Cebu Air, Inc.

(CEB) 1Q2011 Results of Operations

Investors Investors and Analysts Briefing Analysts
May 2011
Strictly Private and Confidential

Disclaimer
This information provided in this presentation is provided only for your reference. Such information has not been independently verified and, as such, is not guaranteed to be accurate nor complete. Neither Cebu Air, Inc. (CEB or the Company) nor any of its affiliates, shareholders, directors, employees, agents or advisers makes expressed or implied representations or warranties as to the accuracy or completeness of the information contained herein and neither of them shall accept any responsibility or liability (including any third party liability) for any loss or damage, whether or not arising from any error or omission in compiling such information or as a result of any partys reliance or use of such information. The information and opinions in this presentation are subject to change without notice. EBITDAR, EBITDA, EBITDAR Margin, EBIT and core net income are not measures of performance under the Philippine Financial Reporting Standards (PFRS), and should not be considered in isolation or as alternatives to net income as an indicator of CEBs operating performance or to cash flow from operating, investing and financing activities as a measure of liquidity, or any other measures of performance under PFRS. Because there are various EBITDAR, EBITDA, EBITDAR Margin, EBIT and core net income calculation methods, CEBs presentation of these measures may not be comparable to similarly titled measures used by other companies. p This presentation also contains certain forward-looking statements. These forward-looking statements include words or phrases such as CEB or its management believes, expects, anticipates, intends, plans, foresees, or other words or phrases of similar import. Similarly, statements that describe CEBs objectives, plans or goals are also forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Such forward looking statements are made based on managements current expectations or beliefs as well as assumptions made by, and information currently available to, management. There is no assurance that expected events will p p y, y , g p occur, that projections will be achieved, or that the Company and its managements assumptions are correct.

Quarter Highlights
1
11.9% traffic growth 87.0% load factor

2
43.1% domestic market share1

8
Php13.7 billion cash3 1.0x adjusted net D-E ratio DE

3
31.5% international passenger growth

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23.6% 23 6% EBITDAR margin 8.9% pre-tax core net income margin

4
14.0 block hours/day2 7.8 turns/day 81% OTP

6
4.5% reduction in cost ex-fuel per ASK
Note: All figures are for 1Q2011; growth figures are 1Q2011 year-on-year comparison 1 Based on CEB internal data (i.e., CEB-operated routes) as CAB data for 3Q10 is not yet available 2 Average utilization for Airbus fleet only 3 Includes financial assets at FVPL and available-for-sale investments

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37.1% increase in ancillary revenue per passenger

Whats In Store?

Business Updates

Financial Results

Outlook

1. Business Updates

Load Factors Up Amidst Increased Competition

Seat load factors reached 87.0% in 1Q2011, 4.4 percentage points higher than in 1Q2010. Total passenger traffic was up 11.9% YoY in 1Q2011; international passenger volume still the main growth driver, growing 31.5% YoY.
Load Factor 80.9% 78.0% 77.4% 85.4% 82.6% 87.0% 1Q11 Y-o-Y Growth

10.5 10 5 9.0 7.5 6.0 4.5 3.0

CAGR: 24.4%

2.2 1.6 1.4 1.0 7.1 4.4 5.3 53 8.2

YoY Growth: 11.9%

Passengers Domestic International Seats Domestic International

11.9% 11 9% 6.9% 31.5% 6.3% 0.4% 27.9%

FY2010 Y-o-Y Growth Passengers Domestic International Seats Domestic International 19.5% 15.3% 37.9% 8.4% 7.2% 12.7%

0.5 2.0

0.7 2.1 1Q11

1.5 2007 2008 2009 2010

1Q10

Domestic
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International

Dominance in the Philippines Continues

CEB is still the leading domestic airline in the Philippines
Domestic Passengers (000)

4,189

4,499

3,499

3,881

3,655

4,289

3,870

4,537

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% %

1.0% 7.6%

1.4% 8.1%

1.3% 6.5%

0.7% 7.4%

1.5% 5.8%

0.8% 7.6%

1.4% 6.1%

0.8% 10.8%

40.4%

33.0%

40.9%

31.3% 31 3%

38.6%

28.3% 28 3%

26.0% 36.6% 26 0%

CEB remains the no.1 domestic carrier with a market share of 43.1% for 1Q2011 on routes it operates. Competitors have gained share after adding capacity at a faster rate.

3.1%

10.3%

1.9%

11.7%

2.4%

17.0%

4.9%

19.3%

47.9% 47.2%

49.5% 48.9%

51.7%

46.3%

51.0%

43.1%

2Q09

2Q10
CEB

3Q09

3Q10
PAL

4Q09

4Q10
Seair

1Q10

(2)

1Q11

(2)

AirPhil Express

Zest Air

Source: Civil Aeronautics Board, Company filings. (1) Passenger numbers include CEBs non-revenue passengers but excludes no-shows. (2) 1Q11 CAB data not available; based on Company data, for CEB-operated routes only

Robust Demand in International Routes

CEBs growing international air traffic and market share
2,234
International Passenger Volume for FY2010 (000)

2,500

14,013
Cathay Pacific Airways, Airways 10%

2,000

3-YR CAGR: 29.5%

1,621 1,375 1,028

1,500

31.5%

Others, 43%

1,000 673 511 500

Cebu Pacific, 15%

Philippine Airlines, 28%

2007 2008 2009 2010 1Q10 1Q11

Singapore Airlines, 5%

Source: Philippine Civil Aeronautics Board (CAB)

CEB grew its international segment by 31.5% YoY in 1Q11 as ASEAN and North Asia destinations continue to show robust demand. CAB has not released 1Q11 international passenger data. But in FY2010, CEB captured 15% international market share during which CEBs international passenger volume grew 37 8% while the market grew 13 7% share, CEB s 37.8% 13.7%.

Conservative Headline Growth but Gaining Mileage on Ancillary Revenues

CEBs total revenue growth and breakdown
8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00

7.002

7.520

Total revenues increased 7.4% YoY in 1Q2011. 1Q2011 Despite improved load factors, increased competition has put downward pressure on yields resulting in a 6 6% YoY drop in average fares in 6.6% 1Q2011.

7.4%

(Php billion) Pax Revenue Ancillary Revenue Cargo Revenue

1Q2010 6.03 0.49 0.48 Cargo Revenue Ancillary Revenue

1Q2011 6.30 0.76 0.46 Pax Revenue

Cargo revenues down 3.2% YoY in 1Q2011 as 1Q2010 was exceptional due to the national elections. elections CEB has successfully improved take up of ancillary revenue per passenger which increased significantly by 37.1% YoY from Php196 in 1Q2010 to Php269 in 1Q2011.

Average Fare ( p) (Php) Ancillary Revenue per Pax (Php)

2,405

2,246

196

269

Effective Marketing and Distribution Network

Success in increasing online presence and proportion of web bookings
Breakdown of sales by distribution channel
60.00% 60 00% 40.00% 20.00% 0.00% 2009
Internet Booking

34.01% 25.38%

40.61%

41.71% 22.21%

47.92% 36.07% 22.74% 29.34%

2010
Cebu Pacific Ticket Offices and Call Centers

1Q2011
Third Party Sales Agents

Sales made through the CEB website has g significantly increased. In 1Q11, the share of web bookings to total sales reached 47.92%. www.cebupacificair.com is the top travel site in the Philippines (Source: comScore Media Metrix) CEB is increasing on-line presence through Facebook, Twitter, and YouTube

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Focused on Improving Operational Efficiency

No. of Sectors Flown Domestic International ASK (millions) Domestic International RPK (millions) Domestic International Ave. Aircraft Utilization (Block Hours/day) Airbus ATR No. of Turns per Day Airbus ATR On-Time Performance (OTP) 1Q10 21,486 17,634 3,852 2,540 1,322 1,217 2,096 2 096 1,119 977 12.24 13.80 13 80 8.17 8.23 8.24 8.22 8 22 92% 1Q11 22,494 17,629 4,865 2,940 1,351 1,589 2,492 2 492 1,202 1,290 12.58 13.97 13 97 8.40 7.81 7.70 8.13 8 13 81% %Change 4.7% 0.0% 26.3% 15.8% 2.1% 30.6% 18.9% 18 9% 7.4% 32.1% 2.8% 1.2% 1 2% 2.8% -5.1% -6.6% -1.1% -1 1% (10.6)

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2. Financial Results

Delivering Profit Amidst Tough Business Conditions

For the Three Months Ended March 31 2010 2011 YoY Change Passengers ('000) Total Revenue (Php m) Average Fare EBITDAR (Php m) EBIT (Php m) Pre-tax Core Net Income (Php m) EBITDAR Margin EBIT Margin M i Pre-tax Core Net Income Margin 2,508 7,002 7 002 2,405 2,384 1,499 1 499 1,274 34.0% 21.4% 21 4% 18.2% 2,806 7,520 7 520 2,246 1,777 741 670 23.6% 9.9% 9 9% 8.9% 11.9% 7.4% 7 4% -6.6% -25.4% -50.6% 50 6% -47.4% (10.4) (11.6) (11 6) (9.3)

CEB posted p p profits despite 41.6% y p year-on-year increase in average j fuel p y g jet price to US$120.66/bbl (published MOPS) in 1Q2011 and 6.6% year-on-year decline in average fares. EBITDAR margin and pre-tax core net income margin were lower at 23.7% and 9.0%, respectively.

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Consistent Focus on Cost Management

Php Flying Operations Fuel Others Maintenance Depreciation and Amortization Aircraft and Traffic Servicing Aircraft and Engine Lease Reservation and Sales Passenger Service General and Administrative Other Expenses Total Cost per ASK Total Cost per ASK ex- Fuel Total Cost per ASK (in US$ cents) $ Total Cost per ASK ex- Fuel (in US$ cents) For the Three Months Ended March 31 2010 2011 YoY Change 1.067 0.905 0 905 0.162 0.221 0.195 0.261 0.153 0.126 0.062 0.075 0.005 2.167 1.262 4.709 2.743 1.234 1.100 1 100 0.134 0.200 0.214 0.254 0.139 0.128 0.062 0.065 0.010 2.306 1.205 5.266 2.753 15.6% 21.6% 21 6% -17.8% -9.4% 9.5% -2.9% -9.3% 1.5% 0.5% -14.2% 89.6% 6.4% -4.5% 11.8% 0.4%

Note: Converted based on average exchange rate for the period: 1Q2011 at Php43.79/US$, 1Q2010 at Php46.01/US$

Unit cost increased 6.3% YoY in 1Q2011 due to higher fuel prices but cost ex-fuel per ASK dropped 4.6% in the same period.

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Summary of Income Statement

Php Millions Passenger Revenue Cargo Revenue Ancillary revenue Total R T t l Revenue Flying Operations Fuel Others Maintenance Depreciation and A D i i d Amortization i i Aircraft and Traffic Servicing Aircraft and Engine Lease Reservation and Sales Passenger Service General and Administrative Other E Oth Expenses Total Operating Expenses EBIT Fuel hedging gains / (losses) Fair value gains / (losses) Foreign exchange gains / (losses) Interest expense - net Equity in net income (loss) of a joint venture Provision for Tax Net Income / (Loss) after Tax Pre-Tax Core Net Income 2010 6,031 479 492 7,002 7 002 2,711 2,298 413 561 496 663 388 321 158 192 14 5,503 1,499 14 0 361 -229 4 93 1,557 1,274 For the Three Months Ended March 31 2011 2010 2011 % Revenue 6,302 86.1% 83.8% 463 6.8% 6.2% 755 7.0% 10.0% 7,520 7 520 % Operating Cost 3,628 49.3% 53.5% 3,235 41.8% 47.7% 393 7.5% 5.8% 588 10.2% 8.7% 629 9.0% 9 0% 9.3% 9 3% 745 12.0% 11.0% 407 7.1% 6.0% 377 5.8% 5.6% 183 2.9% 2.7% 190 3.5% 2.8% 30 0.3% 0 3% 0.4% 0 4% 6,779 % Revenue 741 624 -24 99 -79 9 169 1,201 670 21.4% 0.2% 0.0% 5.2% -3.3% 0.1% 1.3% 22.2% 18.2% 9.9% 8.3% -0.3% 1.3% -1.1% 0.1% 2.2% 16.0% 8.9% YoY Change 4.5% -3.2% 53.4% 7.4% 7 4% 33.8% 40.8% -4.9% 4.9% 26.8% 26 8% 12.4% 5.0% 17.5% 16.3% -0.7% 119.5% 119 5% 23.2% -50.6% 4210.5% -72.6% -65.4% 116.5% 81.3% -22.9% -47.4%

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Sound Financial Position

Php Millions Cash and cash equivalents (1) Current assets Plant and equipment Other noncurrent assets Total assets
( ) Total debt (2) Other liabilities Total liabilities

As of Dec-31 2010 13,267 15,139 33,986 812 49,937 20,503 20 503 11,527 32,030 17,907 11,234 11 234 7,236 18,470 0.40 1.03 1 03 1.82 45.6%

As of Mar-31 2011 13,737 16,057 36,347 842 53,246 21,258 21 258 13,040 34,298 18,948 11,369 11 369 7,522 18,891 0.40 1.00 1 00 1.98 46.4%

Cash balance (including financial assets at FVPL) rose to Php13.7 billion as at end 1Q2011. Gearing ratio at 1.00x and debt service ability at 1.98x adjusted net debt/EBITDAR ratio allow CEB to tap aircraft financing

Total equity Capitalized lease (3) C it li d l Net debt Adjusted net debt Net debt-to-equity (x) Adjusted t debt-to-equity ( ) Adj t d net d bt t it (x) Adjusted net debt/EBITDAR (x) (4) Cash-to-sales ratio (5)
(1) (2) (3) (4) (5)

Cash balance includes financial assets held-for-trading (at fair value) as well as available for sale assets. Includes LT debt, current portion of LT debt, and ARO liability Capitalized lease for March 31 2011 is based on LTM aircraft and engine lease expense x7 31, EBITDAR for March 31, 2011 is based on LTM EBITDAR Sales for March 31, 2011 is based on LTM Revenues

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Summary of Cash Flows

Php Millions CASHFLOWS FROM OPERATING ACTIVITIES Income (loss) before income tax Net adjustments Operating income before working capital changes O ti i b f ki it l h Net changes in working capital Net cash generated from operations Interest paid Interest received Net cash provided by operating activities p y p g CASHFLOWS FROM INVESTING ACTIVITIES Decrease (increase) in: Acquisition of property and equipment Other noncurrent assets Net cash used in investing activities CASHFLOWS FROM FINANCING ACTIVITIES Increase (decrease) in: Repayments of long term debt Payment of treasury shares of stock Net cash provided by financing activities NET FOREIGN EXCHANGE DIFFERENCE NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF PE CASH AND CASH EQUIVALENTS AT END OF PERIOD For the Three Months Ended March 31 2010 2011 1,650 339 1,989 1 989 1,213 3,202 -210 3 2,995 , 1,369 -60 1,309 1 309 1,412 2,721 -186 203 2,738 ,

-90 -3 -94 94

-1,616 -22 -1,639 1,639

-491 0 -491 491 -11 2,411 3,841 3 841 6,241

-557 0 -557 557 -15 543 9,763 9 763 10,292

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3. Outlook

Managing the Fuel Price Hike

Jet fuel price averaged US$138/bbl for MTD April 2011 Measures taken by CEB to mitigate spike in fuel prices: Passed on fuel surcharges

Beginning March 14 for international Beginning March 22 for domestic

Unbundled the f first bag beginning April 1, 2011 through Prepaid Bag Fees (Lite Fares) - Lite Fares now ( ) exclude the free 15 kilograms baggage allowance which used to be included in Go Fares. Now passengers have the option to pay Prepaid Bag Fees if they want to check in bags.

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Bracing for Competition in the Philippine Market

Aggressive expansion plans announced by local competitors End 2010 CEB (A320/A319) PAL (A320/A319) AirPhil Express (A320) Zest Air (A320/A319) Seair (A319) AirAsia Philippines TOTAL Net additions from year ago
Notes: 1 E ti t based on i d t sources and press releases of l Estimates b d industry d l f local carriers l i

End 20111 29 16 (?) 9 (?) 8 to 10 (?) 2 to 4(?) 2 (?) 65 to 70 (?) +9 to +13 (?)

24 19 6 6 2 57

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Potential Risk of More Competition from Foreign Carriers

Executive Order 29 EO 29 (Pocket Open Skies) was issued by the Government on March 14, 2011 in the aim of boosting tourism and foreign investments into the Philippines. A main provision of EO 29 authorizes the Philippine Air Panels to promote and the CAB to grant unrestricted third, fourth and fifth freedom rights to the countrys airports other than the NAIA. CEB believes it can compete with foreign carriers if given a level playing field of equal reciprocal rights The CAB issued on May 6, 2011 the Implementing Rules and Regulations (IRR) for EO29 The IRR does not address CEBs concerns on reciprocity and fair competition

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Key Points
CEB will come out stronger from this challenging business environment CEB will remain the dominant LCC in the Philippines Measures taken to mitigate fuel price increase will take effect by 2Q2011 Ancillary revenue presents significant upside Strong balance will allow CEB to accelerate growth.

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Q&A

Appendix

CEB Fleet Expansion Plan (2011-2014)

Disciplined and flexible fleet expansion plan
29 9 8 12 2009 32 9 8 15 2010 37 11 8 18 2011 39 9 8 22 2012 46 9 8 29 2013
Airbus under Operating Lease

47 5 8 34 2014

Airbus under Finance Lease

ATR under Finance Lease

Ave. fleet age(1)

3.27 years
Notes: (1) As of 31 March 2011

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Summary of Balance Sheet

Php Millions Cash and cash equivalents Financial assets at fair value through profit or loss Receivables Expendable parts, materials and supplies Prepaid expenses and other current assets Current Assets Property and equipment-net Available for sale Investment in a joint venture Other noncurrent assets Total Noncurrent Assets Total Assets Accounts payable and accrued expenses Due to related parties Current portion long term debt long-term Unearned transportation revenue Current Liabilities Long term debt-net of current portion Other noncurrent liabilties Total Noncurrent Liabilties Total Liabilities Paid-up capital Additional paid-up capital Treasury stocks Net unrealized gain (loss) on AFS investment Retained earnings Equity Total Liabilities and Equity As of Dec-31 Dec 31 2010 9,763 3,879 862 370 264 15,139 33,986 115 370 328 34,798 49,937 5,598 36 2,056 2 056 4,606 12,296 16,377 3,357 19,734 32,030 613 8,406 -3 8,891 17,907 49,937 As of Mar-31 Mar 31 2011 10,292 4,224 830 432 278 16,057 36,347 113 378 350 37,189 53,246 6,264 36 2,157 2 157 5,298 13,755 16,984 3,559 20,543 34,298 613 8,406 -159 -4 10,092 18,948 53,246

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