Avantair, Inc. (AAIR)
Investor Presentation
August 2008
SAFE HARBOR
This document contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. All statements, other
than statements of historical fact, including, without limitation, statements
regarding Avantair’s financial position, business strategy, plans, and
Avantair’s management’s objectives and its future operations, and industry
conditions, are forward-looking statements. Although Avantair believes
that the expectations reflected in such forward-looking statements are
reasonable, Avantair can give no assurance that such expectations will
prove to be correct. Important factors that could cause actual results to
differ materially from Avantair’s expectations (“Cautionary Statements”)
include, without limitation, the effect of existing and future laws and
governmental regulations, the results of future financing efforts, and the
political and economic climate of the United States. All subsequent written
and oral forward-looking statements attributable to Avantair, or persons
acting on Avantair’s behalf, are expressly qualified in their entirety by the
Cautionary Statements.
2
INVESTMENT HIGHLIGHTS
Sole provider of the Piaggio Avanti P.180 - roomiest, quietest,
safest and most fuel efficient aircraft with the lowest operating cost
in the light jet category
Compelling drivers spurring demand for private aviation
Rapidly expanding fleet
Significant growth in recurring maintenance and management fees
Strong revenue growth provides clear path to profitability
3
OUR BUSINESS
“Time shares” in Avanti aircraft make private travel available to our
customers
Buy aircraft wholesale, break them into 16 shares (50 hours of
flying time), and sell the shares retail
Aircraft available when customers need to travel
Provide flight operations and fleet maintenance for our customers
Recurring monthly maintenance and management fees
associated with each share sold
5-year agreement with annual CPI increases
Operations include scheduling, pilots and pilot training,
maintenance, chartering, and repositioning
4
1 Source: Federal Reserve Board
( www.federalreserve.gov/pubs/oss/oss2/2004/scf2004home.html)
2 Source: AvData
2 million households with
net worth between $5-$30
million1 and growing
Unfavorable conditions for
travelers in commercial
aviation market
Fractionally owned aircraft
fleet has grown from 8
aircraft in 1986 to 998 as of
May 31, 20072
3 fractional shareholders in
1986 to 59022 today
Card fractional programs
represent a new growth
vehicle for industry
Fractional Aircraft Ownership Growing in Popularity
LARGE ADDRESSABLE MARKET
5
LIGHT JET MARKET GROWTH
With 7.1% year-over-year market share growth, Avantair is currently the fastest growing fractional in
the light jet market
Source: UBS Estimates, Amstat, Boston Aviation
TOTAL MARKET GROWTH
With 1.3% increase in market share from 2007 to 2008, Avantair has the highest percentage of
growth in the fractional industry
Source: UBS Estimates, Amstat, Boston Aviation
COMPETITIVE ADVANTAGES
Sole fleet operator of the
Piaggio Avanti P.180
Lowest fuel burn and fuel
surcharge
30%-50% more fuel
efficient than
comparable jets
Approximately 25%
more efficient than twin
turboprops*
Largest cabin in category
Short runway capability
Powerful leverage in business
model
Increase in fleet size
reduces operating costs
Opportunity for significant
margin growth
Single type aircraft fleet
Lower maintenance and
training costs
Fewer parts in inventory
Company-owned FBOs
* Source: Business and Commercial Aviation, ARG/US ( http://aviationresearch.com/Free/facprgms.asp) and company pricing sheets as of
September 2006
8
BUSINESS MODEL
Maintain aggressive delivery schedule with goal of approximately
one aircraft sold per month
49 aircraft in fleet currently
11 deliveries expected in FY 2009
Total of 60 additional Piaggio Avanti II aircraft on order through
2013
Economies of scale due to larger fleet size
Reduces non-revenue repositioning flights
Leverages existing infrastructure
Fixed Base Operators in two key hubs provide operating and
maintenance efficiencies and lower fuel costs
Drives maintenance and management fees
Disciplined focus on keeping costs down
9
AIRPLANES IN FLEET
*As of end of year
10
Base continues to grow
Up ~70% in FY 2007 to ~$39 million
Leverage opportunities
Fewer repositioning flights
Fewer charters
Leverage infrastructure and fixed costs of
flight operations
Fleet Expansion Drives Recurring Maintenance & Management Fees
FLEET EXPANSION
11
IMPROVING OPERATING EFFICIENCIES
Increase in fleet size lowers total operating costs
49% year-over-year increase in fleet size Q3 FY 2008
versus Q3 FY 2007
Consistent month-over-month decrease in operating loss
in Q3 FY 2008 (January, February, March): $2,123,252,
$1,887,238 and $1,149,553, respectively
57% decrease in year-over-year charter expenses Q3 FY
2008 versus Q3 FY 2007
12
PIAGGIO AVANTI
P.180 AIRCRAFT
THE PIAGGIO AVANTI P.180
As the best value in the fractional industry, the Avanti P.180 offers the
perfect combination of comfort, speed, performance and efficiency.
14
PIAGGIO AERO INDUSTRIES
World’s oldest aircraft company
Developed first amphibious aircraft
Built world’s first helicopter
Invented pressurization
A leading aircraft company today
Airplanes, engines, and
aerostructures
Civilian and military
Well-capitalized: owned by
Ferrari and diMase families (55%)
and Mubadala Development (35%)
Global customer base
Multinational partners
Rolls Royce
Honeywell
Pratt & Whitney
Lockheed Martin
Total order book of over $800 million
15
AVANTI P.180 FEATURES AND BENEFITS
16
AVANTI P.180 CABIN COMPARISON
The Avanti P.180 has the most comfortable cabin in its class
Over a foot taller than other light jets
Over a foot wider than other light jets
17
COMPETITIVE PRICING STRUCTURE
18
* Based on 1/16th share, or 50 hours per year. Source: July 2008 publicly available competitor data.
Avantair, Inc.
Year One Annual Operating Cost Comparison
July 2008
Aircraft Description:
Avantair
CitationShares
Flight Options
NetJets
Flexjet
Make
Piaggio
Cessna
Raytheon
Raytheon
Bombardier
Model
P180
CJ3
Hawker 400XP
Hawker 400XP
Lear40XR
Acquisition Cost
425,000
$
480,000
$
412,500
$
416,625
$
560,000
$
Share Size
1/16
1/16
1/16
1/16
1/16
Maximum Hours per Year
50
50
50
50
50
Unit Operating Costs:
Occupied Hourly Rate
$0
$5,152
$1,350
$1,786
$1,825
Fuel Surcharge/Hour
$444
$0
$1,896
$1,159
$1,532
FET on Occupied Rate
$297
7.5%
7.5%
7.5%
7.5%
Monthly Management Fee
$9,650
$7,644
$7,469
$7,295
Year
One
Annual Operating Costs:
Occupied Hourly Cost
-
$
257,584
$
67,500
$
89,300
$
91,250
$
Fuel Surcharge Cost
22,200
$
-
$
94,800
$
57,950
$
76,600
$
FET on Hourly Cost
3,563
$
19,319
$
12,173
$
11,044
$
12,589
$
Management Fee
115,800
$
-
$
91,728
$
89,628
$
87,540
$
Total Annual Operating Costs
141,563
$
276,903
$
266,201
$
247,922
$
267,979
$
Effective Hourly Rate of Operation
2,831
$
5,538
$
5,324
$
4,958
$
5,360
$
Yearly Cost Savings With Avantair
49%
47%
43%
47%
STRONG CONSUMER DEMAND AND LOYALTY
50% of sales from customer referrals
12% of owners purchase additional shares within one year of
ownership
Average purchase is approximately 1.2 shares, or 60 hours
Conducting a record number of demo flights
Historical demo-to-close ratio is approximately 80%
Charter card program develops strong sales leads
Approximately 20% of charter card holders convert to
shareowners
Increasing marketing and advertising to target new customers
19
EXPERIENCED MANAGEMENT TEAM
Steven F. Santo
Chief Executive Officer
Avantair Founder
Former Assistant District Attorney in NY
Former Managing Partner, Field, Silver & Santo
Former CEO of Skyline Aviation, aircraft leasing company
Pilot for 20 years
Over 1,000 flight hours in the Piaggio Avanti
Richard Pytak
Chief Financial Officer
Former Treasurer at Gibraltar Industries
Former Senior Manager at PricewaterhouseCoopers
Kevin Beitzel
Chief Operating Officer
Former Executive VP of Maintenance and Operations
20 years experience in aviation industry
16 years with US Airways
Kevin V. McKamey
Executive Vice President
Avantair charter employee
20 years experience in aviation industry specifically in operations,
maintenance and servicing
Former manager of flight operations and sales support for Piaggio
America
Over 3,000 flight hours in the Piaggio Avanti
20
FINANCIAL
SECTION
ANNUAL REVENUE AND OPERATING RESULTS
22
CHARTER USAGE
23
Note:
12 Month Avg. = 3.9% / 2006 Avg. = 6.1% / 2007 Avg. = 6.3% / 2008 YTD Avg. = 1.2%
INDUSTRY SALES 4th QUARTER FY 2008
Data Source: Boston Aviation
In Q4, Avantair was the only fractional provider with a positive net change – taking into
account shares sold and subtracting ‘buy back’ hours.
Aircraft Sold (New &
Pre-Owned)
Aircraft Bought
Back
Net Change
CitationShares
2,250
2,600
-350
Bravo
1,075
1,400
-325
CJ3
625
425
200
Excel / XLS
550
775
-225
Flexjet
925
950
-25
Lear 40 / 40XR
675
250
425
Lear 45 / 45XR
250
700
450
NetJets
7,725
8,000
-275
Ultra
450
1,700
-1,250
Hawker 400XP
550
650
-100
Encore / +
2,425
575
1,850
Excel / XLS
4,300
5,075
-775
Flight Options
3,000
4,700
-1,700
400A / 400XP
3,000
4,700
-1,700
Avantair
1,850
250
1,600
Piaggio Avanti
1,850
250
1,600
FINANCIAL MODEL
Fractional share sales are paid in cash up front with
revenue amortized over 60 months
Approximately $1 million gross profit per aircraft
Aircraft deliveries are lumpy
Maintenance and management fees provide recurring
monthly revenues
Growth in fractional shares add incremental monthly fees
on growing base
Expenses have seasonal component
25
FISCAL THIRD QUARTER 2008 RESULTS
Revenues up 51% year-over-year to $29.9 million
36% increase in shares sold to date – 624.5 at 3/31/08 vs.
458 at 3/31/07
Increases in both charter card and demonstration and other
revenues of 42% and 80%, respectively, over last year’s
levels
Net loss declined to $5.4 million from $7.4 million in the prior-
year period
Expect delivery of 11 aircraft in FY 2009
26
AVANTAIR KEY TAKEAWAYS
Large addressable market growing rapidly as the
popularity of fractional aircraft ownership expands
Key competitive advantage due to exclusivity and
competitive pricing for Avanti P.180
Continue with strategic delivery schedule for FY 2009,
with another 60 Piaggio Avanti II aircraft on order through
2013
Expansion of fleet and growth in revenues enhance
operating efficiencies and enable long term profitability
27
Avantair, Inc. (AAIR)
Headquartered in
Clearwater, FL
727.539.0071
avantair.com
