Boeing Commercial Airplanes July 2014

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Cordelia Jackson
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1 Boeing Commercial Airplanes July 2014 The statements contained herein are based on good faith assumptions and are to be used for general information purposes only. These statements do not constitute an offer, promise, warranty or guarantee of performance. July 2014

2 Twenty-year traffic and product forecast All regions of the world 169 airlines / groups 63 traffic flows All jets 30 seats and above No turbo props No business jets Freighters Scheduled and nonscheduled flying

3 Product Long-range Suppliers and strategy business plan airline customers

4 Fleet consists of all jet aircraft with at least 90 seats Accurate 10,000 Medium-term 8,000 6, CMO Forecast Actual Conservative 4,000 2,000 Under-forecasted single-aisles 0 20, Long-term Over-forecasted large and regional jets 16,000 12, CMO Forecast 8,000 Actual 4,000 SOURCES: CMO 1994, CMO 2004, ASCEND

5 Agenda What s trending in aviation? 20-year traffic and airplane forecast Product strategy & development

6 What s trending in aviation? Strong, resilient, Passengers flying Single-aisle is fastest growing market where they want growing, most expected to continue when they want dynamic segment

7 4,000 new markets Low cost carrier will continue fast growth Versatility drives growth

8 >75% of recent deliveries and orders in medium-size space Single-aisle backlog and forecast Large ages-a Versatile and flexible for expansion and frequency Efficient across market spectrum with lower risk 79% 76% 70-75% Market focus will remain in this size space (737 MAX 8) Small S-A deliveries Order backlog since 2010 Future demand

9 Average number of seats last 15 years Flexibility More markets More frequency Passenger preference MAX ,000-3,000 nmi 150 seats Efficiency Unit cost Fuel per seat LCC growth SOURCE: Ascend, single-aisle airplanes excluding regional jets and prop aircraft, all stage lengths

10 20-year traffic and airplane forecast

11 reca Market liberalization Airplane capabilities Environment High speed rail Fuel price Emerging markets Airline strategies & business models Infrastructure t Economic growth Current Market Outlook

12 Resilient, growing market expected to continue RPKs (trillions) recessions 2fi financial i crises 2 Gulf wars 1 oil shock 1 near pandemic (SARS) 9/ RPKs = Revenue Passenger Kilometers SOURCE: ICAO scheduled traffic

13 Macroeconomics Trade GDP level GDP per capita Labor force Value of service Network structure Infrastructure Business model Type of service Regulatory environment Demand

14 2013 to 2033 World economy (GDP) 3.2% Number of airline passengers 4.2% Airline traffic (RPK) 5.0% Cargo traffic (RTK) 4.7%

15 World Air Travel Growth Frequency Growth Nonstop Markets SOURCE: August OAG Index 1993=1.00 Average Airplane Size

16 787 Dreamliner opening new markets around the world As of June 30, 2014 Current new nonstop routes flown with the 787: Delhi Birmingham (AI) Houston Lagos (UA) Tokyo San Jose (NH) Stockholm Fort Lauderdale (DY) Delhi Melbourne lb (AI) Tokyo San Diego (JL) Addis Ababa Dulles b (ET) Stockholm Bangkok k k (DY) Delhi Sydney (AI) Tokyo Boston (JL) Oslo Bangkok (DY) Oslo New York (DY) Denver Tokyo (UA) Tokyo Helsinki (JL) Stockholm New York (DY) Oslo Fort Lauderdale (DY) London Austin (BA) Stockholm Oslo Helsinki Copenhagen San Francisco Denver San Jose Oakland Los Angeles Austin San Diego Houston Boston New York Washington Orlando Fort Lauderdale Birmingham London Lagos Addis Ababa Delhi Chengdu Bangkok Tokyo Announced In operation 787 Operators: Sydney Melbourne

17 They ve been telling it for 15 years and still nothing SOURCE: Airbus Annual Press Conference, 13 January 2014

18 Top25longhaul long-haul airports % +60% +46% 304-2% 299 Capacity Frequency Cities served Seats per flight SOURCE: Industry schedules

19 Airplane deliveries: 36, ,000 25,000 20,000 15,000 10,000 5, ,490 Market value: $5.2T ,000 25,680 $2,560B 2,500 4,520 3, Regional Single- Small Medium Large jets aisle wide-body wide-body wide-body 7% 70% 12% 9% 2% 2,000 1,500 1, $100B $1,140B $1,160B $240B Regional Single- Small Medium Large jets aisle wide-body wide-body wide-body 2% 49% 22% 22% 5%

20 Units 45,000 42,180 40,000 35,000 25,000 21,270 Growth 58% 30,000 Growth 20,910 20,000 15,000 10,000 15,500 Replacement 42% 36,770 5,000 5,410 Retained fleet

21 Annual GDP growth, South Asia China Southeast Asia 4.7 Africa Asia Pacific Latin America Middle East CIS World Oceania North America Europe Northeast Asia SOURCE: IHS Economics

22 RPKs RPKs, billions Added traffic traffic Annual growth % 6.3% Within Asia Pacific* 6.6% Within China 2.3% Within North America 3.5% Within Europe 7.4% Middle East - Asia Pacific 5.3% Europe - Asia Pacific North Atlantic 3.1% Within Latin America 6.9% 4.3% Trans-Pacific 4.5% Within/to CIS 4.7% North America - Latin America 4.9% Europe - Latin America 4 9% 4.9% Africa ca - Europe u ope 0 *Does NOT include travel within China W ld World Average Growth: 5.0% 500 1,000 1,500 2,000 2,500 3,000

23 New airplane deliveries by region Market value by region Region Airplanes Region $B 3% 3% Asia Pacific 13,460 Asia Pacific 2,020 8% 3% 7% 3% Europe 7,450 Europe 1,040 37% 12% North America 7,550 8% North America % Middle East 2,950 Latin America 2,950 C.I.S. 1,330 Africa 1,080 36,770 $5.2T Middle East % Latin America % C.I.S % 20% Africa 140 World Total 36,770 World Total $5,200B

24 RTKs = Revenue Tonne Kilometers 250 RT TKs (billions)

25 100% Share of fleet Delivery units 80% 60% 40% 20% 0% 2013 Freighters 1, Freighters 2,730 Large production >80 tonnes 590 Wide-body conversions tonnes, Medium wide-body production tonnes 370 Standard-body conversions <45 tonnes 2, to 2033 Freighters 960

26 New freighter deliveries: Airplane units Large >80 tonnes 70% 250 Medium tonnes 30% 0 Standard <45 tonnes Market value: $240 billion Marke et value $190B Large >80 tonnes 79% $50B Medium tonnes 21% $0B Standard <45 tonnes

27 Product strategy & development

28 More value to our customers in all markets Efficiency designed-in in from the start Environmental performance Long-range, fast, reliable Operational commonality Passenger experience Low operating cost Standardization

29 Backlog ($B) Q Large 2% Twin- Aisle 52% 787 ME, Central & S. Asia Leasing, Gov't & BBJ Europe & Russia Model Region China, East & SE Asia 767 Single- Aisle 46% North America L. America & Africa Asia Pacific 737

30 Superior value, efficient market coverage 500 Current Boeing Future Boeing X ER 777-8X 350 Seats ER Seats ER ER 737 MAX MAX MAX

31 Superior value, efficient market coverage 600 Airbus Future Boeing A X 400 Seats 350 A X Seats A A A A A321neo 737 MAX A320neo 737 MAX A319neo 737 MAX

32 Things to remember Strong, growing market being driven by customers flying where they want, when they want Single-aisle -- fastest growing and most dynamic segment -- fueling forecast With the most comprehensive widebody lineup in the industry, Boeing will be able to meet customers needs now and in the future

33 For more information, please visit our CMO website: You can also visit my blog, Randy s Journal:

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