A350 Appraiser Briefing

Airbus Africa Market Overview

Hadi Akoum
Vice President Sales Africa

Sun City, November 15th 2005

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Airbus today

Africa Market Situation

Africa Market Forecast

Consolidation & Fragmentation

Todays Challenge

The Airbus fly-by-wire product line

12 5,659 211 models aircraft sold to customers

4,023 delivered 271 2005 deliveries

Data to end September 2005

Order evolution
% share of gross unit orders: 1995 end December 2004 100

80

Boeing 82%

60

Airbus 57% Boeing 43%

40

20

Airbus 18%
1996 1997 1998 1999 2000 2001 2002 2003 2004

0 1995

Cumulative net orders in Africa

% cumulative share of unit orders

100

80

Boeing 70%

60

81 new aircraft

Airbus 56%

40

20

Airbus 30%

63 new aircraft

Boeing 44%

0 1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Delivery trend since 1999

53% 32%
hare delivery s Airbus

Annual Deliveries
1000 800 600 400 200 0

914 800

852 684 680 586

381 281

620

605
285 320

489

527

Boeing

294

311

325

303

305

320

360

Airbus

1999

2000

2001

2002

2003

2004

2005E

Africa Market Situation

2005

2004 traffic well above 2000

Passenger RPKs : 2004 vs. 2000 Europe Europe

+7% +7%
US - Canada US - Canada

same same

Middle East Intl Middle East Intl

+55% +55%
Africa Intl Africa Intl Asia/Pacific Intl Asia/Pacific Intl

Latin America Intl Latin America Intl

+5% +5%

+16% +16%

+8% +8%

Source: ATA (North America), AEA (Europe), AAPA Intl (Asia/Pacific), IATA Gabi (Latin America, Africa & Middle East)

Todays passenger traffic well above 2004 level

Passenger - RPKs - 1st half 2005 vs. 1st half 2004

Europe Europe

+6% +6%
North America North America

+6% +6%

Middle East Intl Middle East Intl

+15% +15%
Asia/Pacific Intl Asia/Pacific Intl Africa Intl Africa Intl +12% +12%

Latin America Intl Latin America Intl

+7% +7%

+13% +13%

Expected 2005 growth: ~7%

Source: ATA (North America), AEA (Europe), AAPA Intl (Asia/Pacific), IATA Gabi (Latin America, Africa & Middle East)

Africa total traffic doubled in last 10 years

24,000 20,000 16,000 12,000 8,000 4,000 0
Traffic in million of ASK*

1993-2004: +100%

Source: September ASK* traffic from OAG

19 72 19 74 19 76 19 78 19 80 19 82 19 84 19 86 19 88 19 90 19 92 19 94 19 96 19 98 20 00 20 02 20 04

Europe Asia/Pacific

Internal Africa North America

Middle East South America

*: Available Seat Kilometre

Africa, a growing share of international tourist arrivals

Middle East Africa 2.2% Asia / Pacific 12.7%

Middle East Africa 4.2%

4.5%
Asia / Pacific 17.2%

3.3%

Americas 20.3% Europe 61.5%

Americas 16.4%

Europe 57.7%

1990 World total 457 millions

2003 World total 691 millions

Source: World Tourism Organization

Chinas Approved Destination Status (ADS)

ADS for 11 African countries - Egypt - Ethiopia - Kenya - Mauritius - Morocco - Seychelles - South Africa - Tanzania - Tunisia - Zambia - Zimbabwe

China, a new tourism source for Africa

Chinese tourism to South Africa booming

Number of Tourists
50000 45000 40000 35000 30000 25000 20000 15000 10000 5000 0

2002

2003

2004

Chinese tourism to South Africa has grown 70% in three years

African airlines have maintained their competitive position on International markets

20,000 16,000 12,000 8,000 4,000 0
19 72 19 74 19 76 19 78 19 80 19 82 19 84 19 86 19 88 19 90 19 92 19 94 19 96 19 98 20 00 20 02 20 04
Traffic in million of ASK* African carriers share

50% 40% 30% 20% 10% 0%

Europe North America

Source: September ASK* traffic from OAG

Middle East South America

Asia/Pacific % African carriers

*: Available Seat Kilometre

Europe-Africa load factor at historic high

Yearly rolling average load factor
Load factor in %

80%

76%

72%

68%

64%

Source: AEA

19 92

20 03 20 0 20 4 05

19 93 19 94 19 95

19 96

19 97

19 98

19 99

20 00

20 01

20 02

Africa traffic drivers

Sustained development of tourism Population concentrated Very limited road network and no rail substitute Strong economic and trade growth Higher propensity to travel as economy develops International markets to continue their strong growth Development of new markets with emerging economies (China, India, Brazil)

Africa Market Forecast

Top 10 Africa fastest growing markets

Source: GMF 2004

5.1

Africa - China

4.9

Africa - Middle East Africa - USA

4.9

4.8

Africa - Western Europe

Average annual RPK growth rate (% p.a.) 2004 - 2023

4.8

Africa - Canada

4.7

Africa - Japan

4.7

Africa - CIS

4.5

Africa - South America Africa - Australia/NZ

4.5

4.4

Africa - Eastern Europe

Top 10 Africa fastest growing sub-markets

0
5.9
South Africa - China Domestic North Africa

South Africa - Western Europe

North Africa Middle East

Average annual RPK growth rate (% p.a.) 2004 - 2023

South Africa - USA

5.1

Africa Sub Sahara - CIS North Africa Western Europe

North Africa - South Africa Africa Sub Sahara Middle East

North Africa - Canada

1
5.8 5.5 5.1 5.1 4.9 4.9 4.8 4.8

High fuel price will accelerate retirement of old and mid generation aircraft
Current passenger fleet in active service by aircraft generation

New North America Europe Asia Latin America and Caribbean Africa Middle East Pacific WORLD
Source: Airclaims. Includes: Western-built jets passenger (>100 seats)

Mid

Old 350 86 206 236 201 70 0

Total 4,304 3,158 2,332 771 485 422 282 11,754

8% 3% 9% 31% 41% 17% 0%

1,710 2,244 1,772 1,300 1,153 254 165 215 174 973 281 119 137 108

5,443 5,162 1,149

Trends in air transport: Increase in fuel cost

Average Age:
DC-9 DC-8 DC-10 MD-80

21 years
707

26 22
8

12

34

74
727

Fuel price is constantly rising

70$ per barrel

world wide and

102
737OG

90$ per Barrel

12
747

in Africa

295 aircraft in total

Change is a must!

The African airlines will take delivery of 641 passenger aircraft

Fleet size

701
600
Growth
309

400

392
Replaced
332

641 aircraft => US$ 60 billion

200
Stay
60

2003

2023

Source: GMF 2004

African airlines passenger aircraft demand

Number of aircraft

600

441 400

200

183

17 0

Single-aisle

Twin-aisle

Large Aircraft

Source: GMF 2004

Consolidation & Fragmentation

Growth by both fragmentation and consolidation

FRAGMENTATION

CONSOLIDATION

Hub by-passing Market development Frequency on thin routes The business travellers
preference

More cost-effective Hub dominance Global network Linking major hubs The logic behind alliances

The real world: fragmentation and consolidation

All but 1 forecaster anticipate aircraft size to increase

Survey among top 12 industry forecasters (manufacturers, suppliers)

Question: Will average seats per aircraft reduce of increase over next 20 years

Number of forecasters

Increase Reduce

11 1

Example: Southern Africa to Europe, an Airbus aircraft for every market

2014

Hub to Hub
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Hub to Point
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VLA routes

350-400-seater routes 250-300-seater routes

The lowest costs

35% higher capacity
747-400

A380-800
Datum

-15%

Lower fuel burn Reduced maintenance costs

Light weight materials Fuel efficient engines New systems

Direct operating cost per seat 6 000nm sector

Driving down costs with technology

Meeting passenger expectations

Airline criteria of choice on US intl flights
What is your main reason for flying on this airline?
% of respondents
40%

33%
30%

20%

17%

14% 11% 7% 5% 4% 4%

10%

3%

1%

1%

0%
ic Pr e le du he sc r s ce ht lie tf ien lig f er en p xp to qu e e -S Fr od on N go us io ev Pr n er ice icy io ion rri ol rv at at t O ca ut se rp pu to ep ht ye re r o e lty flig pl ty m nm fe ya I -ti a o E n L S O er th

nt ie en nv Co

Source:

US Commerce Department Survey (ITA ), 2004

Strong market confidence from 16 customers

10 A380 5 A380 41 A380 2 A380F

159 firm orders & 159 firm orders & commitments from commitments from 16 Customers 16 Customers

4 A380 10 A380F 5 A380 5 A380 5 A380 15 A380 6 A380 2 A380 12 A380 10 A380 6 A380 10 A380F 6 A380 5 A380F

Todays challenge

Todays Challenge
Some trends in air transport
1.- Declining yields 2.- Increase of fuel price 3.- New standard of cabin comfort

PASSENGERS EXPECTATIONS:

MORE COMFORT @ A LOWER PRICE

AIRLINE SITUATION:

INCRESING COST ENVIRONMENT

Trends in air transport: Declining yields

While the load factors may look and indeed are remarkably high, they highlight the airlines dilemma in the current operating climate. Our problem is that our break even load factors are HIGHER still
Ulrich Schulte-Strathaus AEA General Secretary

Trends in air transport: Declining yields

15

Yield Cost

10

EUROPE-SOUTHER AFRICA MARKET The lowest unit cost

BUT
One of the lowest average yield & One of the lowest margins yield-cost

0
Eur./Middle East Southeast Asia Eur. Souther Africa North and Mid Pacific North Atlantic Eur./Middle East Northeast Asia Within Far East Eur. Northeast Asia Eur. - Middle East Eur. Western Africa Within Eur.

Trends in air transport: Declining yields

In the present ultra-competitive environment, it is unlikely that there is significant scope for a recovery in the yields. The prescription for next years must be a renewed assault on cost
Ulrich Schulte-Strathaus AEA General Secretary

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70

Fl ig Fl ig ht Eq u & O il ip m en t Fu el ht C re w

African Airlines operating cost

Avg Efficient world wide Airline

Fl ig

ht Eq u

Average unit cost ($ per achieved ton km)

Avg Efficient African Airline Avg non efficient African Airline

In su ra Fl nc ig ip e ht m en Eq tR ui pm en ta en D l tM ep re ai nt ci at en io an n ce & La A nd m or in tiz g & at io A i rp n or A tC ir ha N av rg ig es at io n C ha St rg at es io n Ex pe Pa ns ss es Ti en ck ge et rS in g, er vi Sa ce le s & G en Pr er om al ot & io A n dm in is tr at iv e

Trends in air transport: Increase in fuel cost

80 70 60 50 40 30 20
Q1 Q2 Q3 Q4 Q1Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3Q4 Q1 Q2 Q3 Q4

US$ per barrel (WTI) History Forecast High-price scenario

Base case

Low-price scenario

2002

2003

2004

2005

2006

2007

2008

Source: Global Insight, August 2005

Block fuel consumption per seat

Block fuel per seat difference %

45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

+42%

+21%

datum A320 family Mid generation Old generation

500 nm sector, 2 class seating

New-generation single-aisle 40% more fuel efficient

The value of youth

500 nm sector ( 1.5h )

A319-100
Mature

737-200
20 years old

A320-200
Mature

727-200A
20 years old

Seats [ Cash Operating Cost $ / trip]

Fuel Airframe maintenance Engine maintenance Line maintenance Flight crew Navigation Landing fees

124

108

150

149

2033 429 306 125 672 335 490

2491 1214 650 562 672 311 401

2142 460 339 132 672 352 562

4118 3936 990 1496 940 375 661

Total COC [$ / trip] Extra cost per trip Extra cost per month

4,390 $ Datum Datum

6,302 $ + 1,911 $ + 319,485 $

4,659 $ Datum Datum

12,516 $ + 7,856 $ + 1,313,321 $

Airbus standard assumptions Fuel price US$2 per gallon

With the worlds favourite cabin!

Survey conducted between March and May 2003 69,308 completed passenger questionnaires

Airbus A320 57%

Boeing 737 NG 43%

As an airline passenger, which single aisle aircraft do you prefer?

Share of respondents preferring type

With the worlds favourite cabin!

More bin volume

Spacious cabin

Up to 25 aisle

Big galleys

The value of youth

3000 nm sector ( 7 h)

A330-200
New

767-300ER
10 years

MD-11ER
15 years

Seats
[Cash Operating Cost $ / trip] Fuel Airframe maintenance Engine maintenance Line maintenance Flight crew Navigation Landing fees

246

214

295

22624 4086 2685 935 7473 2901 1760

20470 7246 3786 1848 7473 2623 1430

28763 10226 8283 2756 7473 3224 2188

Total COC [$ / trip] Extra cost per trip Extra cost per month

42,463 $ Datum Datum

44,876 $ + 2,413 $ + 128,873 $

62,914 $ + 20,450 $ + 1,092,391 $

Airbus standard assumptions Fuel price US$2 per gallon

With The New Cabin

New PSU unit
LED technology Less maintenance

New lighting

New lining
More illumination,
reflected from hidden light sources

LED lighting with

increased control capability

New Toilet design

Smoothened overhead bin doors and hand grips Uninterrupted handrail Softer lining

Nicer Brighter Less removable items

A330 customers in 2005

Northwest 8 aircraft
China Southern 10 aircraft

Air China 20 aircraft

Qatar 2 aircraft

GECAS 2 aircraft

553 orders, 47 customers, 54 operators 42 firm orders in 2005

Data to end September

Backlog of 184 aircraft

What is next?

A380 Innovation

A330 experience

Technologies reduce fuel consumption by 25% over current technology aircraft

A350 competitive highlights

A350-900
Seats (3-class) Full passenger load range (nm) Block fuel / seat Cash cost / seat Noise classification London arrival departure

787-9 265 8000nm +7% +11%

777-200ER 295 7700nm +30% +18%

300 7500nm Datum Datum

QC 0.5 QC1

QC 0.5 QC 1

QC 1 QC 2

Toulouse, 27th April 2005, 10:29 a.m.