Flyr AS — Investor Presentation 2022

Nov 3, 2022

Q3 2022 3 November 2022

CEO | Tonje Wikstrøm Frislid CFO | Brede Huser

Important information and disclaimer

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Strong operational performance despite macroeconomic headwinds

Quarter highlights

• Revenue of NOK 610 million, 80% increase compared to the previous quarter
• Load factor of 80% in Q3 (81% in October 2022)
• On-time performance of 74% (95% of flights delayed by less than one hour)
• 36 FTEs per aircraft lower than key competitors
• High customer satisfaction, positive customer feedback
• Continued strong demand for European leisure destinations
• Two brand-new Boeing 737-8 aircraft entered the fleet
• Operating result (EBIT) of NOK -232 million: Q3 earnings impacted by macroeconomic uncertainty, a weak NOK, high jet fuel prices and lowerthan-expected load factor on Norwegian domestic routes having introduced significant capacity (which takes time to absorb)

Regularity Punctuality

Subsequent events

• Winter schedule reduction initiated on 4 October 2022
• Share issue announced this morning

Table of contents

Financials

Revised business plan

Closing remarks

Appendix

Revenues up 80% from combination of increased production, increased load factor, increased yield and increased ancillary per passenger

• Ancillary revenue up 66% from the previous quarter driven by a 41% increase in guest count (from 475k in Q2 to 667k in Q3) and an 18% increase in spend per guest (up from NOK 33

• Net financial items includes a non-cash USD effect on

in Q2 to NOK 39 in Q3)

2

4

Passenger revenue

1

3

Unit cost by component

Ticket revenue up 84% from the previous quarter driven by:

• Production growth (ASK): Up 41% from Q2 (from 831 million in Q2 to 1,170 million in Q3)
• Improved load factor: Up 11 p.p. from Q2 (from 69% in Q2 to 80% in Q3)
• Improved yield: Up 12% from Q2 (from 0.58 in Q2 to 0.66 in Q3)

Unit cost down 3% in Q3 driven by:

• Unit personnel expenses up from NOK 0.07 to NOK 0.09 primarily due to delayed aircraft delivery from Boeing
• Unit fuel cost down 3% primarily due to lower average cost of jet fuel
• Other operating expenses per unit produced down 22% due to increased scale on fixed cost base

revaluation of aircraft lease liabilities of NOK -207 million

Positive momentum with lean and highly efficient organization

Proven cost structure at a significantly smaller scale than key competitors

Source: Annual and quarterly reports, monthly traffic figures ¹ Displayed revenue does not include Other revenues (amounted to NOK 6.1m as per YTD Q2 2022) 6

Negative cash flow from operating activities of NOK 86m in the quarter

Legacy free balance sheet with significant off-balance sheet assets

Balance sheet

(1,000 NOK)	Q3 2022	Q2 2022
Intangible assets	49,252	46,309
Right of Use assets	1,849,134	1,425,807
Other non-current assets	51,528	43,548
Non-current assets	1,949,913	1,515,665
Trade receivables	277,002	454,787
Other current assets	99,439	80,910
Cash and cash equivalents	153,771	306,519
Current assets	530,211	842,215
Total assets	2,480,125	2,357,880
Equity	(450,292)	7,834
Non-current lease liabilities	1,972,456	1,391,531
Provisions	30,054	20,539
Non-current liabilities	2,002,510	1,412,070
Ticket liabilities	287,137	470,612
Current lease liabilities	287,266	213,481
Trade liabilities	115,831	114,766
Other current liabilities	237,672	139,118
Current liabilities	927,906	937,977
Total equity and liabilities	2,480,125	2,357,880

• 2 additional aircraft received in Q3, increasing lease liabilities by NOK 483 million in the quarter
• Equity at NOK -450 million at the end of the quarter
  • Negative non-cash USD effect on aircraft leases¹ : NOK 207 million in quarter – NOK ~330 million in total
  • Significant unquantified off-balance sheet items, including:
    • Favourable aircraft lease contracts
    • Developed IT and brand
    • Deferred tax asset

Impact on aircraft lease liability from change in USD/NOK

Table of contents

Financials

Revised business plan

Closing remarks

Appendix

Flexible revised business model and strategy to mitigate seasonal risk

A	Own route network	B	Other revenue streams
	International vs. domestic routes • Focus on higher margin European holiday destinations in 2023 with frequency ranging from daily to twice weekly and timetables tailored to leisure travellers	Tour operators	• Able to accommodate tour operator flight schedule due to dynamic approach to own route program • Competitive pricing based on highly efficient cost base • Able to ensure high regularity and low risk of industrial action • Strong relationships with all major Scandinavian tour operators
Route focus	• Limited domestic offering during winter 2023 with frequencies mainly from Oslo to Bergen and Trondheim on Fridays and Sundays • Opportunistic and agile approach to domestic routes beyond 2023 Dynamic supply in line with seasonal demand	Ad-hoc charters	• Operational flexibility, and ability to tailor product to customer expectations • Competitive pricing based on highly efficient cost base • Partnerships with brokers under development • Long-term goal of securing direct contracts with airlines
	• Ramp-up own route network ahead of European summer to capitalize on strong demand for flights to Southern Europe • Reduce own route network during winter low season to preserve cash and free up capacity for wet lease operations in other parts of the world	Wet lease1	• Long-term agent and airline partnerships in the Americas under development – Global shortage of crew and aircraft • Able to accommodate client needs through operational flexibility • Able to price services at competitive levels due to 1) AC lease contracts at pandemic price level, 2) favourable pilot and crew salary levels compared to levels observed North America, 3) few wet lease providers with fuel efficient 737 MAX in fleet
	Our core strategy	Meet seasonal demand	Our operational flexibility

is to serve our guests on our own route network, while simultaneously taking advantage of all reasonable prospects for supporting revenues on an opportunistic basis

by taking advantage of markets with seasonality patterns that differ from the Nordics

allows us to shift capacity rapidly between revenue streams when required, with an ideal planning horizon of 4 to 6 months

Clear message from our customer base – "Best I have ever experienced from an airline"

Our professional and happy crew and customer care specialists provide a customer experience that truly differentiates us from our Nordic and European counterparts – "Happy colleagues, happy guests"

Customer experience

Easy and flexible LCC product with complimentary beverages (water, coffee and tea) and world class customer care

• Easy and flexible product easiest booking process in the world?
• Complementary water, coffee and tea on all flights
• Top management take regular part of day-to-day operations
• Administrative employees hands-on when required (e.g., during peak demand summer 2022 to minimize disruptions and maximize on-time performance)
• Customer care situated at HQ in Oslo, Norway
• Sick leave rates well below industry average despite high pilot and crew utilization
• Strong union relationships with low risk of industrial action

«Incredible service, wholehearted and happy cabin crew – such a fun flight!»

Customer Service

• Top ranked among main competitors in the customer service award held in Norway¹ , with 81.6 points out of 100
• HSMAI² granted Flyr an honours award
• Average guest satisfaction score of 86% so far in 2022

¹ Kundeserviceprisen 2022, ² Hospitality Service Management Association International

Proof of concept demonstrated through strong positive momentum in brand awareness and market share

Flyr well received in the Norwegian air travel market

Overall brand awareness

• Total Flyr brand awareness in Norway is estimated at 83.1% in September 2022
• At the same time, unaided brand awareness is estimated at 56.2% (up from 39.9% as per year-end 2021)

0

5

10

Flyr is reported as "Top of Mind" among 17% of respondents, only slightly behind Norwegian at 18%

modern

Steady, positive trends on brand awareness, preference and associations such as 'Easy', 'Flexible', and 'Value for money' (refer to appendix E for more details)

Market share increasing steadily on operated routes¹

• Majority of market share claimed through own distribution (flyr.com).
• Significant untapped potential from distribution via travel agencies (on-line in August/September)
• Spike in market share in July driven by the SAS pilot strike

0

100

200

300

400

Association: Modern

Source: SSB, Avinor, Flyr ¹ Market shares estimated based on PAX reporting from Avinor on routes operated by Flyr where there are two or more other competing airlines 12

The business plan assumes an average load factor in line with levels achieved from Jun22 to Oct22 (80-90%)

60%

80%

40%

20%

Historical and forecast seat capacity and load factor (Flyr total)

Seat capacity and load factor (%)¹

Seat capacity (000')

250

350

100 50

150

200

Domestic vs. International seat capacity

Historical load factors on key routes to be flown going forward

3	Aug21	Sep21	Oct21	Nov21	Dec21	Jan22	Feb22	Mar22	Apr22	May22	Jun22	Jul22	Aug22	Sep22	Oct22
South of Spain	37%	54%	86%	73%	45%	60%	75%	75%	67%	72%	84%	94%	76%	85%	91%
City	12%	28%	60%	64%	50%	46%	72%	57%	60%	60%	81%	93%	75%	78%	83%
Domestic	41%	37%	50%	49%	43%	50%	60%	50%	62%	60%	82%	90%	60%	55%	64%

South of Spain: Oslo to Alicante, Malaga and Las Palmas, Trondheim to Alicante, Bergen to Alicante City: Oslo to Barcelona, Nice, Rome, Paris, Brussels, Berlin

Domestic: Oslo to Bergen and Trondheim

Seat capacity and load factor in the revised business plan

The left-hand charts show Flyr's historical load factor together with historical and forecast seat capacity, while the above table shows historical load factors for the key route areas that are to be flown going forward¹ .

• o It is Flyr's expectation that load factors on the portfolio of routes to be flown going forward will stabilize around 80-90% year-over-year. This expectation is in line with the load factors observed by Flyr historically. 1
• o The dip in average load factor observed in August and September 2022 is primarily a result of having introduced significant capacity to the Norwegian domestic market to claim market share. This strategy was reversed in October 2022 with full effect from November 2022. 2
• o Flyr entered the market in Q3 2021 and has from this point up until September 2022 introduced significant capacity to the market. The stable growth in load factors on these routes since market entry is primarily a result of increased brand awareness, establishing Flyr as an attractive alternative to the incumbent market participants. 3

The business plan assumes an average net air fare level in line with that achieved from Jun22 to Oct22, with increasing travel agency distribution providing up-side potential

536

Sunday

0

500

85%

Historical average net air fares - Key routes going forward Hist. avg. net air fare^{1 1} and load factor - Key routes going forward

Avg. net air fare and load factor - International2,3 1

Monday

Avg. net air fare and load factor - Domestic1,4

65%

Thursday

74% 72%

Friday

Saturday

Sold PAX by distribution channel (Sep-Oct 2022)⁵ 2

		Aug21	Sep21	Oct21	Nov21	Dec21	Jan22	Feb22	Mar22	Apr22	May22	Jun22	Jul22	Aug22	Sep22	Oct22
	South of Spain	505		770 1,240	946	838	702	894		811 1,342		903 1,146 1,850 1,222 1,194 1,646
	City	495	526	712	560	652	820	573	486	937	757		759 1,194	792	794	903
1,500	Domestic	310	418	431	315	262	238	361	354	390	400	413	457	428	417	456

South of Spain: Oslo to Alicante, Malaga and Las Palmas, Trondheim to Alicante, Bergen to Alicante City: Oslo to Barcelona, Nice, Rome, Paris, Brussels, Berlin Domestic: Oslo to Bergen and Trondheim

Average net air fare

• o The upper left charts show intra-week average daily net air fares and load factors on Flyr's key international and domestic routes going forward in the period June to October 2022 1
  • o Flyr's route network in the revised business plan is to a large extent focused on international leisure destinations where average net air fare levels in the period June to October 2022 have been around or well above NOK 1,000
  • o The revised business plan also includes certain domestic week-end routes from Oslo to Bergen and Trondheim (Fridays and Sundays), which have shown healthy average net air fare and load factor levels historically

Sales channels

• o The lower left chart shows share of seats sold through own direct and third-party distribution channels 2
  • o Most third-party distributors came online this fall (e.g., TravelFusion, which came online from 20. September, and now makes up ~60% of third-party sales)

Source: Monthly traffic figures, Flyr Forecast Model, Flyr data warehouse

¹ Net air fare excluding taxes, fees, etc. ² Calculated for the period June to October 2022, ³ Key international routes going forward (South of Spain + City), ⁴ Oslo to Bergen and Trondheim, ⁵ Data available from 6 September 2022

Table of contents

Financials

Revised business plan

Closing remarks

Appendix

Priorities going forward

• Deliver on the revised business plan: Continue to build on our strong position within leisure – we are here to stay!
• Take care of our colleagues through the winter and prepare for the spring 2023 ramp-up
• Maintain current efficiency levels to ensure competitiveness on core operations. Unit cost going forward will depend on number of aircraft in production.

Appendices

Appendix A: Senior management team

Tonje Wikstrøm Frislid – Chief Executive Officer

Tonje Wikstrøm Frislid became Flyr's CEO in April 2021. She came from her job as unit director in Coor. Wikstrøm Frislid has previously worked for Unibuss and the airline Norwegian. Tonje has a study background in economics, political science and international communication

Brede Huser – Chief Financial Officer

Brede Huser started as Flyr's CFO when Flyr was established. Brede has more than 19 years of experience from the airline Norwegian, where in the period 2006 - 2015 he held leading positions in the finance department before he in 2015 became CEO of Norwegian Reward AS. Before joining Norwegian, Brede worked in finance at Orkla, Arthur Andersen and Ernst & Young.

Thomas Ramdahl – Chief Commercial Officer

Thomas Ramdahl started as Flyr's CCO when Flyr was established. He came from his job as sales director at Høegh Autoliners. Ramdahl previously had more than 20 years of experience from the aviation industry in Norway, and most recently as Chief Commercial Officer of the airline Norwegian from 2014 until he joined Høegh.

Alf Sagen – Chief Information Officer

Alf Sagen started as Flyr's CIO when Flyr was established. He has worked as a consultant with various airlines, airports and suppliers in the aviation industry for 24 years and managed the Nordic division of IT services company Nagarro. Sagen participated in setting up airline Norwegian in 2002 and held different roles in the company, including development of the "ticketless" solution.

Asgeir Nyseth – Chief Operating Officer

Asgeir Nyseth has worked as COO in Flyr since 2020, he has more than 40 years aviation industry experience. Before joining Flyr, he was director and accountable manager of Babcock Scandinavian Air Ambulance Norway and Sweden. He also has extensive experience from the airline Norwegian, including as COO for the Norwegian group and as CEO for Norwegian Long Haul AS, Norwegian Air UK Ltd. and Norwegian Air International Ltd. Asgeir also has a background from Lufttransport where he was CEO before joining Norwegian.

Frode Berg – Chief Legal & Strategy Officer

Frode Berg has been part of Flyr since 2020. Before joining Flyr he held the position as Chief Legal Officer of the airline Norwegian in addition to directorships in several subsidiaries in the Norwegian group. Berg has also been a partner in the law firm Simonsen Vogt Wiig in Oslo. Frode studied law and economics at the University of Tromsø and has a Master of Laws (LLM) from the University of Cambridge.

Bjørn Erik Barman-Jenssen – Chief Ground Operations Officer

Bjørn Erik Barman-Jenssen has been with Flyr since its establishment. He came from the job as EVP Operational Development in the airline Norwegian. Bjørn Erik has solid aviation professional experience, with over 33 years in the industry. In addition to Norwegian, he has worked in both Braathens and SAS. Bjørn Erik established Norwegian Cargo AS and Red Handling and has, in addition to other positions, held the role of CEO of Norwegian Air Resources AS.

Lasse Sandaker-Nielsen – Chief Corporate Affairs Officer

Lasse Sandaker-Nielsen has extensive experience from international aviation, including as SVP Communications at Norwegian Air Shuttle and Chief Communications and Public Affairs Officer at Norse Atlantic Airways. Lasse has also worked as senior advisor at communications and public affairs agency First House, managing editor at TV2.no as well as project manager and desk journalist at online newspaper Nettavisen. Lasse holds a bachelors's degree in mass communication and English, and a master's degree in writing/journalism from Towson University in Maryland, USA

Appendix B: Board of Directors

Erik G. Braathen – Chairman of the board

Erik G. Braathen is the founder and chairman of Flyr. He has extensive experience from the airline business, including being the CEO and part owner of Braathens as well as the chairman of the board of Norwegian Air Shuttle until 2009.

Mr. Braathen is educated from the University of Washington and American Graduate School of International Management. Mr. Braathen has been a member of the board since 2021 and holds 23,051,250 shares in the company.

Paal Cronblad Wollan – Board member (employee elected)

Paal Wollan is a Manager Crew. He has been with Flyr since the start of operations and has more than 30 years of aviation experience from several airlines both in Europe and in the U.S.

Tord Meling – Board member

Tord Meling is a board member of Flyr and currently holds the position as investment director of Ojada AS. He brings over ten years of experience from Norwegian Air Shuttle, including close to six years as the head of aircraft financing. Mr. Meling has Master of Science in Business and Economics from the Norwegian School of Economics. Mr. Meling has been a member of the board since 2020 and holds 750,000 shares in the company.

Per Erik Åkerman – Board member (employee elected)

Per Erik Åkerman is a pilot and captain. He joined Flyr at the beginning of 2022 and has more than 30 years of aviation experience as a pilot for several airlines both in Europe and in the U.S.

Appendix C: Glossary

Term	Description
AC	Aircraft
ASK	Available seat-kilometre
AOC	Air operator certificate
API	Application programming interface
ATC	Air traffic control
CASK	Costs per available seat-kilometre
CX platform	Customer experience platform
EBIT	Earnings before interest and taxes
EBITDAR	Earnings before interest, taxes, depreciation, amortization, and rental costs
EBT	Earnings before tax
FTE	Full time equivalent
HQ	Headquarter
LCC	Low-cost carrier
LF	Load factor
NDC	New distribution capability
PASK	Price per available seat kilometre
ULCC	Ultra low-cost carrier