Aviation Market and Aircraft Finance

Transcription

1 Boeing Capital Corporation Aviation Market and Aircraft Finance

2 Forward-looking statements This presentation contains forward-looking statements, which are not guaranteed, and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict. Certain statements in this document may be "forward-looking" within the meaning of the Private Securities Litigation Reform Act of Words such as may, should, expects, intends, projects, plans, believes, estimates, targets, anticipates, and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future financial condition and operating results, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on our current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict. As a result, these statements speak to events only as of the date they are made and we assume no obligation to update or revise any forward-looking statement, except as required by law. Specific factors that could cause actual results to differ materially from forward-looking statements include, but are not limited to, the effect of economic conditions in the United States and globally, general industry conditions as they may impact us or our customers, and our reliance on our commercial customers, our U.S. government customers, our suppliers and the worldwide market, as well as the other important factors disclosed previously and from time to time in The Boeing Company s filings with the Securities and Exchange Commission.

3 B&W on the water in Seattle 787 s first flight, 12/15/2009 Copyright 2016 Boeing. All rights reserved.

4 20-year forecast: strong long-term growth Annual ASKs Billions to World Economy - 3.1% Airline traffic - 4.9% Cargo traffic - 4.7% 2034 Source: Boeing Current Market Outlook

5 Boeing forecast accuracy Fleet consists of all jet aircraft with at least 90 seats Accurate Conservative 10,000 8,000 6,000 4,000 2, CMO Forecast Medium-term Actual Under-forecasted single-aisles 0 20, Long-term Over-forecasted large and regional jets 16,000 12,000 8, CMO Forecast Actual 4,000 SOURCES: CMO 1994, CMO 2004, ASCEND

6 Travel growth emerging demand Air trips per person per year colors USA 1.00 Brazil Russia 0.10 India China ,000 10, ,000 Source: IHS Economics, Sabre GDP per capita 6

7 100 million new passengers per year in emerging Asia markets +100M LHR 70M ATL 101M per yr

8 Airlines will need 38,000 new airplanes valued at $5.6 trillion by 2034 Airplane deliveries: 38, New airplane deliveries by region ,000 25,000 20,000 15,000 10,000 5, ,490 Regional jets 7% 26,730 Singleaisle 70% 4,770 Small wide-body 13% 3,520 Medium wide-body 9% 540 Large wide-body 1% Region Airplanes Asia 14,330 North America 7,890 Europe 7,310 Middle East 3,180 Latin America 3,020 Africa 1,170 C.I.S. 1,150 World Total 38,050 8% 19% 3% 8% 3% 38,050 21% 38% Source: 2015 Current Market Outlook Copyright 2016 Boeing. All rights reserved. 8

9 Network expansion - not aircraft size - driving growth of mega-city airports % +60% +46% 304-2% 299 Capacity Frequency Cities served Seats per flight Source: Industry schedules for long-haul routes top 25 long-haul airports 9

10 Older, less efficient airplanes will be replaced with more efficient, newer generation airplanes 45,000 Units 43,560 40,000 35,000 30,000 25,000 21,600 20,000 15,000 10,000 21,960 Growth 58% 16,090 Replacement 42% 38,050 5,000 5,510 Retained fleet Source: Boeing Current Market Outlook 10

11 Cycle Drivers are Changing Geographic Balance map or globe Airline Business Model Balance Replacement Requirements

12 Airline profitability is strong 14% 12% 10% 8% EBIT Margin, % revenues 12.1% E 2015F 6% 4% 2% 0% 5.0% 5.3% 3.7% 3.9% 1.2% -2% N. Amer Europe Asia MidEast LatinAm Africa Source: IATA, June 2015 BOEING PROPRIETARY

13 Strong cash generation Operating cash flow ($B) and EBIT margin (%) of world s 15-largest airlines (by revenue) $50 12% $40 9% $30 6% $20 $10 3% $ % Copyright 2016 Boeing. All rights reserved. BOEING PROPRIETARY

14 Balance between supply and demand is objectively measured Utilization Available capacity Load Factors Supply and Demand Lease rates and residual values Parked Fleet Exogenous events

15 Deliveries tracking with historical ratios Replacement of 2.5-3% plus Growth of 3.5-4% Annual deliveries 2,000 1,800 1,600 1,400 1,200 1, Deliveries as % of fleet 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Source: Ascend 15

16 Product Strategy

17 Exceptionally well positioned for the future Superior value, efficient market coverage 500 Current Boeing Future Boeing X ER 777-8X 350 Seats ER ER ER 737 MAX MAX MAX

18 737 MAX MAX efficiency MAX reliability MAX passenger appeal

19 Next-Generation and MAX 737 customers operate throughout the world 9,851 firm orders and 150 customers Through October ,632 deliveries Customer number exclude those for BBJ

20 In-service fleet projection 737 MAX MAX catches up with NG fleet ~4800 ~ NG 737 Classic Ascend data and Boeing Market Analysis

21 2010 Boeing 737 MAX EIS 1984 EIS 1998 Sky Interior EIS 2017 Fuel Fuel reduction 14% reduction 737 Classic Next-Generation 737 6% 20% Fuel reduction 2001 Blended Winglets 2008 Carbon Brakes 2011 Performance Improvements 2017 New Engine & AT Winglet Minor interior upgrades Minor aerodynamics cleanup wing-to-body fairing Minor fuel-burn improvements from 6 different engines 2012 Winglets 2015 New engine Fuel reduction A320 Series EIS to compete with 737 Classic A320neo Launched to compete with 737NG

22 737 MAX 200 ~30% of deliveries in the last 5 years were with 189 seats 737 MAX economy at 28-in pitch New door Older seats Slimline seats 20.9 inches 22 inches 30 inches 28 inches Copyright 2014 Boeing. All rights reserved. 22

23 As of April 06, 2016 Copyright 2016 Boeing. All rights reserved. BOEING PROPRIETARY 23

24 MAX vs. NEO order book Neo overbooking is not market share capture Boeing 737 Max 40% Installed fleet represented 60% in order book 555 Leasing company 864 Airbus A320 NEO Installed fleet represented in order book Leasing company

25 Firm configuration Build First delivery Firm concept Design First flight

26 Boeing widebodies are right-sized and optimized Seamless market coverage from seats Airbus A Future Boeing X A A A A Seats 777-8X

27 Boeing 46% More orders 54% 47% More backlog 53% 35% Airbus 35% More deliveries 65% 65% Net orders last 10 years Backlog units 2015 deliveries

28 787 Most efficient long-range family Unrivaled passenger experience New environmental benchmark

29 Wood shop at Plant 1 in Seattle, in assembly in Everett Plant Copyright 2016 Boeing. All rights reserved.

30 As of April 29, deliveries deliveries 2.7M flight hours 93M passengers flown >99% fleet schedule reliability >12 hours daily utilization 100+ NEW markets 430+ nonstop routes As of April 29, 2016 *SOURCE: ARMS and Ascend Flightglobal Copyright 2016 Boeing. All rights reserved. BOEING PROPRIETARY 30

31 Copyright Boeing. All rights reserved.

32 A place for everyone's bag Dynamic adjustable lighting Inviting, spacious cabin More head room Electronically dimmable windows Every seat is a window seat Copyright Boeing. All rights reserved. BOEING PROPRIETARY 32

33 SOURCE: Third party research commissioned by Boeing, Nov 2014, 21 countries, Base = 3809, BOEING PROPRIETARY

34 As of February 19, 2016 * Copyright 2016 Boeing. All rights reserved.

35 Opening new markets More than 100 new nonstop markets now connected with the 787 Vancouver Oakland Toronto San Jose Denver Boston San Francisco New York San Diego Las Vegas Los Angeles Houston Orlando Monterrey Fort Lauderdale San Juan Puerto Plata Puerto Vallarta Montego Bay Punta Cana St Croix Island Aruba Bergen Oslo Helsinki Edinburgh Dublin Copenhagen Warsaw Manchester Dusseldorf Rome Casablanca Doha Addis Ababa Lagos Nairobi Beijing Seoul Xi'an Tokyo Chengdu Wuhan Osaka Shanghai Delhi Hanoi Guangzhou Bangkok Phuket Ho Chi Minh Sao Paulo Cape Town Mauritius Announced In operation Brisbane Sydney Melbourne As of February 19, 2016 Copyright 2016 Boeing. All rights reserved.

36 schedule Launch Detailed design First delivery Firm concept Firm configuration Rollout and first flight

37 As of February 19, 2016 Copyright 2016 Boeing. All rights reserved.

38 As of April 29, 2016 * Copyright 2016 Boeing. All rights reserved.

39 Copyright 2016 Boeing. All rights reserved. Model 314 Clipper z

40 777 z

41 1,895* firm orders, 1,384 delivered, 69 customers As of March 31, 2016 *Order totals include 777X Copyright 2016 Boeing. All rights reserved.

42 Strong momentum continues for the ER 12 new operators in the last three years American Airlines Aeroflot Ethiopian Airlines Swiss Swiss Thai Saudia Garuda Indonesia Swiss International Airlines United Airlines China Airlines China Southern China Eastern Kuwait Airways Thai Airways China Southern China Eastern

43 Wide-body Competitive Landscape Medium Wide-body The 777 family is outselling the A by more than 4 to 1 Orders through July 31, X / 777-9X ER Small Wide-body Congested marketspace A A / / / A330neo A / A

44 15-year worldwide medium twin-aisle fleet Current generation medium twin-aisle fleet , A , 777X ~30% of the fleet in 2030 will consist of current generation medium twin-aisle airplanes Source: CMO 2014 and Boeing Analysis Copyright 2014 Boeing. All rights reserved. BOEING PROPRIETARY

45 More efficient than A % improvement in fuel efficiency 10% improvement in operating economics Greater airline revenue opportunity Expanded network capability All-new passenger experience Highest reliability in its class

46 New interior with wider cabin New flight deck Folding wing tip for airport compatibility New composite wing with 72 m span All new GE9X engine Natural laminar flow nacelle Copyright 2016 Boeing. All rights reserved. BOEING PROPRIETARY 46

47 As of October 31, Unidentified

48 On track for first delivery First delivery First delivery Offerability Launch Firm configuration GE-9X engine certification Roll-out Flight test Copyright 2016 Boeing. All rights reserved. BOEING PROPRIETARY 48

49 14 customers 121 total orders 101 total deliveries 99.3% dispatch reliability as of November 30, 2015 Copyright 2016 Boeing. All rights reserved. 49

50 Queen of the Skies moves forward 1st 747-8F delivered to Silk Way 747-8F performance improvements since 2011 entry into service 8.3% fuel consumption / tonne improvement* 9,200 lbs OEW reduction 7.7% operating cost / tonne reduction* 570 nmi additional range** 20,400 lb additional max structural payload* 1st Intercontinental delivered to Korean Air 747-8I performance improvements since 2012 entry into service 4.7% fuel consumption improvement 8,300 lbs OEW reduction 2.6% operating cost reduction 455 nmi additional range * with Alternate MZFW option ** at constant payload Copyright 2016 Boeing. All rights reserved. 50

51 121 announced orders and commitments 14 customers F as of December 31, 2015 Copyright 2016 Boeing. All rights reserved. 51

52 Aircraft Finance Overview

53 Healthy aircraft financing environment Leasing Companies F Capital Markets Commercial Banks Export Credit Agencies Private Equity and Hedge Funds Tax Equity New Sources of Funding Airframe and Engine Manufacturers SATISFACTORY CAUTIONARY MAJOR CONCERN

54 Growing delivery finance requirements Financing forecast for global commercial airplane deliveries in 2016 $161 $172 $122 $127 $130 $142 23% 24% 34% 36% 28% 27% 13% 11% F Billions of US$ Cash Capital Markets Bank Debt Export Credit Tax Equity

55 Half of world airline fleet will be leased 0.5% 1.7% 14.7% % 40.7% 50% leased Projection Source: Ascend, Boeing analysis 55

56 Airplanes remain a sound investment Aviation finance is a growth business with stable, attractive returns Growing business with balanced global demand Stable product profile Mature, diverse, and global aircraft finance market 56

57 Working Together for sustainable and efficient aircraft financing Customers Capital Providers Policy and Opinion Leaders