John Schubert Managing Director Asia Pacific & India Marketing September 2017. 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.
Agenda Market performance, expectations 2017 Current Market Outlook Product strategy
Near-record airline profit in 2016 9% Traffic growth rates (RPKs) 82% World load factors $40 Net profit (billions) 8% 7% 80% $35 $30 6% 78% $25 5% 4% 76% $20 3% 74% $15 2% 1% 72% $10 $5 0% 2010 2011 2012 2013 2014 2015 2016 70% 2010 2011 2012 2013 2014 2015 2016 $0 2010 2011 2012 2013 2014 2015 2016 SOURCES: ICAO / IATA
Economic growth Passenger traffic growth Airline profits SOURCES: IHS for economic growth, Boeing estimates passenger for growth, IATA forecast for airline profits
Agenda 2017 Current Market Outlook
Product strategy Long-range business plan Suppliers and airline customers
Economic growth Competitive landscape Airport infrastructure Environmental regulations Airline strategies & business models Fuel price Emerging markets Market liberalization Airplane capabilities
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 2015 2016E RPKs (trillions) 5% long-term growth rate 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 SOURCE: ICAO scheduled traffic / 2016E IATA December 2016, RPKs = Revenue Passenger Kilometers
Average annual growth World economy (GDP) 2.8% Number of airline passengers Cargo traffic (RTK) Passenger traffic (RPK) 4.0% 4.2% 4.7%
Annual GDP growth, 2016 2036 South Asia China 4.9 6.1 Southeast Asia Asia Middle East Africa Latin America World Oceania North America CIS Europe Northeast Asia 2.5 2.1 2.0 1.7 1.2 4.4 3.9 3.5 3.5 3.0 2.8 SOURCE: IHS Economics
2.5 2.0 Air Travel Growth Frequency Growth Nonstop Markets 1.5 1.0 Average Airplane Size 0.5 SOURCE: August OAG/Innovata Index 1996=1.00
787 Dreamliner opening new markets More than 156 new nonstop markets now connected with the 787 In Operation Announced Aug 12, 2017
Airplane deliveries: 41,030 2017-2036 30,000 25,000 20,000 15,000 10,000 5,000 0 2,370 Regional jets 6% 29,530 Singleaisle 72% 5,050 Small pax widebody 12% 3,160 Med/Lg pax widebody 8% 920 Freighters 2% Market value: $6,050 billion 2017-2036 3,500 3,000 2,500 2,000 1,500 1,000 500 0 $110B Regional jets 2% $3,180B Singleaisle 53% $1,340B Small pax widebody 22% $1,160B Med/Lg pax widebody 19% $260B Freighters 4%
Units 50,000 45,000 46,950 40,000 35,000 30,000 25,000 23,480 20,000 15,000 10,000 23,470 Growth 57% 17,560 Replacement 43% 41,030 5,000 5,920 Retained fleet 0 2016 2036
1996 2016 2036 17% 29% 2,410 6,830 17,520 37% SOURCE: CMO MO 2017, Flight Global Ascend Online Data
Airplane deliveries: 930 2017-2036 700 600 500 400 300 200 100 0 10 Regional jets 1% 680 Singleaisle 73% 150 Small pax widebody 16% 90 Med/Lg pax widebody 10% 0 Freighters 0% Market value: $140 billion 2017-2036 80 60 40 20 0 <$5B Regional jets 0% $70B Singleaisle 50% $40B Small pax widebody 29% $30B Med/Lg pax widebody 21% $0B Freighters 0% NOTE: market share may not equal 100% due to rounding
Airplane deliveries: 4,210 2017-2036 3,500 3,000 2,500 2,000 1,500 1,000 500 0 40 Regional jets 1% 3,230 Singleaisle 77% 610 Small pax widebody 14% 320 Med/Lg pax widebody 8% 10 Freighters <1% Market value: $650 billion 2017-2036 3,500 3,000 2,500 2,000 1,500 1,000 500 0 <$5 Regional jets <1% $370B Singleaisle 57% $170B Small pax widebody 26% $110B Med/Lg pax widebody 17% <$5B Freighters <1% NOTE: market share may not equal 100% due to rounding
RPKs, billions Within Oceania Southeast Asia China 2016 traffic Added traffic 2017-2036 Annual growth % 4.2% 4.4% 5.6% Middle East North America Northeast Asia South America Africa 1.9% 6.7% 6.7% 3.3% Oceania traffic growth: 3.9% 6.7% Oceania GDP growth: 2.5% South Asia 6.9% 0 50 100 150 200 250
RPKs, billions Within Southeast Asia China Northeast Asia 2016 traffic Added traffic 2017-2036 Annual growth % 7.2% 6.3% 4.1% Middle East South Asia Europe Oceania North America 5.3% 8.5% 3.5% 4.4% 5.4% SE Asia traffic growth: 6.2% SE Asia GDP growth: 4.4% CIS 5.6% Africa 5.7% 0 100 200 300 400 500 600 700 800 900
Units 1,000 970 900 800 700 390 Growth 42% 600 580 500 930 400 300 200 540 Replacement 58% 100 40 Retained fleet 0 2016 2036
ASMs 24% 2016 52% 24% 48% 25% 2026 2036 48% 24% 28% 27% SOURCE: Boeing CMOs LCC Charter/IT Broad Network Other Networks
38% 2016 34% 49% 27% 52% 2026 2036 24% 28% 24% 24% SOURCE: Boeing CMOs LCC Charter/IT Broad Network Other Networks
Agenda Product strategy
Superior design, efficiency, performance and value Single-aisle Twin-aisle Freighter
737 MAX 8 first delivery May 16, 2017
Status as of September 13, 2017 3,843 orders from 90 customers Total 18 deliveries 170K passenger flown 990 flights 3,190 flight hours 5 customers
More seats & payload-range All new passenger experience Best efficiency & economics 777X is the large passenger airplane of the future
As of August 31, 2017 20 21 34 150 Unidentified 10 25 60 20
The most innovative and efficient airplane family
Status as of August 31, 2017 1,278 orders from 69 customers Total 589 deliveries 787-8 345 deliveries 787-9 244 deliveries 190M passenger flown 984,419 flights 5.7M flight hours 99.4% schedule reliability >12 hours daily utilization 1,536 total routes 677 unique city-pairs 156 new markets
Backlog by value ($B) 747 ME, Central & S. Asia Leasing, Gov't & BBJ Region Europe & Russia North America L. America & Africa China, East & SE Asia Asia Pacific Backlog = 5,744 aircraft Value = $424 billion 787 777 Large 1% Twin- Aisle 49% Model Single- Aisle 50% 737 767
Things to remember Commercial aviation will continue to be a growth industry Asian share of global jet fleet continues expanding Boeing product strategy is right for today and the future