Passenger trends for the top 7 airports. Information includes airline and airport market share from the late 90s, in addition to country GDP growth rates and estimates

1. Dominican Republic
Airport and Airline Passenger Trends
Vaughn Cordle, CFA
Ionosphere Capital, LLC

2. Airports: Scheduled Service

3. Airport Market Share
Total passengers % (scheduled & charter)
11 months ending Nov 2013
PUNTA CANA
49.3%
LAS AMERICAS
29.9%
SANTIAGO
10.4%
PUERTO PLATA
LA ROMANA
CATEY
LA ISABELA
7.2%
1.7%
1.2%
0.3%
Source: Dominican Civil Aviation Institute & Ionosphere Capital, LLC

4. Airport Market Share
Total passengers (scheduled & charter)
11 months ending Nov 2013
PUNTA CANA
4,678,683
LAS AMERICAS
2,836,139
SANTIAGO
983,309
PUERTO PLATA
LA ROMANA
CATEY
LA ISABELA
687,945
163,891
109,450
32,097
Source: Dominican Civil Aviation Institute & Ionosphere Capital, LLC

5. Airport Market Share
Scheduled + charter = over 10 million passengers
Source: Dominican Civil Aviation Institute & Ionosphere Capital, LLC

6. Punta Cana (PUJ)
Total passengers – 12 month average
Punta Cana
Thousands
12 month moving average ending Nov 2013
5,500
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
2001
2001
2001
2002
2002
2003
2003
2003
2004
2004
2005
2005
2006
2006
2006
2007
2007
2008
2008
2008
2009
2009
2010
2010
2011
2011
2011
2012
2012
2013
2013
1,000
Source: Dominican Civil Aviation Institute & Ionosphere Capital, LLC

7. Punta Cana (PUJ)
Total passengers – monthly average
PUNTA CANA
Thousands
Total passengers per month / 12 month moving avg thr Nov 2013
600
566
500
400
300
270
200
100
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Source: Dominican Civil Aviation Institute & Ionosphere Capital, LLC

8. Las Americas (SDQ)
Total passengers – 12 month average
Las Americas
Thousands
12 month moving average ending Nov 2013
4,000
3,500
3,000
2,500
2,000
2001
2001
2001
2002
2002
2003
2003
2003
2004
2004
2005
2005
2006
2006
2006
2007
2007
2008
2008
2008
2009
2009
2010
2010
2011
2011
2011
2012
2012
2013
2013
1,500
Source: Dominican Civil Aviation Institute & Ionosphere Capital, LLC

9. Las Americas (SDQ)
Total passengers – monthly average
LAS AMERICAS
Thousands
Total passengers per month / 12 month avg thr Nov 2013
350
318
300
250
227
200
150
Source: Dominican Civil Aviation Institute & Ionosphere Capital, LLC
100
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
Source: Dominican Civil Aviation Institute & Ionosphere Capital, LLC

10. La Romana (LRM)
Total passengers – 12 month average
La Romana
Thousands
12 month moving average ending Nov 2013
600
500
400
300
200
100
2001
2001
2001
2002
2002
2003
2003
2003
2004
2004
2005
2005
2006
2006
2006
2007
2007
2008
2008
2008
2009
2009
2010
2010
2011
2011
2011
2012
2012
2013
2013
-
Source: Dominican Civil Aviation Institute & Ionosphere Capital, LLC

11. La Romana (LRM)
Total passengers – monthly average
LA ROMANA
Total passengers per month / 12 month avg thr Nov 2013
Thousands
75
70
60
50
40
30
24
20
10
5
2000
2000
2000
2001
2001
2002
2002
2002
2003
2003
2004
2004
2005
2005
2005
2006
2006
2007
2007
2007
2008
2008
2009
2009
2010
2010
2010
2011
2011
2012
2012
2012
2013
2013
-
Source: Dominican Civil Aviation Institute & Ionosphere Capital, LLC

12. Scheduled airlines
Top 10 Airlines – scheduled service into Dominican Republic

13. Scheduled airlines
Top 10 airlines - % share
36 airlines
Top 5: 54.3%
Top 10: 72.3%

14. Punta Cana (PUJ)
Airline passenger share
Top 5 share: 43%
Top 10 share: 65%
Top 20 share: 90%
Total airlines: 34
Notes:
American includes US Airways
Punta Cana is a below average
concentrated airport. The HHI is a
very low 619. This means that there
is a high intensity of rivalry and low
and competitive fares on average.
This is likely the reason passenger
traffic has grown fast over the last
decade.

15. Las Americas (SDQ)
Airline passenger share
Top 5 share: 73%
Top 10 share: 89%
Top 20 share: 99%
Total airlines: 25
Notes:
American includes US Airways
Las Americas is a below average
concentrated airport. The HHI is a low
1,508. This means very competitive fares
for the airport

16. La Romana (LRM)
Airline passenger share
Top 5 share: 86%
Top 10 share: 100%
Total airlines: 12
Notes:
American + American Eagle account
for 21.7% of the share.
La Romana has low to moderate
concentration. The HHI is 1,925.
Jetblue has competitive fares and
American Eagle and American have
lowered labor and other costs in
bankruptcy. The merger with US
airways will result in more
competitive fares as they integrate
operations.

17. Regional Share of Airport Traffic
Scheduled Passenger Service
Scheduled Passenger Share
7%
3%
North America
9%
Europe
Central Amr/Caribbean
15%
66%
South America
Eurasia

18. Regional Share of Airport Traffic
Charter Passenger Service
Charter Passenger Share
5%
6%
4%
North America
Europe
46%
39%
Eurasia
South America
Central Amr/Caribbean

19. Regional Share of Airport Traffic
Charter airlines
Arrival
Airline
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
THOMPSON FLY
SUNWING AIRLINES
AIRTRAN AIRWAYS, INC.
FRONTIER AIRLINES, INC.
CANJET AIRLINES
TUI AIRLINES NEDERLAND
MIAMI AIR INTERNATIONAL, S. A.
ORENBURG AIRLINES, JSC.
SUN COUNTRY AIRLINES
CALIMA DE AVIACIÓN, S. L.
EDELWEISS AIRLINES
WHITE AIR
XL AIRWAYS FRANCE
THOMAS COOK AIRLINES
CARIBBEAN SUN AIRLINES
INSEL AIR INTERNACIONAL, INC.
ALITALIA
CASINO EXPRESS AIRLINE
AIR GUYANE EXPRESS
SERVICIOS AÉREOS PROFESIONALES
AEROLINEA PRINCIPAL CHILE, S. A.
Passengers
Share
73,226
70,428
40,401
39,574
27,691
21,849
21,418
18,905
15,815
13,751
13,548
12,126
11,645
11,418
10,556
8,965
7,662
7,467
6,354
6,165
5,280
14.5%
13.9%
8.0%
7.8%
5.5%
4.3%
4.2%
3.7%
3.1%
2.7%
2.7%
2.4%
2.3%
2.3%
2.1%
1.8%
1.5%
1.5%
1.3%
1.2%
1%
50%
68%
80%
87%
159 charter airlines and
various operators fly
into the Dominican
Republic airports.
# 159 is NetJets

20. Regional Share of Airport Traffic
Scheduled & Charter Passenger Service
Scheduled & Charter Passenger Share
7%
3%
9%
North America
Europe
Central Amr/Caribbean
17%
64%
South America
Eurasia

21. Top Passenger Routes
Origin airports to Dominican Republic
88 routes
Top 5: 48% share
Top 10: 68% share
Top 20: 87% share

22. Top City Pairs
230+ City-pairs
Top 5: 29% share
Top 10: 44% share
Top 15: 56% share

23. Top JFK City-Pairs & Airline Share
High Concentration on these city-pairs
Jetblue is the only airline operating from
JFK to POP, LRM and AZS . 100%
market share = 10,000 HHI

24. U.S. to Latin America
Passenger fares to Latin America

25. Country Market Share
Origin countries to Dominican Republic
Schedule Service
Jan-Nov 2013
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
DR arrivals
Passengers
Market
Share
USA
Canada
Panama
Germany
France
Spain
Russia
Brazil
Peru
Colombia
Venezuela
Netherlands Antilles
Italy
Argentia
United kingdom
2,283,798
501,956
282,619
203,101
185,694
171,050
137,479
62,462
61,970
56,687
49,484
27,368
24,942
14,644
13,644
54.91%
12.07%
6.79%
4.88%
4.46%
4.11%
3.31%
1.50%
1.49%
1.36%
1.19%
0.66%
0.60%
0.35%
0.33%
Sub Total
4,076,898
98.0%
Total DR Pax
4,159,518
100.0%
Top 10 countries represent 95% of all passengers
into Dominican Republic.
83%
US + Canada: 67%
Top 15: 98%
95%

26. Economic Outlook
Economic tail winds will lift passenger volumes in
Dominican Republic airports – all else held constant.
In turn, Dominican Republic’s economic growth is
boosted by higher volumes of passengers.
Country GDP Growth Rate Estimates
2012
USA
Canada
Panama
Germany
France
Spain
Russia
Brazil
Peru
Colombia
Venezuela
Netherlands Antilles
Italy
Argentia
United kingdom
* Weighted Average
2013
2014
2015
2.8
1.9
2.8
3.0
1.7
1.7
2.2
2.4
10.5
7.5
6.9
6.9
0.9
0.5
1.6
1.4
0.0
0.2
0.9
1.5
–1.6
–1.2
0.6
0.8
3.4
1.5
2.0
2.5
1.0
2.3
2.3
2.8
6.3
4.9
5.5
5.9
4.2
4.0
4.3
4.2
5.5
0.7
0.5
1.7
-1.3
0.3
–2.5
–1.8
0.6
1.1
1.9
5.0
2.8
2.5
0.3
1.7
2.4
2.2
2.8
2.0
2.7
It should be noted that GDP forecasts have been too
rosy every year for the last 5 years. FED tapering
will result in currency devaluation in developing
countries, and this in turn will increase airline
operating costs in those regions.
2.9
Weighted Average GDP Growth Rates
3.0
2.5
2.0
1.5
Dominican Republic
3.9
2.5
3.9
4.9
* Weighted average is based on holding passenger market share constant
Source: IMF, World Bank, Conference Board & Ionosphere Capital, LLC
2012
2013
2014
2015

27. US Economic Outlook
The U.S. Economic Forecast
4.0
Consumer Spending
3.5
GDP Growth
3.0
3.1
2.5
2.4
Airline growth is not expected to exceed the growth
rate in consumer spending.
The Conference Board
2.0
Updated: January 15, 2014
1.5
Percentage change, seasonally
adjusted annual rates
3Q The Conference Board, updated January 15, 2014
4Q
1Q
2Q
3Q
2013
2013
2014
2014
2014
4Q
2014
Real GDP
Real Consumer Spending
2013 2014 2015
Year Year Year
1.9
3.0
2.8
2.0
2.6
2.4

28. Oil and Jet Fuel Outlook
Lower oil and fuel costs
Jet Fuel Refiner Price to End Users
Lower energy costs boost economic output and
air travel expenditures, in addition to lowering
airline operating costs. As an example, the U.S.
passenger airlines burned 15.5B gallons (368M
barrels) of jet last year.
Per quarter and in $/gal
$3.20
$3.00
A $4 swing in in a barrel of oil lowers costs by ~
$1.6 billion, which is equivalent to lowering fares
by 1%. This in turn would boost passenger
volumes by about .6% - all else held constant.
Of course rarely is all else held
constant, especially in the airline industry.
$2.80
$2.60
$2.40
$2.20
Source: EIA (Jan 2014) & Ionosphere Capital, LLC
$2.00
2010
2011
2012
2013
2014
2015
2012
2013
2014f
2015f
2016f
Oil Price (US$ per barrel)
105.0
104.1
103.5
99.8
98.6
Oil price (percent change)
1.00
-0.90
-0.60
-3.50
-1.20
Source: World Bank
The current assumption is that oil will be about
$4 (4.4%) lower in 2015 from 2013’s levels and
that jet fuel will be 6% lower. Crack spreads are
expected to fall and this is why jet will fall faster
than oil.

29. Jet Fuel Costs & Airline Fares
Jet fuel costs are expected to fall by 18 cents a
gallon (6%) by 2015 from 2013’s $2.98.
2010 2011 2012 2013 2014 2015
Airline Ticket Price
Index
278
Jet Fuel (cents per
gal)
% change
220
305
313
320
324
9.3%
% change
304
0.3%
2.8%
1.9%
1.3%
310
298
289
280
305
38.6%
1.6% -4.0% -3.1% -3.1%
Based on our (Ionosphere Capital) forecast of
$163 billion in passenger revenue in 2015, it is
assumed that fares will be about 1.7% lower than
would be the case if fuel costs did not fall as
forecasted.
Given the expected price elasticity of demand, we
estimate passenger volumes will be higher by
approximately 1% because of the lower fuel
costs.
Source: BEA, EIA, & Ionosphere Capital, LLC
Of course there are other factors and forces that
must be considered, but directionally the
relationships between fuel, fares, and passenger
volumes have been very consistent over a full
business cycle.

30. Passenger Growth Follows GDP Growth
Passenger Demand Follows GDP
Real GDP Growth
Passengers (RIGHT)
6%
10%
4%
6%
2%
2%
0%
-2%
-2%
-6%
Source: Ionosphere Capital, LLC
-4%
-10%

31. Airfares Impact Passenger Demand
... Passenger Growth Follows Airline Fares
Airline Ticket Prices (LEFT & Inverted)
Passengers (RIGHT)
-10%
10%
-5%
6%
0%
2%
5%
-2%
10%
-6%
Source: Ionosphere Capital, LLC
15%
-10%

32. Jet Fuel Costs Drive Airfares
All U.S. Airlines, yr-over-yr percentage change
Airline Ticket Prices Follow Fuel Costs
Airline Ticket Prices (LEFT)
15%
Jet Fuel Costs (RIGHT)
80%
60%
10%
40%
5%
20%
0%
0%
-20%
-5%
Source: Ionosphere Capital, LLC
-10%
-40%
-60%