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Welcome to our Investment Proposal
Agenda • Strategy and Product
• Markets and Network
• Marketing
• Fleet and Revenue
• Human Capital
• Operations
• Financials
Our Creed We provide guests with an effortless and unique journey,
using state-of-the-art technology, a distinctive and comfortable environment and convenient city-centre
airports
We aim to bring back the Golden Age of flying
Our Vision Creating a niche airline, capturing a very targeted
and lucrative segment: the discerning business and affluent leisure traveller seeking a higher level of
convenience and service from his air transport experience
Business Model • Medium-haul, point-to-point,
full-service
• Connecting main business centres’ city airports of Asia
• FIRST connects TAIWAN to: • Japan • South Korea • Singapore • Hong Kong • Mainland China
Taipei Songshan
Singapore
Hong Kong
Seoul Gimpo
Shanghai Hongqiao Haneda
5
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Product
6
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Effortless Travel Process
• Tailored service in every stage of the travel process
Booking Journey to
Airport
Airport Welcome &
Check-In Boarding In-Flight
Arrival & Destination
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Convenience & Speed • TSA
• City Centre Airports => Total Journey Time
3.84
6.47
3.58
5.33 4.67 4.67
7.30
4.38
6.67 6.50
Hong Kong Singapore China Japan South Korea
TSA TPE
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Engaging the Connected Traveler • NFC (Near Field Communication) Tags
• Mobile Phone Application
Market Forecast
11
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
East Asia
• IMF GDP: +7%
• Air Travel CAGR: • Boeing: +6.7%
• Airbus: +5.4%
$-
$5,000.00
$10,000.00
$15,000.00
$20,000.00
$25,000.00
$30,000.00
-
200
400
600
800
1,000
1,200
1,4001
99
9
20
00
20
01
20
02
20
03
20
04
20
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06
20
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20
09
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20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
GD
P p
er
cap
ita
Pas
sen
gers
Mill
ion
s
Year
Demand & GDP East Asia
Passengers GDP
12
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
World Trade
• 31% East Asia
• Driver for Business
• Goldmine for Travel
East Asia
EU
USA South America
Rest of World
13
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
World Trade
• Top Six Trading Nations
• High Foreign Direct Investment
• Largest Generators in Business Travel
$-
$500.00
$1,000.00
$1,500.00
$2,000.00
$2,500.00
Bill
ion
s
Imports Exports
14
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
East Asian Development
• Contribution to GDP
• Agriculture
• Industry
• Service
Taiwan
China
Singapore
Japan
Korea
Hong Kong
Agriculture
Industry
Services
15
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
East Asian Development
• Growth in Trade
• Industry & Service
• Increase Disposable Income
• Tourism Development
• Introduction of LCC
• Increase Leisure Travel
$-
$10,000.00
$20,000.00
$30,000.00
$40,000.00
US
Do
llar
Average Disposable Income per Capita
2009
2010
2011
2012
$-
$10,000.00
$20,000.00
$30,000.00
US
Do
llar
(Mill
ion
)
Country
Tourism Receipts
2009
2010
2011
2012
16
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
East Asian Development
• Resilient Growth
• Sensitivity in Premium Demand
-
10
20
30
40
50
60
-
200
400
600
800
1,000
1,200
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
Firs
t &
Bu
sin
ess
Mill
ion
s
Eco
no
my
Mill
ion
s
Year
Passenger Demand and Forecast East Asia
Economy First&Business
17
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
East Asian Development
• Seasonality
• China & Western Holiday Pattern
0.6
0.7
0.8
0.9
1
1.1
1.2
1.3
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
ASK
s
Bill
ion
s
Month
Seasonality
2004
2005
2006
2007
2008
2009
2010
2011
2012
18
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Quality Service Index
• Quality Indicators: • Frequency
• Capacity
• Service Offered
• Home Base Factor
• Total Journey Time; Door to Door
• Route Market Shares • Opportunities on Inner-City Airports
• Golden Aviation Circle
19
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Quality Service Index
20
Fares Weekly
frequency Weekly capacity
TSA- GMP
TPE- ICN
TSA-GMP
TPE- ICN
TSA-GMP
TPE- ICN
Quality Factor
Base Factor
Time factor
A/C Seats
QSI Market share
Asiana Airlines $381 20 2272 1 0.9 0.23 113 1.22 15.2% Cathay Pacific $721 14 2347 1 0.9 0.23 166 0.67 8.3% China Airlines $646 25 3505 1 0.9 0.23 142 1.11 13.8% EVA Airways $636 17 2312 1 0.9 0.23 132 0.74 9.2% Korean Air $336 23 2869 1 0.9 0.23 123 1.75 21.7%
Thai Airways $788 14 2142 1 0.9 0.23 152 0.56 6.9% FIRST $700 14 1400 1 1 1 100 2.00 24.9%
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
• Route Monopoly TSA - GMP
Quality Service Index
• Route Trend & Qualitative Analysis
0
100
200
300
400
500
600
0
100000
200000
300000
400000
500000
600000
700000
Pa
ss
en
ge
rs
Year
Demand Forecast Taipei - Singapore
Demand BEST WORST AVERAGE Singapore GDP
21
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
East Asia
• Region
• Growth
• Market Size
• Time Sensitive
22
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Network
23
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Business Network
• FIRST connects TAIWAN and: • Japan
• South Korea
• Singapore
• Hong Kong
• Mainland China
Taipei Songshan
Singapore
Hong Kong
Seoul Gimpo
Shanghai Hongqiao Haneda
24
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Competitive market
0
2
4
6
8
10
12
14
0 1000 2000 3000 4000 5000 6000
Yield & Sector Length
Thai
EVA Air
Air China
China Airlines
CX
China Eastern Airlines
ANA Airlines
SIA
China Southern
25
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Competitive market
0
2
4
6
8
10
12
14
0 1000 2000 3000 4000 5000 6000
Yield & Sector Length
Thai
EVA Air
Air China
China Airlines
CX
China Eastern Airlines
ANA Airlines
SIA
China Southern
26
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Business Network • FIRST connects
TAIWAN and: • Japan
• South Korea
• Singapore
• Hong Kong
• Mainland China
Taipei Songshan
Singapore
Hong Kong
Seoul Gimpo
Shanghai Hongqiao Haneda
16%
19%
16%
27
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Business Network • FIRST connects
TAIWAN and: • Japan
• South Korea
• Singapore
• Hong Kong
• Mainland China
Taipei Songshan
Singapore
Hong Kong
Seoul Gimpo
Shanghai Hongqiao Haneda
21%
16%
19%
16%
28
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Business Network • FIRST connects
TAIWAN and: • Japan
• South Korea
• Singapore
• Hong Kong
• Mainland China
Taipei Songshan
Singapore
Hong Kong
Seoul Gimpo
Shanghai Hongqiao Haneda
21%
16%
19%
16%
28%
29
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Regulatory Environment
30
Taipei Songshan
Singapore
Hong Kong
Seoul Gimpo
Shanghai Hongqiao Haneda
• Domestic Regulation Ownership requirements Air Operator Certificate Operating requirements
• Air Service Agreement (ASA) for Japan, South Korea and Hong Kong
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Regulatory Environment
31
Taipei Songshan
Singapore
Hong Kong
Seoul Gimpo
Shanghai Hongqiao Haneda
• Domestic Regulation Ownership requirements Air Operator Certificate Operating requirements
• “Open Sky” in 2018 between Taiwan and Singapore
• Air Service Agreement (ASA) for Japan, South Korea and Hong Kong
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Regulatory Environment
32
Taipei Songshan
Singapore
Hong Kong
Seoul Gimpo
Shanghai Hongqiao Haneda
• Domestic Regulation Ownership requirements Air Operator Certificate Operating requirements
• Cross-Strait Air Transport Agreement & Supplementary Agreement (Tax-Free, avoidance for double taxation)
• “Open Sky” in 2018 between Taiwan and Singapore
• Air Service Agreement (ASA) for Japan, South Korea and Hong Kong
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Market
33
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
34
Task
Time
Milestone
• Register the company
• Secure Taiwanese
Investment
• Apply for AOC
• Apply for operating license
• Apply for Fares and Tariffs
• Schedule Filing
• Filing for Slots
• Employ personnel
• Train personnel
• Negotiate outsource
contracts
• Set up IT
• Marketing
• Preparing Business
• Start of web sales
• Delivery of aircrafts
• Launch of operation
2014-4 2014-5 2014-6 2014-7 2014-8 2014-9 2014-10
Mile
sto
ne
Star
tin
g p
oin
t
Lega
l Du
rati
on
Es
tim
ated
Du
rati
on
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
5 Year plan:
• Scale vertically – improving efficiency of the existing routes
• Scale horizontally- additional resources (aircraft, frequencies)
2015
2018
2017
2016
•Frequency to Hong Kong & Shanghai •One more aircraft
•New route to Tianjin •One more aircraft
•New route to Kuala Lumpur •One more aircraft + frequency on Shanghai
•New route to Guangzhou •One more aircraft
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Scalability
35
Market Segmentation
Taiwan - 19%
China - 17.86%
Japan - more than 15% are business travellers
Singapore - more than 38% of Taiwanese
business travellers
South Korea - third largest economy in Asia
Hong Kong - prime business destination, Asia´s world city
Taiwan
Singapore
Hong Kong
South Korea China
Japan
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
36
Marketing
37
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Traditional advertising campaigns
• Mixture of traditional and westernized appeal
• Competitive advertisement is considered impolite
• Media used: • Newspaper advertising, credible and respected
newspapers, ads in both native and English languages
• Magazine advertising: Business and luxurious magazines, in order to target our guests
• Billboards: Tradition extended through the Asian market, raise brand awareness
38
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Social Media
• Engaging them towards social media helps FIRST to keep costs at minimal, as few people can keep contact with lots
• For Internet users in Taiwan, social networking sites have become a source of information that is just as influential as any other form of media
• Lot of people said they would trust their friend’s recommendations on social network sites and would be more likely to go for the same product
39
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Social Media
40
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Launch Campaigns
• Treasure Hunt at the airport
• Events in city centers: Showcase of FIRST main features
• “Seat for a Seat Campaign”
41
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
“A Seat for a Seat”
• Passengers with a ticket from one of our peers in the market can have the opportunity to show up at the airport and travel with FIRST for free if there is any seat available at the moment of departure
• Taipei – Singapore: Singapore Airlines and EVA Air
• Taipei – Seoul: Korean Air and EVA Air • Taipei – Hong Kong: Cathay Pacific and EVA Air
• Taipei – Tokyo: ANA Airlines and EVA Air
• Taipei – Shanghai: China Eastern and EVA Air
• Is an opportunity to improve the brand awareness via media coverage and get to know FIRST’s product
42
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Fleet Selection
43
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Fleet Selection
44
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Fleet Selection
45
E195 Availability
25 deliveries listed for 2014 in the world,
including 11 with lessors
Embraer 195 Advanced Range Version
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Cabin Configuration
46
Business Class 12 Recliner Seats
1-2 Layout 42.0’’ Seat Pitch
19.0’’ Seat Width
Economy Class 88 Standard Seats
2-2 Layout 33.0’’ Seat Pitch
18.25’’ Seat Width
Dual-class-cabin configuration:
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
• Highest economy class seat width & pitch among main
competitors
• Highest business class seat pitch among competitors’
narrow-body aircraft
* Airlines operating wide-body aircraft
Seat Comfort Comparison
0
5
10
15
20
25
Economy Class Business Class
Ave
rage
se
at w
idth
(in
che
s)
Seat width comparison
FIRST Singapore Airlines China Airlines EVA Air Cathay Pacific* *
0 10 20 30 40 50 60 70
Economy Class
Business Class
Average seat pitch (inches)
Seat pitch comparison
FIRST Singapore Airlines China Airlines EVA Air Cathay Pacific* *
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Revenue Management
48
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Fare Structure Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
49
Online Fare
Tour Operator
Fares
General Booking
Fares
+20 +20 Corporate Fares
VFR Fares
Payable by the customer
Fuel Surcharge
Monday/Friday Surcharge
Security / Airport Tax
+
+
+
+
Booking Classes
50
• Child/infant discount
• One-way fares
• Same-day return tickets
• Seasonality-based fare
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Fares
51
• Highly regulated market
Economy TSA - SHA LHR - CDG
01.09.14 - 31.12.14, 1.1.15 - 19.1.15, 4.2.15 - 30.6.15,
01.09.15 - 23.12.15
633 182
01.07.15 - 31.08.15, 30.3.15 - 12.04.15
567 182
24.12.14 - 02.01.15, 20.1.15 - 3.2.15
689 230
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Human Capital
52
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
CEO
SVP Finance
Accounts & Expenditure
Leasing & Purchasing
SVP Human Capital
Recruitment
Employee Development
Payroll
Staff Loyalty Programme
Staff Management
SVP Flight Operations
Chief Pilot
Training
Intergrated Ops Control
Crew Scheduling
SVP Technical
QA & HS
Fleet Management
Engineering
SVP Commercial
Strategy
Operations Research
Revenue Management
Pricing
Scheduling
Marketing
SVP Guest Hospitality
Cabin Crew Management
Ground Hospitality
Guest Service
SVP Technology
IT
IS
SVP QA & HISS
Management Assistance
53
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Outsourced Elements • Start-up Airline, Avoid Costly Investments During Start-up
• Ensure High Quality Service
• Import Knowledge
• Request for Proposal (RFP) to All Potential Partners in Region
• IT
• Catering
• Maintenance
• Ground Handling
• Legal Services
54
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Staff Cost
Flight Crew
Cabin Crew Flight Operations
Engineering
Ground Crew
Commercial
Flight Crew
Cabin Crew
Flight Operations
Engineering
Ground Crew
Commercial
Other
Finance
Technology
Guest Hospitality
Human Resources
55
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Staff Numbers
0
2
4
6
8
10
75
95
115
135
155
175
195
215
2014 2015 2016 2017 2018 2019
Nu
mb
er o
f A
ircr
aft
Staf
f
Year
Number of Staff Aircraft
56
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Operations
57
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Aircraft Maintenance • Outsource to avoid costly in-house investment
• E-195 capabilities • Evergreen Aviation Technologies
Corp.
• Tender to all companies in the
region for more options
• Block program
• Stagger maintenance
Year Aircraft January September October November DecemberE195_1
E195_2
E195_3
E195_4
E195_5
E195_1
E195_2
E195_3
E195_4
E195_5
E195_6
E195_1
E195_2
E195_3
E195_4
E195_5
E195_6
E195_7
"B" Check (2 days) "C" Check (5 days)
"A" Check is due over night
20
14
20
15
20
16
58
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Flight and Cabin Crew • Flight time limitations based on the Taiwanese CAA
• Cabin Crew
• 1 Cab. Crew per 50 pax.
• Flight Crew
• Max of 1,000 FH and
a min of 750 FH for
12 months
• FIRST average of
800 FH
0
10
20
30
40
50
60
70
2014 2015 2016 2017
No
. of
Cre
w
Year
Flight/Cabin Crew
Flight Cabin
59
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Schedule • Aircraft average utilisation of 10 Block Hours per day
SHA – Shanghai HKG – Hong Kong GMP – Gimpo, Seoul HND – Haneda, Tokyo
SIN – Singapore CAN – Baiyun, Guangzhou TSN – Tianjin KUL – Kuala Lumpur
60
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Aircraft1
Aircraft2TSA-SINAircraft3
Aircraft4
Aircraft5
00:00 00:30 #
T T T
T
T
T T TTSA-GMP T TGMP-TSA T
05:3004:00 04:30 05:00 11:3006:00 06:30 07:00 07:30 08:00 08:30 09:00 09:30 10:00 10:30 11:00 17:3012:00 12:30 13:00 13:30 14:00 14:30 15:00 15:30 16:00 16:30 17:00 23:3018:00 18:30 19:00 19:30 20:00 20:30 21:00 21:30 22:00 22:30 23:00
T
T
T
T
T
T
TTSA-SIN
TSA-HKGTSA-HKG
T
T
T
T
TT
TT
HKG-TSA
T
T
T
T
SIN-TSA
TT
TSA-HKG
SIN-TSA
TSA-HND HND-TSA
TSA-HND HND-TSA
SHA-TSATSA-SHASHA-TSATSA-SHA
TSA-GMP GMP-TSA
T
T
T T
TSA-SIN
T
TT
T
T
Type Startyear Flighttime WeeklyFrequency
E195 2014 TSA-SHA 14
E195 2014 TSA-HGK 14
E195 2014 TSA-GMP 14
E195 2014 TSA-HND 14
E195 2014 TSA-SIN 14
E195 2015 TSA-CAN 14
E195 2016 TSA-KUL 14
E195 2017 TSA-TSN 14
CAN
TSN
KUL
04:30
SIN
00:30 01:00 01:30
GMP
02:00 02:30 03:00 03:30 04:00
HND
SHA
HKG
Finance
61
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Financing Structure
• FIRST is a partnership between existing directors and Taiwanese and foreign investors
• Maximum foreign ownership limited by law to 50%
• An investment of US$15 million is sought to close the last stage of the financing
• Total financing of US$35 million • US$33 million
minimum capital required to apply for Taiwanese AOC
• Provides 5% cash buffer before operational phase
62
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Investment Vehicle
• 428 000 class A convertible preferred shares • Convertible to class C common stock on 2:1 ratio
• Right to a 15% annual non-cumulative dividend
• Right to a 40% special dividend upon reaching a profitability threshold of 20% in a financial year
• Right of first refusal/Co-sale, ‘’Tag-along’’ and anti-dilution
• Restriction on share transfer to outside investors
• Restriction on transfer to non-Taiwanese nationals
• Shareholder 5-year lock-in
63
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Tax-Mitigation Structure
64
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Economics
• FIRST leverages its unique business model, presence in the fast-growing Asian market and monopolistic status on key business route to outperform the market
Year
2014 2015 2016
Revenue Growth
177% 29%
Net Profit Growth
641% 22%
Net Margin
RASK 25% 66% 63%
CASK $0.21 $0.12 $0.12
Passenger Load Factor
58% 67% 62%
2014 2015 2016
REVENUES $166,904,129 $461,914,762 $596,883,786
Scheduled Passenger Services
99.93% 95.44% 91.24%
Ancillary Revenues 5.00% 9.54% 13.69%
Cargo 0.33% 0.28% 0.34%
EXPENSES $125,747,220 $156,769,208 $223,674,572
NET PROFIT $41,156,908 $305,145,553 $373,209,214
65
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Investment Appraisal
• Profitability
• FIRST generates a substantial profit due to:
• Unique nature of its product
• Network of high-yielding destinations
• High aircraft utilization
Profitability
2014 2015 2016
Operating Ratio 75.34% 33.94% 37.47%
Net Profit Margin 24.66% 66.06% 62.53%
66
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Investment Appraisal
• Return to Shareholders • Venture presents shareholders with abnormal returns
above market averages
• Financing structure optimizes cash in/out flows to maximize shareholder return
67
2014 2015 2016
ROE 55% 55% 55%
EPS $16.45 $148.45 $182.48
Fully-Diluted EPS $14.86 $134.10 $164.84
DPS $16.45 $148.45 $182.48
Dividend Payout Ratio 1 1 1
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Investment Appraisal • Net Present Value (NPV)
Year 1 Year 2 Year 3 Year 4 Year 5 Apr-14 Jul-14 Oct-14 Mar-15
Initial Equity Investment -$2,000,000 -$4,000,000 -$9,000,000
Preferred Dividend (15%) $2,250,000 $2,250,000 $2,250,000 $2,250,000 $2,250,000
Profit Margin 25% 66% 63%
Special Preferred Dividend (40%) $6,000,000 $6,000,000 $6,000,000 $6,000,000 $6,000,000
Total -$2,000,000 -$4,000,000 -$9,000,000 $8,250,000 $8,250,000 $8,250,000 $8,250,000 $8,250,000
NPV (9% Discount Rate) -$2,000,000 -$3,914,744 -$8,620,437 $7,568,807 $6,943,860 $6,370,514 $5,844,508 $5,361,934
Accrued Value -$2,000,000 -$5,914,744 -$14,535,181 -$6,966,373 -$22,513 $6,348,000 $12,192,508 $17,554,442
Payback Period (Years) 5
Total Return 117.03%
Return per Year 23.41%
IRR 35.64%
68
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Investment Appraisal
• Highly attractive and profitable investment • FIRST annualized return outpaces market return for
similar risk-adjusted position
• Return on equity covers virtually any investor’s cost of capital
• Preferred convertible share structure offers both the security and priority of a debt instrument with the capital appreciation potential of common stock
69
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Risk Analysis
• Sensitivity Analysis
Effect on Net Profit of a 1% Change in
2014 2015 2016
Fuel Cost -4.54% 0.70% 0.75%
Passenger Load Factor
-8.03% -3.00% -3.17%
Lease Rate -3.70% -0.57% -0.60%
Maintenance Cost -3.48% -0.56% -0.59%
Staff Cost -0.12% -0.02% -0.02%
Cost of Services -3.24% -0.51% -0.54%
Cost of Ancillaries -0.44% -0.19% -0.27%
70
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Risk Analysis
• Resilience Analysis
Bottom-Line Resilience Analysis
Net Profit with 2014 2015 2016
With 100% Revenues - $305,145,553 $373,209,214
With 75% Revenues - $189,126,506 $223,264,439
With 50% Revenues - $74,802,603 $75,535,701
71
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Exit Strategy
5 Year Horizon
Within the restrictions imposed by regulations
Through the share tender mechanism and exercise of coat tail rights
72
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
73
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Invest FIRST!
• A unique business model
• A lucrative and niche market segment
• An incremental growth protential in Asia
• Outstanding innovations
Thank you very much!
Maxime Leveille Montreal, Canada
Yang Baksa Seoul, Korea
Heshan Karunaratne Delphine Wermeister
Paris, France Cherie Lu Taipei, Taiwan
Gloria Elena Guevara Nieto Saltillo, Mexico
Sylvain Gloux London, UK Vincent Chow
Hong Kong
Norbert Lambriex Tilburg, The Netherlands
77
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
CSR and Environment • CSR
• Women in Aviation International • Sponsor Jingmei Girls' Senior High School in Taipei • Sponsor the Tug-of-War team in Jingmei
• Environment • GREEN comes FIRST
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Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
Exit Strategy
• Initial Public Offering (IPO) • Timeframe: 5-7 years from start of operations
• Public Float: 25-50% of FIRST common stock
• Stock Listing on Taiwan Stock Exchange with cross-listings on: • Hong Kong Stock Exchange
• Singapore Exchange
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Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance