WIXLIB

Tracking the Impacts of COVID-19Updated May 26, 2021“To suggest that the airlines should have better prepared for thisenvironment seems akin to suggesting Pompeii should have investedmore heavily in firefighting technology.” (JPMorgan, Mar. 22, 2020)

Key Points» Compounding the deep losses of 2020, U.S. passenger airlines incurred 5.5 billion in pretax losses in 1Q 2021; airlines have amassed billions in debt to weather the crisis.» The sizable associated interest expense will limit their wherewithal to rehire and reinvest.» Bookings are improving but demand for corporate and long-haul international air travel arelagging, so revenues remain well below 2019 levels and industry cash burn continues.» Air cargo demand reached an all-time high in 2020 and continues to grow in 2021.» Total business traveler spend could take a few more years to return to pre-pandemiclevels, so the industry’s financial recovery will remain fragile and vulnerable to shocks.» Per two nationally recognized surveys, customer satisfaction has reached an all-time high.2

The 11 Largest U.S. Passenger Airlines Incurred 5.5 Billion in Pre-Tax Losses in 1Q 2021Operating Revenues Fell 56% YOY; Operating Expenses Fell 49%Financial Results (in Millions)Passenger1CargoOther2Total operating revenuesSalaries, wages and benefitsAircraft fuel and related taxesMaintenance materials and repairsLanding fees and airport rentalsDepreciation and amortization3Other4Total operating expensesInterest and other non-op expenses, netPre-tax income/(loss)1Q 8121420,850% Chg. .4)(98.3)(48.6)% of 0(946)(5,515)(42.5)(3.1)n/an/a1. Traffic (revenue passenger miles) fell 53%; yield (revenue per passenger-mile flown) fell 20%2. Sale of frequent flyer award miles to airline business partners, transportation of pets, in-sourced aircraft and engine repair, flight simulator rentals, inflight sales, etc.3. Related primarily to ownership of aircraft, ground support equipment, information technology, etc.4. Aircraft rents, professional fees, food/beverage, insurance, commissions, GDS fees, communications, advertising, utilities, office supplies, crew hotels, payments to regional carriers, etc.Source: A4A analysis of reports by Alaska, Allegiant, American, Delta, Frontier, Hawaiian, JetBlue, Southwest, Spirit, Sun Country and United on a consolidated company basis for systemwide operations3

)(7.1)13.813.89.94.96.3In 2020, Travel-Sector Profitability Took a Massive Hit; Overall Corporate Profitability Was FlatPre-Tax Profit Margin (% of Operating Revenues)ChipotleAirlinesDisneyStarbucksAll USA2019Source: Company SEC filingsAppleHotelsMcDonald sRailroads2020Note: Airlines outhwest/Spirit/United; Hotels Choice/Hilton/Hyatt/Marriott/Wyndham; Railroads CSX/Norfolk Southern/Union Pacific4

We Are Unlikely to See a Return to 2019 Passenger Volumes Before 20232021-2022 Clouded by Uncertainty re: State of Pandemic, Vaccination/Therapeutics, EconomyThe Bull Case Better-than-expected vaccine efficacy Accelerating rates of vaccination (worldwide) Fewer travel restrictions Better-than-expected economic outlook/stimulus Business travel resurgence (healthy markets) Personal travel resurgence (record savings) Virtual interactions and dispersion of office workers(“self remotification”) and facilities stimulate demandThe Bear Case Vaccines fail to address new strain(s) of COVID Low rates of vaccine deployment or acceptance Virus persists as people avoid masks and distance Travel restrictions remain despite vaccines/testing Economy falters Business travel lags as companies conserve cash Virtual meeting technologies displace future traveldue to cost and/or climate considerationsU.S. Airline Passenger Traffic Change (%) vs. 2019201002019 Passenger isticSource: A4A and various airline equity analysts52022F2023FOptimistic2024F

Aviation Is in the Early Innings of a Multiyear, Multistage RecoveryContainthe VirusStabilize theEconomyIncreaseEfficiencyAviation-Government Collaboration on itiatives BusinessModel InitiativesAdaptation DebtDebtReductionReductionBusinessModel AdaptationCost-ReductionReduceCash BurnRestore Profitability& Rebuild Margins6Repair BalanceSheets

Airlines and Airports Continue to Invest in the Safety and Wellbeing of Their Customers andCrewmembers, Instituting Multiple Layers of Protection Throughout the ExperiencePartnering With PremierRequiring facecoveringsOffering touchlesscheck-inSanitizing counters,kiosks & gate areasAdjusting securityscreeningMedical InstitutionsUsing HEPAfiltration systemsSterilizing w/electrostaticsprayers & foggersDisinfecting surfaces Reducing touchpoints(e.g., tables, buckles) (e.g., beverage service)Source: AirlinesTakeAction.com7

“When the use of masks is implemented in combinationwith other measures built into aircraft operations, such asincreased ventilation and disinfection of surfaces, theselayered NPIs offer significant protection from acquiringCOVID-19 through air travel.”“The use of face masks is critically important throughoutthe air travel process, from entering the airport fordeparture to leaving the destination airport ”

This study is the first comprehensive researchlooking at the entire inflight experience.The multiple layers of protection againstCOVID-19 make being on an airplane as safeas if not substantially safer than otherroutine activities, such as grocery shopping orgoing to a restaurant.The research found that there is a very lowrisk of virus transmission on airplanes.The scientists concluded that the ventilation onairplanes is so good that it effectivelycounters the proximity travelers are subjectto during flights.

The Harvard research team surveyed 25 airports ofvarious sizes, performed its own modeling of airquality in airport settings and applied the findingsto a comprehensive assessment of research.The report concludes that airports have beenproactive in implementing multiple layersof measures to mitigate the risk of COVID-19transmission, including face coveringrequirements, physical distancing, enhanceddisinfection processes, enhanced ventilation anddeployment of touchless technologies.Researchers from the Harvard confirmed that thismulti-layered approach “significantly mitigatesrisks” in airport settings.

J.D. Power: North America Airline Customer Satisfaction Climbs to Record HighLatest Results Released May 2021“The airline industry adapted to a most unusual year by simplifying ticketing processes, waiving change feesand baggage fees which were key to persuading people to fly during the pandemic. Airline personnel rose tomeet the challenges of a drastically altered travel environment. Maintaining that level of flexibility andrecognition of individual passenger needs will be a strategic advantage for airlines that want to set themselvesapart in passenger satisfaction as travel volumes start to recover.” (Michael Taylor, J.D. Power, May 12, 2008400201168720076006928002006Eight factors Aircraft Baggage Boarding Check-in Cost and fees Flight crew In-flight services Reservation2000Note: The 2021 study is based on responses from 2,309 passengers who flew on a major North American airline between August 2020 and March 2021.Source: : J.D. Power North America Airline Satisfaction StudySM11

India Experiencing Nine Times as Many Daily COVID-19 Deaths as the United StatesCOVID-19 Deaths (7-Day Moving ABrazilSource: U.S. Centers for Disease Control and World Health 1-Mar-201-Mar-20030-Apr-20500

The Global Economy Is Projected to Grow More Than 6% in 2021“The U.S. economy is off to a faster start in 2021 than most forecasters anticipated, and while thebiggest surge in activity is still on the horizon, it is increasingly evident the fastest growth indecades comes with some significant growing pains. Longer lead times, lack of available labor andsupply chain constraints present maddening speed bumps for economic growth.”Wells Fargo Forecasts for 2021 Real GDP Growth (%)11.09.06.37.07.03.66.12.6Source: Wells Fargo Securities (May 12, 2021)134.85.03.2

In Most Recent Week, U.S. Airline Passenger Volumes Were 29% Below Pre-Pandemic LevelsDomestic Air Travel Down 25%, International Air Travel Down 50%Domestic USACanadaMexicoAtlanticSource: A4A member passenger airlines and branded code share partnersLatin (excl. )7-Jan-207-Day Rolling Change (%) vs. Pre-Pandemic in Onboard Passengers*Pacific* Onboard (“segment”) passengers; “pre-pandemic” precedes March 1, 202014

In Most Recent Week, U.S. Passenger Airline Departures Were 25% Below Pre-Pandemic LevelsDomestic Flights Operated Down 23%, International Flights Operated Down 40%Domestic USACanadaMexicoAtlanticSource: A4A member passenger airlines and branded code share partnersLatin (excl. -Jan-207-Day Rolling Change (%) vs. Pre-Pandemic* in Aircraft DeparturesPacific* “Pre-pandemic” precedes March 1, 202015

MontanaWyomingIdahoSouth CarolinaSouth st VirginiaTexasUSVINevadaKansasTennesseeHawaiiNorth CarolinaPuerto RicoWisconsinNorth aKentuckyMinnesotaMassachusettsOregonNew MexicoMissouriPennsylvaniaCaliforniaArkansasNew HampshireOhioMarylandAlaskaNew JerseyVermontNew YorkWash. ReaganRhode Island(17)U.S. 31)(31)(32)(36)(37)(39)0988725232013For July, U.S. Airports Are Averaging a 17% Decline in Flights vs. Pre-Pandemic LevelsNine States Are Exceeding 2019 Levels; Rhode Island/Wash. Reagan/New York Seeing Largest Cuts% Change in U.S. Outbound Scheduled Passenger Flights: July 2021 vs. July 2019Source: Diio by Cirium published schedules (May 21, 2021) for all U.S. and non-U.S. airlines providing scheduled service to all U.S. and non-U.S. destinations16

Four U.S. Passenger Airlines Are Scheduled to Deploy More Capacity Than in 2019United and Delta Have Shrunk the Most Relative to Pre-Pandemic LevelsChange (%) in Systemwide Scheduled Available Seat Miles: July 2021 vs. July 201923640(5)(8)(17)(18)(20)(30)Source: Diio by Cirium published schedules (May 21, 2021)17(31)

ec12-Dec19-Dec26-DecDomestic Load Factor Averaged 83% in Most Recent Week vs. 90% in Same Week of 2019Weekly Average Domestic U.S. Load Factor* (%)83.320192020Source: A4A member passenger airlines and branded code share partners182021* Revenue passenger miles divided by available seat miles

In Most Recent Week, Domestic U.S. Flights Averaged 101 PassengersFlights Between the U.S. and Mexico Averaged 129 PassengersDomestic USACanadaMexicoAtlanticSource: A4A member passenger airlines and branded code share partnersLatin (excl. 12510075502507-Jan-197-Day Moving Average Onboard Passengers* per FlightPacific* Onboard (“segment”) passengers19

On a Systemwide Basis, Passenger Miles Flown Remain 38% Below 2019 LevelsAvailable Seat Miles Are 29% Below 2019 Levels7-Day Rolling Change (%) vs. Pre-Pandemic in Systemwide Passenger Traffic and Capacity*(29)RPMs Flown 0)(80)(90)(100)ASMs Operated ("Capacity")Source: A4A member passenger airlines and branded code share partners* RPM revenue passenger mile; ASM available seat mile; “pre-pandemic” precedes March 1, 202020

Industry Operating Revenues Are Approaching Half of Pre-Pandemic LevelsFor A4A Member Carriers, April Revenues Were Down 52% From 2019A4A Member Airline Operating Revenues: % Change vs. 201920650(20)(40)(60)(54)(56)(52)(64) (66) (67)(68) (69) (66)(80)(77)(81) (79)Sources: nited as reported to A4A on a consolidated company 0)

In Most Recent Week, TSA Checkpoint Volumes Fell 32% Below 2019 ec31-DecTSA Traveler Throughput* (7-Day Moving Average, in Thousands)201920202021* U.S. and foreign carrier customers (excluding Known Crewmember personnel) traversing TSA checkpointsSource: Transportation Security Administration22

At U.S. Airports in March, Passenger Originations Rose in U.S. Virgin Islands vs. Pre-Pandemic% Change in Traveler Throughput by U.S. State/Territory — April 2021 vs. April 2019Source: Transportation Security Administration23