3rd boeing 1 2013-08-22 alaska air cargo summit presentation

7/23/2019 3rd Boeing 1 2013-08-22 Alaska Air Cargo Summit Presentation

1/13

BOEING is a trademark of Boeing Management Company.Copyright 2013 Boeing. All rights reserved.

The statements contained herein are based on good faith assumptions and provided for general information purposes only.These statements do not constitute an offer, promise, warranty or guarantee of performance Actual results may varydepending on certain events or conditions. This document should not be used or relied upon for any purpose other thanthat intended by Boeing.

A Dynamic andChallenging Air CargoMarket Environment

Russell TomRegional Director

Air Cargo - MarketingBoeing Commercial Airplanes

August 27, 2013


2/13

10.0

11.0

12.0

13.0

14.0

15.0

16.0

17.0

J a n

F e

b M a r

A p r

M a y

J u n

J u

l

A u g

S e p

O c

t

N o v

D e c

R T K s

( b i l l i o n s

)

2009 2010 2011 2012 2013

Air cargo volumes reached all-timehigh in early 2011, but growth stalledsince mid-2011

Weak economy

Trade growth slowed Economic uncertainty

World air cargo traffic growth: -1.7% for Jan-Dec 2012 -0.2% June 2013 YTD

Air cargo demand weak since mid-2011

Sources: IATA Carrier Tracker (Industry International Scheduled Freight)and ATA US Domestic Cargo Traffic account for 87.7% of the world RTKs.


3/13

World economic outlook

Weak growth outlook 2012through mid-2013

Global growth increasinglydriven by emerging economies

Growth pickup expected in 2H-2013

At or above trend growth 2014and beyond

Watch Items

EU sovereign debt

US fiscal outlook

Oil prices

Middle East

Economic growth did not meet expectations in2012 and will remain slow through mid-2013

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

2 0 1 2

2 0 1 3

2 0 1 4

2 0 1 5

2 0 1 6

2 0 1 7

Real GDP Growth Global InsightJuly 2013 Forecast

Year-over-Year, %

Long-termaverage

Nov 2011Actual/Forecast

July 2013Actual/Forecast


4/13

Asia tech exports, a major air cargo commodity,have slowed since 2010 due to weak world economy

(40)

(30)

(20)

(10)

-

10

20

30

40

50

60

2005 2006 2007 2008 2009 2010 2011 2012 2013

High-Tech and New-Tech Product Exports

China High Tech Exports (a key sourceof air cargo demand)

Percent Change YoY, Value in USD

Chinas high tech export growth slowedsharpl y in 2013

Growth in Chinas high tech exports declineddramatically as developed economies weakened

Source: Thomsons Reuters, July 12 2013 data pull for June 2013 data.


5/13

Europe-Asia24%

NorthAmerica-

Asia25%

Domesticand

regional25%

Other longhaul16%

NorthAmerica-Europe

10%

Major world air cargo markets 2012Total 161 billion RTK

Europe-Asia

32%

NorthAmerica-

Asia33%

Otherlong haul

21%

NorthAmerica-Europe

14%

Long-haul air cargo markets 2012

Total 120 billion RTK

Decreased Asia exports resulted in 2012 Europeand US long-haul market traffic declines

Asia-Europe and Asia-North America account

for nearly two-thirds of long-haul air cargotraffic

In 2011, Asia-North America RTKs declined 3% and Europe-Asia RTKs declined 8%

Sources: A4A, US Dept of Commerce, Eurostats, AEA, CAAC, IATA,


6/13

(1,000,000)

(500,000)

-

500,000

1,000,000

1,500,000

Africa AsiaPacific

(exclPRC)

PRC Europe ExpressCarriers

LatinAmerica

MiddleEast

NorthAmerica

The current air cargo slowdown has affected Asiaairlines more than other regions

June 2013 Year-to-date

0.0%

-0.7%-0.7% -4.5%

11.4%

1.6%

Sources: IATA Carrier Tracker (industry international scheduled freight), ChinaEastern and A4A US domestic cargo traffic, and Boeing analysis.

-3.7%

Variance of Air Cargo RTKs flown by carrier region, 2013 versus 2012World air cargo contracted0.2% YTD in 2013

Asia-Pacific and N. Americannon-express carriers mostadversely affected

Express carriers slightlynegative

Middle East carriers addingcapacity to capture emergingopportunities

0.2%

Updated: 08/6/13


7/13

0.0

0.2

0.4

0.6

0.8

1.0

1.2

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

2 0 1 2

China to US air cargo tonnage

Electronics

Apparel

Other

Low consumer demand has affected air cargotonnage

Source: US DOC Trade

T o n n e s

( m i l l i o n s )


8/13

0.0

10.0

20.0

30.0

40.0

50.0

60.0

0.0

0.2

0.4

0.6

0.8

1.0

1.2

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

2 0 1 2

M a r i t i m e s h i p p i n g t o n n e s

( m i l l i o n

)

A i r c a r g o t o n n e s

( m i l l i o n

)

China to US air and maritime tonnage

Air cargo

Maritime shipping

China to US air cargo tonnage has returned to pre-recession levels, maritime shipping has not

Top 20 air cargo commodities (SITC 2 digit) account for 95% of China to US air cargo market Air express documents and packages excluded

Source: US DOC Trade


9/13

Air cargo has maintained its market share in thekey trans-pacific cargo market

0

10

20

30

40

5060

70

80

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

2 0 1 2

T o n n e s

( m i l l i o n

)

Air Cargo ShareMaritime shipping share

2.1%

Top 20 air cargo commodities (SITC 2 digit) account for approximately 90% of Japan and S. Korea to US & 95% of China to US to US air cargo markets Air express documents and packages excludedSource: US DOC Trade

2.0% 1.8%2.0% 2.0%

2.2%

2.0%

1.7%2.0%

2.0%

2.3%

2.5%2.2%

Air cargo market share (%)


10/13

Air cargo has maintained its market share acrossthe trans-Atlantic cargo market

Top 20 commodities (SITC 2 digit) account for approximately 90% of Germany to USand 85% of US to Germany, 90% of UK to US and 85% of US to UK air cargo

Air express documents and packages excludedSource: US DOC Trade

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2000 2 001 2002 2 003 2004 2005 2006 200 7 2 008 2009 2010 2011 2012

W e i g h t s

h i p p e d

, m i l l i o n t o n n e

Top 20 air cargo commodities for the US to Germany cargo market

Air cargo share

Maritime shipping share

12.4%

7.9%

9.0%

10.4%

11.7%11.8%11.1%

11.3%13.0%

10.1%10.3%

10.2%

9.0% Air cargo % share

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2 00 0 2 00 1 2 00 2 2 00 3 2 00 4 2 00 5 2 00 6 2 00 7 2 00 8 2 00 9 2 01 0 2 011 2 01 2

W e i g h t s

h i p p e d

, m i l l i o n t o n n e

Top 20 air cargo commodities for the Germany to US cargo marketAir cargo share


5.0% 5.7%6.1%

4.8%

5.0%5.2%

5.1%4.9%4.5%

6.4%

6.1%

6.2%

4.9%

Air cargo % of share

0

0.5

1

1.5

2

2.5

2 00 0 2 00 1 2 00 2 2 00 3 2 00 4 2 00 5 2 00 6 2 00 7 2 00 8 2 00 9 2 01 0 2 011 2 01 2

W e i g h t s

h i p p e d

, m i l

l i o n t o n n e

Top 20 air cargo commodities for the US to UK cargo marketAir cargo share


11.9%

12.3%

12.9%

13.4%14.6%

14.2%12.7%12.2%

12.6%

12.6%

12.9%

10.4%

11.7% Air cargo % share

0.0

0.5

1.0

1.5

2.0

2.5

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

W e i g h t s

h i p p e d

, m i

l l i o n t o n n e

Top 20 air cargo commodities for the UK to US cargo marketAir cargo share


9.9%

11.5%

11.1%

9.1%

8.1%

9.3%

9.0%9.1%

10.2%

11.2%

12.5%

13.9%

8.5% Air cargo % of share


11/13

Air cargo growth recovery will be driven by globaltrade especially Asia trade volumes

-15%

-10%

-5%

0%

5%

10%

15%

20%

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0

2 0 1 1

2 0 1 2

2 0 1 3

2 0 1 4

2 0 1 5

2 0 1 6

2012 2016 World TradeVolume Average Annual

Growth: 5.1%

Annual Percentage Change Over Prior Year

Historical RTKs % Change World Trade Volume % Change

Source: IMF

History Forecast

Air cargo is forecast to grow at slightly less than 1X world trade growth rate


12/13

Main deck air cargo share is stable at ~60% andforecast to remain steady (belly share ~40%)

57%59%

62% 62% 62% 62% 62% 61%58% 59% 59%

0%

10%

20%

30%

40%

50%

60%

70%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Percentage of World RTKs Carried on Freighters

Avg. 60%

Introduction of 777-300ER in 2004 has not diminished freighter share 418 777-300ERs delivered as of July 2013

Sources: ICAO, IATA, A4A, Boeing


13/13

Summary Challenging near-term environment

Economic and trade forecasts point to improvement within a year, at trendby 2014 and beyond

Long-term air cargo drivers remain strong: imperative for reliability and

speed, continuing product innovation, global interdependence Annual world GDP and trade growth will continue to drive 20-year world air cargo

growth rate

Asia-North America will continue to be one of the leading air cargo markets

3rd boeing 1 2013-08-22 alaska air cargo summit presentation

Documents