OUTLOOK FOR BOEING AND CIVIL AVIATION

Transcription

1 OUTLOOK FOR BOEING AND CIVIL AVIATION Randy Tinseth Dr. Fariba Alamdari Vice President, Vice Marketing President, Boeing Market Commercial and Value Airplanes Analysis Boeing Commercial June Airplanes 2007 March 2008 The statements contained herein are based on good faith assumptions and provided for general information purposes only. These statements do not constitute an offer, promise, warranty or guarantee of performance. Actual results may vary depending on certain events or conditions. This document should not be used or relied upon for any purpose other than that intended by Boeing.

2 Agenda Changing trends in the business environment Civil Aviation market outlook Outlook for Boeing

3 Changing trends in the business environment Global economic outlook High fuel prices Environmental pressures Increased securities Increased airline competition Airspace and infrastructure pressures Shortage of skilled labor

4 Economic outlook United States 2.2% 1.5% European Union 2.8% 1.7% Japan 1.9% 1.3% Other Asia 5.5% 5.4% China 11.6% 10.4% Latin America 5.9% 5.5% Mexico 3.1% 3.0% Middle East Canada Other Europe World Growth: % % 5.3% 2.6% 3.4% 6.1% 2.2% 3.5% India 8.8% 8.6% Africa Russia and CIS Based on Global Insight Monthly Interim Forecast (January Interim Update Annual Real GDP) 5.7% 8.6% 6.2% 7.2% Australia and NZ 3.8% 3.5% $0 $2,000 $4,000 $6,000 $8,000 $10, GDP, Billions U.S. Dollars

5 Oil prices and volatility remain high $/Barrel (Brent Crude Oil / Rotterdam Jet Fuel) Avg Ann Prices 2003 $ $ $ $ $72 Jet Fuel Crude Oil Futures Markets Near-term scenario range EIA IATA Goldman Sachs Moody s Global Insight /Gallon Moody s and GS as of Nov. 2007; IATA forecasts as of Dec. 2007; EIA and GI as of Jan Boeing Proprietary

6 Climate change and aviation Emissions from human activities are increasing concentrations of greenhouse gases that lead to climate change Global man-made made CO 2 Of the greenhouse gases, CO2 has the longestlasting, global effects

7 Aviation has made steady, significant environmental progress MORE FUEL Relative fuel use per seat km LESS FUEL Early jet airplanes Second generation jet airplanes 30dB noise improvement 70% fuel improvement and reduced CO2 HIGHER DECIBELS Noise db LOWER DECIBELS EVEN LESS New generation jet airplanes EVEN LOWER

8 Competition is intensifying LCC market share is increasing Africa Percentage of Weekly Seats 7% Asia * 12% S America 21% US 28% Europe 33% Canada 42% 0% 10% 20% 30% 40% 50% Source: OAG May 2007 *Asia includes: India, Ocean, SE Asia, Japan, Korea and China

9 All-business long-haul models taking momentum Network Airline integration/cooperation High Potential Bankrupt Unlikely Premium Economy Business First Level of service

10 Gulf network strategy of one stop to anywhere Houston Toronto New York Edinburgh Glasgow Moscow Dublin Manchester Birmingham Berlin Brussels London Paris Frankf urt Munich Vienna Nice Genev a Rome Sapporo Madrid Istanbul Beijing Tunis Algiers Athens Mashad Seoul Malta Larnaca Tehran Casablanca Beirut Peshawar Islamabad Osaka Tripoli Lahore Cairo Kuwait Shiraz Shanghai Delhi Dammam Kathmandu Luxor RiyBahrain adh Muscat Karachi Kolkata Dhaka Jeddah Doha Dubai Hong Kong Abu Dhabi Khartoum Sanaa Mumbai Yangon Chennai Bangalore Bangkok Manila Kochi Cebu Lagos Accra Colombo Kuala Lumpur Abidjan Entebbe Male Singapore Nairobi Mahe Island Dar Es Salaam Jakarta Mauritius Sao Paulo Cape Town Johannesburg Perth Brisbane Sy dney Melbourne Auckland Christchurch

11 The big players are still big 400+ Airlines Top ten: 36% ASM Share

12 IATA profitability outlook Fuel, weaker revenue environment reduce 2008 outlook $10 Net Profit (Loss) Billions Percent of Revenue 10% $6 6% $2 2% ($2) % ($6) -6% ($10) ($14) Source: : ICAO data for world scheduled traffic (domestic + international) : IATA estimate for world scheduled traffic (domestic + international) -10% -14% Source: IATA, December 2007

13 Agenda Changing trends in the business environment Civil Aviation market outlook Outlook for Boeing

14 20-year forecast: strong long-term growth outlook

15 Economic growth is driving the fastest markets Annual GDP growth, China India Africa Southwest Asia Southeast Asia CIS Middle East South America Central America WORLD Oceania North America Europe Northeast Asia * Source: Global Insight Percentage * Includes China

16 The fastest growing markets China Average annual growth rate, India N. America - SE Asia SE Asia - India World Average Growth: 5.0% Central America Source: Boeing, Current Market Outlook Percentage (RPKs) * Includes China

17 Airlines will need over 28,600 new airplanes valued at $2.8 trillion

18 Market for new airplanes set to become considerably more geographically balanced

19 Long-term demand for new airplanes remains strong 40,000 Units 36,400 30,000 20,000 18,200 10,000 18,200 Growth 10,400 Replacement 28, ,800 Retained Fleet

20 Continuous improvement in air transport 36,420 airplanes 80% new Better for the environment Better for passengers Better for airlines World fleet in % remaining From today s fleet

21 Agenda Changing trends in the business environment Civil Aviation market outlook Outlook for Boeing

22 Most recent performance 2007 review Net orders of 1,413 airplanes Another record sales year! 3 rd straight year of more than 1,000 orders Delivered 441 aircraft up from s s s s Record backlog of 3,427 airplanes Well balanced across regions Well balanced by airplane model Well balanced by airline business model

23 Our strategy focuses on our core competencies and on customer needs Skilled and motivated team Working Together Highest ethical standards Detailed customer knowledge and focus Understand and shape the market Valued relationships Customer preferred solutions Superior customer experience Market-driving products and services Point-to-point nonstop frequency Simplified product family Services and business solutions Continuous quality and productivity improvement Efficiently produce through cycles Large-scale systems integration Lean global enterprise Delivering value

24 A complete product family designed to meet the market s needs New Airplane Market Demand ,000 Airplanes Airplane Size $2.8T Market Value Large $270B Intermediate Twin 2, $680B Small Twin 3, $590B Single Aisle 17, $1,200B Regional Jet 3,700 $110B

25 Strong backlog affirms Boeing s product strategy $ - Billions Backlog $ $ Model Large 8% Twin-Aisle 61% Single-Aisle 31% $ $124 Region $70 Middle East & Africa Russia Leasing & Gov't Americas Americas China Europe S.E. Asia Asia-Pacific (less China) Asia Pacific

26 To enable our customers to satisfy their customers To carry passengers Safely Reliably Conveniently At lower cost In comfortable surroundings Environmentally friendly

27 The 787 is a great example of addressing our customers challenges

28 BOEING is a trademark of Boeing Management Company. Convenient travel

29 Airlines have responded to demand for convenience by adding service Index (1986=1.0) History Forecast Frequency Growth Air Travel Growth 5.0 Nonstops Air Travel Growth Frequency Growth Nonstops 1.0 Average Airplane Size Average Airplane Size Routes over 3,000 miles and this trend will continue Source: Boeing, Current Market Outlook 2007

30 BOEING is a trademark of Boeing Management Company. Comfortable surroundings

31 This is not what passengers want!

32 787 cabin architecture is revolutionary

33 BOEING is a trademark of Boeing Management Company. Lower costs

34 Fuel, airport handling and maintenance make up the majority of airline operating cost U.S. Major carriers Operating Expenses 2006 Fuel & Oil 25 Airport Handling 14 Crew Compensation 12 Maintenance 9 Passenger Service 7 Promotion & Sales 7 General & Admin 5 Depreciation & Amort 5 Source: Form ($B)

35 Reducing weight has been a major objective for the 787 program We ve come a long way!

36 The 787 incorporates significantly more composites than previous airplanes Significant weight reduction Opens new design possibilities More potential for future development Proven in-service durability, reduced impact damage Reduced corrosion and fatigue Reduced scheduled maintenance Easy repair within turn-around times Carbon laminate Carbon sandwich Fiberglass Aluminum Aluminum/steel/ titanium pylons Titanium 15% Steel 10% Aluminum 20% Other 5% Composites 50%

37 BOEING is a trademark of Boeing Management Company. Environmentally friendly

38 The 787 will be the most environmentally friendly jet in service Less fuel used Lower emissions Quieter for communities, crews, and passengers Fewer hazardous materials Less waste in production

39 787 noise footprint stays within the airport perimeter London Heathrow 3,000NMI 85dBA

40 787 unprecedented customer response 56 customers announced 857 firm orders Through January 31, 2008

41 In summary Aviation business environment is increasingly challenging World air traffic continues to grow with regional variations, supported by economic growth and liberalization This growth drives the demand for airplane - 28,600 new airplanes valued at $2.8T For a sustainable growth there is a need for thorough understanding of our customers challenges, and investment in infrastructure, technology and people Boeing product strategy is focused on investing in solutions that support sustainable growth

42 BOEING is a trademark of Boeing Management Company.