Industry perspective Current Market Outlook Sam Bolooki Director International Business Development & Programs Boeing Global Air Traffic Management Oct. 2013
Agenda Aviation industry 20-year commercial traffic and forecast
Aviation ecosystem Capability Passenger Load Fuel Performance Navigation Weather Collision Avoidance Terrain Avoidance Noise Reduction Capability Airline Pilot Training FA Training Flight Planning City Pair Development Flight Schedules Execution Walk Around Flight Plan load Weight and & Balance Push Back Taxi Departure Etc Execution Aircraft Dispatch Crew Scheduling Flight Monitor Plane/Crew /Customer Disruption Management Aviation Ecosystem Capability Terminal/Gates Ramp Taxiway Runway Passenger Flow Airport Capability Airspace Architecture Surveillance Method Digital Communication Common Network ATC Training Operational Plan Execution Airspace Ramp Traffic Management Push Back Clearance Surface Management Disruption Management De-Icing Emergency Execution Trajectory Conflict Mgt Disruption Management Trajectory Negotiation Dynamic Sector Mgt ATC Workflow
Oil prices expected to remain elevated and volatile Spot $/Barrel (Brent Crude Oil / Rotterdam Jet Fuel) 180 160 140 120 100 80 60 Jet Fuel /Gallon 450 400 350 300 250 200 150 40 Brent Crude Oil 20 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Historical data source: EIA
Fuel has doubled as a percentage of airline costs* over the past 10 years 15% 2003 Fuel price: US $0.82/gal 25% Single-aisle Wide-body 30% 2013 Fuel price: US $2.73/gal 50% *Cash operating cost, typical rules, representative aircraft
Cents per seat-mile New technology and intense competition continue to push airline yields downward
Agenda Aviation industry 20-year commercial traffic and forecast
Why the Current Market Outlook (CMO)? Product strategy Long-range business plan Suppliers and airline customers
Boeing forecast accuracy Fleet consists of all jet aircraft with at least 90 seats Accurate despite market dynamics Long-term forecasts have been more conservative Single-aisle segment has exceeded expectations 10 000 8 000 6 000 4 000 2 000 0 20 000 2003 CMO Forecast Medium-term 2003-2012 Long-term Actual Large aircraft and regional jet segments have underperformed 16 000 12 000 8 000 4 000 1994 CMO Forecast Actual Sources: CMO 1994, CMO 2003, ASCEND 0 1994-2012
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 2013-2032
Air travel and economic growth are directly related 16 14 12 10 8 6 4 2 0-2 -4 Percent annual change passenger traffic Long-term traffic growth Real GDP growth 1971 1976 1981 1986 1991 1996 2001 2006 2011 8 7 6 5 4 3 2 1 0-1 -2 Pax airline traffic growth GDP Sources: Traffic growth ICAO/IATA GDP growth IMF (PPP)
RTKs (Billions) RPKs (trillions) World air travel has grown 5% per year since 1980 6.0 5.0 4.0 3.0 2.0 4 recessions 2 financial crises 2 Gulf wars 1 oil shock 1 near pandemic (SARS) 9/11 1.0 0.0 1980 1984 1988 1992 1996 2000 2004 2008 2012 250 200 150 100 50 RPKs = Revenue Passenger Kilometers Source: ICAO scheduled traffic RTKs = Revenue Tone Kilometers 0 1980 1984 1988 1992 1996 2000 2004 2008 2012
20-year forecast: strong long-term growth 2013 to 2032 World economy (GDP) 3.2% Number of airline passengers 4.1% Airline traffic (RPK) 5.0% Cargo traffic (RTK) 5.0%
Airplane units Airlines and cargo operators will need more than 36,000 new airplanes Airplane deliveries: 35,280 2013-2032 25 000 20 000 15 000 10 000 5 000 0 2,020 Regional jets 6% 24,670 Singleaisle 70% 4,530 Small wide-body 13% 3,300 Medium wide-body 9% 760 Large wide-body 2% New freighter deliveries: 850 2013 2032 700 600 500 400 300 200 100 0 640 Large More than 80 tonnes 75% 210 Medium 40 to 80 tonnes 25% 0 Standard Less than 45 tonnes
Airspace faces new Challenges as Industry Grows Global Fleet Doubles by 2032 (1)... (# Aircraft) Tripling Airport Congestion (2) (Global Aircraft Capacity) 100% +104% 75% 44 Replacement 13,380 Retained 6,030 50% 25% 0% 84 11 46 6 10 2010 2013 2030 2032 Crowded Airports (3) Congested Airports (4) Notes: (1) Boeing Current Market Outlook (2013) (2) BCA Market Analysis (2013) of top 111 global airports (3) Crowded = projected traffic 85% to 94% capacity (4) Congested = projected traffic > 95% capacity
Air travel growth varies by market Within Asia Pacific* 2012 traffic Added traffic 2013-2032 Annual growth % 6.2% Within North America 2.3% Within China 6.9% Within Europe 3.6% Europe - Asia Pacific 5.5% North Atlantic 3.5% Middle East - Asia Pacific Within Latin America Trans-Pacific Within/to CIS 7.3% 6.9% 4.5% 4.8% World Average Growth: 5.0% North America - Latin America 5.0% Europe - Latin America 4.7% Africa - Europe 4.8% *Does NOT include within China 0 500 1 000 1 500 2 000 2 500 3 000 RPKs, billions
Conclusions World economy will remain volatile Aviation Industry continues to focus on efficiency Need for airspace and airport capacity optimization Aircraft Collaboration, Collaboration, Collaboration Airline Aviation Ecosystem Airspace Airport We are all in it together
Sam Bolooki Director, Int'l BD & Programs Boeing Global Air Traffic Management Office: 703-465-3838 Mobile: 206-854-4839 E-mail: sam.h.bolooki@boeing.com Thank You