things are great! so start worrying. aviation/defense industry overview and forecast presentation to...
TRANSCRIPT
Things Are Great!So Start Worrying.
Aviation/Defense Industry Overview
And Forecast
Presentation To The National Aeronautic AssociationArlington, VARichard AboulafiaVice President, AnalysisTeal Group Corporationwww.tealgroup.comJanuary 2015
Aircraft Market Performance 1990-2014
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14
0%
5%
10%
15%
20%
25%
-5%
-10%
-15%
(% Change YoY)
$0
$30
$60
$90
$120
$150
$180(Value of Deliveries in '15 $ Bns)
Market Change YoY Value of Deliveries
Civil And Military Aircraft DeliveriesAggregate 2005-2014: 74.5% Growth (6.4% CAGR)
'89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '140
20
40
60
80
100
120
140(Market Value in 2015 $ Bns)
Civil Military
‘05-‘14: 42.0% Growth(4.0% CAGR)
‘05-‘14: 88.7% Growth (7.3% CAGR)
Aircraft Markets, Through Good And Bad Years
The Numbers Are Better Than We Feel….Worldwide New Deliveries In
2014 (2015 $) CAGR ’03-‘08
CAGR ’08-‘13
Change ‘08-‘13
Change ’13-‘14
Large Jetliners ($98.8 b) 7.5% 10.3% 63.4% 7.8%
Business Aircraft ($23.2 b) 17.1% -3.7% -17.0% -0.6%
Regionals ($7.2 b) 4.3% -6.4% -28.2% 7.7%
Civil Rotorcraft ($5.9 b) 18.4% -1.5% -7.1% -4.2%
Military Rotorcraft($16.8 b) 10.3% 9.0% 53.6% 17.1%
Military Transports ($5.3b) 3.2% -1.2% -6.0% -8.1%
Fighters ($18.3 b) 1.9% 0.8% 4.0% 10.2%
All Civil ($135.3 b) 10.0% 5.0% 27.8% 5.7%
All Military ($44.5 b) 3.9% 3.7% 20.0% 10.2%
Total ($179.8 b) 8.2% 4.7% 25.8% 6.8%
US Aircraft Industry Output
'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '140%
10%
20%
30%
40%
50%
60%
70%(% of World)
$0
$20
$40
$60
$80
$100(Value of Deliveries in '15 $ Bns)
US Output As % of World Total Value of Deliveries
2014: $96.9 bn/ 54.3% of World
DoD Investment, O&M Funding
Budget Authority
115
140
173190
179
214
239 237
271
293285 284
256265
250260265
42 4657
65 69 73 78 77 80 80 8172
64 63 64 67 7054 61
78 8397
105
134
165
135 138 134121
104 101 97108113
FY01 FY03 FY05 FY07 FY09 FY11 FY13 FY15 FY170
50
100
150
200
250
300($ bns)
Procurement RDT&E O&M
DoD Tactical Aircraft Procurement, FY1986-2016
Worst. Recapitalization. Ever.
0
100
200
300
400(Units Procured)
0
2
4
6
8
10
12(Funding in '15 $Bns)
Units Funding
World Fighter Production Shares
'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '240
4
8
12
16
20
24
28(Share By '15 $bns Value)
F-35 US F-35 International Undetermined Europe
Russia RoW Non-F-35 US
LRS-B Looking GoodBut What About The Other Funding?
12 13 14 15 16 17 18 190
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
289.6 291.7379.4
1045.3
1818
2707.32836
258.7359.4
913.7
1590.6
2372.2
3090.8
3451.2
FY14FY15
FY
$M
The US Military Fixed Wing WaterfallThere’s A Lot Riding On The F-35...
Excludes jetliner derivatives
'94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '240
5
10
15
20
25(Value in '15$ Bns)
C-17 AV-8B F/A-18 F-15 F-16 F-22 T-45
T-6 C-130 F-35 T-X B-X
Boeing Military Fixed Wing Deliveries
'94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '240
2
4
6
8
10
(Value in '15$ Bns)
C-17 AV-8B F/A-18 F-15 P-8 KC-46
Military Rotorcraft Market Falls In US; Civil Market Recovers To Higher Level
'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '240
2
4
6
8
10
12(Market Value in '15 $ Bns)
Civil Military (US) Military (International)
Our Forgotten Nemesis...CyclicalityLarge Jetliner Deliveries By Value
$0
$20
$40
$60
$80
$100(Value in '15 $Bns)
‘01-‘03 -10.7% CAGR; -28.8% peak-trough‘91-‘95 -12.5%
CAGR; -41% peak-trough‘80-‘84 -13.9%
CAGR; -45% peak-trough
‘68-‘77 -11% CAGR; -65% peak-trough
‘84-‘9116.1% CAGR
‘95-‘9920.8% CAGR
‘04-‘149.6% CAGR; An 11-Year Supercycle
OR‘99-‘03 -11% CAGR; -37.3% peak-trough
Y/Y Traffic: Strong Numbers Again, Even For Cargo2013 Totals: RPKs 5.2%, ASKs 4.8%, FTKs 1.4%; 2012 Totals: RPKs 5.3%,
ASKs 3.9%, FTKs -1.5%; 2011: RPKs 6.9%, ASKs 8.2%, FTKs -0.6%
Source: IATA
0%
10%
20%
30%
-10%
-20%
RPKs ASKs FTKs
Comparative Backlog Values
130.03
107.75
79.53
199.11
300.42
271.06 269.97
300.11 316.81
365.33
421.92
48.55
112.93 115.48
173.03
281.81 268.21
277.58
309.53 321.6
397.42
436.27
1.95 3.51 5.19 5.8 7.1 9.5
0
50
100
150
200
250
300
350
400
450(Value in '15 $Bns)
Boeing Airbus Bombardier
Market Share Outlook By Deliveries ValueThe Duopoly Endures
'76 '78 '80 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12 '14 '16 '18 '20 '22 '240
20
40
60
80
100
(Value in '15 $Bns)
Boeing Airbus Douglas/Lockheed Bombardier/COMAC/Irkut
Orders Composition: The Great Re-Engining Shift
$16$32
$50$30 $33 $33 $27$2
$23
$36
$19 $5
$65
$2$7
$45
$21
$22$57
$65
$95
$3
$24 $1
$1
$25
$40
$68
2002 2006 2008 2010 2012 2013 2014$0
$50
$100
$150
$200
(Value in '15 $ bns)
Legacy Next-Gen
Major Derivative Re-engine Minor Derivative Re-engine
Bottom Half Bizjet Segment V. Top Half
'89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '140
4
8
12
16
(Market Value in '15 $ Bns)
Bottom Half (<$26M) Top Half (>$26M)
‘03-‘08 CAGR: 19.7% Bottom, 15.3% Top ‘08-‘14:
-54.7% Bottom, 24.8% Top
‘08-‘10: -56.8% Bottom , 3.5% Top
Aircraft Forecast By Composition
(2015-2024; 2015 $)
$526.8B26.6%
$1,450.7B73.4%
$901.2B45.6%
$552.1B27.9% $524.1B
26.5%
Remainder
Next 15
Civil
Military
Top 5 Programs
Top 20 Aviation Programs: Volume MattersCumulative Deliveries Value in ‘15 $ Bns
Airbus A320/NeoBoeing 737NG/MAX
Boeing 787Boeing 777/X
Airbus A350XWBLockheed Martin F-35
Airbus A330/NeoBombardier Global
Embraer E-JetsSikorsky H-60
Gulfstream 650Su-30/T-50
Airbus A400MAirbus A380
Boeing 767/KC-46Boeing AH-64
Gulfstream 500/600Gulfstream 550
Lockheed Martin C-130JDassault Falcon 7/8X
$0 $50 $100 $150 $200 $250
2015-2024 2005-2014
Big Picture Risks And Opportunities• The US: only healthy big economy.• All jetliner market change is bad.
–Fuel is changing.–A post-2020 bust?
• 787 deferred costs.• Does Boeing need a new single-aisle?• Everything about the A380.• CSeries and BBD.• Republican shift: back to non-deficit hawks.• LRS-B: M&A precipitator?• USN and the tactical combat market.• Oil prices and civil helos.• Business jet market recovery sustainability.
Aircraft Production 2005-2024Largely Sheltered From The Storm; Long-Term Growth, Too
'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23 '240
30
60
90
120
150
180
210(Market Value in '15 $ Bns)
Fighters Business Aircraft Rotorcraft
MilitaryTransports/Trainers/Other Jetliners/Regional AC