Higher (And Scarier) Strongest Aircraft Market Outlook In Ten Years

Transcription

1 Higher (And Scarier) Strongest Aircraft Market Outlook In Ten Years Presentation To The National Aeronautic Association Washington, DC Richard Aboulafia Vice President, Analysis Teal Group Corporation January 218

2 218 $ Billions World Aircraft Deliveries By Value, CAGR: 3.7% CAGR: 2% Military Civil

3 Aircraft Markets, Through Good And Bad Years World New Deliveries CAGR CAGR Change Change In 217 (218 $) Large Jetliners ($12.2 b) 7.5% 9.9% 6.9% 1.3% Business Aircraft ($2.3 b) 17.2% -2.2% -15.9% -2.% Regionals ($7.1 b) 4.6% -3.2%.4% -7.6% Civil Rotorcraft ($4.1 b) 19.8% -1.3% -36.1% 1.4% Military Rotorcraft($12.9 b) 9.7% 9.% -16.3% -11.8% Military Transports ($6.1b) 3.2% -.7% 7.3% -3.8% Fighters ($18.6 b) 1.9% 1.1% -.8% 9.1% All Civil ($133.8 b) 1.1% 5.%.6%.5% All Military ($41.1 b) 3.8% 3.4% -5.2% -1.6% Total ($175 b) 8.2% 5.1% -.8%.%

4 Value in 218 $ Billions % of World 1 US Aircraft Industry Output 7% 9 8 6% 7 5% 6 4% 5 4 3% 3 2% 2 1 1% % Total US Deliveries By Value US Output % of World

5 Value In 218 $ Bns Cyclicality, Our Long-Forgotten Nemesis 1 '4-17 8% CAGR A 13-Year Super Cycle 8 '95-'99 2.8% CAGR 6 '84-' % CAGR 4 2 '68-'77-11 CAGR; 65% peak-to-trough '8-' % CAGR; -45% peak-to-trough '91-' % CAGR; 41% peak-to-trough '1-'3-1.7% CAGR; 28.8% peak-to-trough Or '99-'3-11 CAGR; 65% peak-totrough

6 35 Large Jetliner Orders And Deliveries '69 '71 '73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '1 '3 '5 '7 '9 '11 '13 '15 '17 Deliveries Net Orders

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8 Y/Y Traffic: Well Above Trend 217 1H Totals: RPKs 7.9% (12-year high), FTKs 1.4% (3x 5-year average) 216 Totals: RPKs 6.3%, ASKs 6.2%, FTKs 3.8%215 Totals: RPKs 6.5%, ASKs 5.6%, FTKs 2.2% 3% 2% 1% % -1% -2% Jul '8 Oct Source: IATA Jan '9 Apr Jul Oct Jan '1 Apr Jul Oct Jan '11 Apr Jul Oct Jan '12 Apr RPKs ASKs FTKs Jul Oct Jan '13 Apr Jul Oct Jan '14 Apr Jul Oct Jan '15 Apr Jul Oct Jan '16 Apr Jul Oct Jan '17 Apr Jul Oct

9 RPMs GDP Global Economic Growth Outpaced By Travel Demand CAGRs: : RPMs 6.5% GDP 3.3% : RPMs 5.3% GDP 3.1% 12, 1, 8, , 15 4, 1 5 2, RPMs (Bns) GDP (PPP, constant 211$ Bns)

10 4 BRIC Deliveries: Peaked, Except For China China Russia India Brazil

11 Deliveries In 218 $ Billions The Air Transport Market By Class Regionals Single Aisles Twin Aisles

12 218 $Billions 5 Firm Order Backlog Values h h Boeing Airbus Bombardier

13 Mid-Market Backlogs: Airbus's Strong Position A321neo 737MAX9/1 A321ceo A33-2 A33-8

14 Deliveries in 218 $Billions Jetliner Market Shares By Deliveries Boeing Airbus COMAC/Irkut

15 Value in 218 $ Billions Deliveries "It Was Different That Time," We Hope To One Day Say Value Units

16 '17 $Millions Business Aircraft Market by Class A Gradual Shift Towards Larger Aircraft $35 $3 $25 $2 $15 $1 $5 $ '7 '8 '9 '1 '11 '12 '13 '14 '15 '16 '17 '18 '19 '2 '21 '22 '23 '24 '25 26 Very Light Entry Level Mid-Sized Super Mid-Sized Large Very Large Ultra Jetliners+RJs Turboprops

17 Then-Year $ Bns 3 DoD Investment, O+M: Booming Again, In Theory Procurement RDT&E O&M

18 Units Procured Funding in FY18 $ Billions DoD Tactical Aircraft Procurement FY86-FY18 A Return to the Peak, But Fundamental Problems Remain 4 Funding Units

19 World Fighter Production Shares 35 (Value of Deliveries in '18 Billions) '8 '9 '1 '11 '12 '13 '14 '15 '16 '17 '18 '19 '2 '21 '22 '23 '24 '25 '26 '27 F-35 US F-35 International Undetermined Europe Russia RoW Non-F-35 US

20 Deliveries in 218 $ Billions US Military Fixed Wing Aircraft Deliveries '94 '95 '96 '97 '98 '99 ' '1 '2 '3 '4 '5 '6 '7 '8 '9 '1 '11 '12 '13 '14 '15 '16 '17 '18 '19 '2 '21 '22 '23 '24 '25 '26 '27 C-17 AV-8B F/A-18 F-15 F-16 F-22 T-45 T-6 C-13 F-35 T-X B-21

21 Deliveries in 217 $ billions 2 Missiles, Munitions, UAVs: Strong Growth '4 '5 '6 '7 '8 '9 '1 '11 '12 '13 '14 '15 '16 '17 '18 '19 '2 '21 '22 '23 '24 '25 26 AAM ASM ADM ATM Anti-Ship SSM Smart munitions UAVs

22 Global Aircraft Market Outlook In One Page Market 218 Risk Elevator Comment Large Jetliners 4.7% Business Aircraft 4.1% Regionals -13.7% Civil Rotorcraft -1.3% Military Rotorcraft 8.9% Military Transports 7.8% SA ramp dealing w/ production snafus. TA overcapacity an issue. Watch China, fuel, interest rates Some signs of hope, but many false starts over a disappointing decade. Waiting for E-2; Scope clause is only big risk, but no growth. Still tough. Too many new models aimed at a weak Segment (oil). Trending down as programs of record end/slow; no risk of accelerated downturn. Long-term flat. Only risk is A4M execution; C13J benefits if it s a problem. Fighters 1.% I like this market. F-35, plus strong Gen 4.5 All Civil 3.5% All Military 11.% Jetliner growth compensating for weakness in other segments; more risk from emerging markets, oil. Global insecurity, Tension, Malice. Special mission also boosts topline. Total Industry 5.2% Overall outlook best in ten years.