Airbus Foundations of Leadership John Leahy CCO of Airbus North America Investor Forum 2004 New York December 3rd, 2004 1 Airbus today 12 models 5,093 aircraft sold to 197 customers 3,722 delivered 290 2004 deliveries to end November Data to end November 2004 2
2004 order share and value Units Revenues Airbus 218 aircraft 51% Boeing 207 aircraft 49% Airbus $17.7B 47% Boeing $19.8B 53% 425 firm orders $37.5 billion Data to end November 2004 3 2004 orders by size category 100-200 seater 304 orders A320 Family 179 a/c 59% 717 737 757 125 a/c 41% A300 A310 A330-200 6 a/c 9% 767 7E7 61 a/c 91% 200-275 seater 67 orders 275-375 seater 44 orders A330-300 A340 33 a/c 75% 777 11 a/c 25% 0 A380 0% 10 100% 375+ seater 10 orders Data to end November 2004 4
Order evolution - gross % share of gross unit orders: 1995 end November 2004 100 80 60 40 Boeing 82% Airbus 51% Boeing 49% 20 Airbus 18% 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 5 Deliveries 2003 2004 to end October Airbus 305 aircraft 52% Boeing 281 aircraft 48% Airbus 261 aircraft 52% Boeing 238 aircraft 48% 586 aircraft delivered 499 aircraft delivered 6
Delivery trend 32% Airbus delivery share 52% Airbus 1000 800 600 400 914 620 800 489 852 527 684 381 586 281 287 Boeing 602 200 0 294 311 325 303 305 315 1999 2000 2001 2002 2003 2004E 7 2004 world traffic to grow at 11.4% vs 2003 % year over year change - RPK 14% 12% 10% 8% 6% 4% 2% 0% -2% -4% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004E Source: ICAO, Airbus forecast 8
World air transport operating result (EBIT) Billions US$ 15 2004 average fuel price 10 5 0 $30 / barrel $40 / barrel -5-10 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004E* An average of $40 / Barrel will reduce EBIT from ~ $3.5B to ~ $1B Source: IATA, Airbus estimates for 2004 9 Only a small part of the current parked fleet is likely to return to active service 1800 1600 1400 1200 1000 800 600 400 200 0 1990 1991 Source : Airclaims End Oct 2004 Number of western built passenger jets parked at year end by generation 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 YtD Only 250 to 300 currently parked aircraft will return to service Old Mid New 10
No oversupply of aircraft 91 1 717 37 737SG 26 1 23 737NG 757-200 29 MD-80/90 Airbus Boeing End September 2004 11 A closer look at parked A320 Family Available (no current placement) Known placement Temporarily parked by operator Of 26 A320 Family parked 8 temporarily parked 15 have known placements 3 no current placement (0.1% fleet) Availability far lower than perceived 3 8 Parked fleet is very dynamic - not same aircraft month-to-month 2 1 6 5 1 A319 A320 A321 End September 2004 12
A320 Family lease rates have made a strong recovery 100% 90% Negative impacts on lease rates: General market conditions post 9/11 6 major bankruptcies - SAB, CMM, AAA, SWR, AES & AEF - 128 A320 Family released 80% 70% 60% 50% 2000 2001 2002 2003 2004 Chapter 11 filings USA, UAL, ACA 550+ A320 Family involved with potential for many rejections Drivers of a strong recovery Planned production increase not implemented & strict no white tail policy Proactive role of Airbus with lessors and other owners to place aircraft Rapid expansion of operator base Improvement of general market conditions, especially outside North 13 America Leasing markets and aircraft availability 14
Leasing companies backlog (end October 2004) Airline Backlog: 987aircraft 70.5% Leasing Backlog: 412 aircraft 29.5% 1399 aircraft 15 Lessor placement rates 8 open slots 100% 80% 60% 40% Unplaced Placed 20% 0% 2005 16
Leasing placement trend Number of aircraft 150 125 138 100 Last 12 months: 171 a/c 114 106 75 106 50 25 65 52 0 2001 2002 2003 2004 171 aircraft placed in the last 12 months proves clear recovery of the market 17 18
A321 & A330-200 : a new wave in the mid-market Deliveries share 100% 80% Early 1990s 757 & 767 captured 80% of the market sector 757 New Wave A321 & A330-200 capture >80% and rising 60% 40% 767 A330-200 20% 0% A300/A310 A321 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 19 Economic realities Typical cash operating cost breakdown Landing & nav. fees (21%) Flight crew (27%) Fuel (30%) Maintenance (22%) Cost of Ownership (40%) Cash Operating Cost (60%) Total Operating Cost 20
Similar operating costs per seat 7E7 @ 217 seats A330-200 @ 245 seats 7E7-8 vs. A330-200 as datum Delta % As % of COC per seat As % of Total Operating Cost per seat Fuel -8.5-2.9-1.5 Maintenance 5.6 1.6 0.5 Landing & nav 7.6 1.1 0.6 Flight crew 12.9 3.6 1.8 Total +3.0% +1.4% 21 Subject to launch 22
250 & 300 seat 20-year demand 250 seats: 1800 aircraft - 767-300ER - 7E7-8 - A330-200 - A350-800 300 seats: 1300 aircraft - 777-200ER/LR - 7E7-9 - A330-300 - A340-300 - A340-500 - A350-900 20-year market is 3100 aircraft 23 A350 highlights All new cabin New high bypass engines Passive and active load alleviation New HTP Wing drag improvements Rear fuselage Al-Li or CFRP CFRP outer wing box Optimised fuselage design (Al-Li) Full titanium pylon Centre wing box in CFRP 24
A350-800 competitive highlights A350-800 7E7-8 Seats (3-class) 245 217 Full passenger load range (nm) 8600nm 8500nm Block fuel / seat Cash cost / seat MWE per seat Noise classification London arrival departure Datum +2.5% Datum +7% Datum +3% QC 0.5 QC 0.5 QC1 QC1 25 A350-900 competitive highlights A350-900 7E7-9 777-200ER Seats (3-class) Full passenger load range (nm) Block fuel / seat Cash cost / seat MWE per seat Noise classification London arrival departure 275 257 290 7600nm 8100nm 7700nm Datum equal +20% Datum +3% +6% Datum same +10% QC 0.5 QC 0.5 QC 1 QC1 QC 1 QC 2 26
27 A380 an all new, state-of-the-art design 560t 555 seats 8000 nm EIS 2006 590t 150 t 5620 nm EIS 2008 28
Strong market confidence 41 A380 & 2 A380F 10 A380 5 A380 & 5 A380F 10 A380 6 A380 12 A380 10 A380F 2 A380 15 A380 6 A380 5 A380 4 A380 6 A380 now 139 firm orders & commitments 29 23 commitments in the last 14 months December 2003 Qatar Airways 2 A380s October 2003 Korean Air 5 A380s August 2004 August 2004 Thai (MOU) 6 A380s December 2003 Malaysia Airlines 6 A380s July 2004 Etihad (MOU) 30 4 A380s
Top 20 airlines by RPK 1 st Half 2004 net profit margin in % 15.0% 10.0% 5.0% 0.0% A380 A380 A380 A380 A380 A380 A380-5.0% -10.0% Cathay Pacific Emirates Singapore Qantas Thai British Airways Southwest Korean Lufthansa AMR Iberia Air France ANA US Air Continental United Air Canada Northwest JALS Delta 1Q2004 for JALS, Air France includes KLM 31 Superior range and economics -400 400 A380-800 800 Seats 412 555 Max TOW (tonnes) 397 560 Max range (nm) 7100 8000 COC per seat Datum -17% COC per m 2 of cabin Datum -26% 32
More volume, more seats, more comfort Relative net usable* floor area +50% More comfort per seat 35% more seats Datum -400 A380 * gross area less cut-outs for stairs/lifts and minimum regulatory aisles / assist space 33 A380 walk through A new life in the air new version with 16m
The GREEN GIANT for our planet The first long-haul aircraft with less than 3 litres per pax/100km fuel consumption* 35 * 5000 nm sector, Typical International Flight Profile, 555 pax 35% more pax & half the noise London departure -400X QC8 910 klb MTOW -400 875 klb MTOW QC4 QC2 A380 350 400 450 500 550 600 650 MTOW (t) A380 - the low noise answer for growth 36
Growth by both fragmentation and consolidation FRAGMENTATION Hub by-passing Market development Frequency on thin routes The business traveller s preference CONSOLIDATION More cost-effective Hub dominance Global network Linking major hubs The logic behind alliances The real world: fragmentation and consolidation 37 Large aircraft operations are concentrated 80% of all movements are concentrated into just 37 airports ANC HNL SFO LAX ORD JFK MIA AMS LHR FRA CDG LUX JED RUH DXB DEL BOM CTS PEK ICN NRT HND KIX PVG ITM FUK HKG OKA TPE BKK MNL KUL SIN JNB MEL SYD AKL All of these airports, and many more, are either ready, prepared or planning for A380 operations 38
Europe-Asia scheduling constraints LHR-HKG November 11 2004 CX 250 18.50 744 BA 025 19.00 744 BA 031 20.40 744 CX 252 21.00 343 VS 200 21.30 346 CX 254 21.55 744 BA 027 22.05 744 HKG-LHR November 12 2004 BA 026 23.25 744 VS 201 23.35 346 BA 032 23.45 744 CX 251 23.55 744 CX 255 00.25 343 QF 029 01.20 744 LON 12 13 14 15 16 17 18 19 20 21 22 23 24 01 02 03 04 05 06 07 08 09 10 11 12 HKG 19 20 21 22 23 24 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 Airport curfews & passenger convenience mean all flights are constrained to very limited time windows 39 Origin-destination traffic between U.S. and China Origin/destination passengers to mainland China Guangzhou Beijing Shanghai Washington Boston Chicago Honolulu San Francisco Los Angeles New York Mainland China Final destination cities 90% to 3 cities USA First origin cities 70% from 3 cities Source: MIDT 2003 40
Meeting passenger expectations Airline criteria of choice on US int l flights What is your main reason for flying on this airline? % of respondents 40% 33% 30% 20% 17% 14% 11% 10% 7% 5% 4% 4% 3% 1% 1% 0% r e s le ht nc flie du flig rie he nt e c e p p s u o ex nt St eq d nfr nie oo No ve g n us Co io ev Pr ic Pr Source: e US Commerce Department Survey (ITA ), 2004 O er th t fe Sa io at ut ep r y n l ya Lo ty to er r ri ca n y e lic tio vic ta po er pu ts er e h y r o ig e pl -fl tim In Em no 41 A380 routes - 2008 42
As one era ends 180 160 159 139 140 129 120 102 95 100 77 80 85 77 A380 62 52 60 37 40 A380 Launch 20 36 25 F 0 1997 1998 1999 2000 2001 2002 2003 2004 another one begins Data to end September 2004 43 Introduction of at New York 15 months BOAC JAL 707 DC8 Air France 707 Lufthansa 707 TWA Pan Am Mar. 70 Jun. 70 Sep. 70 Mar. 71 Jun. 71 Competition & product preference forced all airlines to rapidly introduce the at New York Source: ICAO 44
Introduction of at Tokyo 6 months Air France JAL 707 DC8 Lufthansa Pan Am Northwest 707 707 Dec. 71 Mar. 72 Jun. 72 Sep. 72 Dec. 72 Source: ICAO Competition & product preference forced all airlines to rapidly introduce the at Tokyo 45 Introduction of at London 18 months JAL 707 BOAC 707 TWA Pan Am Mar.70 Jun. 70 Mar. 71 Jun. 71 Sep. 71 Source: ICAO Competition & product preference forced all airlines to rapidly introduce the at London 46
Introduction of at Hong Kong 9 months Air France 707 BOAC 707 Lufthansa 707 Pan Am 707 Northwest Sep. 71 Dec. 71 Mar. 72 Jun. 72 Sep. 72 Competition & product preference forced all airlines to rapidly introduce the at Hong Kong Source: ICAO 47 48
Safe Harbor Statement Certain of the statements contained in this document are not historical facts but rather are statements of future expectations and other forward-looking statements that are based on management s beliefs. These statements reflect the Company s views and assumptions as of the date of the statements and involve known and unknown risk and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. When used in this document, words such as anticipate, believe, estimate, expect, may, intend, plan to and project are intended to identify forward-looking statements. Such forward-looking statements include, without limitation, projections for improvements in process and operations, new business opportunities, revenues and revenues growth, operating margin growth, cash flow, deliveries, launches, compliance with delivery schedules, performance against Company targets, new products, current and future markets for the Company products and other trend projections. This forward looking information is based upon a number of assumptions including without limitation: Assumption regarding demand Current and future markets for the Company s products and services Internal performance including the ability to successfully integrate EADS activities to control costs and maintain quality Customer financing Customer, supplier and subcontractor performance or contract negotiations Favourable outcomes of certain pending sales campaigns Forward looking statements are subject to uncertainty and actual future results and trends may differ materially depending on variety of factors including without limitation: General economic and labour conditions, including in particular economic conditions in Europe and North America, Legal, financial and governmental risk related to international transactions The Cyclical nature of some of the Company s businesses Volatility of the market for certain products and services Product performance risks Collective bargaining labour disputes Factors that result in significant and prolonged disruption to air travel world-wide The outcome of political and legal processes, including uncertainty regarding government funding of certain programs Consolidation among competitors in the aerospace industry The cost of developing, and the commercial success of new products Exchange rate and interest rate spread fluctuations between the Euro and the U.S. dollar and other currencies Legal proceeding and other economic, political and technological risk and uncertainties Additional information regarding these factors is contained in the Company s document de référence dated 1st April 2004. The Company disclaims any intention or obligation to update these forward-looking statements. Consequently the Company is not responsible for any consequencies from using any of the above statements. 49