current market outlook - speednewsspeednews.com/documentaccess/761.pdf · twin-aisle single-aisle...

BOEING is a trademark of Boeing Management Company.Copyright © 2009 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 vary depending on certain events or conditions. This document should not be used or relied upon for any purpose other thanthat intended by Boeing.

CURRENTMARKETOUTLOOK

Randy TinsethVice President, MarketingBoeing Commercial AirplanesJune 2009

COPYRIGHT © 2009 THE BOEING COMPANY

Agenda

Current Market Outlook (CMO)

20-year forecast

Product strategy & development


Long-term forecast reflects today’s market realities

As we begin our briefing, I’d like to acknowledge the extremely dynamic situation we are facing today in the commercial aviation industry. Near-term challenges include a global economic recession, declining passenger and cargo traffic and unpredictable fuel prices.

This year’s Current Market Outlook is rooted not only in these near-term realities, but also recognizes the nature of a long-term forecast.

Boeing has publicly issued its Current Market Outlook for 45 years. During that time the Outlook has reflected both sizeable upturns and downturns. Our industry has faced significant market challenges, including the Asian Financial Crisis, SARS, terrorist acts, three major world recessions, two Gulf wars….all clearly with their own dynamics and their own impact on global air travel. What we have learned is that our industry, which is based on the need to transport passengers and freight via our global aviation system, is extremely resilient.

Based on that perspective, as we always do, we have developed the forecast in a manner that considers today’s market environment but, just as importantly, takes a long-term view of the market and the fundamentals that drive commercial aviation. These drivers include economic growth, world trade and new aircraft capabilities.

So, while acknowledging our near-term challenges, let’s take a longer-view look, which points to a 20-year period in which we see that the basic factors underlying the need for new airplanes are strong.


Boeing Current Market Outlook

Longest-running complete worldwide jet forecast:

Published since 1964All jets 30 seats and aboveFreightersScheduled and nonscheduled flying


A380LargeTwin-aisleSingle-aisle

Size category

0%

25%

50%

75%

100%

Airbus forecast2000 – 201914,661 units

Single-aisle55%

Twin-aisle35%

A3809%

Airplane demand2000 – Present*

13,811 units

Different view of the market has led to different strategies

* Deliveries 2000 thru May 14, 2009 plus backlog (passenger jets only, excluding RJs)

Boeing forecast2000 – 201917,318 units

Single-aisle71%

Twin-aisle25%

Large4%

Single-aisle75%

Twin-aisle23%

Large 2%


2009 CMO web site: new and improved

Interactive –interactive database provides more useable contentCurrent – ability to add content to it over timeSooner – delivering more information in JuneEnvironmental –substantial savings to environmentPrintable – PDF for those who like a hard copy


Agenda


20-year forecast



Market forecast drivers and considerationsTraffic forecast

7.8

7.5

5.8

6.6

5.1

6.6

7.0

5.6

5.1

3.2

4.1

4.3

4.9

0 2 4 6 8

China

Southwest Asia

Africa

Southeast Asia

CIS

Middle East

South America

Central America

Oceania

North America

Europe

Northeast Asia

WORLD

Annual growth, 2009 - 2028

Percentage

7.8

7.5

5.8

6.6

5.1

6.6

7.0

5.6

5.1

3.2

4.1

4.3

4.9

0 2 4 6 8

China

Southwest Asia

Africa

Southeast Asia

CIS

Middle East

South America

Central America

Oceania

North America

Europe

Northeast Asia

WORLD

Annual growth, 2009 - 2028

Percentage

Emerging marketsEnvironment

Airplane capabilitiesEconomic growth

Fuel price

$70-90/barrel

Infrastructure

Airline strategies &business models

Market liberalization

0.5

1.0

1.5

2.0

2.5

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

Market evolution


World air travel has grown 5.3% per year since 1978

RPKs = Revenue Passenger KilometersSource: ICAO, Scheduled Traffic and operating profit

0.0

1.0

2.0

3.0

4.0

5.019

7719

7819

7919

8019

8119

8219

8319

8419

8519

8619

8719

8819

8919

9019

9119

9219

9319

9419

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

08

Trend

RPK

s (tr

illio

ns)


20-year forecast: strong long-term growth

Worldeconomy

(GDP)

Numberof airline

passengers

Airlinetraffic(RPK)

Cargotraffic(RTK)

3.1

4.1

4.95.4


Air travel growth has been met by increased frequencies and nonstops

Frequency Growth

Nonstop Markets

Average Airplane Size

Air Travel Growth

August OAG

WorldIndex 1988=1.00

0.5

1.0

1.5

2.0

2.5

3.0

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

All routes


Airlines will need 29,000 new airplanes valued at $3.2 trillion

AIRPLANE DELIVERIES: 29,0002009 - 2028

MARKET VALUE: $3.2T2009 - 2028

0

5,000

10,000

15,000

20,000

2,100regional jets

7%

19,460single-aisle

67%

6,700twin-aisle

23%

740large3%

0

400

800

1,200

1,600

Airp

lane u

nits

Marke

t valu

e, $ b

illion

s

$70Bregional jets

2%

$1,420Bsingle-aisle

44%

$1,510Btwin-aisle

47%

$220Blarge7%


0

10,000

20,000

30,000

40,000

2008 2028

Older, less efficient airplanes will be replaced with more efficient, newer generation airplanes

Units

35,60035,600

16,800Growth

58%

12,200Replacement

42%

6,6006,600Retained FleetRetained Fleet

29,00018,80018,800


Today and tomorrow by model mix

Twin-aisle

0

8,000

2008 2028

8,0808,080

4,000 3,5103,510 23%

19%

Single-aisle

2008 2028

11,360 11,360

24,23024,230

0

10,000

20,000

60%

68%

Regional Jet3,0603,060

2,2202,220

0

3,000

2008 2028

1,500 16% 6%

Large

0

1,200

2008 2028

600

1,0701,070870870

5% 3%


Aircraft productivity is constantly increasing

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

45,000

40,000

Passenger fleetin 200818,80018,800

Passenger fleetin 202835,60035,600

Without industry improvements, nearly 12,000 additional airplanes would be needed in the 2028 fleet

Improvements bring:More seatsHigher utilizationLonger missionsIncreased load factors


Dramatic improvements in airplane efficiency over last 20 years

727-200SeatsStage lengthUtilizationRPMs

3Q881497548.9

26.8M

737-800SeatsStage lengthUtilizationRPMs

3Q08157

1,41211.7

58.1M

Seats +5.4% Seats +5.4% Improvements:Improvements: Stage length +87.3% Stage length +87.3% Utilization +31.5% Utilization +31.5% RPMs +117% RPMs +117%


Emerging markets are driving the economic growth

Source: Global Insight

ANNUAL GDP GROWTH2009 – 2028

1.3

1.9

2.4

2.9

3.1

3.7

3.8

3.8

4.4

4.6

4.9

6.1

7.2

NortheastAsia

Europe

NorthAmerica

Oceania

World

Russia/Central Asia

LatinAmerica

MiddleEast

Asia-Pacific

SoutheastAsia

Africa

SouthwestAsia

China


Air travel growth varies by market

2008 traffic2008 trafficAdded traffic

2009-2028Added traffic

2009-2028AnnualAnnual

growth%growth%

Europe – Latin America

RPKs, billions*includes within China

Middle East – Asia-Pacific

Africa – Europe

Within/to Russia & Central Asia

Within Latin America

North America – Latin America

Transpacific

Europe – Asia Pacific

North Atlantic

Within China

Within Europe

Within North America

Asia-Pacific*

8.6%4.6%

4.7%6.4%4.3%5.3%

5.4%6.3%

5.5%4.9%

3.4%2.5%

6.9%

World Average Growth:4.9%

0 500 1,000 1,500 2,000 2,500 3,000 3,500


Market for new airplanes set to becomeconsiderably more geographically balanced

31%

26%

25%

6%6%

2%

36%

21%

25%

9%

3%2%

AIRPLANE DELIVERIES BY REGION2009 - 2028

MARKET VALUE BY REGION2009 - 2028

Region AirplanesAsia-Pacific 8,960North America 7,690Europe 7,330Middle East 1,710Latin America 1,640Russia & Central Asia 1,050Africa 620

World Total 29,000

Region $BAsia-Pacific 1,130North America 680Europe 800Middle East 300Latin America 150Russia & Central Asia 90Africa 70

World Total $3,220B

4% 4%

29,000 $3.2T


World air cargo market has grown 5.8% per year since 1978

-100

-50

0

50

100

150

200

1978

1979

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

*

Worl

d Air C

argo T

raffic

, RTK

s, bil

lions

-7%

-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

11%

12%

13%

14%

% C

hang

e in C

argo T

raffic

, Yea

r-Ove

r-Yea

r

% Traffic Change Actual Traffic, RTKS

RTKs = Revenue Tonne Kilometers*2008 estimated by BCA Marketing


New freighter deliveries will be led by demand for large widebodies NEW FREIGHTER DELIVERIES: 7102009 - 2028

1% <1%490

Large(>80 tonnes)

210Medium widebody

(40-80 tonnes)

10Standard-body (<45 tonnes)

$130BLarge

(>80 tonnes)

$40B Medium widebody

(40-80 tonnes)

$<1BStandard-body (<45 tonnes)

Airp

lane u

nits

MARKET VALUE: $170 BILLION2009 - 2028

Marke

t valu

e

0

100

200

300

400

500

0

25

50

75

100

125

69%

30%

76%

24%


2009 to 2028new freighters

2,760710 New

2,050 Converted

2008freighter fleet

1,940

2028freighter fleet3,250

Freighter fleet will grow by more than two-thirdswith a shift toward larger freighters

Market value: $170 billion

Large830total

Mediumwidebody

750total

Standard-body1,180total

Size categoryLarge(>80 tonnes)

Medium widebody(40-80 tonnes)

Standard-body(<45 tonnes)

1,170Converted

490New

340Converted

540Converted

210New

10 New

Share of fleet Delivery units

Standard-body39%

Mediumwidebody

35%

Large26%

Standard-body39%

Mediumwidebody

28%

Large33%

0%

25%

50%

75%

100%


146 airline

customers

Europe and Boeing

~600 suppliers

~$1.75 billion USD per year

1,944 airplanes in service

563 airplanes on order

6,900 flights per day

920,000 pax per day


Europe air traffic growth varies by market

3.4%3.4%

4.6%4.6%

5.4%5.4%

5.5%5.5%

5.7%5.7%

5.4%5.4%

Europe Average Growth: 4.1%

Region’s Average GDP Growth: 1.9%

AnnualAnnualgrowth %growth %

Added traffic2009 - 2028

Added traffic2009 - 20282008 traffic2008 traffic

RPKs, billions

To and fromSouth America

To and fromSoutheast Asia

To and fromMiddle East

To and fromAfrica

To and fromNorth America

WithinEurope

To and fromSouthwest Asia

To and fromChina

0 200 400 600 800 1,000 1,200 1,400

5.7%5.7%

6.1%6.1%


European airlines will need 7,330 new airplanes

LargeTwin-aisleSingle-aisleRegional jet

Size category

Market value: $800 billion


Units

7,770

2008 2028

A large demand for replacing older, less-efficient aircraft

3,470Growth

47%

3,860Replacement

53%

440Retained Fleet

7,3304,3304,330

0

2,000

4,000

6,000

8,000


Agenda


20-year forecast



Full market coverage from 100-500 seats

Environmentally progressive

Operational commonality

Long-range, fast, reliable

Low operating cost

Standardization

Passengerexperience

Lifecycle solutions

Full market coverage from 100-500 seats

Environmentally progressive

Operational commonality

Long-range, fast, reliable

Low operating cost

Standardization

Passengerexperience

Lifecycle solutions

Market-driving products and services



Substantial, balanced backlog validates Boeing’s product strategy

Backlog $Backlog $ ModelModel

RegionRegion

Single-Aisle

32%

Twin-Aisle

61%

Large7%

747

777 737

767

787

266279255

174

124

0

50

100

150

200

250

300

2005 2006 2007 2008 1Q09

$ = Billions

Americas

Europe

Leasing & Gov't

S.E.Asia

Middle East & Africa

Asia-Pacific

China & EastAsia

Russia


Next-Generation 737 -- the perfect family for the 100-200 seat segment

Single-Aisle Jets100 – 200 Seats

*as of May 31, 2009

Demonstrated success in multiple market segments

High reliability, high utilization, fast turn times

Lowest operating costs

5,069 firm orders and 2,911 deliveries to 118 customers*


Continuous innovation since entry into service

Improved comfort

BigBinsTM

(EIS 2002)In-seat video system

(EIS 2006)737 Boeing Sky Interior

(EIS 2010) New lavatory

(EIS 2005)Flight deck noise reduction

(EIS 2004)

Performance Improvements (EIS 2011)

Carbon brakes (EIS 2008)

Short field performance(EIS 2006)

180-minute ETOPS (EIS 2000)

Blended winglet(EIS 2001)

CFM Tech Insertion (EIS 2007)

High-altitude airport(EIS 2005)

Improved performance

Improved navigation

Vertical situation display(EIS 2003)

Electronic flight bag (EIS 2006)

Head-up display(EIS 2001)

Navigation performance scales for RNP (EIS 2003)

GPS landing system(EIS 2005)

Cat IIIB(EIS 2003)


New window reveal

New window reveal

New pivot bins with greater than BigBin capacity

New pivot bins with greater than BigBin capacity

New PSUs with LED reading lights

New PSUs with LED reading lights

Brighter color & décorBrighter color & décor New sculpted sidewalls

New sculpted sidewalls

Color LED ceiling lighting enhances the

sense of spaciousness

Color LED ceiling lighting enhances the

sense of spaciousness

Improved operational security features

Improved operational security features

Quieter cabinQuieter cabin

Color LED sidewall lighting

Color LED sidewall lighting

Speaker in every PSU enhances sound quality

Speaker in every PSU enhances sound qualityLife Vest in PSU*Life Vest in PSU*

New touch-screen attendant panel

New touch-screen attendant panel

* Optional featureCOPYRIGHT © 2009 THE BOEING COMPANY

737 Boeing Sky Interior connects passengers to the flying experience


777 family providing new strategic growth opportunities for airlines today

Twin-Aisle Jets300 - 400 Seats

A complete, common family offering broad market coverage

Unmatched payload and range capability

More spacious and comfortable cabin

1,107 firm orders and 784 deliveries to 56 customers*

*as of May 31, 2009


The world’s largest and most capable twin-engine freighter The world’s largest and most capable twin-engine freighter

Lowest trip cost of any large freighterLowest trip cost of any large freighter

Ideal complement to747 freighter familyIdeal complement to747 freighter family

The longest range twin-engine freighterThe longest range twin-engine freighter

The 777 Freighter brings the advanced technology of the 777 to the freighter market


Twin-Aisle Jets200 – 300 Seats

787 Dreamliner – the game changer in the 200-300 seat market

Breakthrough business opportunities for airlinesUnrivaled comfort and spaciousness for passengersCleaner, quieter and more efficient for the environment866 firm orders from 56 customers*

*as of May 31, 2009


787 Dreamliner prep for flight progress

Compared to 767, except for NOx


Program schedule defines milestones

201320072004

787-8FirstFlight

787-8 Enters Service

Firm Configuration

ProgramLaunch

2005 2006 2008 2009 2010 2011 2012

Start of Major

Assembly


RollOut

Initial fueling and fuel testingInitial fueling and fuel testingFirst engine and APU runsFirst engine and APU runs

Gauntlet testingGauntlet testingHigh and low speed taxi testingHigh and low speed taxi testing

Preparing for first flightPreparing for first flight


The New 747-8 Intercontinental & Freighter --the shape of the future

Twin-Aisle Jets400 – 500 Seats

747-8F

747-8

A New 747 that leverages 787 technology

Best economics of any large airplane

Ideal market fit, less risk

105 firm orders from 11 customers*

*as of May 31, 2009


747-8 program progress


747-8 program schedule

2007

747-8FFirstFlight

747-8F Enters Service

Freighter Firm

ConfigurationProgram Launch

2005 2006 2008 2009 2010 2011

747-8FStart of Major

Assembly

IntercontinentalFirm

Configuration


Freighter:Engineering 98% completeAirplane #1 build progress more than 50% completeAirplane #2 production started (41 section, wings)

Intercontinental:39% drawing release achieved

Status as of June 8, 2009


Boeing is tackling climate change

Environmentally progressive products and services

Advanced global air traffic management concepts

Renewable fuel and energy solutions

Through innovative research and developmentThrough innovative research and development


Things to remember

Boeing CMO – a long-term forecast reflecting the realities of today’s marketAviation industry resilient; long-term market outlook is strong

Passenger air travel will grow at 4.9%, cargo at 5.4%Airlines will need 29,000 new airplanes valued at $3.2 trillion,European airlines will need 7,330 airplanes valued at $800 billion

Boeing is investing across the product line to sustain market leadership

BOEING is a trademark of Boeing Management Company.Copyright © 2009 Boeing. All rights reserved.

For more information, please visit our CMO website: http://www.boeing.com/cmo

You can also visit my blog, Randy’s Journal: http://boeingblogs.com/randy/

current market outlook - speednewsspeednews.com/documentaccess/761.pdf · twin-aisle single-aisle...

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