,930 24,474 21,472
Load Factor (%) 76.6 77.2 80.2
RASK 1.277 1.226 1.165
PRASK 1.16 1.11 1.05
Yield (mexican pesos) 1.56 1.47 1.34
CASK 1.20 1.15 1.14
CASK ex fuel 0.78 0.76 0.74
Fleet 116 117 123
2012 2013
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