Regional Aircraft The Way Forward. The most successful Regional Aircraft programs in history. Presented by Mike Lewis. September 26, 2006

Transcription

1 Regional Aircraft The Way Forward The most successful Regional Aircraft programs in history. Presented by Mike Lewis September 26, 2006

2 Regional Passenger Traffic Strong Growth Continues Worldwide Regional Traffic Growth Since 1978 = 11% per annum 50 Deregulation 11% per annum 0 2 Passengers (Millions) est. Source: RAA and ERA

3 Regional Jets Changed The Landscape * Source: OAG 3

4 Continued Growth for U.S. Regionals Passengers Operations Passengers Enplaned (millions) % % % % RPM s (billions) % % % % ASM s (billions) % % % % Av Passenger Trip Length (Miles) % % % % Av Seating Capacity % % % % 4 Source: Velocity Group for RAA

5 50-seat Regional Jets are an integral part of airlines networks Worldwide Scheduled Non-stop Markets by Average Seats Offered 3,500 3,000 No sign of significant fleet withdrawal No. of Markets 2,500 2,000 Short term surplus aircraft are expected to go back into the system , Source: OAG 1, Average Seats per Departure

6 Regional Airlines Link Small Communities to the World 1400 Airport Count by Type of Aircraft Service 1, ,097 Airports Served % Served exclusively by regional aircraft % Served exclusively by regional aircraft 63% Served exclusively by regional aircraft Regional only Mainline only Both Eurpoe, Europe, Africa & Middle East Asia/Pacific Americas 6 Source: OAG

7 Regional Airlines and Low Cost Carriers Are Part of the Same Market Dynamic Historical Distribution of U.S. Domestic Passenger Enplanements 3% 5% 10% 7% 7% 9% 14% 16% 18% 20% 21% 22% 11% 13% 16% 19% 20% 21% 91% 83% 84% 76% 71% 66% 61% 59% 57% Network Regionals Low Cost Source: Velocity Group for RAA 7

8 Airline Challenges are Intensifying Increasing cost of jet fuel Decreasing passenger yield Source: ATA, cents per US gallon US carrier average yield in 1978 cents Diverging CASM gap Network carrier 8.6 Low cost carrier 8.2 US DOT Form

9 As Major Carriers Drop Their Small Narrowbodies They Outsource the Routes to Regional Partners Aircraft Unit Cost Comparison (500 nm Sector) Cost per seat-mile (US ) Regional Carriers 50 Seaters 70 Seaters 90 Seaters Outsourced Routes 2005 US Domestic Yield Curve Network Carriers 110 Seaters 130 Seaters Low Fare Carriers 150 Seaters 180 Seaters 6 $0 $5 $10 $15 $20 $25 Cost per mile (US$) Assumptions: US operating environment and fuel $1.80 per US gallon 9

10 The Capacity Growth and Outsourcing Trends Are Evident in Reported Figures Mainline Aircraft Market Share and Average Seat Capacity Regional Aircraft Market Share and Average Seat Capacity % 83.2% 81.9% 80.4% 80.0% 77.6% % 16.8% 18.1% 19.6% 20.0% 22.4% Average seats per departure Total seats offered 10 Source: OAG, US & Europe data ONLY

11 Industry Instability Will Continue Until Segmentation Share Equilibrium Is Reached Networks will match their operating costs to the premium the passenger is willing to pay: Where Will It End Up? Restructure - labor - productivity - schedule - distribution - simplification Route Transfer to Regional Partners - scope - cost Network Carriers Low Cost Carriers 22% Regional Airlines 21% Network Carriers 57% Today Low Cost Carriers 33% Regional Airlines 33% Network Carriers 33% Equilibrium Operating Costs Are The Key 11

12 Market Pressures Are Favoring Larger Regional Aircraft Driving Factors Lower Yields Higher Fuel Prices Relaxed Pilot Scope Clauses Route Transfers from Mainline 12

13 Only Bombardier Offers Comprehensive Common Families of Turboprops and Regional Jets Q seats CRJ seats Q seats CRJ seats Q seats CRJ seats Q200, Q300, Q400, CRJ200, CRJ700 and CRJ900 are trademarks of Bombardier Inc. or its subsidiaries. 13

14 Bombardier Has Lead the Market Over Five years Gross Orders in the Seat Regional Market 28% 49% 42% 40% 50% 58% 72% 51% 58% 60% 50% 42% Ytd Bombardier Others Note: Data includes order conversions between programs. Does not include corporate shuttle aircraft. At September 27,

15 Regional Jet Market & Programs 15

16 The World s 5 th Most Successful Commercial Jet Program Total Units Delivered B A318/319/320/ DC9/MD B CRJ 1376 Aircraft Family B747 B757 B707 B767 ERJ A300/ A330/ B F28/70/ DC8 556 Sources: Company reports at July31, 2006 ERJ includes EMB 135/140/145 16

17 Diverse Customer Base for the CRJ Series 45 Customers Worldwide 17

18 Bombardier CRJ Series Sales Status As of July 31, 2006 Firm Aircraft Delivered Aircraft Backlog 1,048 1,047 1 CRJ700* CRJ CRJ ,449 1, CRJ100/200/440* Total * Includes Corporate variants of the CRJ (Orders and deliveries include 26 CRJ200 and seven CRJ700.) 18

19 CRJ100/200/440 Fleet At a Glance Fleet Aircraft in Service * 948 Parked Aircraft * 94 Operators in Service 28 Regional operators 12 Business operators Reliability - as of June 2006 (excludes business operators) Dispatch Reliability 99.0% Scheduled Completion 99.6% Utilization - as of June 2006 (excludes business operators) Cumulative Hours 13,426,555 Cumulative Cycles 11,582,651 High Time Aircraft - (in service) Hours 32,019 SN 7030 (SkyWest) Cycles 29,458 SN 7011 (Comair) 19 * Commercial Aviation Value Report August 2006

20 CRJ700/900 Fleet At a Glance Fleet Aircraft in Service * 328 Parked Aircraft * 2 Operators in Service 20 Reliability - June 2006 (excludes business operators) Dispatch Reliability 99.0% Scheduled Completion 99.6% Utilization Cumulative Hours 1,860,215 Cumulative Cycles 1,386, * Commercial Aviation Value Report August 2006

21 Large RJs Compete Effectively With Narrowbodies on a Cost Per Seat Basis 500 nm Sector Operating Cost per Seat-Mile Comparison Regional Carriers Major Carriers TOC TOC DOC DOC CRJ200 CRJ700 CRJ900 CRJ900X 100-Seat Jet 130-Seat Jet 150-Seat Jet 180-Seat Jet 21 Assumptions: US operating environment and fuel $1.80 per US gallon

22 Larger Regional Jets Are A New Weapon In The Arsenal 500 NM Sector Base CRJ seats CRJ200 Cost per Seat (CASM) -11 % CRJ Seats CRJ700-21% CRJ Seats CRJ900 Trip Costs 22

23 The CRJ900 Continues to Gain Momentum Over 100 firm orders in the past 30 months 23

24 Turboprop Market & Programs 24

25 Bombardier Q Series Dash 8 Sales Status As of July 31, 2006 Firm Aircraft Delivered Aircraft Backlog Q Q Q Q Total

26 Q100/200/300 Fleet At a Glance Fleet Aircraft in Service * 604 Parked Aircraft * 20 Operators in Service 85 Reliability - as of June 2006 (excludes business operators) Dispatch Reliability 98.8% Scheduled Completion 99.4% Utilization - as of June 2006 Cumulative Hours 15,698,390 Cumulative Cycles 19,086,029 High Time Aircraft - (in service as of Sept 2005)) Hours 55,794 SN 9 (Piedmont) Cycles 68,413 SN 23 (Island Air) 26 * Commercial Aviation Value Report August 2006

27 Q400 Fleet At a Glance Fleet Aircraft in Service* 125 Parked Aircraft * 0 Operators in Service 16 Reliability - as of July 2006 (excludes business operators) Dispatch Reliability 98.7% Scheduled Completion 99.6% Utilization - as of July 2006 (excludes business operators) Cumulative Hours 819,102 Cumulative Cycles 914, * Commercial Aviation Value Report August 2006

28 Larger Turboprops Are The Next Breakthrough 200 NM Sector Base Q seats Q200 Cost per Seat -24 % Q Seats Q % Q Seats Q400 Trip Costs 28

29 The Q400 Continues to Gain Ground Around The World Luxair South African Express Over 90 firm orders in the past 30 months including our latest Customers Porter Airlines Tassili Airlines Frontier Airlines 29

30 Their Has Been a Resurgence in Turboprop Orders Gross Orders in the Seat Regional Market 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 15% 36% 52% 85% 64% 48% Ytd Regional Jets Turboprops 30

31 Market Pressures Are Favoring Larger Regional Aircraft Driving Factors Lower Yields Higher Fuel Prices Relaxed Pilot Scope Clauses Route Transfers from Mainline 31

32 Bombardier Is Well Positioned for the Future Q seats CRJ seats Q seats CRJ seats UNDER STUDY Q seats Q400X 90 seats CRJ seats CRJ900X 98 seats Q200, Q300, Q400, CRJ200, CRJ700 and CRJ900 are trademarks of Bombardier Inc. or its subsidiaries. 32

33 Regional Aircraft Strategy Going Forward Capitalize on surging turboprop volume and forecasted next wave of large CRJ orders to strengthen our backlog Aggressively pursue cost reduction initiatives including lean manufacturing, supply base rationalization and low cost manufacturing strategies Continue to capitalize on our strong platforms and introduce new derivatives to meet market needs 33

34 Disclaimer Information contained in this document is proprietary to Bombardier Inc., Bombardier Aerospace, Regional Aircraft ( Bombardier ). This document must not be reproduced or shared with, or distributed to, any third party in whole or in part without Bombardier s prior written consent. This document is submitted for informational purposes only; is not part of any proposal; and creates no contractual commitment. Bombardier provides the information contained in this document on an as is, where is basis and makes no representation or warranty of any kind regarding the applicability or reliability of any of such information with respect to any use whatsoever to be made of it by the recipient. Any information of a technical nature contained in this document may contain inaccuracies and is subject to change and should never be relied upon for operational use. 34