Current Market Outlook 2015 Boeing Commercial Airplanes July 2014 The statements contained herein are based on good faith assumptions and are to be used for general information purposes only. These statements do not constitute an offer, promise, warranty or. guarantee of performance. The statements contained herein are based on good faith assumptions are to be used for general information purposes only. These statements do not constitute an offer, promise, warranty or guarantee of performance. Steve Hahn Director, Japan Enterprise Technology Programs November 2015 July 2014
Agenda Recent market performance, trends 20-year traffic and airplane forecast Product strategy
Since 2010 Global economic growth rate below average Passenger market resilient, growing Cargo market recovering nicely Airlines managing better than ever before NOTE: Annual growth rates (%) and cumulative profit ($B)
Growth driven by emerging economies, LCCs Market much more diverse, balanced Continued strong replacement demand New airplanes, capabilities opening new markets
20-year traffic and airplane forecast
Twenty-year traffic and product forecast All regions of the world 185 airlines / groups 63 traffic flows All jets 30 seats and above No turbo props No business jets Freighters Scheduled and nonscheduled flying
reca Market liberalization Airplane capabilities Environment High speed rail Fuel price Emerging markets Airline strategies & business models Infrastructure Economic growth 2015-2034 Current Market Outlook
Resilient, growing market expected to continue 5% long-term growth rate 6.0 RPKs (trillions) 5.0 4.0 3.0 2.0 Above trend since 2010 1.0 0.0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 RPKs = Revenue Passenger Kilometers SOURCE: ICAO scheduled traffic
Macroeconomics Trade GDP level GDP per capita Labor force Value of service Network structure Infrastructure Business model Regulatory environment Demand
2014 to 2034 World economy (GDP) 3.1% Number of airline passengers 4.0% Airline traffic (RPK) 4.9% Cargo traffic (RTK) 4.7%
~6% traffic growth (RPKs) +180 million passengers +900 more airplanes (passenger) SOURCE: IATA and BCA Analysis
Market fragmentation drives growth 2.5 2.0 Air Travel Growth Frequency Growth Nonstop Markets World 1.5 1.0 Average Airplane Size 0.5 SOURCE: August OAG Index 1994=1.00
It s what passengers want, not bigger airplanes 14% New direct routes 78% 8% Additional frequencies Larger airplane size on existing routes
Airplane deliveries: 38,050 2015-2034 New airplane deliveries by region 2015-2034 30,000 25,000 20,000 15,000 10,000 5,000 0 2,490 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%
Airplane deliveries: $5.6 trillion 2015-2034 New airplane values by region 2015-2034 3,000 2,500 2,000 1,500 1,000 500 0 $100B Regional jets 2% $2,770B Singleaisle 50% $1,250B Small wide-body 22% $1,220B Medium wide-body 22% $230B Large wide-body 4% Region Airplanes Asia $2,200B North America $940B Europe $1,050B Middle East $730B Latin America $350B Africa $160B C.I.S. $140B World Total $5,570B 13% 19% 6% 3% 3% $5.6T 17% 39%
Global fleet will double Units 45,000 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 0 2014 2034
Western jets retired with >90 seats, excluding hull losses 700 600 Widebody Single-aisle 500 400 300 200 100 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 SOURCE: Flight Global Ascend
65% Medium wide-body Large wide-body 2034 2014 8% 3% 9% 2% 6% 12% Regional jet 13% 11% Single-aisle 21,600 Small wide-body airplanes 43,560 airplanes 70% SOURCE: Ascend & Boeing CMO
Air cargo market Year-over-year RTK growth 6% 5% 4% 3% 2% 1% 0% -1% -2% 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 SOURCE: IATA Carrier Tracker (industry international scheduled freight) and A4A US domestic cargo traffic
New freighter deliveries: 920 2015 2034 Airplane units 700 600 500 400 300 200 100 0 650 Large >80 tonnes 70% 270 Medium 40-80 tonnes 30% 0 Standard <45 tonnes Market value: $290 billion 2015 2034 Market value 250 200 150 100 50 0 $230B Large >80 tonnes 79% $60B Medium 40-80 tonnes 21% $0B Standard <45 tonnes
100% Share of fleet Delivery units 80% 60% 40% Large production >80 tonnes Wide-body conversions 40-120 tonnes Medium wide-body production 40-80 tonnes 400 650 2,340 1,020 20% 0% 2014 Freighters 1,720 2034 Freighters 2,930 Standard-body conversions <45 tonnes 270 2015 to 2034 Freighters
Product strategy
Superior value, efficient market coverage Current Boeing Future Boeing 500 500 747-8 747-8 450 450 777-9X 400 777-300ER 400 777-8X 350 350 Seats 300 777-200ER 787-9 787-10 787-9 300 Seats 250 787-8 767-300ER 787-8 250 200 737 MAX 200 200 737-900ER 737 MAX 9 150 737-800 737 MAX 8 150 737-700 737 MAX 7 100 100 Boeing Standard Rules seat counts
Backlog by value ($B) 747 ME, Central & S. Asia Leasing, Gov't & BBJ Region Europe & Russia North America China, East & SE Asia L. America & Africa Asia Pacific Backlog = 5,715 aircraft Value = $435 billion 777 Large 1% Twin- Aisle 54% 787 Model Single- Aisle 45% 737 767
Things to remember Strong, growing market being driven by expansion Single-aisle fuelling forecast Boeing product strategy is right for today and the future
For more information, please visit our CMO website: http://www.boeing.com/cmo