Rome – 29th September

Business Aviation in Italy National Forum

Date

Rome – 29th September

Business Aviation in Italy – National Forum

State of Industry

Date

A sector of its own…

WHAT IS BUSINESS AVIATION ?

Definition is a mix of tech & ops considerations It transcends a concept: tailor-made • Business Aviation is : > on demand – non scheduled > aircraft with 19 seats and less

• Business Aviation is : > the aviation for business

Business Aviation in Italy – Rome, 29th September

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Multiple aircraft types offer multiple solutions to customer

Business Aviation in Italy – Rome, 29th September

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A multi-faceted, do-it-all, resourceful sector spanning many different highly-skilled jobs

Business Aviation in Italy – Rome, 29th September

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State Of The Industry A Bumpy Ride From 2008 On Will 2015 be the start of renewed and long-term growth?

Business Aviation in Italy – Rome, 29th of September

Business Aviation in Italy – Rome, 29th September 7

Some macro-economic KPIs seem to imply this… EU-28 GDP Variations

15%

15%

11,3%

10% 5%

-10% -15% -20%

10,4%

10%

5,0% 2,5%

0% -5%

EU-28 BusAv Traffic Variations

5%

0%

2004 -5%

2,0% 2005 1

3,4%

3,1% 0,1%

2006 2

2007 3

2008 4 -3,6%

3,3% 2,1% 2009 5 -4,4%

2010 6

1,7% 1,8% 2011 7

-0,4%

0,0%

2012 8

2013 9 -2,9%

-5,0%

1,3% 1,0%

1,5% 0,5%

2014 10

2015 11

-10%

-15%

-14,0%

-20%

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… Whilst some others are more worrying EUR/USD Exchange rate Cost of maintenance

Cost of fuel

Cost of A/C acquisition

Value of the asset

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Pressure is relieved on 20% of BusAv’s operating costs, boosting margins… Fuel price evolution

€ 2,80 € 2,60

Price per Gallon

€ 2,40 € 2,20 € 2,00 € 1,80 € 1,60 € 1,40 € 1,20 € 1,00

2010

2011

2012

2013

2014

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… Whilst despite SES hopes, ATC charges, (8% of operating costs), continue to creep upwards Route charges € 148.000.000 € 146.000.000

+ 8.4% since 2010

€ 144.000.000 € 142.000.000 € 140.000.000 € 138.000.000 € 136.000.000 € 134.000.000 € 132.000.000 € 130.000.000 € 128.000.000

2010

2011

2012

2013

2014

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So There’s No Crystal Ball But are the fundamentals of the sector sound?

Business Aviation 12 in Italy – Rome, 29th September

Business Aviation is an essential part of air transport It boasts a fleet of 3,500 aircraft Market Share in Europe (in movements)

European Business Aviation Fleet

3,5% 7,0%

All-Cargo Business Aviation Charter

Bizliners 4,0%

2,4%

Heavy Jets

23,7%

53,4%

Lowcost

Midsize Jets

Other

11,9%

28,2%

Traditional Sched.

Light Jets 3,9%

Turboprop

31,4%

30,5%

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BusAv is mostly composed of complex aircraft profiled for long international journeys

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For hire and corporate are on equal footing Leisure is just a small fraction Business Aviation Mission Profile 100% 90% 80%

70%

48,7% AOC flights

60%

Non commercial flights

50% 40% 30%

40,5%

Other flights (Emergency, State,) Leasure)

20% 10% 0%

10,8%

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BusAv is mostly present in the biggest economies, with Italy No. 4 300000

250000

Biggest Business Aviation Markets (2013 vs 2014)

4,0%

+1,1%

3,0%

Number of departures

2,0%

200000

-1,7% 1,0%

150000

+2,1% +0,1% -0,1%

100000

50000

0

0,0%

-2,4%

+3,3%

-1,0%

-2,0%

-3,0%

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After decades of double-digit growth, BusAv is facing stagnation Yearly variations on BusAv traffic (EU 28)

2005-2015 variation on BusAv traffic (EU 28)

70.000

80.000 75.000 70.000

Number of flights

60.000 55.000 50.000

65.000 60.000 55.000 50.000 45.000

45.000

40.000

2013

2014

Dec

Nov

Oct

Sep

Aug

Jul

Jun

May

Apr

Mar

Feb

40.000

Jan

Number of flights

65.000

35.000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

2015

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2015 so far seems to be no exception… Total departures EU28 (internal and international) 310000

+0,5%

290000

-0,2%

270000 250000 230000

299.018

300.393

299.690

Jan - July 2013

Jan - July 2014

Jan - July 2015

210000 190000 170000 150000

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Same causes and consequences at the major European airports. Italian airports are lagging behind

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The Italian Job A snapshot of the Italian market

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The double dip recession has been longer and more pronounced in Italy… GDP Evolution in Italy 1,5%

1,1%

1,0%

0,7%

0,4%

0,5% 0,0% -0,5% -1,0% -1,5% -2,0% -2,5% -3,0%

-3,0% -3,5% 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

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And so has its adverse impact on the sector Flows per month

Average Daily Departure Business Aviation Italy

2014 Average 3.000

2,00% 1,60%

120,0

15,0%

100,0

10,0%

80,0

5,0%

60,0

0,0%

40,0

-5,0% -10,0%

-3,98% 2.000

0,00% -1,00%

1.500 -2,00% 1.000

-3,00%

500

-4,00%

20,0

0

-5,00%

0,0

Arrivals

Departures 2013

Internals

GROWTH

1,00%

2.500

AVERAGE DAILY DEPARTURE

1,56%

-15,0% 2006

2007

2008

2009

2010

2011

2012

2013

2014

2014

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Despite lull in Italian economy, effects are not to be seen on BusAv movements Yearly variations on BusAv traffic (Italy) 20.000 18.000

Number of flights

16.000 14.000 12.000 10.000 8.000

6.000 Jan

Feb

Mar

Apr

May

Jun

2013

2014

Jul

Aug

Sep

Oct

Nov

Dec

2015 Business Aviation in Italy – Rome, 29th September

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Contrary to other EU countries, the Italian BusAv sector is subject to artificial barriers Business Aviation Flights YoY growth 15,0% 10,0% 5,0% 0,0% -5,0% -10,0% -15,0%

Luxury Tax announced Business Aviation in Italy – Rome, 29th September

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BusAv market share is higher in Italy than elsewhere

Market Share in Italy (in movements) 3%

8%

48% All-Cargo

4%

Business Aviation Charter

Business Aviation Fleet in Italy - 157 aircraft Bizliners

1

Heavy Jets

Midsize Jets

34

16

Lowcost Other

Light jets

Traditional Sched.

35% 2%

Turboprop

60

46

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BusAv is key to the country, socially, economically, and business-wise

1 bn € Impact on GVA

500 m € Impact on wages and salaries

12.000 highly-skilled workers Impact on local employment

~80 Italian companies own a BusAv fleet

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Italy relies on BusAv connection to other markets

Daily flights from and to Italy 2014 Average 80

6,0%

-4,1%

70

4,0%

60 50

2,0%

0,8%

40 30 20

0,0%

5,4%

0,0%

-2,0%

-2,0%

10 0

-4,0%

-6,0%

Germany

UK

Switzerland 2013

France

Italy

2014

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Major BusAv airports have low seasonnality

July 2015

January 2015

Low seasonality factor

1

LIML

Milano Linate

19,4

1

LIEO

Olbia Costa Smeralda

32,6

2

LIRA

Rome Ciampino

15,7

2

LIML

Milano Linate

32,2

3

LIPZ

Venezia Tessera

4,4

3

LIRA

Rome Ciampino

27,5

4

LIPE

Bologna

4,1

4

LIRN

Napoli Capodichino

16,5

5

LIMF

Torino/Caselle

3,8

5

LIPZ

Venezia Tessera

9,9

6

LIRE

Pratica di Mare

3,1

6

LIRP

Pisa San Giusto

9,8

7

LIMJ

Genova Sestri

2,7

7

LIMJ

Genova Sestri

9,0

8

LIPH

Treviso San Angelo

2,7

8

LIRQ

Firenze/Peretola

8,4

9

LIPX

Verona Villafranca

2,6

9

LIPE

Bologna

6,2

10

LIRP

Pisa san Giusto

2,6

10

LIMF

Torino/Caselle

6,1

11

LIRQ

Firenze/Peretola

2,5

11

LIMC

Milano Malpensa

6,1

12

LIRN

Napoli Capodichino

2,3

12

LIPX

Verona Villafranca

6,0

13

LIMC

Milano Malpensa

2,2

13

LIEE

Cagliari Elmas

5,9

14

LIPB

Bolzano

2,1

14

LICJ

Palermo Punta Raisi

5,5

15

LIPY

Ancona Falconara

1,7

15

LICC

Catania Fontanarossa

5,3

High seasonality factor

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Business Aviation connects Italy, thereby contributing to internal cohesion •

Business aviation allows trips that could not be reasonably done with others transportation means > example MILAN

Main Italian city pairs connected by Business Aviation

PERUGIA

Milan – Perugia by highway= ~ 5 hours Milan – Florence >> Florence – Perugia = ~ 4-6 hours no direct connection Milan – Perugia = ~ 45 minutes

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These brands are unique. They fly the colours of Italy across the globe

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Thank you for your attention Grazie per la vostra attenzione