Commercial aviation. Market outlook, key trends driving growth and implications for airports. Dave Gamrath BCA Marketing.

Transcription

1 Commercial aviation Market outlook, key trends driving growth and implications for airports Dave Gamrath BCA Marketing June 2014 BOEING is a trademark of Boeing Management Company. Copyright 2014 Boeing. All rights reserved.

2 Market forecast drivers and considerations Market liberalization Airplane capabilities Environment High speed rail Fuel price Emerging markets Airline strategies & business models Infrastructure Economic growth Current Market Outlook Copyright 2014 Boeing. All rights reserved.

3 20-year Forecast: Strong Long-term Growth 2012 to 2032 World economy (GDP) 3.2% Number of airline passengers 4.1% Airline traffic (RPK) 5.0% Cargo traffic (RTK) 5.0% Copyright 2014 Boeing. All rights reserved. 3

4 Market for new airplanes to become even more geographically balanced New airplane deliveries by region Region Airplanes Asia Pacific 12,820 Europe 7,460 North America 7,250 Middle East 2,610 Latin America 2,900 C.I.S. 1,170 Africa 1,070 World Total 35,280 7% 21% 3% 8% 3% 21% 37% Market value by region Region $B Asia Pacific 1,890 Europe 1,020 North America % 17% 3% 6% 3% 35,280 $4.8T Middle East 550 Latin America 300 C.I.S. 140 Africa 130 World Total $4,840B 21% 39% Copyright 2014 Boeing. All rights reserved.

5 Airlines will need more than 35,000 new airplanes valued at $4.8 trillion Airplane deliveries: 35, ,000 24,670 20,000 Market value: $4.8T ,500 2,000 $2,290B 15,000 10,000 1,500 1,000 $1,100B $1,090B 5, ,020 Regional jets 6% Singleaisle 70% 4,530 Small wide-body 13% 3,300 Medium wide-body 9% 760 Large wide-body 2% $80B Regional jets 2% Singleaisle 47% Small wide-body 23% Medium wide-body 22% $280B Large wide-body 6% Copyright 2014 Boeing. All rights reserved. 5

6 Older, less efficient airplanes will be replaced with more efficient, newer generation airplanes Units 45,000 40,000 41,240 35,000 30,000 25,000 20,310 20,000 15,000 10,000 20,930 Growth 59% 14,350 Replacement 41% 35,280 5,000 5,960 Retained fleet Copyright 2014 Boeing. All rights reserved.

7 Key market trends Agenda Gulf 3 Network carriers China LCCs Medium-haul LCCs Leasing Impact for airports

8 Gulf 3

9 ~15% of the World s Population >80% of the World s Population : Range circles at 4,000 mi Emirates business model is strategically located to serve more than 80% of the world s population within an 8 hour flight of Dubai Copyright 2014 Boeing. All rights reserved. 9

10 Gulf 3 success: one stop to everywhere Prime location Supportive governments Efficient operation Strong brands Utilizing 8000NM aircraft Emirates Qatar Etihad Copyright 2014 Boeing. All rights reserved.

11 Gulf 3 will be fastest growing T.A. operators Increasing access to new markets Equity stakes Partnerships Competitor response using 787 and A350 capabilities Only just beginning to fill potential future market opportunities Twin-aisle fleet Etihad Qatar Emirates Fleet growth CAGR th Freedom business model a key driver of twin aisle growth Copyright 2014 Boeing. All rights reserved. Etihad 40% 12% Qatar 19% 7% Emirates 13% 5.5%* *Emirates seat CAGR ~7.0%

12 Network carriers

13 Network carriers restructure to restore profitability Consolidation continuing Partnering (alliances, anti-trust immunity joint ventures, etc.) Premium traveler focus Strong focus on profitability Record profits in a tough climate Nine of ten largest airlines are Global Network Carriers

14 China

15 HJ China is one of the fastest growing regions over next decade 1000 Passengers carried (millions) China s Big 4 airlines seek int l growth opportunities Government relaxes approvals for start-ups Continued gov t influence 86% of deliveries over next 10 years for growth % CAGR In-service fleet 12.5% CAGR 11.2% CAGR 8.2% CAGR Growth of middle class will keep traffic growth strong Regional Jets Single Aisle Twin Aisle Freight Data Source:CAAC/ Flight Global Ascend Online Database Jan 2013/ CMO 2013

16 Low Cost Carriers

17 secondary airports point-to-point low labor costs common fleet fast growing start ups low-cost carriers ancillary revenue one class cabin low fares stimulate traffic no frequent flier program no seat assignments no frills high utilization business model evolving

18 LCC business model has gone worldwide North America Flights/week: 37,700 NMiles/flight: 720 Europe & CIS Flights/week: 31,800 NMiles/flight: 650 Middle East Flights/week: 2,400 NMiles/flight: 910 NE Asia & China Flights/week: 5,500 NMiles/flight: 550 Latin America Flights/week: 13,000 NMiles/flight: 520 Africa Flights/week: 610 NMiles/flight: 600 S Asia Flights/week: 5,800 NMiles/flight: 600 SE Asia Flights/week: 16,100 NMiles/flight: 590 Source: Aug 2013 OAG Oceania Flights/week: 2,100 NMiles/flight: 850

19 LCC s will dominate short-haul markets ASMs % 3% 14% % 20% % Source: Boeing CMOs 25% 64% 24% 59% 24% 54% LCC Charter/IT Broad Network Other Networks LCCs continue to stimulate significant traffic growth

20 Medium-Haul Low Cost Carriers

21 Asia pacific is center of Medium-haul LCCs JFK-ARN (3908sm) JFK-OSL (3675sm) ARN-BKK (5152sm) OSL-BKK (5386sm) JED-KUL (4388sm) DXB-MNL (4289sm) NRT-OOL (4497sm) MEL-HNL (5512sm) SIN-AKL (5223sm) Source: Nov 2013 OAG includes wide-body service from Norwegian, AirAsia X, Jetstar, Cebu Pacific, Scoot

22 100 million new passengers per year in emerging Asia ATL 95M LHR 70M +100M per yr Copyright 2014 Boeing. All rights reserved.

23 Medium-Haul LCCs are small but growing Twin-aisle LCC Fleet Densely populated markets Price sensitive customers LCC hub/network for feed Slow reaction from Legacy carriers Possible new airline entrants ? Growth potential for medium-haul LCC business model

24 Leasing

25 The leasing market continues to grow share Growth driven by airlines demand for flexibility Emergence of new lessors China, Russia, Airlines (Norwegian, Lion Air) Sale-Lease-Backs may reduce lessor speculative-buys Key source of aircraft financing ,160 Total 1,343 Leased ,032 Total 3,715 Leased ,341 Total 7,621 Leased 14.7% 24.7% 35.7% 2020 Forecast 45-50% Leased Source: Ascend Online 14 May 2013 Includes all in-service/stored western built jets in standard airline service; leased defined as managed by operating lessors Financing availability remains key for continued growth Copyright 2014 Boeing. All rights reserved.

26 Impact of growth for airports

27 Multiple avenues towards airport capacity increases Remove current bottlenecks Runways and taxiways Airport ramp area Terminal building Roads Construct new runways/taxiways Improve airspace procedures Use of new avionics and ground infrastructure RNAV/RNP, ADS-B Out/In New airport construction Source: FAA website Continuous focus towards congestion relief remains critical Copyright 2014 Boeing. All rights reserved.

28 Thank you! Copyright 2014 Boeing. All rights reserved.