Anil PatelSenior DirectorBoeing Capital Corporation

Anil PatelSenior DirectorBoeing Capital Corporation

International Conference on Contemporary Issues&

Workshop on Introduction toAir Transport, Air Law & Regulation

March 21 – 25, 2008 New Delhi

International Conference on Contemporary Issues&

Workshop on Introduction toAir Transport, Air Law & Regulation

March 21 – 25, 2008 New Delhi

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AgendaAgenda

• Market Review & Forecast

• Boeing Products in the market

• Aviation Financing

• Summary

3

0

2

4

6

8

10

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1986 1996 2006 2016 2026

20-Year Forecast: Strong Long-Term Growth

Historical

Long-Term Growth2007 - 2026

GDP = 3.1% Passenger = 5.0%

Cargo = 6.1%

Long-Term Growth2007 - 2026

GDP = 3.1% Passenger = 5.0%

Cargo = 6.1%

RPKs (trillions)

Future

Historic Growth1986 - 2006

GDP = 2.9% Passenger = 4.8%Cargo = 6.3%

4

Airlines Will Need Over 28,600 New Airplanes

28,600 airplanes

13%22%

62%

747 and largerTwin-aisleSingle-aisleRegional jets

3%

Includes CIS

$2.8T 2006 delivery dollars

42%

9%

45%

4%

5

19%

1%

6%

74%

41% 53%

2%

4%

911airplanes

$86.0 billiondelivery dollars*

Regional jetsSingle-aisleTwin-aisle747 and larger

*In year 2006 dollars Catalogue Prices

Source: Boeing Current Market Outlook 2007

Over the Next 20 Years India Will Require a Large Number of Airplanes

Very Few in 747 and Larger Size

Over the Next 20 Years India Will Require a Large Number of Airplanes

Very Few in 747 and Larger Size

6

-5%

0%

5%

10%

Asian Currency

Crisis

Iranian crisis

Historically Cyclical Nature of Aviation

Oil Embargo

Aviation downturns World Real GDP GrowthOperating Margin

GulfWar 1

9/11

1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

7

World Traffic and Capacity Growth

4.6%

6.5%

0.9%

4.5%

RPKsRPKs

3.0%

5.9%

0.1%

3.6%

ASKsASKs

1212--Month moving Month moving averageaverage

4.0%3.9%Asia

8.1%7.2%Europe

3.6%1.1%US Domestic

5.4%4.5%World

RPKsRPKsASKsASKs

YearYear--toto--year changeyear change

Traffic outpacing capacity growthTraffic outpacing capacity growth

ROM Associates, ATA, and AEA, airline reports and Boeing Market Analysis. As of August 2007

8

Airline Productivity Rising

6.0

7.0

8.0

9.0

2000 2001 2002 2003 2004 2005 20068.0

8.5

9.0

9.5

10.0

10.5

11.0

2000 2001 2002 2003 2004 2005 200660%

65%

70%

75%

80%

2000 2001 2002 2003 2004 2005 2006

+ 8%

Single-AisleUtilization

Twin-AisleUtilization

World LoadFactors

+ 6% + 4%

Utilization and load factors at historical highsUtilization and load factors at historical highs

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Increasing Geographic Diversity of theWorld’s Fleet

Source: AirclaimsNote: 2026 fleet composition based on forecast fleet from Boeing 2007 CMO

19701970 20062006 20262026

EuropeEurope33%33%

NorthAmerica

55%

NorthAmerica

55%

OtherOther7%7%

AsiaAsia5%5%

EuropeEurope31%31%

NorthAmerica

37%

NorthAmerica

37%

OtherOther13%13%

AsiaAsia19%19%

EuropeEurope26%26%

North America

33%

North America

33%

OtherOther13%13%

AsiaAsia28%28%

Geographic fleet balance should mitigate aviation cyclesGeographic fleet balance should mitigate aviation cycles

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Air travel growth has been met by increased frequencies and nonstops

Air travel growth has been met by increased frequencies and nonstops

Index 1980=1.00

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

Frequency Growth

Nonstop Markets

Average Airplane Size

Air Travel Growth

2006 OAG data reflected

World

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Single-Aisle Product Strategy

Passenger Airplane Deliveries Forecast2007 – 2026 2006 – 2025

BOEING AIRBUS

737-900ER180 seats

737-800162 seats

737-700126 seats

737-600110 seats

A321-200183 seats

A320-200150 seats

A319-200126 seats

A318107 seats

240Seats

90 Seats

17,63017,630 15,33015,330

12

A340-600323 seats

A340-500/A340-300/A330-300280 262 262 seats

A330-200241 seats

747-400416 seats

Twin-Aisle Product Strategy

777-300/-300ER365 seats

777-200/-200ER/200LR301 seats

767-400ER 245 seats

767-300ER 218 seats

767-200ER 181 seats

BOEING AIRBUSA380-800555 seats

200 Seat Gap

60 Seat Gap

A350-800

A350-900

A350-1000

SEATS

747-8467 seats

787-9280 seats

787-8242 seats

777-200ER/200LR 787-10301 seats

2,630

3,190

-200-

1,263

2,579

2,125

-450-

-400-

-300-

-350-

-250-

-500-

563

295

295

Passenger Airplane Deliveries Forecast2007 – 2026 2006 – 2025

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737NG Market Validation

737-MI-2006 01-23-08-DR/LB

4,549 firm orders and 113 customers

• Through December 2007.• 2,467 deliveries.• Number of customers exclude BBJ.

SunExpress

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787 Unprecedented Market Success

*

*

*

*January 21, 2008

*

56 customers; 857 firm orders56 customers; 857 firm orders

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The 777 is the market leader

1,044 firm orders687 delivered54 customers

December 31, 2007

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12

104 Announced Orders

COPYRIGHT © 2006 THE BOEING COMPANY

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As of January 11, 2008

20

6

13 14

5

10

5

10 5

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Aircraft Financing Environment

GGNew Sources of Funding

G

G

G

G

G/Y/G

G

G

20072007

G

G

G/Y

G

G/Y

G/Y

G

20082008FebFeb

GGGGPrivate Equity / Hedge Funds

YYRRTax Equity

GGGGExport Credit Agencies

GGR/YRAirframe and Engine Manufacturers

YR/YRRPublic Debt / Capital Markets

GGGR/YCommercial Banks

GGYR/YLessors

20062006200520052004200420032003Capital ProvidersCapital Providers

Satisfactory Cautionary Major ConcernG Y R ChangeY/G

G

G/Y

G/Y

Y/R

G

Y/R

Y

G/Y

TodayToday

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Sources of Aircraft Financing –Boeing Deliveries ($)

2003

31%31%

26%26%18%18%

17%17%

8%8%

2004

35%35%

20%20%25%25%

16%16%4%4%

2005

38%38%

17%17%

26%26%

18%18%1%1%

2007

34%34%

30%30%

22%22%

11%11%3%3%

2006

29%29%

30%30%

21%21%<1%<1%

1%1%

Leasing companies Export credit Bank debt

Cash/other sources ManufacturerPublic debt/capital markets

2008 fcst.

22%22%

19%19%39%39%

14%14%7%7%

18%18%

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Developing New Sources of Capital

ChinaChinaChina Middle EastMiddle EastMiddle East

Developing Regional BankingDeveloping Regional BankingDeveloping Regional Banking Sovereign Wealth FundsSovereign Wealth FundsSovereign Wealth Funds

• Qatar• Kuwait• Saudi Arabia• UAE• Bahrain• Oman

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Evolution of Aircraft Finance

Aircraft AssetAircraft Asset

Airline CreditAirline Credit

Airline CreditAirline CreditAirline CreditAirline Credit

Aircraft AssetAircraft Asset

AirAirccrraafftt AssetAssetYesterday

Today

Tomorrow

Managing risk through asset differentiationManaging risk through asset differentiation

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What Makes an Airplane a Great Investment?

Airplane capabilities (range, speed…)

Number of engine types available

Part of a family of airplanes

Environmental friendliness

Simplicity of re-configuration

OEM support for model

Many airplanes sold …

To lots of different customers…

With geographic distribution of sales

Liquidity and stable residual value performanceLiquidity and stable residual value performance

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Solutions

Pioneering technology Manufacturing Operational efficiency Public policy

Environmental Initiative

Risks

Opportunities

Efficient / incentive- basedcarbon market

Sustainable environment

Airline businessAirline businessAsset valuesAsset values

Managing risk / unlocking opportunities by Working TogetherManaging risk / unlocking opportunities by Working Together

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Evolving Global A/C Finance Infrastructure

OECD

European

SafetyAgency

Aviation

EUROCONTROLIASB

Cape Town Treaty

AWG AWG –– the voice of our industrythe voice of our industry

BANK FORINTERNATIONALSETTLEMENTS

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Cape Town Treaty in Full Force and EffectMarch 31, 2008

Panama

Oman

Afghanistan

Indonesia

Ethiopia

Ireland

Mongolia

Cape Verde

Nigeria

Malaysia

Kenya

Mexico

Pakistan

Senegal

South Africa

Albania

USA

Angola

Colombia

India

Global syndication infrastructureGlobal syndication infrastructureGlobal syndication infrastructure

20082008CandidatesCandidates

China

EU

UAE

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AirlineCustomers

AirlineCustomers

OpinionMakersOpinionMakers

CapitalProviders

CapitalProviders

BoeingBoeing

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SummarySummary

• Large aircraft market over the next 20 years: 28,600 units and $2.8T

• Boeing’s product strategy is addressing the market requirements

• Boeing working to ensure adequate financing is and will be available

• Improve aircraft financing environment

• Environmental

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