The BCA Business Environment and Future Market Strategy

Transcription

1 The BCA Business Environment and Future Market Strategy Nicole Piasecki Vice President Marketing & Business Strategy September 2004

2 2 Near Term Recovery Airplane Deliveries (2006) Airline Orders (2005) Airline Profits (2005) Capacity Requirement Traffic Growth (early 2004) Economic Growth Industry slowly recovering

3 3 Balancing Supply and Demand 100% 100 Change In Lease Rates As compared To 1999 Values 90% 80% 70% 60% More Than 30% A320 # of Parked Aircraft A320 Family 737NG 33 50% Lease Rate Source: Avmark, AVN, GRA, IBA AISI Data through 1 st quarter S- 01 N- 01 J- 02 M- 02 Signs of recovery are evident M- 02 J- 02 S- 02 N- 02 D- 02 F- 03 A- 03 J- 03 Source: Airclaims A- 03 O- 03 D- 03 J- 04 1

4 4 Air Traffic Market Gulf War Crisis Present Crisis Billions RPKs 9 6 Liberalization New Business Models Technology 3 Long Term Growth GDP 3.0% Passenger 5.2% Cargo 6.2% Long-term global growth

5 5 Passenger Needs Safe and reliable service Non-stop service with more frequency choices Lower fares in comfortable surroundings

6 6 Fragmentation ASKs Frequency Growth Airport Pairs Airplane Size in Seats Airlines will continue to address passenger desires for non-stops and frequencies

7 7 Airline Business Models Network Carriers Aggregation through hubs Seamless service anywhere Complex yield manage ment Legacy labor agreements Passenger flexibility Asset & infrastructure complexity Low-Cost Carriers Asset and labor productivity De-emphasizing connectivity Simplification Under-served airports Stimulate de mand Minimal legacy baggage Growing Premium Niche market High margin Less hassle Customer solutions Market Share loss: 5% in Last 5 years Market Penetration: 25% N. America 15% + Europe / Australia 2% Asia New business models drive productivity Very small relative to others

8 8 Airline Profitability Yields Total Unit Operating Expense (Cents/ASM) US Average = 10.3 asm Low Cost Carrier = 7.5 asm Labor Simplification Standardization Consolidation Crew Compensation Airport Handling Fuel & oil Owni ng A/p Maint. Rev enue Mg t Other G & A Passenger Serv ices Innovation will continue to drive productivity improvements and revenue growth

9 9 Future Airplane Requirements and Customers Europe/Africa/ Mid East Asia Pacific Americas $2 Trillion 25,000 Airplanes over the next 20 years A A A380 Large 11% Intermediate Twin-Aisle 43% 5% Small & Intermediate Regional Jets E190 Single-Aisle 41% 717 A E7 Well positioned for the future 757

10 10 The Right Strategy to Deliver Value Fleet Technical Services Enhancements and & Modifications Global Customer Support Maintenance and Engineering Services Preferred Airplane Family Spares Material Management & Spares Flight Operations Support Financial Services Aircraft Trading e-enabled Military Applications BBJ Point-to-point... Nonstop... Frequency Safety, Economics, Reliability, Simplicity, Connectivity and Flexibility Services and business solutions

11 11 7E7: A New Airplane for a New World Innovative systems technologies Breakthrough passenger cabin Advanced flight deck Large cargo capacity Advanced wing design Advanced technology engines and nacelles Composite primary structure More Standardized Airplane

12 12 7E7: A New Airplane for a New World Improved reliability and maintainability New passenger sensation Enhanced safety and capability More revenue potential Lower scheduled maintenance cost Short and Long Range Efficiency Faster cruise speed Breakthrough fuel efficiency Lower community noise Lower emissions Easier movement of aircraft between operators Easier financing Higher residual value

13 13 7E7 Structure Carbon laminate Carbon sandwich Fiberglass Aluminum Aluminum/steel/titanium pylons Using new materials technology to revolutionize flight

14 14 Engine Technology Delivers Outstanding Performance Engine and nacelle features: Higher bypass ratio Advanced materials and coatings No-engine-bleed systems architecture Low-noise nacelles with chevrons Common strut attachment point for all engines

15 15 Easy to Configure Standardization Easy to Transition Easy to Update

16 16 Breakthrough Fuel Efficiency Fuel consumption per Passenger SEATS 225 SEAT S 250 SEAT S 275 SEATS 300 SEATS Current Quads 350 SEATS 400 SEAT S 450 SEAT S 500 SEATS 550 SEATS % Current Twins 250 7E Fuel consumption per trip

17 17 Elevating the Passenger Experience Improved: A300/A330/A340 7E7 Pressure altitude Humidity Lighting Air quality Temperature The 7E7 is 35 cm (14 ) Wider 47.0 cm 54.6 cm 54.6cm Sound quality Comfort Economy seating

18 18 A Better View of the World 7E7 DREAMLINER A330/340

19 19 7E7-8 Cargo Revenue Up to 45% More Revenue Cargo Than A Revenue Cargo Passenger Baggage Crew Rest Bulk 5 pallets 465 ft 3 12 LD-3 4 pallets + 2 LD-3 A cargo layout 695 ft 3 Crew rest Revenue Cargo Comparison 8 LD-3 A pallets + 2 LD-3 7E7-8 5 pallets + 5 LD-3 More revenue capacity allows for more revenue and reduced risk

20 20 Environmental Sustainability Airport Footprints London Heathrow Airport A340 A E7 85 dba contours 3,000 nmi mission Exceptional environmental performance leads to unconstrained operations

21 21 London-Heathrow Departures Daily departures OAG August 2004 All scheduled passenger service 83% of the airplane departures are below 300 seats 68% of the airplane departures are below 200 seats or less Over 450 Seat size category Very Large Airplanes Will Not Reduce Airport Congestion

22 22 Creating New Nonstop Routes The 7E7 can connect more than 450 new airport pairs Possible New Airport Pairs Atlanta - Athe ns Helsinki - Shanghai Newark - Rio de Janeiro Paris - Minneapolis Vancouver - Munich Dubai - Taipei Washington, D.C. - Rome London - Fukuoka San Francisco - Milan Munich - Singapore

23 23 Delivers Lower Unit Costs and a Revenue Premium for Less Risk London Cost Benefits Fuel Efficiency Maintenance Costs Weight-related Costs Connection Costs Incremental Passenger Handling Costs Sharjah Revenue Benefits Non-stop Premium Cargo Benefit More Flexibility Comfort Calcutta 7E7 offers a better solution

24 24 Market Versatility and Broad Customer Base ~350 Cities Served by 7E7s in 2022 ~30 Cities Served by A380s in 2022 *200 Customers *20 Customers * * Addressable Market Efficient, capable small twins have more market opportunity

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