Barbarians at the Gate:

Disruptors in Aviation

2

Air travel is remarkably resilient

Source: Boeing

3

Utilization and Load Factors at all-time highs

100

105

110

2010 2011 2012 2013 2014

Passenger Airline Utilization, Indexed with

2004=100

70%

75%

80%

2010 2011 2012 2013 2014

World Passenger Load Factors

Source: Boeing.

4

Source: International Air Transport Association estimates.

2016: Industry outlook per region

5

Aircraft market outlook 2015-2034

SUPPLY Deliveries: ~6-7% of fleet Other factors: ~1%

DEMAND Industry Growth ~5% Replacement: ~2-3%

Source: Boeing.

6

Supply: Replace older, less efficient planes

Source: Boeing

7

Demand: Asia-Pacific leading growth

China

India

Middle East

Asia

Africa

CIS

Latin America

Eastern Europe

6.3

billion people

2014

Yearly RPK growth

2015-2034

+5.8%

Western Europe

North America

Japan

1

billion people

2014+3.8%

Ad

va

nc

ed

Em

erg

ing

/

De

ve

lop

ing

Source: Boeing.

8

Top 3 megatrend growth drivers

Demographic

shifts

Technological

advances

Shift in global

economic power

82%

59%

77%

81% 41%60%

Airline CEOs All CEOs

Source: PricewaterhouseCoopers.

9

“We fly anything, anywhere, anytime”

10

“Disruptive Innovation” – Now a popular term

0

20

40

60

80

100

120

2007 2008 2009 2010 2011 2012 2013 2014 2015

Art

icle

men

tion

s p

er

mon

th in E

ng

lish

on

th

e inte

rnet

Source: Google Trends

11

Incumbent

12

Higher

PRODUCT

PERFORMANCE

Lower

Source: HBR article «What is distuptive innovation?"

Time

New entrant

13

14

AirAsia

15

LCC business model has gone global

Source: Boeing

16

LCCs now provide a large share of capacity

0 10 20 30 40 50 60

CIS

China

Africa

Middle East

Northeast Asia

Oceania

World

North America

Latin America

Europe

South Asia

Southeast Asia

2013 LCC market share (%) measured in annual seats by airline domicile

Source:Diio/Innovata 2013, jet only

17

425 471 480

264263247 259

444

3 977

2 936

2 001

1 120

4 721

2034

3 670

Europe

Emerging

countries

North

America

20242004

1 792

2014

2 704

History Forecast

Middle Class set to Double in EM by 2034

6.4 bln 7.2 bln 8.0 bln 8.6 bln

World population growthSource: Oxford Economics, Airbus GMF 2015

18

10x Telenor Arena enter middle class each day

19

Stock price performance 2010-2015

20

0 5 10 15

AirAsia

Lufthansa

Air France - KLM

SAS

Norwegian Air

Southwest

EasyJet

RyanAir

P/E 2016e

0 5 10

SAS

Lufthansa

Air France - KLM

Southwest

EasyJet

AirAsia

RyanAir

Norwegian Air

EV/EBITDA 2016e

Source: Bloomberg.

Big variations among company valuations

21

Top 3 risks – according to airline CEOs

0 20 40 60 80 100

Over-regulation

Increasing Tax Burden

Protectionist tendencies by Gov

All CEO Airline CEO

Source: PricewaterhouseCoopers.

22

All about the CASK

0,25 0,250,3

0,42

0,49 0,49

0,590,62

0,74

0

0,1

0,2

0,3

0,4

0,5

0,6

0,7

0,8

2014 (full-year reports) in NOK

Source: Swedbank research.

23

24

25

And the winners are…

Strong Management

Cost Advantage

Scale

Financing