Commercial update. Global Investor Forum, Toulouse November John Leahy Chief Operating Officer Customers

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1 Commercial update Global Investor Forum, Toulouse November 2010 John Leahy Chief Operating Officer Customers 1

2 2 Disclaimer Disclaimer This presentation includes forward-looking statements. Words such as anticipates, believes, estimates, expects, intends, plans, projects, may and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include statements made about strategy, ramp-up and delivery schedules, introduction of new products and services and market expectations, as well as statements regarding future performance and outlook. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include but are not limited to: Changes in general economic, political or market conditions, including the cyclical nature of some of EADS businesses; Significant disruptions in air travel (including as a result of terrorist attacks); Currency exchange rate fluctuations, in particular between the Euro and the U.S. dollar; The successful execution of internal performance plans, including cost reduction and productivity efforts; Product performance risks, as well as programme development and management risks; Customer, supplier and subcontractor performance or contract negotiations, including financing issues; Competition and consolidation in the aerospace and defence industry; Significant collective bargaining labour disputes; The outcome of political and legal processes, including the availability of government financing for certain programmes and the size of defence and space procurement budgets; Research and development costs in connection with new products; Legal, financial and governmental risks related to international transactions; Legal and investigatory proceedings and other economic, political and technological risks and uncertainties. As a result, EADS actual results may differ materially from the plans, goals and expectations set forth in such forward-looking statements. For a discussion of factors that could cause future results to differ from such forward-looking statements, see EADS Registration Document dated 22nd April Any forward-looking statement contained in this presentation speaks as of the date of this presentation. EADS undertakes no obligation to publicly revise or update any forward-looking statements in light of new information, future events or otherwise. 2

3 3 Airbus today : approaching 10,000 orders A380 Family A350 XWB Family A330 / A340 Family A320 Family aircraft sold to 322 customers Order backlog of aircraft Data to end October

4 4 Airbus in 2010 So far in 2010 The 6,000th Airbus delivery 2000 th twin-aisle order A350 XWB orders from United and Cathay Pacific Emirates orders 32 additional A380s A Freighter now in service with three airlines 417 deliveries to end October And to come: A320 Family production increase from 34 to 36 per month Studying new engine options for the A320 Family (neo) 4

5 5 Airbus and Boeing net market share since 1995 Net order share (%) Over 12 years of parity 5

6 net market share to end October 849 industry orders $99.1 bn industry 6

7 net market share to end October ACJ 3 100% BBJ 0 0% A % % 7

8 8 GDP and passenger traffic development World Real GDP and passenger traffic (year-over-year) 8% 6% October passenger traffic up 8.3% 4% 2% 0% -2% Real & forecast GDP Traffic ASKs -4% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Source: IHS Global Insight, OAG ASK data, Airbus (October 2010 data) Passenger traffic recovering in-line with GDP 8

9 9 All regions are showing positive growth 16% 12% 8% 4% Passenger traffic (monthly ASKs year-over-year) Traffic up 14.5% Traffic up 6.6% 5.1% 0% -4% -8% United States Western Europe ASKs Emerging Economies -12% J M M J S N J M M J S N J M M J S N J M M J S N Emerging economies are leading the way Source: OAG (October2010 data), * 54 emerging economies, Airbus 9

10 10 Yields recovering in all regions Relative yield evolution (base year 2000) Recovery driven by premium traffic recovery Global yields have increased +0.8% pa Source: ATA, AEA, AAPA and airlines data for

11 11 Cash-flow is strong again. EBITDA as % revenues (seasonally adjusted) Operational cash flow rebounds Source: IATA / Bloomberg September

12 12 Airlines returning to profitability Airline industry EBIT margins (% of revenues) Source: ICAO / IATA (September 2010) EBIT: Asian airlines performing well 12

13 13 Airline Q financial results (IATA forecast) Demand growth above historical rates +8% RPK, +25% RTK year-to-date Yields are up and load factors at historical peak levels Q results reflect a strong recovery, especially in Asia $1.9b net income for US airlines, $1.4b for European airlines, very positive outlook for Asia $925m net income for Emirates 1 st half 2010 (April to Sept) represents approx 20% world profit Full year 2010 results should be above 2007 levels $20b operating profit +3.7% EBIT margin 13

14 14 A320 Family firm orders deliveries order backlog (October 2010) An A320 takes off every six seconds of every day 14

15 15 A320 Family little impact from the recession Monthly production rate 40 40/month 34/month Recession 6 years of backlog Pro-active production planning based on audited demand Data end October

16 A320 Family vs 737NG Market By airline segment 16 Network Low-cost Charter Leasing 2,851 in operation 117 operators 1,038 in operation 50 operators 201 in operation 39 operators 1,760 ordered 26 lessors Market share (Number of operators) Market share (Number of operators) Market share (Number of operators) Market share (Number of customers) Airbus 58% Boeing 42% Airbus 61% Boeing 39% Airbus 59% Boeing 41% Airbus 54% Boeing 46% Data at end October 2010 A320 Family is the leader in all market segments 16

17 A320 Family vs 737NG Market By single aisle fleet size 17 Over 50 aircraft 20 to 50 aircraft 10 to 20 aircraft 1 to 10 aircraft 2,191 in operation 21 operators Market share (Number of operators) 937 in operation 33 operators Market share (Number of operators) 515 in operation 37 operators Market share (Number of operators) 453 in operation 118 operators Market share (Number of operators) Airbus 54% Boeing 46% Airbus 59% Boeing 41% Airbus 65% Boeing 35% Airbus 57% Boeing 43% Data at end October 2010 A320 Family is preferred whatever the airline fleet size 17

18 A321 orders and type conversions A321 orders to date: ALC Leasing for 757 replacement Type conversions From A319/A320 to A321 Net change: +45 A321 Increasing demand for A321s Data at end October

19 19 A321 is the market choice for 757 replacement Airlines that have already made the choice 757 operators -US Airways Thomas Cook Thomson Airways China Southern Air China British Airways Finnair Monarch Airlines A321 orders 51a/c in service + 27 orders 10 a/c in service 2 a/c in service 57 a/c in service 27 a/c in service + 12 orders 11 a/c in service 6 a/c in service 16 a/c in service 180 in service plus 39 on order 757 operators -Continental ER orders 42a/c in service + 5 orders Over 700 passenger s to replace Data at end October

20 20 The best keeps getting better Sharklets Better range, payload, performance and fuel efficiency 20

21 21 Airbus single-aisle product strategy Efficiency A30X Game-Changing Solutions A320 + new engine option (neo)* A320 + Sharklets Today Bringing the best aircraft at the right time *Product development study 21

22 22 A320 neo to further improve efficiency Sharklets Over 3.5% fuel burn saving on long sectors Improved field performance New engine options Bypass ration increased from 5 to 9-12 Fan diameter increased from ~64in to up to 81in Lower noise levels 15% lower SFC Maintaining reliability and commonality Up to 15% fuel burn reduction 22

23 23 A330 super efficient twins firm orders 734 deliveries 374 order backlog (October 2010) An A330 takes off every 56 seconds of every day 23

24 24 A330 ever more popular Operators A330 market base continues to grow strongly Source: Airbus/Ascend Data end October

25 25 First A at 238t Now in service 330nm extra range Up to 3.4t more payload 25

26 26 A350 XWB orders status (October 2010) 573 firm orders 35 customers 26

27 27 Cathay Pacific order for 30 A s The A350 fits perfectly into our operation......just right to become the backbone of our mid-sized long haul wide-bodied fleet. Tony Tyler Cathay Pacific Chief Executive Officer 27

28 and A350 firm order comparison Cumulative net orders since launch 787: 851 Market share A350 XWB: 573 Airbus 40% Boeing 60% Airbus data to end October 2010 Boeing data from Boeing.com 15 Nov

29 29 A330/A350 XWB net orders since A350 launch Airbus : 1085 Boeing : 737 Market share Airbus 60% Boeing 40% A330 A350 XWB The A330 and A350 XWB have together sold over 1,000 a/c since the A350 XWB launch Net orders from December 2006 to October 2010 inclusive Boeing data from Boeing.com 29

30 30 Airbus offer comfort standards for the future 10 ab LD / 8ab UD 9 ab 8ab 8 ab 6ab 6 ab seat width 18.5 in seat width 18 in seat width 18 in seat width 18 in 6 ab seat width 17in 10 ab MD seat width 17in 9 ab 10 ab 9 ab seat width 17.2in seat width 17in seat width 18.5in A330 and A350 XWB offer consistent and high comfort 30

31 31 A330 and A350 XWB the winning combination 31

32 32 A380 orders status (October 2010) 234 firm orders 17 customers 32

33 33 Emirates announces incremental A380 order The economics are fantastic. It has given us a huge advantage because the seat - mile costs are much lower than on any other aircraft. Maurice Flannigan Executive Chairman Bloomberg, June16th,

34 34 Outstanding A380 success for Lufthansa The capacity utilisation of the A380 is usually 90 percent. That s more than we expected. Wolfgang Mayrhuber Deutsche Lufthansa CEO Frankfurter Allgemeine Zeitung Online, 10 th November 2010 Our goal was for the average earnings per seat to be no less than in other aircraft. In fact, they are greater. Wolfgang Mayrhuber Deutsche Lufthansa CEO 34

35 35 A380 deliveries are accelerating 16 deliveries in 2010 (at 8 November) 39 deliveries to 5 operators 35

36 36 A380: The future has arrived 11 A380s in service 14 A380s in service 6 A380s in service 4 A380s in service 4 A380 in service The A380 has exceeded all expectations, delivered on its promise of reliability and fuel efficiency and is a favourite with customers Chew Choon Seng CEO Singapore Airlines, October 2008 In-service fleet at 08/11/10 36

37 The A380 network keeps growing 27 routes to 20 destinations 37 Over 192,300 revenue flight hours in over 21,400 revenue flights (as of October 11 th, 2010) London Manchester Paris Frankfurt Zurich Beijing Tokyo New York Jeddah Dubai Bangkok Seoul Hong Kong Los Angeles Singapore Airlines Emirates Qantas Singapore Air France Lufthansa Additional airline-announced routes for 2010/2011 shown dotted Johannesburg Sydney Auckland More than 8 million passengers have enjoyed the A380 experience 37

38 38 Leading airlines choose the A Top 20 international carriers int l RPKs (millions) Air France / KLM Lufthansa / SWISS United / Continental Emirates 2010 IATA world traffic data for 2009 Delta Air Lines (+NW) 11 of 20 top international airlines have ordered 201 out of 234 A380s A380 customers British Airways Singapore Airlines Cathay Pacific Airways American Airlines Qantas Korean Air Air Canada Thai Airways Japan Airlines Iberia Qatar Airways Virgin Atlantic Turkish Airlines China Airlines Malaysia Airlines 38

39 39 The A380 attracts passengers Courtesy of Auckland Airport We are confident we are offering the best in-flight product across all four classes and this has been validated by overwhelmingly high satisfaction ratings from our customers, particularly when it comes to entertainment, comfort, space and privacy. Even in the current environment, A380 loads are very strong. Rob Gurney Group Executive, Commercial Qantas Airline Fleet Management, July

40 40 The A380 Effect = more passengers + more revenues Qantas Chief Executive Alan Joyce said his airline has seen the percentage of its 450 seats filled on an A380 run about two to three percentage points higher than on its Boeing 747 jumbo jets, even though the fares Qantas charges for A380 flights run 2% to 3% higher as well. In surveys, satisfaction scores on the A380 have been higher than Qantas has seen for any airplane in its history The Wall Street Journal - 18 June

41 41 The A380 Effect: increasing airline revenue "On Sydney-Los Angeles we have a Boeing 747 and A380 [operating] together - the [A380's] seat load factor is three or four points higher. First year of A380 Operations John Borghetti, former EGM Qantas - ATI news, Feb 09 Route Load Factor A380 Load Factor Sydney - Los Angeles 76% 79% +3% Sydney - Singapore 68% 74% +6% Singapore - London LHR 80% 88% +8% The A380 boosts load factors Source: Sabre Estimate based on MIDT Booking Data Comparisons made on 12 months prior to A380 EIS and 12 months after A380 EIS on each route 41

42 Skymark Airlines signs MoU for four A380s First Japanese airline to order the A Following press and analyst briefing (12/11/2010) the share price increased 20% 42

43 Range capability from Tokyo 2500m runways 30 deg C., Maximum passengers +10t cargo 43 Tokyo 747-8I 405 pax pax ER 305 pax A pax A380: Europe & US capability with 525 pax + 10t cargo 43

44 44 The A380 is the profit machine 44

45 45 SQ MSN010 and EK MSN013 off 16R at SYD, 16 April 2010 JETPHOTOS.NET 45