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
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
Product Long-range Suppliers and strategy business plan airline customers
Fleet consists of all jet aircraft with at least 90 seats Accurate 10,000 Medium-term 8,000 6,000 2004 CMO Forecast Actual Conservative 4,000 2,000 Under-forecasted single-aisles 0 20,000 2004-2013 Long-term Over-forecasted large and regional jets 16,000 12,000 1994 CMO Forecast 8,000 Actual 4,000 SOURCES: CMO 1994, CMO 2004, ASCEND 0 1994-2013
Agenda What s trending in aviation? 20-year traffic and airplane forecast Product strategy & development
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
4,000 new markets Low cost carrier will continue fast growth Versatility drives growth
>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 2010-2013 deliveries Order backlog since 2010 Future demand
Average number of seats last 15 years Flexibility More markets More frequency Passenger preference 170 737 MAX 8 160 2,000-3,000 nmi 150 seats Efficiency Unit cost Fuel per seat LCC growth 2000 2002 2004 2006 2008 2010 2012 2014 SOURCE: Ascend, single-aisle airplanes excluding regional jets and prop aircraft, all stage lengths
20-year traffic and airplane forecast
reca Market liberalization Airplane capabilities Environment High speed rail Fuel price Emerging markets Airline strategies & business models Infrastructure t Economic growth Current Market Outlook 2014-2033
Resilient, growing market expected to continue RPKs (trillions) 6.0 5.0 4.0 3.0 4 recessions 2fi financial i crises 2 Gulf wars 1 oil shock 1 near pandemic (SARS) 9/11 2.0 1.0 0.0 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 2009 2010 2011 2012 2013 RPKs = Revenue Passenger Kilometers SOURCE: ICAO scheduled traffic
Macroeconomics Trade GDP level GDP per capita Labor force Value of service Network structure Infrastructure Business model Type of service Regulatory environment Demand
2013 to 2033 World economy (GDP) 3.2% Number of airline passengers 4.2% Airline traffic (RPK) 5.0% Cargo traffic (RTK) 4.7%
World 2.5 2.0 Air Travel Growth Frequency Growth Nonstop Markets 1.5 1.0 0.5 SOURCE: August OAG Index 1993=1.00 Average Airplane Size
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
They ve been telling it for 15 years and still nothing SOURCE: Airbus Annual Press Conference, 13 January 2014
Top25longhaul long-haul airports 2000 2014 +58% +60% +46% 304-2% 299 Capacity Frequency Cities served Seats per flight SOURCE: Industry schedules
Airplane deliveries: 36,770 2014-2033 2014-2033 30,000 25,000 20,000 15,000 10,000 5,000 0 2,490 Market value: $5.2T 2014 2033 3,000 25,680 $2,560B 2,500 4,520 3,460 620 Regional Single- Small Medium Large jets aisle wide-body wide-body wide-body 7% 70% 12% 9% 2% 2,000 1,500 1,000 500 0 $100B $1,140B $1,160B $240B Regional Single- Small Medium Large jets aisle wide-body wide-body wide-body 2% 49% 22% 22% 5%
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 0 2013 2033
Annual GDP growth, 2013 2033 South Asia China 62 6.2 Southeast Asia 4.7 Africa Asia Pacific Latin America Middle East CIS World Oceania North America Europe Northeast Asia 1.5 1.9 27 2.7 2.5 3.3 3.2 3.9 3.8 4.7 4.4 6.5 SOURCE: IHS Economics
RPKs RPKs, billions Added traffic 2014-2033 2013 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
New airplane deliveries by region Market value by region 2014 20332033 2014 20332033 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 870 39% Middle East 2,950 Latin America 2,950 C.I.S. 1,330 Africa 1,080 36,770 $5.2T Middle East 640 21% Latin America 340 17% C.I.S. 150 20% 20% Africa 140 World Total 36,770 World Total $5,200B
RTKs = Revenue Tonne Kilometers 250 RT TKs (billions) 200 150 100 50 0 1980 1984 1988 1992 1996 2000 2004 2008 2012
100% Share of fleet Delivery units 80% 60% 40% 20% 0% 2013 Freighters 1,690 2033 Freighters 2,730 Large production >80 tonnes 590 Wide-body conversions 40-120 tonnes, Medium wide-body production 40-80 tonnes 370 Standard-body conversions <45 tonnes 2,170 250 2014 to 2033 Freighters 960
New freighter deliveries: 840 2014 2033 2033 700 Airplane units 600 500 400 300 200 100 0 590 Large >80 tonnes 70% 250 Medium 40-80 tonnes 30% 0 Standard <45 tonnes Market value: $240 billion 2014 2033 250 Marke et value 200 150 100 50 0 $190B Large >80 tonnes 79% $50B Medium 40-80 tonnes 21% $0B Standard <45 tonnes
Product strategy & development
More value to our customers in all markets Efficiency designed-in in from the start Environmental performance Long-range, fast, reliable Operational commonality Passenger experience Low operating cost Standardization
350 300 250 200 150 100 50 0 374 374 Backlog ($B) 319 295 256 2010 2011 2012 2013 1Q14 747 777 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
Superior value, efficient market coverage 500 Current Boeing Future Boeing 500 747-8 747-8 450 450 400 777-9X 400 350 777-300ER 777-8X 350 Seats 300 777-200ER 787-10 300 Seats 787-9 787-9 250 787-8 767-300ER 787-8 250 200 737-900ER 737 MAX 9 200 150 737-800 737 MAX 8 150 737-700 737 MAX 7 100 100
Superior value, efficient market coverage 600 Airbus Future Boeing 600 550 A380 550 500 500 450 747-8 450 400 777-9X 400 Seats 350 A350-1000 777-8X 787-10 350 Seats 300 250 A350-900 A330-300 A350-800 A330-200 787-9 787-8 300 250 200 A321neo 737 MAX 9 200 150 A320neo 737 MAX 8 150 A319neo 737 MAX 7 100 100
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
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