Jet Fuel Pricing Outlook and Key Drivers

Paul CluettGlobal Sales Co-ordination Manager

• Oil and Jet Fuel Trends

• Future issues and concerns

• Key Drivers

To Cover

World Oil Supply/Demand Balance(million b/d)

Year 2003 Year Year 2002 I II III IV 2003 I II III IV 2004

Demand 90 91 92 92 91 91 92 92

Atlantic Basin 50.8 51.2 50.3 51.9 52.7 51.5 52.2 51.0 52.6 53.4 52.3Pacific Basin 26.5 28.3 26.5 26.9 28.1 27.4 29.1 27.4 27.9 29.1 28.4

Total Demand 77.4 79.5 76.8 78.8 80.8 79.0 81.2 78.4 80.5 82.6 80.7

SupplyNon OPEC 46.5 47.3 46.6 47.0 48.1 47.3 48.2 48.3 48.3 49.3 48.5OPEC - Crude 25.5 26.5 26.8 26.8 27.6 26.9 27.8 27.0 27.3 27.5 27.4 - NGLs/Cond. 3.5 3.5 3.6 3.6 3.8 3.6 3.8 3.8 3.9 3.9 3.9Supply Contingency 0.0 0.0 -0.1 -0.2 -0.2 -0.1 -0.3 -0.3 -0.3 -0.3 -0.3

Total Production 75.4 77.3 76.9 77.3 79.2 77.7 79.6 78.8 79.2 80.4 79.5Losses -0.2 -0.1 -0.2 -0.2 -0.1 -0.2 -0.1 -0.2 -0.2 -0.1 -0.2Processing Gain 1.7 1.6 1.6 1.7 1.7 1.7 1.6 1.7 1.7 1.7 1.7

Total Supply 76.9 78.8 78.3 78.8 80.9 79.2 81.1 80.2 80.6 82.0 81.0Implied Global Stockbuild

-0.5 -0.7 1.5 0.0 0.1 0.2 -0.2 1.8 0.1 -0.6 0.3

Actual/Proj. OECD Comm. -0.4 -0.7 1.3 0.5 -0.6 0.1 -0.2 1.3 0.0 -0.5 0.1

Actual/Proj. OECD Gvmt. 0.2 0.2 0.0 0.2 0.3 0.2 0.2 0.2 0.1 0.1 0.1

- Result. Calc. non-OECD -0.2 -0.3 0.4 -0.8 0.0 -0.2 -0.1 0.7 0.0 -0.3 0.1

- Oil at Sea estimate 0.0 0.2 -0.3 0.1 0.4 0.1 0.0 -0.3 0.0 0.1 0.0

2004

Total OECD Jet Demand

Total OECD Jet Demand

OPEC Basket Price

16

18

20

22

24

26

28

30

32

34

2-Jan-01

27-Feb-01

25-Apr-01

21-Jun-01

16-Aug-

01

11-Oct-01

6-Dec-01

4-Feb-02

2-Apr-02

28-May-

02

23-Jul-02

17-Sep-02

12-Nov-02

8-Jan-03

5-Mar-03

1-May-

03

26-Jun-03

21-Aug-

03

16-Oct-03

11-Dec-03

2-Feb-04

$/bbl

OPEC Price BandOPEC Price Band

20 Day Average20 Day Average

Daily Basket PriceDaily Basket Price

Data to 25 MarchData to 25 March

OPEC Basket Price in Euro

16

18

20

22

24

26

28

30

32

34

2-Jan-01

27-Feb-01

25-Apr-01

21-Jun-01

16-Aug-01

11-Oct-01

6-Dec-01

4-Feb-02

2-Apr-02

28-May-

02

23-Jul-02

17-Sep-02

12-Nov-02

8-Jan-03

5-Mar-03

1-May-

03

26-Jun-03

21-Aug-03

16-Oct-03

11-Dec-03

2-Feb-04

Euro/bbl

Data to 25 MarchData to 25 March

OPEC Price Band *OPEC Price Band *

20 Day Average20 Day Average

Daily Basket PriceDaily Basket Price

* OPEC Price Band calculated with Euro/Dollar rate at time of OPEC Basket introduction

Select World Jet Fuel Prices

20

40

60

80

100

120

Jan-

99

Jun-

99

Nov

-99

Apr

-00

Sep

-00

Feb

-01

Jul-0

1

Dec

-01

May

-02

Oct

-02

Mar

-03

Aug

-03

Jan-

04

US

cen

ts/g

allo

n

0

50

100

150

200

250

300

350

400

450

US

dol

lars

/MT

Singapore US Gulf Coast Northwest Europe CIF ARA

Oil Price Wars

Far East Nuclear Power Plants

Extreme Cold

Today…

9/11

Selective World Jet Fuel Prices

OECD Product Stocks

1450

1500

1550

1600

1650

1700

1750

1800

1850

Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

million b/d

20012001

19981998

19991999

20002000

20022002

20032003

20042004

Iata stats - overview

-20%

-15%

-10%

-5%

0%

5%

10%

15%

Feb2003

Mar2003

Apr2003

May2003

Jun2003

Jul2003

Aug2003

Sep2003

Oct2003

Nov2003

Dec2003

Jan2004

RPK's ASK's FTK's ATK's PLF's

ATK's for Middle East airlines

-20%

0%

20%

40%

60%

80%

100%

Feb2003

Mar2003

Apr2003

May2003

Jun2003

Jul2003

Aug2003

Sep2003

Oct2003

Nov2003

Dec2003

Jan2004

EMIRATES GULF AIR

IRAN AIR QATAR AIRWAYS

ROYAL JORDANIAN SAUDI ARABIAN AIRLINES

Regional ATK trend

-15%-10%

-5%

0%5%

10%15%20%

25%30%35%

Feb2003

Mar2003

Apr2003

May2003

Jun2003

Jul2003

Aug2003

Sep2003

Oct2003

Nov2003

Dec2003

Jan2004

Africa Europe Far Eas t

Middle Eas t North Am erica South Am erica

• RPK - Revenue passenger km• ASK - Available seat km• FTK – Freight tonne km • ATK – Available tonne km• PLF – Passenger load factor

Airline Trends

Issues and Concerns

• Fragile Airline Finances and Airline Bankruptcies.• Limited Hedging cover by airlines.• Low Sulphur Diesel and Squeeze on Jet production.• Infrastructure and Investment.• Environmental developments.• Tax.• Deregulation & New competition.• Airport congestion and slots.

• Jet Price levels – High at present

will they continue at current levels?.

• No more shocks Sars/Iraqi etc.

• Supply Security.

• Low stocks & refinery reliability.

• Better Demand Forecasting.

• Passenger Confidence.

Key Drivers of Jet Fuel Pricing