Discover India !

Presentation by Suresh NairGeneral Manager-India, Sri lanka, Nepal

& Bangladesh-Air Asia Berhad

Aviation Outlook Asia 2014

Market opportunities and challenges for route expansion to India

• Assessing opportunities and challenges for airlines to plan route expansion to India

• With the highly price sensitive market, how to strategize for profitability?

• What are the potential destinations in India to tap on for growth in decades ahead

Less then 1% of 1.3 Billion Indians travelled internationally in 2013

And yet…

In 2013 more than One Million Indian tourists travelled to Thailand alone. Half a Million to Malaysia and the same number to Singapore

India has 52 cities with a population of more than 1 million. 18 of these cities have international airports

300 Million middle class and upper middle class Indians have the capability to travel abroad

15 Million Indians travel everyday on Indian Railways in India

Airline traffic in India is expected to almost triple over the next decade

Domestic Airline Pax

Int’national Airline Pax

TotalAirline Pax

Growth Multiple

Absolute Growth

2002/03 14m 15m 29m2012/13 58m 43m 101m 3.5x 72 m2022/23# 178m 116m# 294m 2.9x 193m

*CAPA Forecast# International forecast assumes current lifting of 5 year/20 aircraft rule . CAPA forecast for International Traffic for FY 15 is closer to 10%.

Indian Outbound Departures Foreign Visitor Arrivals2012 15.0 m 6.7 m2017* 24.4 m 11.4 m2022* 40.4 m 15.9 m

CAPA forecasts domestic passenger numbers could grow to 900 million per annum by 2040, 15x current levels, and the domestic fleet alone could exceed 3000 aircraft. This may appear to be a fantasy from where we sit now, but it is possible and achievable should we choose to work towards it.

Note – these projections are unconstrained and assume that capacity and supply-side issues (e.g. airport infrastructure, availability of skilled resources etc.) will be available to meet demand.

Long Term Growth Potential is Massive

Despite this rapid growth, the market is far from saturation. India ranks 6th in the world for domestic seats, and 19th for international, but on a seats per capita basis it remains very low, even relative to other emerging markets.

Source: CAPA Research, Innovata

IndiaChina

Russian FederationJapan

United StatesTurkey

ThailandSouth Korea

CanadaMalaysia

ItalyFrance

GermanySpain and Canary Islands

United KingdomNetherlandsSwitzerlandHong KongSingapore

United Arab Emirates

0.00 5.00 10.00 15.00 20.00 25.000.040.090.460.670.711.001.091.341.621.801.952.152.763.403.744.35

7.0211.01

13.3121.30

IndiaPhilippines

ChinaMexico

Russian FederationIndonesia

United KingdomGermanyThailand

FranceItaly

TurkeyBrazil

Spain and Canary IslandsMalaysia

JapanCanada

United StatesAustraliaNorway

- 1.00 2.00 3.00 4.00 5.00 6.00 0.07

0.30 0.34 0.36 0.38 0.41 0.42 0.43 0.43 0.49 0.59 0.64 0.65 0.81

1.04 1.18

1.57 2.59

3.50 5.24

Ranking by International Seats per capita of 20 largest markets

Ranking by Domestic Seats per capita of 20 largest markets

Why the time is ripe…

Penetration of aviation is lowest, at 0.04 for international seats per capita for 20 largest markets (source CAPA)

New Government policies like “Make in India” announced by the Prime Minister recently and tourism initiatives is expected to increase international air travel into India and out of India

The Visa on Arrival facility being offered to more and more nationalities including nationals of Singapore, Vietnam, Cambodia etc..will boost inbound tourism into India

And above all…

ASEAN Open Skies 18 Non Metro Airports which are also tourist centers in

India including Kochi , Ahmedabad , Trivandrum , and Bodhgaya have been declared as open sky from ASEAN countries

These airports plus another 17 more have been upgraded by the Airport Authority of India to state-of-the-art status.

Extension of this policy to cover all countries would greatly boost tourist potential of India and enhance opportunities for airlines to bring in business and leisure passengers

Some Airlines from ASEAN has made good use of this policy which benefited airports including Trichy, Kochi, Ahmedabad , Visakhapatnam and Trivandrum

PatnaLucknow Guwahati

Gaya

Varanasi

Bhubneshwar

Khajuraho

Aurangabad

Goa

Jaipur

Port Blair

Kochi

Thiruvanthanpuram

Calicut

Amritsar

Vishakhapatnam

Ahmedabad

Trichy

Inbound Potential

Incredible India ! TajMahal, Himalayas, Kerala, Rajasthan, Goa and the list goes on….

The 25 million Indian diaspora- People of Indian origin living all over the world including Singapore, Malaysia, Hong Kong and Fiji form a huge market for traffic into India

Buddhist circuit- India is the home to 3 of the 4 holiest Buddhist shrines including Bodhgaya where Lord Buddha got enlightenment

Route Expansion Opportunities The Top Non Metro cities in India which has excellent

growth potential are:-

Pune AhmedabadKochi ChandigarhBhubaneshwar IndoreSurat JaipurNashik Rajkot

India

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