Private and Confidential SA Express (SOC) Limited Briefing to The Standing Committee on Appropriations relating to the SAX R1.249 billion allocation  23 November 2018 Private and Confidential

Private and Confidential Contents 1 SA Express Mandate 2 Problem Statement 1 3 Turnaround Strategy 1 6 4 SA Express Performance 9 5 Funding Allocation & Application 1 Private and Confidential

Private and Confidential Company Mandate Statutory Provide transportation of Passengers, cargo and mail, air charters and other related services. Promote frequency of services on lower destiny routes and to expand regional air services capability in the Republic of the African Continent and surrounding islands. Private and Confidential

Private and Confidential Problem Statement Prior to Suspension Airline Performance Finance Challenges Weak Balance Sheet Long outstanding debts Frozen credit lines Liquidity challenge Monthly cash-burn High cost structure Corporate Challenges Low staff morale High staff turnover High rate of management vacancies Onerous agreements/contracts Zero accountability Shortage of skills Private and Confidential

TURNAROUND STRATEGY

Private and Confidential SAX Adopted the G-POCH strategy based on the principles of Governance, Profitability, Operational Efficiency, Customer Value and Human Capital Governance Ensure good corporate governance (board and management and legal compliance) Review of Policies & Procedures G Profitability Grow Revenue Introduce cost reduction program P Operational Efficiency Improve and maintain OTP Focus on improving ground turnaround Improve Dispatch Reliability O Customer Value Proposition Improve product and services offered Ensure aircraft On Time Departure Develop Communication Plan C Human Capital Retain and develop competent employees Inculcate culture of high performance H Private and Confidential

Private and Confidential The G-POCH tenets form the basis of 2018-2020 Corporate Turnaround Plan with clear deliverables and milestones G Initiatives & Outcomes (0 - 6 Months - Phase 1) Governance Filled all vacant post-holder positions with experienced aviation specialist Head of Safety GM : Technical Person Responsible for Aircraft Person Responsible for Flight Full compliance with SACAA Finalised the review of all key policies and framework e.g Supply chain Policy Delegation of authority framework Irregular expenditure policy Fruitless and wasteful Private and Confidential

Private and Confidential The G-POCH tenets form the basis of 2018-2020 Corporate Turnaround Plan with clear deliverables and milestones P Initiatives & Outcomes (0 - 6 Months - Phase 1) Profitability Improve Revenue We have introduced high yield regional routes such as Lubumbashi and Walvis bay as part of Phase 1 Focused on consolidating ORTIA as the main hub On track to reopen Cape Town as base (from January 2019) Reduce Costs Reduced aircraft lease costs CRJ700-$24K per month (11% reduction) CRJ 200-$160k per month (termination of monthly rental) Cancelled all charters R18m saving per month Employee Costs All overtime terminated Reduction of pool cars Capital Restructuring Capital injection to improve debt gearing Private and Confidential

Private and Confidential The G-POCH tenets form the basis of 2018-2020 Corporate Turnaround Plan with clear deliverables and milestones O Initiatives & Outcomes (0 - 6 Months - Phase 1) Operations We have improved OTP from 64% to above 90% We have improved aircraft reliability from 77% to above 95% Purchasing directly from OEMs thus reducing cost and improving efficiencies C Reduced customer complaints relating to missing bags Introduction of “Premium Economy” on Lubumbashi effective December 19 Increased frequency has provided the customer flexibility Customer Private and Confidential

The G-POCH tenets form the basis of 2018-2020 Corporate Turnaround Plan with clear deliverables and milestones H Initiatives & Outcomes (0 - 6 Months - Phase 1) Revised and promoted new company values to drive a culture of accountability and performance Human Capital

Private and Confidential During the month of August SAX carried a total of 2 894 passengers (from the 15th to 31st August 2018 In the month of September 2018 SAX carried a total of 23 295 passengers SA EXPRESS PERFORMANCE Private and Confidential

SAX Serviceable Fleet & Projection During the month of August SAX carried a total of 2 894 passengers (from the 15th to 31st August 2018 In the month of September 2018 SAX carried a total of 23 295 passengers SAX Serviceable Fleet & Projection 8 Aircraft 10 Aircraft 12 Aircraft 14 Aircraft 15 Aircraft 22 Nov 18 30 Nov 18 30 Dec 18 31 Jan 19 19 Mar 19 Private and Confidential

Private and Confidential OTP vs Competitors *Source: ACSA SA Express exceeded 90% target by achieving 94% Best On time performance compared to other feeder carriers. Private and Confidential

Technical Dispatch Reliability Private and Confidential

Passenger Performance Year to Date Oct The Airline will introduce four more routes between December 2018 and January 2019 Private and Confidential

Positive Growth Trend Recorded Initial launch routes have shown positive growth trend Private and Confidential

Flown vs. Booked & Projected Booking Nov-Dec Private and Confidential

Revenue Performance Aug to Oct 2018 Passenger revenue achieved for August was R4.7m with a total of 96 flight departures operating for only 8 days. Passenger revenue for the month of September 2018 was R40.4m Passenger revenue for the month of October 2018 was R51.8m Private and Confidential

Private and Confidential Income Statement Phase 1 the company will incur a loss as it returns to optimal operations Phase 2 - by April 19 ,once additional regional routes are implemented, the company begins to break even Private and Confidential

Thank you