2. Agenda
• Strategy and Product
• Markets and Network
• Marketing
• Fleet and Revenue
• Human Capital
• Operations
• Financials
3. 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
4.
5. 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
7. 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
12. 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
1,400
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
GDPpercapita
Passengers
Millions
Year
Demand & GDP East Asia
Passengers GDP
12
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
13. World Trade
• 31% East Asia
• Driver for Business
• Goldmine for Travel
East Asia
EU
USASouth
America
Rest of
World
13
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
14. 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
Billions
Imports Exports
14
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
15. 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
16. 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
USDollar
Average Disposable Income per Capita
2009
2010
2011
2012
$-
$10,000.00
$20,000.00
$30,000.00
USDollar(Million)
Country
Tourism Receipts
2009
2010
2011
2012
16
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
17. East Asian Development
• Resilient Growth
• Sensitivity in Premium Demand
-
10
20
30
40
50
60
-
200
400
600
800
1,000
1,200
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
First&Business
Millions
Economy
Millions
Year
Passenger Demand and Forecast East Asia
Economy First&Business
17
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
18. 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
ASKs
Billions
Month
Seasonality
2004
2005
2006
2007
2008
2009
2010
2011
2012
18
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
19. 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
24. 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
25. 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
26. 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
27. 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
28. 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
29. 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
30. 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
31. 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
32. 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
34. 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
MilestoneStartingpoint
LegalDurationEstimatedDuration
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
35. 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
36. 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 KoreaChina
Japan
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
36
38. 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
39. 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
41. 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
42. “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
45. 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
47. • 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
Averageseatwidth(inches)
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
58. 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 December
E195_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
201420152016
58
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
59. 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.ofCrew
Year
Flight/Cabin Crew
Flight Cabin
59
Strategy Product Forecast Network Market Marketing Fleet Revenue HR Operations Finance
60. 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
Aircraft 1
Aircraft 2TSA-SIN
Aircraft 3
Aircraft 4
Aircraft 5
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 Start year Flight time Weekly Frequency
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
62. 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
63. 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
68. 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
69. 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
70. 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
71. 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
72. 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
74. Invest FIRST!
• A unique business model
• A lucrative and niche market segment
• An incremental growth protential in Asia
• Outstanding innovations
75. Thank you very much!
Maxime Leveille
Montreal, Canada
Yang Baksa
Seoul, Korea
Heshan Karunaratne
Delphine Wermeister
Paris, FranceCherie Lu
Taipei, Taiwan
Gloria Elena Guevara Nieto
Saltillo, Mexico
Sylvain Gloux
London, UKVincent Chow
Hong Kong
Norbert Lambriex
Tilburg, The Netherlands
