1Q09 Presentation

1st Quarter 2009 Financial Results
as at 31st March 2009

Presentation to Media
Dato Sri Idris Jala (MD/CEO) Tengku Dato Azmil (ED/CFO) 12 June 2009
State of the aviation industry
Copyright Malaysian Airline System Berhad 2009. Highly Confidential . All rights reserved
2009 is the toughest year for airlines Quadruple Squeeze No one is immune! Falling Demand
Overcapacity
400 aircraft delivery in Asia Pacific
Fuel Volatility
Most airlines are hedged at $100 / bbl Reduction in fares & fuel surcharge
H1N1 Flu
2009 is the most challenging time for the airline industry

1
Fuel prices
Fuel prices continue to be volatile While fuel prices have fallen, many airlines losing money/see lower profits due to hedging position Over 40 airlines have gone bankrupt and more financially weak airlines are expected to follow
2
3 4
Overcapacity
Overcapacity still persist A lot of aircraft coming into Asia Pacific, capacity growing faster than demand
Global economic slowdown

Delaying spending due to economic uncertainties Weaker demand for discretionary travel Lower global air traffic, companies downgrading from business to economy Globally, airlines have recorded dips in passenger loads and yield pressures
H1N1 Flu Pandemic

Heightened level of alert to Phase 5, spreading globally A huge threat to airline and air travel recovery
NEW!!!
4
IATA Airline industry outlook remains fragile

Carriers in all regions expected to report losses in 2009
2009 industry losses doubled to US$9.0 billion Asia Pacific airlines hardest hit - US$3.3 billion loss Industry revenues to fall by US$80 billion or 15% to US$448 billion
Passenger traffic expected to contract by 8%

Cargo to decline by 17% Yields to decline 7% Industry shrinking - 6% capacity cut Growing concern on traffic - swine influenza
50 airlines have gone bankrupt in the last 18 months
Source: IATA, June 2009

Weak trends in freight and travel continues

International Passenger and Freight Growth
Source: IATA
Sharp fall in traffic downward trend continues

International Passenger Load Factors
Source: IATA
Sharp fall in traffic, Asia Pacific hardest hit!

Passenger Growth by Region
8
4.7 Jan-09 3.1 0.4 Feb-09 2.7 Mar-09 YTD-09
4 0
-1.4
% Growth in RPKs
-4 -8
-2.6 -3.8 -5.7 -8.4 -9.1 -10.1 -11.6 -3.7 -5.9 -6.2 -5.6 -9.1 -10.1 -11.1
-12 -16 -20

-13.7
-11.2 -12.4 -12.8 -14.5
-10.6 -12.0 -13.4
-15.6
Africa
Asia Pacific
Europe
Latin America
Middle East
North America
Total
Source: IATA
1Q09 yoy passenger traffic fell by 9.1% Asia Pacific 1Q09 yoy passenger traffic fell by 12.4%
Pressure mounts amidst new capacity
Source: Ascend, IATA
The number of aircraft parked continue to increase (> 2300 aircraft parked in 2009)
Source: Ascend
10
State of the Airline Industry - 2008

3.8b 3.2b
630m 550m 244m
320m 330m 400m
266m
500m
700m 627m 2b 2.2b 3.5b 4b 7b 6b 3.1b 1.5b 1.8b
4b
19b 21b
31 b
(Net income in RM)

Source: Bloomberg
NOT EXHAUSTIVE
11
State of Malaysian Carriers in 2008 Profitability impacted by tough operating environment

244m
161m 120m
+
40m
38m 3QFY08 46m 9m 4QFY08 FY08 1QFY08 2QFY08 3QFY08 4QFY08 FY08
1QFY08
2QFY08
_
177m
(Net income in RM) Source: Company results announcement

465m 472m
12
State of the Airline Industry - 1st Quarter 2009
42m 21m 300m 21m
98m
320m 450m 470m 510m 650m 1.2b 1.2b 1.3b 1.3b 1.3b 1.1b 640m
2.3b 2.3b 2.8 b
(Net income in RM)

Source: Bloomberg
NOT EXHAUSTIVE
13
Early Adoption of FRS 139
What is FRS 139?

Financial Reporting Standard 139 is a standard issued by the Malaysian Accounting Standards Board (MASB) that establishes the principles for recognising and measuring financial assets, financial liabilities and certain contracts to buy or sell non-financial items. It is similar to International Accounting Standard IAS39 which are already adopted by many international airlines. FRS 139 is to be made mandatory in Malaysia effective from 1st January 2010.
15
Key Rationale for Early Adoption FRS 139

1. Most airlines have hedged fuel at US$100+ per barrel and are incurring huge MTM losses 2. FRS 139 has been adopted in most countries. Most airlines (Singapore Airlines, Cathay, Qantas) are on IAS 39 regime and US & European airlines are already on IAS 39/FAS 133
3. Investors and analysts have expressed reservations on the comparability of our results to our peers unless our MTM losses are explicitly stated in line with other airlines. As such, they have been speculating on what would have been MAS financial results in an FRS 139 environment.
16
Many have declared mark-to-market losses in 2008

Singapore Airlines Cathay Pacific China Airlines 629 m Shanghai Airlines China Eastern Air France - KLM
Hedging Gain / Loss (USD)
Air China
25 m
811 m
908m
980 m 994 m 1.18b

Asia Pacific airlines fuel hedging mark to market losses for 2008 Source : Bloomberg, Analyst Reports, Centre for Asia Pacific Aviation, internet
17
Impact from adoption of FRS 139

1. P&L MTM losses - Big hit in opening reserves at 1st January 2009 Effectively, the P&L is reset to oil price forward curve as at 1st January 2009 MTM impact will change depending on the oil price forward curve Upward movement will result in MTM gain
Downward movement will result in MTM loss

The fuel MTM losses are effectively paper losses and will only be realised over the next three years and the quantum realised is subjected to the actual oil prices 2. Balance Sheet Unrealised hedges will be recognised in the Balance Sheet
No impact on MAS healthy cash position, fundamentals remain intact

18
FRS 139 Resetting of MTM Losses (Example) FRS 139 Resetting of MTM Losses
Balance Sheet @ 1/01/09
MTM Losses
(based on forward curve @ 31st March 2009)
(90)
(100)
Profit & Loss
Q1
(10)
Q2
0
Q3
0
Q4
0
2010
0
* Simulated for reference only
19
FRS 139 Resetting of MTM Losses (Example)

USD 70 USD 60 USD 50
Balance Sheet (90)
Gain Loss
MTM Loss (100)
Q1
P&L (10)
Q2
-
Q3
-
Q4
-
2010
20
Note : Simulated reference. Other factors influencing derivates valuations are held constant
Oil price volatility continues into 2009

Hedges provide protection from the rising fuel price
80
10 Jun 2009 SinJet US$78/bbl WTI US$71/bbl
70
US$/bbl
60
50
SinJet
40
WTI Crude Jan-Mar09 SinJet avg 1Apr-10Jun09 SinJet avg Jan-10Jun09 SinJet avg
US$55/bbl
3/6/2009 4/3/2009 2/13/2009 2/20/2009 2/27/2009 3/13/2009 3/20/2009 3/27/2009 4/10/2009 4/17/2009
US$64/bbl
5/1/2009 5/8/2009 4/24/2009 5/15/2009
US$59/bbl
5/22/2009 5/29/2009 6/5/2009
30
1/2/2009 1/9/2009 1/16/2009 1/23/2009 1/30/2009 2/6/2009
Sin Jet
Source: Bloomberg SinJet and WTI Crude prices from 2 Jan 2009 rights reserved Copyright Malaysian Airline System Berhad 2009. Highly Confidential . All
WTI Crude
21
1st Quarter 2009 Financial Highlights
State of the Airline Industry - 2008

3.8b 3.2b
630m 550m 244m
320m 330m 400m
266m
500m
700m 627m 2b 2.2b 3.5b 4b 7b 6b 3.1b 1.5b 1.8b
4b
19b 21b
31 b
(Net income in RM)

Source: Bloomberg
NOT EXHAUSTIVE
23
State of Malaysian Carriers in 2008 Profitability impacted by tough operating environment

244m
161m 120m
+
40m
38m 3QFY08 46m 9m 4QFY08 FY08 1QFY08 2QFY08 3QFY08 4QFY08 FY08
1QFY08
2QFY08
_
177m
(Net income in RM) Source: Company results announcement

465m 472m
24
1Q09 impact of challenging operating environment resulted in demand and revenue decline
+ Operating loss of RM138 million in 1Q09 Total operating expenditure decreased by 20%
Revenue declined due to the worst global recession in 70 years Seat factor dropped 13.1 ppts Pax yield up 4% to 29.5 sen/RPK
In response to the collapse in demand, we have proactively reduced capacity by 11%
25
Overview of Group Profit & Loss: 1Q09 vs 1Q08

1Q09 (RM mil) Passenger Pax Revenue Fuel Surcharge Other Revenue Cargo Belly & Freighter Fuel Surcharge Other Revenue Gain on sale of properties Revenue Expenditure Fuel Non-fuel Operating Profit before fin cost & taxes Derivative losses Finance costs Taxation Operating Profit after fin cost & taxes Share of results of Associated Companies Minority Interest Net Profit after tax
1Q08 (RM mil) 2,246 401 156 392 147 406 2 3,750 1,442 2,175 133 (4) (14) 115 5 (0) 120
26
1,594 400 171 235 65 275 2,740 713 2,165 (138) (557) (17) 12 (700) 6 (1) (695)
1Q09 Passenger*: RASK , Yield , Seat Factor

Pax Revenue (RM mil) 2,666 -25% 1,999 RASK (sen/ASK)
19.7
-16%
16.5
2,220 1,551 16.4 12.8
1Q08
1Q09
1Q08
1Q09
Capacity ASK (Mil km)
13,565
-11%
12,095
Yield (sen/RPK)
28.4
+4%
29.5
Seat Factor (%) RPK (Mil km)
-13.1ppts 69.2 9,386 1Q08 -28% 56.1 23.6 22.9 1Q09
6,785
1Q09 1Q08
*Excluding Firefly and MASwings Including fuel surcharge and admin fees
27
1Q09 Cargo: Belly

540 Cargo Revenue* (RM mil) -45% 298
Freighter
RCTKM* (sen/CTKM) 57.6 -24% 43.7
1Q08 Capacity CTKM (Mil km) 936 -27%
1Q09
1Q08
1Q09
682 Yield* (sen/LTKM) 89.5 -24% 68.3
Cargo Load Factor (%)
64.4
-0.4ppts 64.0
Filled LTKM (Mil km)
603
-28% 436
1Q08
* Include (cargo) fuel surcharge
1Q09
1Q08
1Q09 28
Total expenditure decreased 20%, Fuel costs decreased 50%

Costs 1Q09 RM mil vs 1Q08 RM mil Variance
Maintenance Leasing Sales Incentives Advertising Staff Costs In flight cost Commissions Fuel Others TOTAL
320 495 23 22 531 89 73 713 612 2,878
+38 +34 +10 +6 -12 -19 -24 -729 -43 -739
Engine maintenance for B777 New lease of 738-800 in 2009, one-off rate reduction in MASkargo lease rental in 2008
Advertising ELF & All Inclusive Fares campaign
Largely decline in pax growth Removal and reduction in commission Lower avg fuel price from US$114 to US$62 and lower consumption
29
1Q09 Fuel Analysis Reduction in total fuel cost from lower fuel price and consumption
RM billion
-0.63 1.44
1,220
- 0.73
+0.15 -0.25
Price decreased by USD52 from USD114/bbl to USD62/bbl
0.71
1Q08
Price
Forex
Volume
1Q09
30
Balance Sheet Healthy Cash Balance

RM mil 31 Mar 2009 31 Dec 2008
Cash
Negotiable Deposit
Other Current Assets Non Current Assets Deferred Tax Assets Total Assets Long Term Borrowing Other Liabilities Total Liabilities
4,3,772
2,942
3,572
830
2,132 3,208 20 9,132 (668) (8,911) (9,579)
1,045
2,311 3,142 (0) 10,070 (986) (4,887) (5,873)
4,617
Net Assets
Represented by: Shareholders Equity Minority Interests
(447)
(459) 12
4,197
4,186 11
31
Impact to Balance Sheet

Unrealised MTM loss triggers negative equity Shareholders equity as at 31st March 2009 is -RM459 m. This means that technically we meet the definition of a PN17 company However operations remains robust and healthy
Proforma as at 29th May 2009, the shareholders equity is +RM692 m (i.e. no longer meeting the PN17 criteria)
We have obtained a PN17 waiver from Bursa
32
Rationale for obtaining PN17 waiver from Bursa

First time adoption and transition to FRS139 Negative equity of RM0.46 billion of which -RM3.3 billion is attributed to MTM The fuel MTM losses are effectively paper losses. These will only be realized over time as the hedges are contractual arrangements over the next three years (2009, 2010, 2011) The fuel MTM will fluctuate with oil price movements. It will reduce if the oil prices move upwards relative to current forward curve. It is such that on daily basis, MAS could be in and out of PN17. MAS liquidity is still strong with cash balance of RM3.8 billion and minimum immediate obligation.
* projected opening 1/1/2009 with FRS139 ** projection made in April 2009
33
Equity position would be positive at 29 May forward curve

Balance Sheet
as at 31Mar09 (in RM billion)
Proforma non-FRS139
FRS 139
Proforma FRS 139

with fuel MTM (29May09)
Share cap & RCPS
1.73
1.73
1.73
Reserves
2.382
(2.19)1
(1.04)3
Equity
4.11
PN 17 Threshold = RM0.06 b
(0.46)
0.69
Include unrealised MTM loss of RM3.33 billion
No unrealised MTM in reserves
Unrealised fuel MTM loss dropped by RM 1.15 billion
34
MTM Trend: Sensitivity to oil prices

Fuel MTM has improved by RM1.1 billion since 31 Mar 2009 due to upward price movement
RM (Million)
Weekly Fuel MTM movement relative to 31/03/2009
66 61
1,000 800 600 400 200 0
56 52 52 50
3 Apr 10 Apr 17 Apr
58
51
30 Apr
8 May 15 May
22 May
29 May
Fuel WTI (USD/ bbl) 35
Potential hedging gains in Q2 due to oil price movements

Ceteris paribus (all else being equal)
Since 31st March 2009, oil price has increased more than 35% As of 29th May 2009, MAS could benefit from hedging gain of RM1.1 billion in the Q2 P&L Consequently, it could mean that MAS Q1 RM695 million will be fully reversed by the RM1.1 billion
RM
1.1b gain
36
If oil price continue to rise higher than 31st March 2009 (USD 49 / bbl WTI )
+ Potential hedging gain of RM 1.1 billion

(as at 29th May 2009)
+ Continue to be protected with restructured hedges

(47% remaining volume hedged @ USD 103/ bbl WTI for 2009)
37
Initiatives
We are on track to achieve profitable growth but interrupted by current global recession
35x 737-800 6x A380 15x ATR Codeshares & Interline
Grow network, build capacity
Everyday Low Fares All Inclusive Fares MH Value Fares Weekend Specials Fuel Surcharge Reduction
Profitable Growth
MH & safety Skytrax 5-Star award (2005, 2006, 2007, 2008, 2009) >34 awards (2005 - 2008)
Competitive fares
5 Star
Get more customers, more revenue Lower cost
Savings 2006: RM 665 m 2007: RM 738 m 2008: RM 936 m
Increased internet sales 3rd party MRO Haj & Charter Firefly
39
Our focus for 2009 is to continue with our competitive fares initiatives to stimulate demand
1
Everyday Low Fares
2
MH Value Fares
MH Stimulus Package
Global Travel Fairs (MATF & MATTA)

Internet
40
With Everyday Low Fares & All Inclusive Low Fares Internet sales improved by 173% in 2008
MH Value Fares MATF & MATTA
YoY Sales Comparison

180 160
FARES
Sales in Million (MYR)
140 120 100 80 60 40 20 0
2008/09
RM 475 mil
Total internet sales improvement from Jan-Dec08 -
2007/08
Mar
Aug
May
Dec
June
July
Sept
Nov
2009
Feb
Mar
41
Jan
Apr
Oct
Significant improvement in internet sales for Q1 2009 (compared to 2008)

112 m
99 m
57 m
42 m 31 m 44 m
Jan 08
Jan 09
Feb 08
Feb 09
March 08
March 09
+82.5%
Sales in RM million
+164%
+121%
42
MAS has also introduced MH Value Fares

How would you like to fly today?
One of the first airlines in It is about providing value They will now have full
control of their travel experience with four new fare options for economy class travel. and choice to our customers Asia to launch these fare options
43
Aggressively Domestic & Global Sales MAS connects to hundreds of destinations with 700 sales staff and 1,300 agents in over 30 countries worldwide
Malaysia Airlines Travel Fair February 2009 MATTA Travel Fair March 2009
MHs global travel fairs are proven to deliver results up to 50% up lift of passengers Copyright Malaysian Airline System Berhad 2009. Highly Confidential . All rights reserved
44
Our travel fair has showed 50% - 415% improvement in passenger and revenue
MATF MATTA
+52%
92,000
140,000
+42%
100 m
70.32 m
+525%
25,000
+415%
18.1 m
3.51 m
4,000
2008
2009
2008
2009
2008
2009
2008
2009
Pax
Sales (RM)
Pax (000)
Sales (RM m)
45
GOOD RESPONSE TO MAS STIMULUS PACKAGE
Something for everyone! 9 deals covering first, business and economy class travel Covers 7 deals for
economy class travel, 1 for business and 1 for business and first class
Covers domestic,
ASEAN and international travel
46
Challenges & Outlook 2009
3 thrusts and 7 KBAs to survive this crisis

Serve Customers
Make Money Save Money
5.
2.
3.
1.
MH initiatives / win awards
4.
Dual Pricing & Aggressive Sales Subsidiary ancillary / revenues Strategic Alliances
6.
7.
Capacity Cut Cost reduction / Budget cut 7% Fuel Hedging Restructuring

48
48
On track to implement tough cost measures in 2009 to preserve cash target RM700m RM1b
1
2 3
Budget cut 7% across the board in 2009

Freeze all recruitment Freeze all discretionary training and traveling
4 5
Stop discretionary expenditure

Prioritise projects
49
Strategic Approaches to deal with the crisis (i.e collapse in demand)

High
Increase Yield Drop Seat Factor
1 3 Dynamic
Pricing
Maintain Yield and accept a reduction in seat factor Drop Yield and reduce drop in seat factor Tandem increase in yield and seat factor (complicated but needed fine tuning)
2
Yield
3
Drop Yield Drop Seat Factor
High
2
Low Low
Seat Factor
50
We have embarked on a revolutionary dual pricing approach Dual Pricing

Framework
Non Peak Flights

Competitive pricing Capture market share Go for high Seat Factor (e.g. Everyday Low Fares, travel fair, aggressive promotion, etc)
Peak Flights
Cost plus pricing Aim to maximise profit Accept lower Seat Factor in return for higher yields
51
51
Our approach goes down to the route DNA level

MH Pax Business
ROUTE
LHR
MH1 MH2 MH4
AMS
MH16 MH17
SYD
LAX
MH90
EWR
MH91
FLIGHT
MONTH
DAY
31
28
31
31
28
31
31
28
31
110,076 P&L
52
MAS Fundamentals Remain Intact

At current times Cash is king - cash & negotiable deposits of around RM3.8 billion as at Mar09
We do not take delivery of new jet aircraft until end 2010

To date, we have already proactively cut capacity by 11% in 2009
Cost savings of over RM2 billion over the last 3 years

We already have put in place stringent controls over costs and investments MAS continues to be hedged will continue to be protected from rising fuel prices Drive aggressive sales - forward booking remains strong Reinvent the way we manage inventory and yield
53
If oil price continue to rise higher than 31st March 2009 (USD 49 / bbl WTI )
+ Potential hedging gain of RM 1.1 billion

(as at 29th May 2009)
+ Continue to be protected with restructured hedges

(47% remaining volume hedged @ USD 103/ bbl WTI for 2009)
54
Thank You
For further queries, please email kinhoong.ma@malaysiaairlines.com
Back-up
Sales & Bookings Up by 81% and 98% despite H1N1 Flu

Sales (RM)
443 m
Bookings (000)
411,000
245 m
207,000
2008
2009 *
2008
2009 *
+81%
*January 2009 24 May 2009
+98%
57
Strategic Approaches to deal with the crisis (i.e collapse in demand)

High
Increase Yield Drop Seat Factor
1 3 Dynamic
Pricing
Maintain Yield and accept a reduction in seat factor Drop Yield and reduce drop in seat factor Tandem increase in yield and seat factor (complicated but needed fine tuning)
2
Yield
3
Drop Yield Drop Seat Factor
High
2
Low Low
Seat Factor
58
Sales & Booking improvement of 126% and 158% despite economy slowdown
Sales (RM)
269 m
Bookings (000)
236,000
119 m
91,000
2008
2009
2008
2009
+126%
JanuaryMarch 2009
+158%
59
1Q09 Loss After Tax Core net loss of RM108m

RM million
Net Loss After Tax
Category 1
Category 2
Net Loss on Recurring Basis
-108 +23
+564 -695
*Note: Category 1 - One off items, e.g., gain on sale of properties, disposal of aircraft Category 2 - Unusual items occurred during the year due to change in estimates and/or change in accounting policies, revised depreciation
60
Peer performance - yoy [option 1]

15% 11.2% 10%
Year on Year Comparison (%)
5.9%
17,160
27,427
19,536
13,160
5% 0% -5%
7.7 5.5 71.2
7.4
5.7 76.1
7.2
5.6 77.6
0.4%
1.2%
58,529
45,395
-0.8%
63,853
-5.4% -10% -15%
50,889
-5.6% -8.2ppt
-5.8%
-5.7ppt
-2.3ppt -5.5%
-2.6%
-1.8%-2.4ppt 8.4 6.7 79.7
-10.7% -15.2% -20% -20.3% -25% -15.3% -14.9%
SIA
Thai
Ask RPK Yield
Cathay
RASK SF ppt
Qantas
Source: Company, Research reports estimates Note: 1) SIA Jan-Mar09 2) Thai Jan-Mar09, seat factor Jan-Feb09 3) CX data 2H08 31/12/08 4) Qantas data 1H09 31/12/08 5) ASK & RPK in million 6) Yield (US cents/RPK) 7) RASK (US cents/ASK)
61
Peer performance - yoy [option 2]

15% 11.2% 10%
Year on Year comparison (%)
5.9% 5% 0.4% 0% -0.8% -5% -5.4% -10% -10.7% -15% -14.9% -20% -20.3% -25% -15.2% -15.3% -2.6% -5.6% -5.8% -1.8% -5.5% 1.2% 71.2 76.1 77.6 79.7 -2.4ppt -2.3ppt -5.7ppt -8.2ppt
Ask
RPK SIA Thai
Yield Cathay
RASK Qantas
SF
Source: Company, Research reports estimates Note: 1) SIA Jan-Mar09 2) Thai Jan-Mar09, seat factor Jan-Feb09 3) CX data 2H08 31/12/08 4) Qantas data 1H09 31/12/08 5) ASK & RPK in million 6) Yield (US cents/RPK) 7) RASK (US cents/ASK)
62
No compromise on quality: Customer Value Proposition

MHCVP Progress (as at end Apr 09)
100%
Out st and ing ( 9 6 - 10 0 ) Exceed ing ( 9 0 - 9 5)
800
738
700
80%
On T ar g et ( 8 0 - 8 9 )
87%
600
T hr esho ld ( 70 - 79 )
60%
500
400 40%
300
200 20%
Total (initiatives registered) Total (due by end Mar 09) Completed (by end Mar 09)
738 707 614 93
100
Cumulative closure rate is at 87%

0% Total Copyright Malaysian Airline System BerhadCumulative Closure All rights reserved 2009. Highly Confidential . Rate
Delayed
0 projects initiated by end of Mar 2009
63
MAS hedging position

MAS has restructured hedges in light of volatile fuel prices this is a more prudent measure than unwinding hedges Oil prices have moved up 25% since 31 March (until 2 June 2009) Restructured hedge position 53% @ US$106 WTI MAS will still be protected from rising fuel prices which will translate into write back on MTM unrealised hedging losses MAS effectively pays spot prices on the fuel it consumes today since all hedging losses has been accounted for. Consistent hedge practice ensures stable/longer term outlook
64

1Q09 Presentation

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1Q09 Presentation

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1st Quarter 2009 Financial Results

as at 31st March 2009

State of the aviation industry

2009 is the most challenging time for the airline industry

Global economic slowdown

H1N1 Flu Pandemic

IATA Airline industry outlook remains fragile

Passenger traffic expected to contract by 8%

50 airlines have gone bankrupt in the last 18 months

Source: IATA, June 2009

Weak trends in freight and travel continues

Sharp fall in traffic downward trend continues

Sharp fall in traffic, Asia Pacific hardest hit!

-12 -16 -20

-11.2 -12.4 -12.8 -14.5

-10.6 -12.0 -13.4

Pressure mounts amidst new capacity

Source: Ascend, IATA

State of the Airline Industry - 2008

630m 550m 244m

320m 330m 400m

(Net income in RM)

State of Malaysian Carriers in 2008 Profitability impacted by tough operating environment

(Net income in RM) Source: Company results announcement

State of the Airline Industry - 1st Quarter 2009

42m 21m 300m 21m

2.3b 2.3b 2.8 b

(Net income in RM)

Early Adoption of FRS 139

What is FRS 139?

Key Rationale for Early Adoption FRS 139

Many have declared mark-to-market losses in 2008

Hedging Gain / Loss (USD)

980 m 994 m 1.18b

Impact from adoption of FRS 139

Downward movement will result in MTM loss

No impact on MAS healthy cash position, fundamentals remain intact

Profit & Loss

* Simulated for reference only

FRS 139 Resetting of MTM Losses (Example)

MTM Loss (100)

Oil price volatility continues into 2009

10 Jun 2009 SinJet US$78/bbl WTI US$71/bbl

1st Quarter 2009 Financial Highlights

State of the Airline Industry - 2008

630m 550m 244m

320m 330m 400m

(Net income in RM)

State of Malaysian Carriers in 2008 Profitability impacted by tough operating environment

(Net income in RM) Source: Company results announcement

Overview of Group Profit & Loss: 1Q09 vs 1Q08

1Q09 Passenger*: RASK , Yield , Seat Factor

2,220 1,551 16.4 12.8

Capacity ASK (Mil km)

Seat Factor (%) RPK (Mil km)

-13.1ppts 69.2 9,386 1Q08 -28% 56.1 23.6 22.9 1Q09

1Q09 Cargo: Belly

1Q08 Capacity CTKM (Mil km) 936 -27%

682 Yield* (sen/LTKM) 89.5 -24% 68.3

Cargo Load Factor (%)

Filled LTKM (Mil km)

Total expenditure decreased 20%, Fuel costs decreased 50%

320 495 23 22 531 89 73 713 612 2,878