Avianca Holdings S.A. 2Q 2013 Earnings Results

Disclaimer

This presentation contains certain forward-looking statements. Such forward-looking statements

involve a certain degree of risk and uncertainty with respect to the Company’s business, financial

results, trends, strategy and projections, and are based on assumptions, data or methods which,

although considered reasonable by the Company, may turn out to be incorrect, or may not be possible

to realize. The Company gives no assurance that expectations disclosed in this presentation will be

confirmed. Prospective investors are cautioned that any such forward-looking statements are not

guarantees of future performance and involve risks and uncertainties, and that actual results may

differ materially from those in the forward-looking statements, due to a variety of factors. The

Company specifically disclaims any obligation to update any forward-looking statements, which speak

only for the date they are made.

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Source: Company information

2013 Industry Highlights Environment Capacity worldwide, measured in ASK's, grew 3.9% during the first half of 2013

when compared to the same period in 2012, while traffic (RPK’s) increased 4.8%. As a result, load factor for the industry increased to 79.0%, up 0.8 pp when compared to the same period in 2012

During the first half of 2013 international air travel traffic (RPK’s) in Latin America grew well above the global pace at 8.7%, supported from strong business travel demand

During the first semester of 2013, the number of passengers carried in Latin America grew 6.7% when compared to the same period in 2012. Capacity, measured in ASK’s, increased 5.5% while traffic measured in RPK´s increased 7.0%. As a result the load factor increased to 76.2% from 75.1% in the same period last year

During the first half of 2013, the global freight business experienced a stabilization in the number of tons shipped of 0.1%, while Latin America maintained a stable growth trend of 1.6%.

Fuel Prices

Fuel prices decreased on average 4.6% in the first half of 2013 while for the second quarter of this year prices decreased 6.5% over the same period in 2012

Exchange Rate

The Colombian peso experienced, during the first half of 2013, a depreciation of nearly 9.1%. For the second quarter of this year the peso depreciated 5.3% over the same period in 2012

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Source: ALTA & IATA

Operating revenues reached USD $ 1.1 billion, an increase of approximately 7.6% over the same period of 2012 Operating income (EBIT) for 2Q 2013 was USD $ 35.3 million, an increase of USD$ 23.1 million over the same period of last year. Consequently operating margin increased to 3.2%, up from 1.2% in 2Q 2012

EBITDAR came in at USD $ 144.1 million, a 30.8% increase over the same period of last year. EBITDAR Margin for the quarter rose to 13.0% increasing 2.3 pp over the same period of 2012 The cost per available seat kilometer excluding fuel costs (CASK ex Fuel) decreased 0.5% versus the same period of 2012

Capacity measured in ASK’s increased 8.7%, while passenger traffic measured in RPK’s rose 9.3%, outpacing Latin America and worldwide traffic growth . As a result, the load factor for the quarter increased to 78.2% from 77.7% in the previous year

Passengers carried reached 5.9 million, increasing 9.6% over the same period of 2012.

In the second quarter of 2013 AVIANCA HOLDINGS reached a Net income of USD$ 70.3 million


2Q 2013 Results Highlights

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(USD$ Millions) 2Q 2012 2Q 2013 % Var 2Q

2013

% VAR 2Q 2013

(Ex-Items)*

1H 2012 1H 2013 % VAR 1H

2013

% VAR 1H 2013

(Ex-Items)*

Total Operating Revenues 1,027.0 1,105.1 7.6% 7.6% 2,078.7 2,223.1 6.9% 6.9%

Passenger 856.3 906.0 5.8% 5.8% 1,738.0 1,843.6 6.1% 6.1%

Cargo and other 170.8 199.1 16.6% 16.6% 340.7 379.6 11.4% 11.4%

Total operating expenses 1,014.9 1,069.9 5.4% 4.7% 1,984.9 2,085.1 5.1% 4.2%

Expenses Excluding Fuel 700.7 757.5 8.1% 7.1% 1,345.0 1,432.9 6.5% 5.3%

Aircraft fuel 314.2 312.4 -0.6% -0.6% 639.9 652.2 1.9% 1.9%

EBIT 12.2 35.3 +100% +100% 93.9 138.0 47.0% 74.2%

EBIT Margin 1.2% 3.2% +2 pp +2.64 pp 4.5% 6.2% +1.69 pp +2.45 pp

Net Income -44.8 70.3 +100% +100% -45.7 147.5 +100% +100%

Net Margin -4.4% 6.4% +10.7 pp +9.8 pp -2.20% 6.64% +8.83 pp +8.83 pp

EBITDAR 110.2 144.1 30.8% 38.2% 289.8 344.9 19.0% 25.7%

EBITDAR Margin 10.7% 13.0% +2.3 pp +2.9 pp 13.9% 15.5% +1.57 pp +2.33 pp

Avianca Holdings consolidated operating revenues increased by 7.6%, leveraged by a strong growth 9.6% in passengers carried

Total Operating Revenues grew 7.6% while Total Operating expenses grew 5.4%. Excluding special items Total Operating expenses increased only 4.7%

Operating profit grew by USD$ 23 million over the same period of 2012, while operating margin increased by 2.2 pp reaching 6.2%

Net income for the second quarter of 2012 includes a foreign exchange loss of USD$ 27.3 million and net income for the same period in 2013 includes a profit of USD$ 71.2 million profit

EBIT = Operating Income, EBITDAR = earnings before interest, tax, depreciation, amortization and aircraft rentals

*

• Ex-Items: Excluding Gain/Loss on sale of property and equipment


2Q 2013 Earnings Results Summary

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1,014.8

1,066.9

1,018.7

1,069.9

3.80

16.11

8.03

6.78 6.10

6.03 4.74

3.49 0.75 -1.87 -1.89 2.93

Total Costs Highlights (Numbers expressed in million of USD$)

Excluding special items total costs increased in USD $48.3 Million

• *Ex-Items: Excluding Gain/Loss on sale of property and equipment • Others Include: Air Traffic & Flight Operation

2Q 2013 Earnings Results

+4.7%

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41.70

69.49

37.90

72.42

-3.80

49.70

28.30 1.89 1.87 16.10

8.00

6.78

6.09 6.03

3.49 0.75 2.93

EBITDA Highlights (Numbers expressed in million of USD$)

Excluding special items EBITDA increased in USD$ 34.5 Million

+91.3%

2Q 2013 Earnings Results

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* Cash and Cash equivalents under IFRS standards expressed in USD$ Millions

2Q 2013 Cash Balance

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En el 4T 2012 se tuvieron los

siguientes movimientos de caja:

Adicionalmente, la compañía a Septiembre de 2012 contaba con:

*

Cash US$MM Cash/Revenue LTM US$MM

Concepto US$ Millones

Generación de caja operativa 128.8

Pago de Pensiones (8.5)

Pago de Intereses (18.1)

Pago de PDP's (40.1)

Pago de deuda (56.1)

Otros (39.6)

Total (33.6)

Concepto US$ Millones

Depósitos para compra de flota 266.5

Depósito para mantenimiento aeronaves 151.4

Depósito para arrendamiento aeronaves 106.2

Total 524.1

AVH Cash Position highlights the following

variations for the 2nd Q13:

AVH has made the following cash deposits:

511

466425

630

13.4%10.9%

9.8%

14.3%

2011 2012 1Q-2013 2Q-2013

Deposits US$ Millions

PDP's 359.5

Maintenance Reserves 161.5

Security Deposits for Operating Leases 37.1

Total 558.1

Variations US$ Millions

Net Financing Activities 295

Operating Cash Flow 81

Asset Sales 13

Interests (17)

Others (19)

PDP's (32)

Dividend Payments (37)

Debt Payments (79)

Total 205


During the second quarter of 2013 realized hedge losses summed up to USD$ 1.0 million, which accounted for 27% of the gallons hedged.

Hedged 164 million gallons, approximately 31% of the expected volume to be consumed over the next 12 months

The average hedge price per gallon stands at USD$ 2.92 / gallon


2Q 2013 Fuel Hedging Strategy

33% 31% 25%

17% 1%

1%

14% 15% 17%

14%

0%

10%

20%

30%

40%

50%

3Q 2013 4Q 2013 1Q 2014 2Q 2014 3Q 2014 4Q 2014

FUEL HEDGE (% Consumption)

H.O SWAP H.O CALL OPT

46%

43%

31%

1% 1%

47%

INSTRUMENT 3Q -13 4Q -13 1Q -14 2Q -14 3Q -14 4Q -14

H.O SWAP (USD) 2,887 2,909 2,921 2,892 2,799 2,790

H.O CALL OPT (USD) 2,933 3,010 2,981 2,854 0 0

* Hedge in Heating Oil

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Capacity (ASK’s millions) Traffic RPK’s (millions) Load Factor

2Q 2012 2Q 2013

9.3% 8.7%

Yield (USD$)* RASK (USD$)

-3.2% -1.0%

CASK - Exfuel (USD$)

-0,5%

77.7%

78.2% 9,506

8,748

7,435

6,801

12.6 12.2 11.7 11.6

8.01 7.97

0.5 pp

Capacity (ASK’s millions) Traffic (RPK’s millions) Load Factor

Yield (USD$) TRASK (USD$) CASK* - Exfuel (USD$)

2Q 2013 Passenger Business Highlights

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QoQ Total CASK decreased 3.0%

*Accounting Cask includes all business segments (Passenger, Cargo & Other) Source: Company information

+22.8%

+4.4%

International Network

Domestic Network Colombia – Peru - Ecuador

Regional Network Central America

3 HUBS

Bogota

San Salvador

Lima

3 Complementary

Focus Cities

San Jose

Quito

Guayaquil

Avianca routes Destinations HUBS Complementary Focus Cities

Map Conventions

Guayaquil

Pereira

Armenia Ibague

Bucaramanga

La Paz

Santa Cruz de la Sierra

Waspan

Puerto Cabezas

Blue Field

Corn Island

San Carlos

San Juan del Norte

La Fortuna/Arenal

Bonanza

Sluna Rosita

Tamarindo

Tambor

Quepos/Manuel Antonio

Bahía Draka

Palmar Sur

Puerto Jimenez Golfito

Taca Regional routes Destinations HUBS Complementary Focus Cities

Map Conventions

South America

North America

Europe (Spain)

Total ASK Growth

8.7%

Map Conventions

Avianca,Taca, Aerogal routes Destinations HUBS Complementary Focus Cities

Map Conventions

Intra Home Markets

Domestic

CAM & CAR

+1.05%

+0.41%

18.7%

17.8%

Diversified Capacity Growth

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+14.9%

+13.5%

+18.3%

+8.85%




3 HUBS

Bogota

San Salvador

Lima

3 Complementary

Focus Cities

San Jose

Quito

Guayaquil


Map Conventions

Guayaquil

Pereira

Armenia Ibague

Bucaramanga

La Paz


Waspan

Puerto Cabezas

Blue Field

Corn Island

San Carlos

San Juan del Norte

La Fortuna/Arenal

Bonanza

Sluna Rosita

Tamarindo

Tambor


Bahía Draka

Palmar Sur



Map Conventions

South America

North America

Europe (Spain)

Total RPK Growth

9.3%

Map Conventions


Map Conventions

Intra Home Markets

Domestic

CAM & CAR

+2.8%

+7.8%

Diversified Traffic Growth

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71.5%




3 HUBS

Bogota

San Salvador

Lima

3 Complementary

Focus Cities

San Jose

Quito

Guayaquil


Map Conventions

Guayaquil

Pereira

Armenia Ibague

Bucaramanga

La Paz


Waspan

Puerto Cabezas

Blue Field

Corn Island

San Carlos

San Juan del Norte

La Fortuna/Arenal

Bonanza

Sluna Rosita

Tamarindo

Tambor


Bahía Draka

Palmar Sur



Map Conventions

South America

North America

Europe (Spain)

Total LF Growth

78.2%

Map Conventions


Map Conventions

Intra Home Markets

Domestic

CAM & CAR

82.8%

76.0%

87.5%

75.3%

68.7%

Network optimization

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3.027.120847.760

510.760

485.937

468.297

294.626

165.744 131.188

Domestic Colombia 14,7%

North America 3,91%

CAM/CAR 5,86%

South America 6,02%

Intra Home Markets 13,08%

Domestic Peru 23,68%

Domestic Ecuador -34,38%

Europe 20,41%

+ 9.6%

2Q 2012 Vs 2Q 2013 Pax Growth

Diversified Passenger Growth

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60,21%

12,90%

29,88%

55,48%

15,12%*

20,81%

Colombia Peru Ecuador

Sustained leadership in the Colombian Domestic Market with a 55.48% market share as of June 30th 2013

During the first semester of 2013 the Colombian domestic market grew by more than 25% in number of passengers

Domestic Market Share by Country

2Q 2012

2Q 2013

A market leader in the Andean Region and Central America

*Data as of March 30th 2013

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Internacional Markets Share by Region

The integration of Avianca Holdings route network has consolidated the company's leadership and passenger traffic between its home markets, generating significant connectivity in the Americas. This has enabled:

An increase in passenger traffic in domestic markets

Enhanced service from our home markets to international destinations

To efficiently occupy the capacity incorporated in the different markets

Offer a wider choice of possibilities to connect two destinations in the region

2Q 2012

2Q 2013

A market leader in the Andean Region and Central America

68,75%

28,09%

44,48%

29,48%

68,22%

27,40%

43,14%

30,83%

Home Markets Home Markets toNAM

Home Markets toSAM

Home Markets toSpain

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As the company implements its cargo fleet renovation plan it will reorganize and optimize its current cargo network. As the company does not do segment reporting; it is assumed that due to the increase in capacity the CATK has been reduced during the first half of 2013

2Q Cargo Business Highlights

Capacity (ATK’s Thousands) Shipped Tons

Load Factor Average Fare (USD$)

1Q 2012

1Q 2013

6.9% 10.9%

237,756

263,785

67.9% 63.8%

4.1pp

1.10 0,98

-11.6%

60,365

66,330

Capacity (ATK´s Thousands) Tons Shipped

Load Factor Average Fare ($USD)

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2Q 2013 Highlights

Increased frequencies from and to the Bogota hub as part of the network optimization plan on the following routes:

• 1F BOGSMR 7F BOGRCH • 14F BOGCTG 6F BGAMDE • 7F BAQBOG 4F BOGMAD • 14F BOGCLO 3F BOGPUJ • 10F BOGMDE 1F BOGHAV • 4F BOGCUC 3F BOGGYE

Implemented the second frequency to Madrid (Spain) from the Bogota Hub.

During the second quarter of 2012 the company launched its single commercial brand: Avianca

Avianca S.A was recognized by Skytrax as the airline with the best onboard and airport service in South America

LifeMiles was chosen as the Frequent Flyer Program with the Best Redemption Ability in the Americas, by one of the most recognized awards in the industry: the Freddie Awards.

In Line with the fleet renewal plan, the company continues to incorporate new aircraft to its operation:

2 A320 equipped with sharklets

During the second quarter the company took delivery of the first ATR 72

FLEET

NETWORK

MILESTONES


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In Summary

During the second quarter the company has continued with its leadership and consolidation strategy in Latin America

The company continues to expand its passenger network, while outperforming the growth in traffic in Latin America and worldwide

The cost reducing initiatives implemented so far have resulted into relevant margin expansion :

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• Operating income increasing by USD$ 23.1 million over the same quarter of last year and USD$ 138.0 million over the first semester of 2012

• Operating margin of 3.2%, up from 1.2% in 2Q 2012 and increasing to 6.2% in the first half 2013 over the same period last year

• EBITDAR Margin of 13.0% (+2.3 pp) and 15.5% (+1.6pp) in the first quarter and in the first half of 2013 over the same period of 2012 respectively


Outlook 2013

ASK 8% - 10%

10 - 12%

77% - 79%

EBIT % 6.5% - 7.5%

LF

PAX

The results obtained on this second quarter are in line with the Companies full-year 2013 outlook


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Thank You

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