Corporate Presentation

February-2010
Indian Aviation – An overview

¾ Indian Aviation - Adverse environment behind us

¾ Sharp turnaround in business confidence
¾ Airlines Industry set to take-off
¾ LCCs emerging stronger
Indian Aviation – Adverse environment behind us

Uptick in passenger traffic

• Passenger growth has bounced back after a 50%
42%

rocky 2008 40%

30%
34%

30%

• December quarter saw a return to 20%

11% 12%
8% 8% 9% 10% 9%
8% 7% 8%
2007 demand levels
10% 7%
4%

0%

• Load factors have improved -10%

2002 2003 2004 2005 2006 2007 2008
-5%

2009

Real GDP Growth Rates Passenger Growth Rate

significantly – 69% for the period Apr

– Nov 2009 as against 64% for FY09
Moderation in fuel prices
80

• Fuel prices are down 46% from their peak 70

60

in CY2008

INR per KL
50

40

30

20

10

Jul-08

Jul-09
Nov-07

Nov-08

Nov-09
Mar-08

Mar-09
Aug-07

Sep-07

Oct-07

Dec-07

Jan-08

Feb-08

Apr-08

May-08

Jun-08

Aug-08

Sep-08

Oct-08

Dec-08

Jan-09

Feb-09

Apr-09

May-09

Jun-09

Aug-09

Sep-09

Oct-09

Dec-09
Source: IOCL ATF Prices (Mumbai)

Source: IOCL

With recovery in demand and correction of fuel prices, leading airlines have turned profitable in
the last quarter

3
 What
Sharp turnaround is LCCconfidence
in business

Optimism on economic prospects Optimism on industry prospects

90% 90%
82%
79% 77%
80% 80%

% respondents expressing improved prospect

% respondents expressing improved prospect

73%
69% 69% 69%
70% 70%
64%
60% 61%
60% 57% 60%

50% 50% 46%

42%
39% 40%
40%
30% 30%
30% 25% 25%
23%
22%
19% 20% 15%
20%

9% 9% 10% 7%
10%
0%
0% Q1 FY09 Q2 FY09 Q3 FY09 Q4 FY09 Q1 FY10 Q2 FY10
Q1 FY09 Q2 FY09 Q3 FY09 Q4 FY09 Q1 FY10 Q2 FY10
Current Industryperformance Expected Industry performance
Current economic performance Expected economic performance

● FICCI Business confidence survey conducted every quarter to gauge business

confidence in India
- 82% of the respondents felt economic conditions would improve in the next six
months
- 77% of the respondents felt industry conditions would improve in the next six
months
- 79% of the firms surveyed indicated improvement in expected firm level confidence
in the next six months

More and more firms expect improved economic and industry prospects going forward which
reflects return of business confidence

4
 What
Airline Industry set to is LCC
take-off

With growth in domestic traffic, demand-supply gap is expected to improve further

90 76%
84
82
80 78 74% 74%
72 73%
70 72% 72%
61 62 62
59 60
60 56 70%
KM in Bn

69%
50
69%
50 68% 68%
42 42
40 38 66%

30 64% 64%

20 62%

10 60%

0 58%
FY08 FY09 FY10P FY11P FY12P FY13P FY14P

ASKM KMs performed Load factor

Source: DGCA, Crisil Research

● Correction in capacity over the last 18 months

● Demand witnessed steady improvement since mid-2009

● Domestic load factors are expected to improve from current levels

5
 What
LCCs emerging is
stronger LCC
LCC model is emerging as the preferred choice for all carriers
● Full Service Carriers have migrated a
100%

90%

80%
Market Share of LCCs (%)
significant part of their capacities to the
70%
Low Cost business model
60%

50%

40%
● While most of the airlines in the process
30%
of rationalization have trimmed their
20%

10% capacities, SpiceJet and Indigo (vanilla

0%
Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 LCCs) have ramped up their capacities
Note: Assuming 50% of Kingfishers operations are from LCC operations from Dec
2008 onwards
steadily
Significant Improvement in market share of LCCs
Change (% pts)
● LCCs have registered steepest increase in
15%
Indigo 6.2%
9%
market share as compared to other
13%
Spicejet
9%
3.9%
airlines
5%
GoAir 1.3%
4%

26%
Jet Airways+Jetlite -3.8%
30%

24%
Kingfisher -8.2%
29%

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

Source: DGCA FY08 Dec-09

6
SpiceJet

¾ Key Strengths
¾ Capturing significant share of uptick in demand
¾ Management Team
¾ Shareholding
Key Strengths

Robust business model

• Single fleet type – reduces maintenance costs

• Higher utilization of aircraft – reduces fixed costs per seat

• Direct distribution – reduced distribution costs and improved working capital cycle

Outstanding performance

• Steady increase in market share - ~13% as of Dec 2009 as against 9% in Mar 2009

• Amongst the highest load factors in the industry – consistently above full service carriers

• Aircraft utilization rate of over 12 Hrs per day (~10 Hrs for other airlines)

• Consistently recorded one of the lowest cost / ASKM

8
Robust Business Model

● Operates single fleet type - ● Direct distribution through

Boeing 737 NG call centers and internet
● Lower maintenance and ● Avoids booking through travel

Di
training costs agents

re
yp
● Synergies in terms of ● Advance payment mechanism

ct
tt
common contracts, sales, reduces working capital

di
e
processes and systems etc burden

fle

st
● Reduction in cost per seat by ● Reduces distribution costs by

rib
le
Key drivers
~20% ~10% of revenues

ng
of

ut
business model

io
Si

n
Higher aircraft utilization

● Highest aircraft utilization of 12 hours

per day
● Corresponding figures for the peers in
the range of 7-11 hours
● Driven by faster check-in system and
quick turn around
● Reduction in fixed cost absorption by
15-20%

9
Outstanding Performance (1/2)

Steadily gaining market share

15%
● Steadily increased its market share since
inception – more than doubled the
Market Share (%)
market share in 4 years
10%

5%

0%
Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10

Source: DGCA

Amongst the best load factors in the industry

100%
Load Factor (%)
● Load factors amongst the best in the
industry
90%
● Consistently recorded better load factors
80%
than the full service carriers

70%

60%

50%
Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09
Indigo Jet Airways Jetlite KingFisher SpiceJet

Source: DGCA

10
Outstanding Performance (2/2)

● Legacy carriers use 10 hours vs. 12 hours by Highest utilization level in the industry
SpiceJet which translates to one additional 13
Block hours
flight a day 12

11

10

Hours
8

4
Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09
Indigo Jet Airways Jetlite KingFisher SpiceJet

Source: DGCA

Consistently lowest cost per ASKM

● Lowest cost per ASKM aided by Cost/ ASKM

6

● Lower turn around time

5

● Higher level of automation of processes IN R

● Higher utilization
3

● Centralized flight despatch

2

● All fixed costs are distributed over larger 1QFY09 2QFY09 3QFY09
SpiceJet
4QFY09
Jet Airways
1QFY10
JetLite
2QFY10 3QFY10

flying hours
Note: Latest data available only for SpiceJet, Jet Airways and JetLite

11
Capturing significant share of uptick in demand

Improved operations post recovery

Swift ramp-up of operations post recovery 800 ASKM and Load factors 85%
769
752 750
● ASKMs improved from 1.5 bn in Q209 733 725
715
730 80%

to 2.3 bn in 3Q10 700 680 677 682 75%

638
● Departures increased from 7,527 in

ASKM in M n
626
70%

Q209 to 11,680 in 3Q10 600 589

560 65%

● Passengers carried increased from 0.72 500

513
500
489
60%

mn in Q209 to 1.8 mn in 3Q10 55%

● Increased market share from 8% in 400 50%

FY08 to ~13% in Dec-2009

Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09
ASKM Load factor
Source: DGCA
Turnaround in financial performance

With a robust growth in demand and a lean 1,500

1,089

cost structure, SpiceJet returned to 1,000

profitability during 3Q10 500 263

19
0
(78)
(500)
Q2 FY09 Q3 FY09 Q4 FY09 Q1 FY10 Q2 FY10 Q3FY10

(1,000)
(1,013)

(1,500)

(2,000)
(1,975)

(2,500) PAT in INR Millions

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Management Team

Chief Executive Officer Sanjay Aggarwal

Chief Commercial Officer Samyukth Sridharan

Chief Financial Officer Seema Chandra

Chief Technology Officer (IT) Virender Pal

VP - Engineering & Maintenance Robert Bryant

Head – Customer Care Sarabjeet Kaur

Head - Flight Safety Capt R L Kapur

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Shareholding as of 31st December, 2009

No. of Shares % Stake

Promoter (Foreign) 31,077,500 12.9%
Public
Financial Institutions 30,966,041 12.8%
FIIs 22,554,238 9.4%
Bodies Corp 53,136,306 22.0%
Individuals 57,210,302 23.7%
Others
NRIs 10,647,100 4.4%
Foreign Corporate Bodies 34,315,836 14.2%
Others 1,262,237 0.5%
Total 241,169,560 100.0%

14
Performance

¾ Operating Statistics
¾ Financial Performance
Operating Statistics

FY10 figures are for 9 months

16
Operating Statistics

FY10 figures are for 9 months

17
Quarterly Operating Statistics

*In Rupees

18
Financial Performance

FY10 figures are for 9 months

19
Quarterly Financial Performance

20
Profit & Loss Statement

Figures in INR Millions 3Q10* FY09 FY08

INCOME

Operating revenue 16,159 16,894 12,950

Other Income 372 1,241 1,436
Total Income 16,531 18,135 14,386

EXPENDITURE
Operating expenses 10,724 13,376 9,894
Lease rentals 2,949 3,589 2,526
Employee remuneration and benefits 1,339 1,551 1,404
Selling & Administrative expenses 1,033 2,571 1,646
Finance charges 50 160 137
Depreciation and Amortization 49 73 78
Loss of settlement of litigations - 188 -
Total Expenditure 16,142 21,508 15,685

PBT 389 (3,372) (1,299)

Tax – FBT - (33) (24)

Net Income 389 (3,405) (1,323)

Prior period adjustments (40) (121) (11)

Net Income for the period 349 (3,526) (1,334)

Profit brought forward (8,838) (5,074) (3,740)

Foreign currency translation - (238) -
Profit / Loss carried to B/S (8,489) (8,838) (5,074)
*Figures for 9 months

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Balance Sheet

Sources of funds Application of funds

Figures in INR Millions FY09 FY08 Figures in INR Millions FY09 FY08

Share capital 2,410 2,407 Fixed assets

Share warrants 62 - Gross block 958 865
Reserves & surplus 2,073 2,948 Less: Depreciation and amortization 282 214
Total Shareholder's funds 4,545 5,354 Net Block 676 651
Capital work in progress 1,853 4,989
Secured loans 333 1,667 Investments - 4
FCCBs 4,066 3,191
Current assets
Other unsecured loans 490 458 Inventories 125 111
Total Loans 4,888 5,316 Sundry debtors 124 16
Cash and bank balances 3,080 5,995
Total Sources 9,433 10,670 Other current assets 108 -
Loans and advances 1,543 1,742
Total Current assets 4,980 7,864

Current liabilities and provisions

Current liabilities 5,657 7,217
Provisions 1,257 695
Total Current liabilities and provisions 6,914 7,912

Net Current Assets (1,934) (48)

Profit & Loss Account (8,838) (5,074)

Total Application of funds 9,433 10,670

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Thank You!