May 2008 - 1 -

Investor PresentationMay 2008

Air Arabia PJSC

May 2008 - 2 -

Disclaimer

Information contained in this presentation is subject to change without

notice, its accuracy is not guaranteed and it may not contain all material

information concerning the company. Neither we nor our advisors make

any representation regarding, and assumes no responsibility or liability

for, the accuracy or completeness of, or any errors or omissions in, any

information contained herein.

In addition, the information contains projections and forward-looking

statements that reflect the company’s current views with respect to future

events and financial performance. These views are based on current

assumptions which are subject to various risks and which may change over

time. No assurance can be given that future events will occur, that

projections will be achieved, or that the company’s assumptions are

correct. Actual results may differ materially from those projected.

This presentation is strictly not to be distributed without the explicit

consent of

Company management under any circumstance.

May 2008 - 3 -

Air Arabia at a Glance

Investment Highlights

Financial Highlights

Strategy and Outlook

Agenda

- 4 -May 2008

Highlights

A national carrier of the UAE… Established in 2003 by the Government of Sharjah

First and largest low-cost airline in the MENA region

5.03 billion RPK(1)

2.5x the number of passengers as its closest LCC rival(1)

Current fleet of 11 leased Airbus 320s

Network covering a total population of 1.7 billion, 37 destinations in 21 countries within the Subcontinent, MENA region and Central Asia

Broke even within the first full year of operations

Awarded “best low cost carrier in the Middle East” by Skytrax

Adel Ali, CEO was awarded the CEO of the year 2007 by Aviation Business Magazine

Started operations from second Hub in Nepal in Jan 08

(1)For Year Ending 31 December, 2007

Route Network – as of December 2007

- 5 -May 2008

Passenger and Aircraft Growth

Total Passengers and Load Factor Geographic Distribution

Fleet SizeNumber of Destinations

5

15

23

32

37 38

0

5

10

15

20

25

30

35

40

2003 2004 2005 2006 2007 08 Q1

3

5

8

11

14

0

2

4

6

8

10

12

14

16

2004 2005 2006 2007 08 Q1

547

1,133

1,763

2,700

757

79%68%

80%86% 85%

-

500

1,000

1,500

2,000

2,500

3,000

2004 2005 2006 2007 Q1 2008

Pass

enge

rs ('

000s

)

0%

20%

40%

60%

80%

100%Lo

ad F

acto

r (%

)

Passengers Load Factor

Central Asia, 5%

Subcontinent, 37%

GCC, 33%

Middle East (Ex-GCC),

15%

N. Africa, 10%

- 6 -May 2008

Investment Highlights

Highly favorable home and regional market dynamics

Strong air traffic growth projected in our target regions

Low Cost Carrier (LCC) model highly untapped in the Middle East

First mover advantage

Highly profitable Low Cost Carrier business model

Continue to drive costs lower through operational efficiencies

Consistently achieved the highest level of aircraft utilization in the A320

family

Cost-effective distribution network and booking system

Drive growth through an aggressive expansion plan

Significant route and fleet expansion planned, supported by Sharjah Airport

expansion

Track record of profitable expansion

Started operations from second hub in Nepal in Jan 08 and plans for third

hub through 2008

Support from the Sharjah and UAE Government

Experienced management team

- 7 -May 2008

Highly Favorable Home and Regional Market Dynamics

International Air Traffic Growth by Key Route Area

Middle East Passenger Traffic(1)

Source: Airbus

Strong Air Traffic Growth Projected in Our Target Regions

(1) Airbus Estimate; based on number of passengers of the top 20 airlines in the Middle East

7.1%

5.3%

5.3% 6.

0%

Middle East Routes All International Routes

AAG

R %

200

5A-2

010E

Passenger Freight

81

270

2005A 2025E

Pas

seng

ers in

MM

- 8 -May 2008

Highly Favorable Home and Regional Market Dynamics

LCC Penetration - Middle East(2)

Europe

(1) Source: IBM Business Consulting Services

North America

LCC Penetration – Proven Markets – 2005A(1)

GCC countries, particularly UAE, have a significant expatriate population from the Indian Subcontinent, Egypt and the Levant (80% of UAE population is expatriate)

Low Cost Carrier (LCC) Model Highly Untapped in the Middle East

(2) Source: Air Arabia – 2005A: based on number of passengers of Air Arabia and Jazeera Airways (1.2m; Source: respective company websites) as a percentage of total passenger traffic in the Middle East (148m; Source: Zawya.com).

2005A 2008E – Air Arabia Estimate

LCC11%

Traditional Carriers89%

LCC25%

Traditional Carriers75%

Traditional Carriers99.2%

LCC0.8%

LCC1.4%

Traditional Carriers98.6%

- 9 -May 2008

Highly Profitable Low Cost Carrier Business Model (Q3/07)

CompanyRevenue / ASK(AED - Fils)

Cost / ASK(AED - Fils)

EBITDAR

Air Asia 13.7 11.2 32.2%Air Arabia 21.1 13.6 34.3%Ryan Air 21.5 16.8 30.0%Jet Blue 20.3 19.1 16.6%South West 22.6 20.8 15.2%Vigin Blue 36.8 31.3 19.6%WestJet 34.0 29.2 23.7%GOL 29.7 29.8 13.0%EasyJet 31.1 25.9 16.6%Vueling Airlines SA 24.4 27.9 3.4%UAL Corp (US) 29.1 27.6 11.8%North West Airlines (Corp) 30.6 27.3 17.7%LCC Median 26.7 26.6 17.2%Cathy 32.6 29.6 19.8%Emirates 28.0 25.2 24.7%SIA 35.7 30.8 25.9%Qantas 53.4 49.5 19.0%Air France - KLM 51.1 47.0 17.1%British Airways 42.8 38.0 21.6%

- 10 -May 2008

Highly Profitable Low Cost Carrier Business Model

12% Y-o-Y Growth

Revenue/Passenger – Q1 2007 Vs. Q1 2008

Cost/Passenger – Q1 2007 Vs. Q1 2008

22% Y-o-Y Increase

5% Y-o-Y Increase

Cost/Passenger – Excluding fuel

Continue to Drive Costs Lower Through Operational Efficiencies

418

470

Revenue/Passenger (AED)

Q1 2007 Q1 2008

346

421

Cost/ Passenger (AED)

Q1 2007 Q1 2008

218

229

Cost/ Passenger (AED)

Q1 2007 Q1 2008

- 11 -May 2008

Highly Profitable Low Cost Carrier Business Model

98.0

98.2

98.4

98.6

98.8

99.0

99.2

99.4

99.6

99.8

100.0

7 8 9 10 11 12 13 14 15

Daily Utilization (Hours)

Ope

ration

al R

elia

bilit

y %

Source: Airbus

YTD we have achieved a flying time per aircraft of over 14 hours per day with more than 99% reliability

*

*Data indicated for Q1 2007

Avg. A320

Consistently Achieved the Highest Level of Aircraft Utilization in the A320 Family

- 12 -May 2008

Drive Growth Through an Aggressive Expansion Plan

We currently serve only 38 out of the potential 200 airports within 5-hours

flying radius

Significant Route and Fleet Expansion Planned, Supported by Sharjah Airport Expansion

5 Hour Flying Radius (Sharjah Hub)

- 13 -May 2008

Drive Growth Through an Aggressive Expansion Plan

# of Destinations vs. Net Profit Margin Breakeven Load Factor vs. Actual Load Factor*

Track Record of Profitable Expansion

(1)Two destinations added in October; Net income excluding interest on

IPO funds

Months to Recent Route

Start of Operations

Load FactorsMonths to Profitability

Chittagong - Bangladesh Jun - 07 95% 1

Peshwar - Pakistan Mar - 07 85% 2

Chennai - India Nov - 06 74% 2

Thiruvananthapuram - India Nov - 06 89% 2

Kochi - India May 06 95% 1

73% 67% 68%79% 80% 86% 85%

77%

0%

20%

40%

60%

80%

100%

2005 2006 2007 Q1 08

Breakeven load factor Actual load factor

1216

24

3238

23.0%

18.0%

4.0%0.0%0.0%

0

10

20

30

40

04 Q1 05 Q1 06 Q1 07 Q1 08 Q1

Des

tina

tion

s

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Net

pro

fit m

argi

n (%

)

Destinations Net profit margin

- 14 -May 2008

Experienced Management Team

- 15 -May 2008

Historical Financial Performance

Revenues Gross Profit

EBITDAR Net Profit

192

411

749

1,225

356

-

200

400

600

800

1,000

1,200

1,400

2004 2005 2006 2007 08 Q1

Rev

enue

s (A

ED

in M

M)

2465

130

318

53

13.8%15.8%

25.9%

17.4%

12.5%

050

100150200250300350

2004 2005 2006 2007 08 Q1Gro

ss P

rofit (

AED

in

MM

)

0.0%5.0%10.0%15.0%20.0%25.0%30.0%

% M

argi

n

Gross profit Margin

2984

182

421

130

34.0%

15.1%20.4% 24.3% 34.4%

0

100

200

300

400

500

2004 2005 2006 2007 08 Q1

EBIT

DAR (AED

in

MM

)

0.0%

10.0%

20.0%

30.0%

40.0%%

Mar

gin

EBITDAR EBITDAR Margin

0 0 5

43

7820.4%

0.0%0.0% 4.0%

18.0%

0

20

40

60

80

100

Q1 04 Q1 05 Q1 06 Q1 07 Q1 08

Net

Pro

fit (

AED

in M

M)

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

% M

argi

n

Net Profit Net Margin

- 16 -May 2008

Operating Statistics

2004 2005 2006 2007 Q1 08# of Aircrafts 3 5 8 11 11Average Aircrafts 3.0 4.9 6.0 9.5 11Destinations 15 23 32 37 38# of Passengers (Millions) 0.6 1.1 1.7 2.7 0.76RPK (Billions) 1.2 2.5 3.7 5.0 1.5ASK (Billions) 1.8 3.2 4.7 5.8 1.7Average Load Factor 68.0% 79.0% 80.0% 86.0% 85%Revenue / Passenger 318.2 354.7 425.0 453.6 470Cost / Passenger 348.9 345.3 382.1 351.6 421Cost / Passenger (Ex-Fuel) 240.2 220.7 248.0 207.9 229EBITDAR Margin 13.9% 20.4% 24.9% 34.4% 34%