Asiana Airlines

2016. 4Q Performance

2017. 2
 - Contents -

1. 2016. 4Q Financial Performance ---------------------------------------- 1

2. 2016. 4Q Operating Performance ---------------------------------------- 5

3. Fleet Plan ---------------------------------------- 8

[Appendix] 2016. 4Q Financial Performance ---------------------------------------- 9

The Information has been prepared to assist the recipients in making their own assessment of the Company

and does not purport to contain all of the information that may be required.

The Company makes no representation or warranty as to the accuracy or completeness of any information

contained herein, including any estimates or projections, and nothing contained herein should be replied upon

as a promise or a representation regarding future events or performance.

1. Financial Performance in 4Q 2016

1) Income Statement (Consolidated)

(Unit : KRW 100mil.)

Revenue Operating Income Net Income

2,489
(4.5%) 2,098 1,935
(444.5%) (Turnaround)
2,570 -649
874 419 543
57,851 (Sustained
(6.2%) (Turnaround)
55,362 deficit)

472 '15.4Q '16.4Q 2015 2016

14,864 408
13,991 -513
-12

'15.4Q '16.4Q 2015 2016 -1,161

-1,392
'15.4Q '16.4Q 2015 2016

▶ 4Q16’s revenue increased by 87.4bil owing to better demand in cargo business caused by thriving Global IT industry
as well as the rising demand for international passenger.

▶ 4Q16’s operating profit sharply increased year on year due to profitability improvement based on full-scale implementation
of restructuring and reduction of fuel expense.

▶ 4Q16’s net income decreased by 64.9bil year on year due to foreign currency translation loss due to continuously strong USD.

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1. Financial Performance in 4Q 2016

2) Balance Sheet (Consolidated)

(Unit : KRW 100mil.)

Assets Liabilities Equity

92,927 84,412 10,442

-10,611 82,317 71,875 8,516 1,926

-12,537
(-11.4%) (22.6%)
(-14.9%)

2015 2016 2015 2016 2015 2016

▶ Debt reduction through asset disposal Debt ratio

1100%
- Engine Sale & LeaseBack (KRW111.3Bil., Feb, Nov of 2016) 991.2%
- Sales of Kumho Terminal’s shares (KRW270Bil., Apr. 2016)
- Sales of KAPS’s shares (KRW129Bil., Jun. 2016) 900% 961.2%

▶ Equity increase due to good operating performance and new stock issuance 683.1%
688.3%
(50.7Bil., Nov, 2016) 700%
572.2%
▶ Debt increase due to introduction of new aircraft (2 A380) in 4Q16
500%
☞ Improvement of Debt ratio : 302.9%p ↓ [991.2%(2015) → 688.3%(2016)] 2015 '16.1Q '16.2Q '16.3Q 2016
※ On non-consolidated basis, 99.0%p↓ [991.5%(2015) → 892.4%(2016)]

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1. Financial Performance in 4Q 2016

3) Income Statement & Balance Sheet (Non-consolidated)

(Unit : KRW 100mil.)

Revenue Operating Income Net Income

2,252
1,971 -1,167 2,077
552 568 (2,406.5%)
(3.8%) (Turnaround) (Turnaround)
(4.2%) (Turnaround)
2,345
52,043 54,014 558
115
489 94
13,153 13,705 -78
'15.4Q '16.4Q 2015 2016
'15.4Q '16.4Q 2015 2016
'15.4Q '16.4Q 2015 2016 -1,052
-1,519

Assets Liabilities Equity

72,086 64,822 7,264
62,897
69,241 1,925 6,344 920
2,845
(3.1%) (14.5%)
(4.1%)

2015 2016 2015 2016 2015 2016

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1. Financial Performance in 4Q 2016

4) Borrowings (Non-consolidated)

▣ Minimization of F/X risk by implementing natural hedge through currency diversification of the borrowings
(funding in long-position currency)

(Unit: KRW 100mil., USD mil., JPY mil., EUR mil., HKD mil.)

‘15.12.31 ‘16.12.31 Change

Category
Amount (%) Amount (%) Difference (%)

KRW 25,679 57.8% 21,370 48.2% -4,309 -9.6%p

USD 745 19.6% 1,223 33.3% 478 13.7%p

JPY 15,192 3.3% 2,015 0.5% -13,178 -2.9%p

EUR 668 19.2% 608 17.4% -59 -1.9%p

HKD 0 0.0% 184 0.6% 184 0.6%p

Total
44,435 100.0% 44,352 100.0% -84
(KRW 100mil.)
* F/X rate as of December 31, 2016 : USD 1,208.5, JPY 10.3681, EUR 1,267.6, HKD 155.83

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1. Financial Performance in 4Q 2016

5) Revenue and Cost (Non-consolidated)

Revenue Cost

‘16.4Q ‘16.4Q
KRW 1,371bil. KRW 1,322bil.

Others
Dom. Pax
13.1% Others Labor
4.6%
27.8% 13.5%
(0.5%p)
(-0.3%p)
(0.9%p) (0.5%p)
Cargo Fuel
Int’l Pax Airport related
26.5% 25.1%
55.8% cost
(2.7%p) (-2.3%p)
(-2.9%p) 8.1%
(-0.1%p) Depreciation
Maintenanc and
Rent
e amortization
11.2%
7.2% 7.1%
(0.7%p)
(0.2%p) (0.0%p)

* () is year-on-year change
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2. Operating Performance in 4Q 2016

1) Int’l Passenger
 L/F increased by 2.1%p YoY due to the adjustment of supply in unprofitable routes and uptrend of travel demand
resulting from stably low oil price lasts.
 Yield decreased by 3.3% YoY due to increase of supply in US routes and the risk of terrorism in European region.

Category ‘15.4Q ‘16.4Q Change % 2015 2016 Change %

Rev(KRW 100mil.) 7,681 7,573 -108 -1.4% 31,183 32,547 1,363 4.4%
ASK(Mil.Km) 12,338 12,255 -83 -0.7% 47,105 48,869 1,764 3.7%
RPK(Mil.Km) 9,826 10,018 192 2.0% 37,709 40,320 2,611 6.9%
L/F 79.6% 81.7% 2.1%p - 80.1% 82.5% 2.5%p -
Yield(\) 78.2 75.6 -2.6 -3.3% 82.7 80.7 -2.0 -2.4%
* Revenue is net of sales commission.

2) Cargo

 L/F increased by 3.2%p YoY owing to favorable demand for LCD and smartphone in US and Europe despite the capacity increase.
 Yield increased by 3.1% YoY due to increase of cargo traffic volume during the peak-season and fare increase.

Category ‘15.4Q ‘16.4Q Change % 2015 2016 Change %

Rev(KRW 100mil.) 2,956 3,429 473 16.0% 11,441 11,055 -387 -3.4%
ATK(Mil.Km) 1,397 1,509 112 8.0% 5,465 5,627 162 3.0%
RTK(Mil.Km) 1,071 1,206 134 12.5% 4,104 4,296 192 4.7%
L/F 76.7% 79.9% 3.2%p 75.1% 76.3% 1.2%p
Yield(\) 275.9 284.4 8.5 3.1% 278.8 257.3 -21.5 -7.7%
* Revenue is net of sales commission.
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2. Operating Performance in 4Q 2016

3) Revenue Composition by Routes

Pax Cargo

Dom. Oceania CIS Japan Others

7.9% 4.9% 1.6% China 3.3% 1.6%
(0.1%p) (0.1%p) (-0.2%p) 8.9% (0.0%p) (-0.3%p)
China
(0.0%p)
Europe 19.5%
(0.0%p)
9.4%
(-0.3%p) S.E Asia
16.4% USA
Japan USA (-0.9%p) 49.6%
13.8% 19.4%
(1.6%p)
(0.3%p) (0.1%p)
S.E Asia Europe
23.3% 20.4%
(-0.2%p) (-0.4%p)

[() is year-on-year change]

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3. Fleet Plan

2016
Category 2015 2017
Total Operating Financing Owned
Total 84 83 50(60%) 13(16%) 20(24%) 81

A320/321 32 29 29 0 0 26
B767 7 7 0 0 7 7
A330 15 15 15 0 0 15
A350 0 0 0 0 0 4
B747 4 4 0 0 4 2
B777 11 11 2 7 2 9
A380 4 6 0 6 0 6
Passenger Total 73 72 46 13 13 69
B767F 1 1 0 0 1 1
B747F 10 10 4 0 6 11
Freighter Total 11 11 4 0 7 12

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[Appendix] Financial Performance in 4Q 2016

Income Statement(Consolidated)
(Unit : KRW 100mil.)

Category '15.4Q '16.4Q Change Change(%) 2015 2016 Change Change(%)

Revenue 13,991 14,864 874 6.2% 55,362 57,851 2,489 4.5%

Sales Cost 12,622 12,859 236 1.9% 49,264 49,276 12 0.0%

SG & A. Cost 1,380 1,598 218 15.8% 5,626 6,005 378 6.7%

Operating income -12 408 419 Turnaround 472 2,570 2,098 444.5%

- OP Margin(%) -0.1% 2.7% 2.8%p - 0.9% 4.4% 3.6%p -

Non-Operating income 283 -1,866 -2,150 - -1,780 -1,870 -89 -

Other Gain 337 -447 -783 - 1,934 2,639 705 36.5%

Other Loss -251 1,131 1,382 - 2,658 3,394 735 27.7%

Financial Gain 16 24 8 47.2% 77 92 15 19.8%

Financial Loss 372 296 -76 -20.4% 1,430 1,437 7 0.5%

Equity Method Income &
51 -17 -68 - 298 231 -67 -22.5%
Expense
Income before taxes 271 -1,459 -1,730 Turnaround -1,308 700 2,009 Turnaround
Earning from continuing
431 -1,161 -1,593 - -975 440 1,416 -
operations
Earning from discontinuing
-944 0 944 - -416 103 519 -
operations
Net income -513 -1,161 -649 - -1,392 543 1,935 Turnaround
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[Appendix] Financial Performance in 4Q 2016

Balance Sheet (Consolidated)

(Unit : KRW 100mil.)

Change
Category ‘15.12.31 ‘16.12.31
Diff (%)
Current Assets 12,448 12,021 -426 -3.4%
Non-Current Assets 80,480 70,295 -10,184 -12.7%
Total Assets 92,927 82,317 -10,611 -11.4%
Current Liabilities 33,109 32,697 -413 -1.2%
Non-Current Liabilities 51,302 39,178 -12,124 -23.6%
Total Liabilities 84,412 71,875 -12,537 -14.9%
Share Capital 9,755 10,262 507 5.2%
Shareholder’s Equity 8,516 10,442 1,926 22.6%
Debt Ratio 991.2% 688.3% -302.9%p -

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[Appendix] Financial Performance in 4Q 2016

Income Statement(Non-consolidated)
(Unit : KRW 100mil.)

구분 '15.4Q '16.4Q Change Change(%) 2015 2016 Change Change(%)

Revenue 13,153 13,705 552 4.2% 52,043 54,014 1,971 3.8%

Sales Cost 11,910 11,756 -154 -1.3% 46,538 46,002 -535 -1.2%

SG & A. Cost 1,321 1,460 139 10.5% 5,412 5,666 255 4.7%

Operating income -78 489 568 Turnaround 94 2,345 2,252 2406.5%

- OP Margin(%) -0.6% 3.6% 4.2%p - 0.2% 4.3% 4.2%p -

Non-Operating income 181 -1,857 -2,038 - -2,040 -1,602 437 -

Other Gain 326 -483 -808 - 1,916 2,924 1,008 52.6%

Other Loss -204 1,104 1,308 - 2,629 3,194 565 21.5%

Financial Gain 17 17 0 0.1% 77 72 -4 -5.9%

Financial Loss 366 287 -79 -21.6% 1,403 1,404 0 0.0%

Income before taxes 102 -1,368 -1,470 Turnaround -1,946 743 2,689 Turnaround

Net income 115 -1,052 -1,167 Turnaround -1,519 558 2,077 Turnaround

Gain(loss) on F/X transaction

628 -1,485 -2,114 - -842 -625 217 -
& translation

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[Appendix] Financial Performance in 4Q 2016

Balance Sheet (Non-consolidated)

(Unit : KRW 100mil.)

Change
Category ‘15.12.31 ‘16.9.30
Diff (%)
Current Assets 7,177 9,368 2,191 30.5%
Non-Current Assets 62,064 62,718 654 1.1%
Total Assets 69,241 72,086 2,845 4.1%
Current Liabilities 25,103 29,353 4,250 16.9%
Non-Current Liabilities 37,794 35,469 -2,325 -6.2%
- Borrowings with
44,435 44,352 -84 -0.2%
Interest
- Borrowings without
18,461 20,470 2,009 10.9%
Interest
Total Liabilities 62,897 64,822 1,925 3.1%
Share Capital 9,755 10,262 507 5.2%
Shareholder’s Equity 6,344 7,264 920 14.5%
Debt Ratio 991.5% 892.4% -99.0%p -

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[Appendix] Financial Performance in 4Q 2016

Cost Breakdown(Non-consolidated)
(Unit : KRW 100mil.)

Category '15.4Q '16.4Q Change Change(%) 2015 2016 Change Change(%)

Total Cost 13,232 13,216 -16 -0.1% 51,950 51,669 -281 -0.5%

- Sales Cost 11,910 11,756 -154 -1.3% 46,538 46,002 -535 -1.2%

- SG & A. Cost 1,321 1,460 139 10.5% 5,412 5,666 255 4.7%

Fuel 3,628 3,322 -306 -8.4% 14,576 12,394 -2,183 -15.0%

- Fuel Price ($/BBL) 71.6 64.1 -7.5 -10.5% 77.5 61.0 -16.5 -21.3%

- Consumption
437.6 456.0 18.4 4.2% 1,681.3 1,760.9 79.6 4.7%
(ten thousand BBL)
- F/X rates(KRW/USD) 1,156.7 1,136.7 -20.0 -1.7% 1,120.0 1,155.8 35.8 3.2%

Labor 1,728 1,786 58 3.4% 6,884 7,203 319 4.6%

- No. of employees 10,408 10,146 -259 -2.5% - - - -

Rental 1,388 1,482 95 6.8% 5,221 5,738 517 9.9%

Depreciation 927 933 5 0.6% 3,828 3,659 -169 -4.4%

Maintenance 924 945 21 2.3% 3,514 3,809 295 8.4%

Airport Charges 1,079 1,069 -10 -0.9% 4,112 4,374 262 6.4%

Net Interest Cost 349 270 -79 -22.6% 1,327 1,332 5 0.4%
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