Boeing current market_outlook_2013-2032


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It’s no huge leap, but it is a big step. That’s the best way I’d describe our new Current Market Outlook (CMO) which I unveiled today in Paris. We’re forecasting the demand for 35,280 airplanes over the next two decades (up from 34,000 a year ago)—with a dollar value of $4.8 trillion.

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Boeing current market_outlook_2013-2032

  1. 1. Current Market Outlook2013 –2032
  2. 2. Current Market Outlook2013 –20323Copyright © 2013 Boeing. All rights reserved.Outlook on a PageGrowth measuresRegionsWorld economy (GDP) %Airline traffic (RPK) %Cargo traffic (RTK) %Airplane fleet %Market sizeDeliveriesMarket value ($B)Average value ($M)Unit share %Value share %New airplane deliveriesLarge widebodyMedium widebodySmall widebodySingle aisleRegional jetsTotalMarket value (2012 $B, catalog prices)Large widebodyMedium widebodySmall widebodySingle aisleRegional jetsTotal2012 fleetLarge widebodyMedium widebodySmall widebodySingle aisleRegional jetsTotal2032 fleetLarge widebodyMedium widebodySmall widebodySingle aisleRegional jetsTotalMarket values above 5 have been rounded to the nearest 10.2012 to 2032Number of airlinepassengersAirline traffic(RPK)Cargo traffic(RTK)World economy(GDP)5.0%4.1%3.2%5.0%Delivery units2%2013 to 2032New airplanes35,820Share of fleet2012Airplanes20,310Delivery units6%9%13%70%100%0%75%50%25%Share of fleet2032Airplanes41,240•Regional jets •Single aisle •Small widebody •Medium widebody •Large widebodyAsiaPacific4.,8201,89015036392601,4701,8608,81042012,82090490460840101,8903305006603,4701305,0903501,5502,08010,35042014,750NorthAmerica2.,2508101102117303907605,0001,0707,25010130170460408101202907103,7601,7106,590605001,0406,1401,0708,810Europe1.,4601,02014021211706508505,6101807,46060210210530101,0201803603403,1603504,3902006909905,9302008,010MIddleEast3.,6105502107112806704101,240102,610100230100120155080270230500601,1402507004501,420302,850LatinAmerica4.,90030010086—402702,4201702,900—107021010300—201201,050901,280—503803,1502103,790CIS3.,1701401204320601308601001,170201030701014060201706802001,13050701901,1001201,530Africa4.,07013012033—20250730701,070—1060602130106080420120690—502801,0401301,500World3.,2804,8401401001007603,3004,53024,6702,02035,2802801,0901,1002,290804,8407801,5202,31013,0402,66020,3109103,6105,41029,1302,18041,240World regionsMarket growth ratesWorld regionsMarket value: $4,840 billionWorld regionsKey indicators and new airplane markets
  3. 3. Current Market Outlook2013 –20324 Copyright © 2013 Boeing. All rights reserved.Current Market Outlook2013 –2032Purpose of the forecastThe Current Market Outlook is our long-term forecast of airtraffic volumes and airplane demand. The forecast has severalimportant practical applications. It helps shape our productstrategy and provides guidance for our long-term businessplanning. We have shared the forecast with the public since1964 to help airlines, suppliers, and the financial communitymake informed decisions.Each year we start fresh, so we can factor the effects of currentbusiness conditions and developments into our analysis of thelong-term drivers of air travel. The forecast details demand forpassenger and freighter airplanes, both for fleet growth and forreplacement of airplanes that retire during the forecast period.We also project the demand for conversion of passengerairplanes to freighters.Air travel continues to be resilientThe remarkable resilience of air travel is amply documented inmore than 45 years of published editions of the Boeing CurrentMarket Outlook.Commercial aviation has weathered many downturns in the past.Yet recovery has followed quickly as the industry reliably returnedto its long-term growth rate of approximately 5 percent per year.Despite uncertainties, 2012 passenger traffic rose 5.3 percentfrom 2011 levels. We expect this trend to continue over thenext 20 years, with world passenger traffic growing 5.0 percentannually. Air cargo traffic has been moderating after a high periodin 2010. Air cargo contracted by 1.5 percent in 2012. Expansionof emerging-market economies will, however, foster a growingneed for fast, efficient transport of goods. We estimate that aircargo will grow 5.0 percent annually through 2032.The shape of the marketWe forecast a long-term demand for 35,280 new airplanes,valued at $4.8 trillion. We project that 14,350 of these newairplanes (41 percent of the total new deliveries) will replaceolder, less efficient airplanes, reducing the cost of air travel anddecreasing carbon emissions. The remaining 20,930 airplaneswill be for fleet growth, stimulating expansion in emergingmarkets and innovative airline business models. Approximately24,670 airplanes (70 percent of new deliveries) will be single-aisleairplanes, reflecting growth in emerging markets such as China,and the continued expansion of low-cost carriers throughoutthe world. Widebody share will also increase, from 23 percentof today’s fleet to 24 percent in 2032. The 8,590 new widebodyairplanes will allow airlines to continue expansion into moreinternational markets.Randy Tinsethintroducesthe 2013Current MarketOutlookCurrent Market Outlook2013–2032New ValueSize airplanes ($B)Large widebody 760 280Medium widebody 3,300 1,090Small widebody 4,530 1,100Single aisle 24,670 2,290Regional jets 2,020 80Total 35,280 4,840Airplanes in service2013 and 2032Demand by size2012 to 2032Size 2012 2032Large widebody 780 910Medium widebody 1,520 3,610Small widebody 2,310 5,410Single aisle 13,040 29,130Regional jets 2,660 2,180Total 20,310 41,240*$ values throughout the CMO are catalog prices.New ValueRegion airplanes ($B)Asia Pacific 12,820 1,890Europe 7,460 1,020North America 7,250 810Middle East 2,610 550Latin America 2,900 300CIS* 1,170 140Africa 1,070 130Total 35,280 4,840Key indicators2012 to 2032Demand by region2013 to 2032GrowthmeasuresWorld economy 3.2%Gross domesticproduct (GDP)Airplane fleet 3.6%Number of 4.1%passengersAirline traffic 5.0%Revenue passenger-kilometers (RPK)Cargo traffic 5.0%Revenue tonne-kilometers (RTK) *Commonwealth of Independent States.Long-Term Market
  4. 4. Current Market Outlook2013 –20325Copyright © 2013 Boeing. All rights reserved.Dynamic industryAviation is a dynamic industry that continuously adapts tovarious market forces. Key market forces that impact the airlineindustry are fuel prices, economic growth and development,environmental regulations, infrastructure, market liberalization,airplane capabilities, other modes of transport, business models,and emerging markets. Each of these forces can have bothpositive and negative impacts on the industry. Fuel is now thelargest component of an airline’s cost structure. This has drivenmanufacturers to produce more efficient airplanes, such as the787 and the 737 MAX, while encouraging airlines to pursue costreductions and revenue enhancements in other areas in order tomaintain profitability, even with higher fuel costs.These market forces are incorporated into the long-term forecastthat Boeing produces annually. The economy, as reflected bygross domestic product (GDP), one of the main contributors toairline growth, is forecast to rise 3.2 percent over the next 20years, which will drive 5.0 percent annual growth in passengertraffic as well as 5.0 percent annual growth in cargo traffic (whichis also highly dependent on global trade).Airlines responding and adaptingAirlines continue to adapt to the dynamic business environment.Operating statistics suggest that airlines are deploying capacitystrategically to help boost yields and cover higher fuel expenses.Passenger traffic continues to grow at or above trend. Passengertraffic grew 5.3 percent in 2012 compared to 2011, while capacitygrew at a rate of 3.9 percent. This led to an industry-high loadfactor of 79.1 percent in 2012. Despite a challenging economy,2012 was one of the best years the airline industry has hadsince the Great Recession. In 2012, airlines earned $7.6 billionprofit. Asian airlines and North America contributed the most toprofitability. IATA forecasts an even more profitable year in 2013,with traffic following the trend of at least 5.0 percentannual growth.Source:IATAJune 2013NorthAmericaEurope Asia MiddleEastLatinAmericaAfrica5.0%4.0%3.0%2.0%1.0%0.0%-1%2.4 4.4 3.7 4.60.3 1.6(0.1)0.11.0 1.5 0.30.6Net profit (billions $)•2012 •2013FMarket developmentsRegional profitability outlookMarket developmentsMarket drivers and considerationsWorld load factors2002200320042005200620072008200920102011201280%78%76%74%72%70%68%66%Source:ICAO/IATAMarket developmentsWorld passenger load factors at historic highsMarket Developments
  5. 5. Current Market Outlook2013 –2032Current Market Outlook2013 –20326 Copyright © 2013 Boeing. All rights reserved.Growth tempered by policy uncertaintyGlobal GDP growth for 2012 was disappointing at 2.2 percent.Expectations for a strengthening economic recovery as the yearprogressed failed to materialize. Policy uncertainty in the Eurozonecaused the yields of peripheral country sovereign bonds to spikein mid-year, pushing Europe back into recession. US policyuncertainty produced the threat of the economy falling over a“fiscal cliff.” The result was weaker growth, not only in these majordeveloped economies, but also in major emerging economies.Regions recover at different ratesEmerging economies also faced their own headwinds. In China,investment and industrial production slowed in the face of theinventory buildup that resulted from the stimulus-driven boomof 2010 and 2011. Regulations aimed at curbing excesses in theproperty market also contributed to the slowdown. Growth inthe rest of Asia was relatively strong, driven by robust domesticdemand, which buffered lower demand for exports. Theexception was Japan, which was mired in recession for most ofthe year. Growth moderated in Latin America and the decelerationwas particularly pronounced in Brazil. The Mexican economy,by contrast, strengthened as increased business and consumerconfidence sustained domestic demand.Recovery in the major developed economies has been weak ashouseholds and governments reduce debt built up before andduring the Great Recession. Global growth in 2013 is forecastto be no stronger than in 2012, though as policy uncertaintyrecedes, momentum is projected to increase in the second halfof the year. This should provide a more robust base foraccelerated growth in 2014 and 2015.Fuel prices continue to challenge profitabilityVolatile oil prices have been the greatest challenge to airlineprofitability apart from the weak economy. Fuel costs havesurpassed labor as the largest segment of airline operating cost.Fuel costs, approximately 13 percent of total costs in 2002, arecloser to 34 percent today. After spiking in early 2012, oil priceshave remained relatively stable. On the demand side, the weakeconomic outlook has moderated near-term growth projections.On the supply side, rising shale oil production in the United Statesis moderating near-term price projections. Lower jet fuel pricesare bolstering near-term airline profitability outlooks.Spot $/barrel (Brent crude oil / US Gulf Coast jet fuel)1801601401201008060402020132000Average Annual Price2007 $722006 $652008 $972009 $622010 $802011 $1112012 $1122013 YTD $110Year-over-YearMay 2012Apr 2013US, EU, Japan = 62% of World GDPJet FuelBrent Crude OilReal GDP growthApril 2013 forecastBusiness environmentNear‐term economic challenges-3-2-101234520072008200920102011201220132014201520162017Long-term averageSource: IHS Global InsightBusiness environmentRegional profitability outlookSource:IATABusiness environmentOil and jet fuel prices elevated and volatileSource: EIANorthAmericaEurope Asia MiddleEastLatinAmericaAfrica2012 net profit (billions $)4.5%4.0%3.5%3.0%2.5%2.0%1.5%1.0%0.5%0%0.5% 0.3(0.1)Market DevelopmentsBusiness Environment
  6. 6. Current Market Outlook2013 –20327Copyright © 2013 Boeing. All rights reserved.Single-aisle market share on the riseToday there are more than 900 airlines in operation, withmore than 20,000 jet airplanes in service. The fleet compositionhas changed over the past 20 years, and we expect that it willcontinue to evolve over time. The widebody fleet mix has seenone of the largest changes. In 1992, the majority of widebodyairplanes were of the small and large size categories. We expectthe medium widebody category to gain an increasing sharethrough 2032. The regional jet segment of the market continuesto shrink as airlines focus on costs. This market segment willremain flat, thus losing share as airlines favor other size categoriesof airplanes. As emerging markets and the diversity of businessmodels continue to expand, we expect that single-aisle airplaneswill remain popular with airlines and passengers and thus gainshare going forward.Growing fuel efficiencyFuel costs have nearly doubled over the past 10 years.Fuel represents up to 30 percent of total operating cost forsingle-aisle airplanes and up to 50 percent for widebodyairplanes. Airlines are looking at all opportunities to reduce costs.One way to do this is to replace older, less efficient airplanes withnew-technology airplanes, such as the 737 MAX and 787. Otherways include increasing airplane utilization. Utilization for thesingle-aisle fleet is currently 2 percent higher than it was in 2011,and the widebody fleet is 0.4 percent higher than in 2011. Thesteadily rising load factor is another way airlines are increasingefficiency. Average load factor reached a record high of 79percent in 2012.Increasing geographical diversityAt year-end 2012, the United States had the world’s largestcommercial fleet, comprising 6,080 airplanes. China, Russia,and the United Kingdom followed with the second, third, andfourth largest commercial fleets. Commercial airplane backlogsindicate growing geographical diversity in the order base. TheUnited States and China retain the top two positions in terms ofnumber of airplane orders, as new entrants including Indonesia,India, Malaysia, and Russia gain a significant presence.Today’s fleetFuel has doubled as a percentage of airline costsToday’s fleetIn-service fleet: 20,314Source:Flight Global Ascendonline database100%80%60%40%20%0%200350004000300070006000200010000USAChinaRussiaUKGermanyCanadaJapanFranceBrazilAustraliaLargest in-service jet fleet at year-end 2011(Jets over 30 seats)Single aisle Widebody20032013 2013*over the past 10 years as a cash operating cost, typical rules, representative aircraftToday’s FleetBacklog: 10,0223,0002,5002,0001,5001,0005000USAChinaIndonesiaIndiaMalaysiaRussiaUAEBrazilNorwaySingaporeBacklog by country at year‐end 2012(Jets over 30 seats)Source:Flight Global Ascendonline database•Fuel costsMarket DevelopmentsToday’s Fleet
  7. 7. Current Market Outlook2013 –2032Current Market Outlook2013 –20328 Copyright © 2013 Boeing. All rights reserved.Infrastructure investment remains crucialSustained investment in aviation infrastructure is crucial to thecontinuing growth of commercial aviation. Airports, nationalairspace management agencies, and airlines share challengesand opportunities of aviation growth.Boeing analysis indicates that congestion at certain airportsaround the world will increase over the next 20 years as projectedcommercial air traffic growth drives demand for takeoffs andlandings to reach or surpass airport capacity. The world’s busiestairports, such as London’s Heathrow, have already reached theirlimits for hourly airplane movements, even with slot controls.Many airports have capacity to meet projected traffic growth.Other airports have the capacity to handle demand efficientlyduring off-peak hours, but are constrained during morning and/orevening hours when demand is highest. Continued infrastructureinvestment is particularly important in regions, such as China,Northeast and Southeast Asia, India, and Latin America, whereaviation growth outpaces planned infrastructure development.Capital improvementsAirport authorities around the world are investing in largecapital projects, including new or improved runways, terminalexpansions, and entirely new airports. These investments cansignificantly increase airport capacity, but are substantial, anddevelopment times typically extend more than a decade frominitial planning to completion of construction. Community noiseand environmental concerns often stretch development timesfurther and may limit the scope of expansion.Airspace management enhancementsMany national and regional airspace management agencies areengaged in programs to overhaul airspace systems. For example,the United States is implementing the NextGen program tohelp airports run smoother and avoid long takeoff lines on therunway. This type of program is implemented gradually, and theimprovements in airport efficiency will be realized over time.Airlines have implemented a number of approaches to manageairport crowding. In particular, airlines have replaced smallerairplanes such as regional jets with larger single-aisle airplanes,helping to ease demand for takeoff and landing slots duringpeak periods. Creating secondary hubs and expanding serviceto secondary airports also can ease congestion at the busiestairports. Airline alliances have proven effective in allowing airlinesto expand route systems without duplicating services thatwould add to congestion.In sum, although airports and governmental air services agencieswill need to continue investing in infrastructure improvements, andairlines will need to evolve strategic responses at some airports,congestion will not be a major limiting factor to commercial airtraffic growth during the forecast period.Total cargo tonnes (millions)543210HongKong(HKG)Memphis(MEM)Shanghai(PVG)Incheon(ICN)Anchorage(ANC)Dubai(DXB)Louisville(SDF)Paris(CDG)Frankfurt(FRA)Tokyo(NRT)Total passengers (millions)100806040200Atlanta(ATL)Beijing(PEK)London(LHR)Chicago(ORD)Tokyo(HND)LosAngeles(LAX)Paris(CDG)Dallas(DFW)JAKARTA(CGK)DUBAI(DXB)Investment ininfrastructure iskey to growthInfrastructureInfrastructure is crucial to growthInfrastructure2012 busiest airports by passengersInfrastructure2012 busiest airports by cargoSource:ACI PreliminaryRankingSource:ACI PreliminaryRankingMarket DevelopmentsInfrastructure
  8. 8. Current Market Outlook2013 –20329Copyright © 2013 Boeing. All rights reserved.Limited competition with commercial aviationOur long-term forecast considers the impact that othertechnologies, including high-speed rail (HSR), have on air travel.In 2010, worldwide railways carried 45 percent less passengertraffic, but 45 times more cargo traffic than commercial aviation.The total distance covered by railway networks was just 2.5percent that of the aviation network. Analysis shows that (1)railways are well suited for carrying passengers over relativelyshort distances (terrain permitting), whereas aviation excels forlonger journeys; (2) railways are an efficient mode for overlandcargo transport; and (3) aviation is very effective for creating largetransportation networks without heavy investmentin infrastructure.It has been 50 years since Japan introduced the world’s firstmodern HSR service between Tokyo and Osaka. At the end of2012, the world’s longest HSR line with 2,230 kilometers betweenBeijing and Guangzhou became fully operational. A total of about10,000 kilometers of HSR is in operation in China, more than inthe rest of the world combined. Altogether, HSR still accounts forless than 2 percent of the world’s railway lines.Recent information from China confirmslimited competitionOverall rail traffic growth (conventional plus HSR) in Chinahas not changed significantly since the introduction of the first350-km/hr HSR between Beijing and Tianjin in 2008. Growth inrail traffic remains slower than domestic air travel growth. Theaverage distance per rail trip has also remained flat for the pastfew years. In other countries, average trip distance has typicallyincreased after the introduction of new HSR lines. Of the roughly1,350 domestic city pairs served by airlines in China, about 200are on the HSR network. For markets with more than twice-daily service, only 17 have experienced more than a 25 percentreduction in capacity since 2009. Although airlines must adjustfares to compete with HSR, industry data shows that averageairline fares on the busiest Beijing-to-Shanghai route have heldup well since the 2011 HSR inauguration.Intermodal strategiesHSR could compete with some airlines in high-volume,high-yield markets. Yet, the relatively short routes where HSRexcels represent only a small portion of the market served bycommercial aviation. Airline assets are highly flexible, becauseairplanes can be easily redeployed to more lucrative markets.In addition, the infrastructure investment for a comprehensiveaviation network is much lower than for ground modes oftransport. Aviation’s network connectivity simply cannot bereplicated by ground-based modes. Opportunities to developintermodal solutions can potentially combine the advantagesof both HSR and aviation.Passenger traffic (RPK, trillions)AirRail0 2 4 6 8 1055%0 2 4 6 8 10Cargo traffic (RTK, trillions)AirRailTrack/network (km, millions)AirRail0 10 20 30 40 5045x2.5%1,3251,3501,3751,2501,2751,3002012High-speed railRail1vs. air2Sources:12010 UIC members22010 ICAO/BoeingHigh-speed railChina’s impact on domestic aviationSource:CAAC Ministryof RailwaysHigh-speed railTop high-speed rail by countryHigh-speed rail in service(1,000 km, 3/2013)0 2 4 6 8 10ChinaSpainJapanFranceItalyGermany•Rail •Air (domestic)30%10%20%0%525550575450475500Year-over-yeargrowth(RPK)Averagestage length (kilometers)2006 2008 2010Market DevelopmentsHigh-Speed Rail
  9. 9. Current Market Outlook2013 –2032Current Market Outlook2013 –203210 Copyright © 2013 Boeing. All rights reserved.Environmental challenges for the airplane marketFor both economic and environmental reasons, airline customersdemand ever-increasing fuel efficiency. Boeing and the aviationindustry have committed to ambitious carbon dioxide emissionstargets to achieve carbon-neutral aviation growth beyond 2020and halve net carbon emissions by 2050 (compared to 2005).Boeing is playing a leadership role in leveraging technology andinnovation in support of the industry’s strategy by• Improving the performance of current jetliners and introducingnew airplanes, such as the 787 Dreamliner, 747-8, and 737MAX, that are significantly more efficient than the airplanesthey replace.• Enabling greater operational efficiency through improvedairline operations and advocating for modernization of theglobal air traffic management system infrastructure.• Championing the commercialization of sustainable aviationfuels that produce better than 50 percent lower life-cyclecarbon dioxide emissions than conventional fuels.This long-term approach will enable the aviation industry to meetits environmental targets and retain its license to grow.Sustainable aviation fuelsTwo aviation biofuels processes have already been approvedfor commercial use, and several more are on track for approvalin the coming years. Already, conventional jet fuel blends withup to 50 percent biofuel derived from sources such as camelina,waste cooking oil, and algae have been used on more than1,500 commercial flights. Increasing the availability of sustainableaviation fuel is a critical component of aviation’s strategy toreduce emissions. Meeting airline fuel demand at price pointscomparable to those of petroleum-based fuels requires continuedinvestment and government policy support. Boeing will continueto be an industry catalyst and advocate in both arenas.Airport environment and growthThe Current Market Outlook projects a near doubling of thecommercial airplane fleet by 2032. This will require manyconstrained airports to increase capacity. In some regions of theworld, particularly Europe, airport communities have expressedconcerns about the environmental effects of increased operationsand airport expansion. Finding the appropriate balance betweengrowth and community concerns takes time and can slow orlimit progress in a region’s capacity planning. The combinationof new, cleaner, and quieter airplanes like the 787, and innovativeoperational procedures that take advantage of RequiredNavigational Performance (RNP) and other operational efficiencytechnologies, holds the potential to improve the environmentaround airports while enabling airports to sustain regionaleconomic growth.302008 2009 2010 2011 2012202515205100262421158Sustainable Aviation Fuel Users Group growthSAFUG represents ~ 32% of commercial aviation fuel demandEarly jet airplanesNew generationjet airplanesNoise footprint based on 85 dBa1950s 1990sRelativefueluseNoisedBHigherLowerMoreLess90% Reduction in noise footprint70% Fuel improvement and CO2efficiencyEnvironmentAirline commitment to biofuels is growingEnvironmentTrack record of significant progressEnvironment2013Reducingenvironmentalimpacts throughtechnologyimprovementsMarket DevelopmentsEnvironment
  10. 10. Current Market Outlook2013 –203211Copyright © 2013 Boeing. All rights reserved.Industry growth amid economic uncertaintyBoeing’s business analysis includes extensive study of globalgeopolitical dynamics that influence commercial aviation. Thisresearch focuses on current events as well as long-term trends.The analysis helps to determine risk and opportunity in thecommercial aviation market as a whole, and in specific regionsaround the world.While recent global events, including regional political turmoil,energy price volatility, and debt crises, have dampened near-term global economic growth, over the longer term, globalgrowth forecasts are nearing pre-crisis levels. As the effects ofgovernment support programs wind down, it will be importantfor governments to maintain pro-growth policies. With respectto trade policy, the pace of new protectionist measures hasslowed. Any resurgence of protectionism could constraineconomic growth, adversely affecting demand for air traveland new airplanes.Level playing field and aviation liberalizationGovernment assistance for civil aircraft development remainsa concern. Recent World Trade Organization rulings havemade clear that such government support must be providedon commercial terms. In the area of export finance, with othernations ramping up their own export credit activity, the Export-Import Bank of the United States remains a vital contributor tothe competitiveness of US exporters.Liberalization of aviation services (“Open Skies”) stimulatescompetition, giving passengers more choices and generallyreducing ticket prices, which in turn increases demand for airtravel. While the aviation industry remains heavily regulated inmany parts of the world, the pace of liberalization has beensteady, led by the United States, which has concluded OpenSkies agreements with nearly 110 partners, including majormarkets such as the European Union and Japan.Infrastructure, security, and environmentThe Current Market Outlook projects that the global largecommercial airplane fleet will nearly double by the year 2032.Such growth will require infrastructure investments, as initiativesto modernize air traffic management provide crucialenhancements to both system capacity and efficiency.While significant improvements in aviation security have beenmade globally since 9/11, constant vigilance is still required.Security concerns will continue to affect commercialaviation operations.The aviation industry is addressing environmental challengeswith a three-pronged strategy of designing more efficient andsafer aircraft, improving operational procedures, and developingsustainable biofuels. Boeing is working with governments aroundthe world to support the industry’s emission-reduction goals. Thisapproach will allow the industry to continue strong growth overthe long term, despite anticipated regulatory constraints.Global policy trendsNew trade restrictive measures by G-20 membersGlobal policy trends2013A global business needs a global policy perspective2025101505ReportVIIIReportVIIReportVIReportVReportIVReportIIIReportIIReportINew protectionist measures by G-20 nations(monthly average)Source: Reports on G-20 Trade and Investment Measures,April 2009-October 2012 (each report covers approximately five months).Global policy trendsChina domestic frequencies1992 2012Total weekly 351 8,701ASKs* (millions)Weekly 2,184 52,651frequenciesTotal airport 199 1,208pairsAirplane 148 150size (seats)Domestic frequencies24-fold since 1992.2012 *Available seat-kilometers.1992Source:August OAGMarket DevelopmentsGlobal Policy Trends
  11. 11. Current Market Outlook2013 –2032Current Market Outlook2013 –203212 Copyright © 2013 Boeing. All rights reserved.Practical value for Boeing and the industryThe long-term forecast contained in Boeing’s CurrentMarket Outlook guides product strategy and provides thebasis for business plan development. We have shared theforecast with the public since 1964 to help airlines, suppliers,industry organizations, academia, and financiers make informedbusiness decisions and benchmark other forecasts or analyses.Air travel demand is resilientGlobal and regional economic cycles profoundly affect airtravel demand, so it is essential to take the current phase of theeconomic cycle into account in developing the long-term forecast.Historically, declines in economic activity are often associatedwith unexpected events. The resilience of air travel demanddepends on the nature of the event and the extent to which theevent affects air travel, directly or indirectly. For example, eventsrelated to personal safety, such as pandemic, war, or threatsagainst aircraft, have a greater effect than commercial or politicalevents. Perturbations from the long-term demand trend aretypically relatively short lived, lasting around 12 months. The roleair travel plays in the fabric of society is key to its resilience. Airtravel is an essential part of personal and business life for manytravelers. The Internet, mobile connectivity, and social media areincreasingly integrated into daily life, including how we research,discuss, plan, and book travel. At the same time, improvedairplane technology and efficiency are allowing airlines to makeair travel more affordable, so airfares generally represent asmaller portion of total trip costs.Development process for air travel demand outlookOur air travel demand forecast is developed by constructingand matching top-down and bottom-up analyses. Bottom-upanalysis involves forecasts of traffic between and within individualcountries, based on economic predictions, growth momentum,historical trends, travel attractiveness, and projections of therelative openness of air services and domestic airline regulation.Additionally, government statistics on inbound and outboundvisitors and tourism receipts are included to identify and cross-check trends. Countries are grouped into geographical regionsthat generate air traffic flows between and within the regions. Inthe top-down approach, global and regional markets are similarlyprojected on aggregated variables. The bottom-up and top-downprojections are then reconciled, allowing for the effects of industryand airline business model developments. Further, positive ornegative region-specific developments, including populationdynamics, shifts toward or away from other modes of transport,and emergence of new air services, are factored in. The resultingregional traffic forecasts are used in developing the airplanedemand forecast.Methodology2013MethodologyWorld passenger traffic growth vs. GDPSources:Traffic-ICAO/IATAGDP-IMF (PPP)-4-20246810121416-2-1012345678Percent passengerairline traffic growthReal GDP growth1971 1976 1981 1986 1991 1996 2001 2006 2011Long-term traffic growthEXPLORE!The methodologybehind the 2013traffic outlookMethodologyRelative liberalization and trafficEurope – North AmericaIntra-North AmericaIntra-EuropeEurope – AfricaIntra-ChinaIntra-Southeast Asia North America – Northeast AsiaIntra-South AmericaCentral America – North AmericaEurope – Middle EastRelative liberalization index More liberal10001001010 1 2 3 4 5 6TrafficstimulationMethodology
  12. 12. Current Market Outlook2013 –203213Copyright © 2013 Boeing. All rights reserved.Philosophy behind the forecastGrowth in air travel, measured in revenue passenger-kilometers(RPK), has historically outpaced economic growth, representedby GDP. At the global level, the relationship isRPK (growth) = GDP (growth) + f(t)where f(t) is a time-varying function that typically centersaround 2 percent.This leads us to conclude that, at the regional level, about 60to 80 percent of air travel growth can be attributed to economicgrowth, which in turn is driven by trade. This conclusion isconsistent with the observation that countries whose economiesare tied to trade tend to have higher rates of air travel. Air travelrevenues consistently average about 1 percent of GDP incountries around the world, regardless of the size of the nationaleconomy. Globally, air travel has consistently tended toward thishistorical share of GDP. With a few exceptions, most countriesmove toward the general trend over the long term. The time-varying function f(t) accounts for the 20 to 40 percent of air travelgrowth that is not directly associated with GDP growth. Thiscomponent of growth derives from the value travelers placeon the speed and convenience that only air travel can offer.For example, the value travelers place on choice of arrival anddeparture times, routings, nonstop flights, choice of carriers,service class, and fares stimulates increased aviation services.Liberalization is the primary driver of value creation in theglobal air transport network, typically spurring a “bump” intraffic demand. Studies suggest that as the relative opennessof a country’s bilateral air service rises from the 20th to the 70thpercentile, the resulting increase in traffic can boost air traveldemand by 30 percent. Often, improved air services directlyand indirectly stimulate economic growth, creating a virtuouscircle that leads to further air transport growth, which in turnleads to added economic growth, and so on. The percentageof air transport growth that comes from economic developmentcompared to the percentage that comes from the value of airtravel services is an indicator of the maturity of an air travelmarket. Although individual regions may exhibit signs of slowingdue to maturing markets, other regions continue or begin to growvigorously. Current global percentages do not indicate that theworld aviation market is nearing maturity in aggregate.MethodologyDrivers of air travelMethodologyWorld airline revenuesSource:ICAO, IATA IHS GlobalInsight nominal GDP60%-80% 20%-40%TraveldemandAdditionaltravel demandEconomicgrowthGlobaltradeValueof serviceSafe,efficient,competitiveindustryFuel CapabilityEnvironment InfrastructureAirlinestrategiesMarketevolutionEmergingmarketsMarketliberalizationPercent of GDP0.50%0.75%1.00%1.25%2013F20122009200620032000MethodologyLevels of liberalizationSource:World Economic ForumTravel & Tourism Report 2009Level of liberalizationnnnRegulatorynnnTransitionalnnLiberalMethodology—continued
  13. 13. Current Market Outlook2013 –2032Current Market Outlook2013 –203214 Copyright © 2013 Boeing. All rights reserved.New airline business models and emerging economiesEach year, we begin our analysis for the Current Market Outlookby examining key industry indicators, including fuel, marketliberalization, airline capabilities, airline strategies, emergingmarkets, economic growth, high-speed rail, and the environment.Worldwide economic activity is the most powerful driver ofcommercial air transport growth and the resulting demand forairplanes. The global gross domestic product (GDP) is projectedto grow 3.2 percent per year for the next 20 years, driving bothair passenger traffic and air cargo traffic to average 5.0 percentannual growth worldwide over the same period.Global growth spurred by emerging economiesEmerging economies are projected to grow 5.2 percent peryear over the next 20 years, outpacing established economies,which will average 2.1 percent growth. Emerging and developingeconomies will account for 60 percent of global growth between2012 and 2032. Their share of real global GDP will increase from31 percent to 45 percent over the same period. The fastestgrowing economies include Asia Pacific (projected 4.5 percentgrowth), Latin America (projected 4.0 percent growth), and theMiddle East (projected 3.8 percent growth).Household income will grow and consumption patterns willchange as educated labor forces expand, investment in physicaland social infrastructure increases, urbanization progresses,and the relative importance of economic sectors shifts withinthe world’s emerging economies. With urbanization, the laborforce shifts toward the industrial and service sectors, whichspurs median incomes to converge toward the income levelsof developed economies. The emerging global middle classwill expect to enjoy standards of living comparable to those indeveloped economies. As demand for international goodsand services rises and leisure time increases, appetite fortravel will grow.Business models and airline strategiesThere is a need for 35,280 new airplanes, 41 percent of whichwill replace older airplanes and 59 percent will expand the fleet.Airline strategies and business models help determine the typesof airplanes that airlines purchase and, consequently, the typesof airplanes that manufacturers produce. Low-cost carriers drivethe strong demand for new, efficient single-aisle airplanes. Theirshare of the market is expected to grow from 14 percent to20 percent by 2032. International expansion of network carriersis driving demand for 8,590 new widebody airplanes, including850 freighters, primarily large freighters such as the 747-8Freighter and 777 Freighter.Forecast indicatorsEmerging markets driving economic growthForecast indicatorsAnnual traffic growthSouth AsiaChinaSoutheast AsiaAsia PacificAfricaLatin AmericaMiddle EastCISWorldOceaniaNorth AmericaEuropeNortheast AsiaAnnual GDP growth 2012 to 20326.64.76.444. 2012 to 2032Within ChinaWithin Asia Pacific incl. ChinaWithin North AmericaNorth America – Latin AmericaNorth AtlanticMiddle East – Asia PacificWithin/to CISEurope – Asia PacificWithin Latin AmericaAfrica – EuropeEurope – Latin AmericaWithin EuropeTranspacific6.9%6.9%2.3%3.5%5.5%3.6%7.3%4.8%6.5%5.0%4.8%4.5%4.7%6.9%6.9%2.3%3.5%5.5%3.6%7.3%4.8%6.5%5.0%4.8%4.5%4.7%Forecast indicatorsGrowth rates2012 to 20324.1%3.2%5.0%5.0%4.1%3.2%Numberof airlinepassengersAirlinetraffic(RPK)Cargotraffic(RTK)Worldeconomy(GDP)Forecast Indicators
  14. 14. Current Market Outlook2013 –203215Copyright © 2013 Boeing. All rights reserved.Fleet size will doubleThe in-service commercial fleet will grow an average3.6 percent per year to double in size from 20,310 airplanestoday to 41,240 by 2032. Over the next 20 years, the airlineindustry will need 35,280 new airplanes, of which 41 percentwill replace older, less efficient airplanes. Nearly 59 percent ofthe new deliveries will reflect growth in emerging marketsand evolving business models.Single-aisle airplanes to predominateSingle-aisle airplanes continue to dominate the world’s fleet.In 2012, the single-aisle category comprised 64 percent of theworld’s fleet. By 2032, we estimate that share will rise to 70percent. Of the forecast demand for 24,670 new single-aisleairplanes, valued at $2.3 trillion, 37 percent will replace olderairplanes, while 63 percent will expand the fleet. Emergingmarkets are driving demand for single-aisle airplanes. The AsiaPacific region is expected to need 8,810 new airplanes to expandits single-aisle fleet from 3,470 to 10,350 airplanes by 2032.Latin America, which is expected to take delivery of 2,420 newsingle-aisle airplanes, and the Middle East, which is expectedto take delivery of 1,240 new airplanes, also generate strongdemand. Low-cost carriers, whose business models focuson fleet commonality, also drive demand forsingle-aisle airplanes.Expanding international markets increase demandTraffic on long-haul routes is forecast to grow 5.1 percentannually over the next 20 years, creating demand for 8,590 newwidebody airplanes. The largest widebody markets are AsiaPacific, Europe, North America, and the Middle East, whichwill take nearly 92 percent of all new deliveries.Efficiencies of the fleetIncreased airline costs, specifically increased fuel costs, aredriving airlines to operate the most efficient airplanes available.Consequently, we foresee a modest increase in the averagesize of airplanes in operation. Airlines are replacing small regionaljets with larger regional jets. This trend continues in the single-aisle category. Airlines that have ordered 737-700s are ordering737-800s, and airlines that ordered 737-800s are ordering737-900ERs. In the widebody fleet, small- and medium-sizeairplanes are in greatest demand, representing 91 percent of theprojected widebody market. The multiple sizes in the widebodyairplane families, which include the 787, 777, and 747 families,allow airlines to optimize their networks by choosing the rightsize airplane for each market they serve.Fleet developmentsWorld fleet will double by 2032•Regional jets •Single aisle •Small widebody •Medium widebody •Large widebody6%2%9%64%70%4%7%7% 12%65%13%13%2%13% 13%41,240airplanes20,310airplanes11,800airplanes203220121992Source:Ascend andBoeing CMOFleet developmentsOver half of new deliveries are for growth40,00030,00020,00010,000041,24035,28020322012Growth20,93059%Replacement14,35041%5,960RetainedUnits20,310Fleet developmentsMarket share by business models20322%2%22%31%43%•Broad Network•Intermediate Network•Low Cost•Charter/IT•FreightSource:Ascend andBoeing CMOFleet Development
  15. 15. Current Market Outlook2013 –2032Current Market Outlook2013 –203216 Copyright © 2013 Boeing. All rights reserved.Single-aisle airplanes remain pivotalOver the next 20 years, we project that 24,670 single-aisleairplanes will be delivered, representing 70 percent of commercialairplane deliveries and 47 percent of total delivery value. Typicallyused for shorter distance travel, single-aisle airplanes are a flexibleasset that airlines use both within regions and to connect adjacentregions. Demand for single-aisle airplanes will continue to be highin emerging economies where passenger traffic is growing andmarkets are liberalizing. Asia Pacific will receive 36 percent ofthe new single-aisle airplanes, while Europe and North Americatake 23 percent and 20 percent, respectively. In the maturemarkets, roughly half of new single-aisle airplanes will replaceaging airplanes. As new 737 MAX and A320neo airplanes enterservice, fleet fuel efficiency will improve and the more capableairplanes will be able to serve new, longer markets. Passengerswill especially appreciate the new interior already available onthe 737 for these longer flights.International traffic creates small and mediumwidebody demandThe small and medium widebody airplane category is thehighest valued market segment of the forecast. Accounting for22 percent of forecast deliveries, the category represents 45percent of the total world airplane delivery value at US$2.2 trillionover the next 20 years. This product category is also the mostdynamic, with deliveries of the Boeing 787 Dreamliner increasing,introduction of the Airbus A350 pending, and development ofeven more fuel-efficient mid-sized airplanes anticipated. Theseproducts allow airlines to create new, economical, point-to-pointinternational services and give airlines flexibility to complementexisting Boeing 787 and 777 and Airbus A330 service. Overthe next 20 years, the vast majority of these airplanes currentlyflying will be retired. By 2032, about 87 percent of the small andmedium widebody airplanes in operation will have beendelivered since 2012.Demand for large airplanes focused in key regionsAsia Pacific, Europe, and the Middle East account for morethan 90 percent of large-airplane demand in the 20-year forecast.These airplanes will serve as passenger jetliners on high-traffictrunk routes, as well as dedicated commercial freighters. Theforecast 760 deliveries comprise 6 percent of total delivery value.The Asia Pacific region will receive 34 percent of these deliveries,while Europe will take 22 percent and the Middle East will take37 percent. Although their share of long-haul traffic will diminishover the next 20 years, large airplanes remain an importantpart of the commercial airline fleet.New airplanes85% of fleet will be new by 2032100%75%50%25%0%85% NewAirplanes15%RemainingAirplanesNew airplanesMarket value: $4.8 trillion05001,0001,5002,0002,500Regionaljets2%$80Singleaisle47%$2,290Smallwidebody23%$1,100Mediumwidebody22%$1,090Largewidebody6%Market valuein billionsDelivery units3%4%8%7%21%21%36%2013 to 2032New airplanes35,280New airplanesDeliveries by regionNewRegion airplanes• Asia Pacific 12,820• Europe 7,460• North America 7,250• Middle East 2,610• Latin America 2,900• CIS 1,170• Africa 1,070Total 35,280$280New Airplanes
  16. 16. Current Market Outlook2013 –203217Copyright © 2013 Boeing. All rights reserved.Remarkable air cargo traffic stabilityDespite an unusually challenging environment over the pastseveral years, air cargo remains indispensable for a variety ofindustries that require transport of time-sensitive commodities.These commodities include perishables; high-value, low-weight goods including consumer electronics; high-fashionapparel; pharmaceuticals; industrial machinery; and high-value intermediate goods such as auto parts. The speed andpunctuality advantages of air freight ensure that it will continueto play a significant role in the global economy.Both dedicated freighters and passenger airplane lowerholds carry air cargo. Cargo capacity on passenger flights hasbeen expanding as airlines deploy new jetliners, such as the777-300ER, that have excellent cargo capability. Dedicated freightservices, however, offer shippers a combination of reliability,predictability, and control over timing and routing that lower-holdcargo operations can’t often match. Thus, freighters consistentlyaccount for roughly 60 percent of global air cargo traffic.Air cargo traffic, as measured in revenue tonne-kilometers(RTK), is projected to average 5.0 percent growth per year overthe next 20 years, as global GDP and world trade return towardhistoric growth rates. Replacement of aging airplanes, plus theindustry’s growth requirements, will create a demand for 2,300freighter deliveries over the same period. About 1,450 of thesewill be passenger airplane conversions. The remaining 850airplanes, valued at $240 billion, will be new. The freighter fleetwill increase by more than half, from 1,730 airplanes in 2012to 2,810 in 2032.All standard-body freighters will be conversionsBoeing forecasts a requirement for 940 standard-body freighters,all passenger conversions, which are attractive for standard-body operations due to their low capital cost. Demand will beespecially strong in emerging markets.Express carriers drive medium widebody demandAbout one-third of the 590 medium widebody freightersdelivered during the forecast period will be new purpose-builtfreighters. This freighter market is driven by express carriers thatmitigate the lower economic efficiency of medium widebodieswith higher yields. Competition from less expensive surfacetransport and passenger airplane lower-hold capacity constrainsthe use of medium widebody freighters in regional markets.Intercontinental operations favor new, large freightersThe performance, efficiency, and reliability of new, purpose-built freighters outweigh the lower purchase prices for convertedlarge freighters, especially for intercontinental operations, wherehigh cargo density, larger payloads, and extended range arecrucial. Thus, of the 770 large freighter deliveries, more than80 percent will be new airplanes.Air Cargo Market2013 to 2032Freighters 2,300Share of fleet0%380 21025%64050%75% 940100% 13020322012Delivery unitsAir cargo market850 new and 1,450 converted•Large >80 tonnes•Medium 40 to 80 tonnes•Standard <80 tonnes•ConvertedAir cargo marketAnnual growth: 5.4% since 1982•Annual change1982199020002012•Annual RTKs25020015010050020%15%5%10%0%-10%-5%-15%Annual growth Annual RTKs (billions)Market value(in billions)$40Medium40 to 80tonnes$200LargeMore than80 tonnesAir cargo marketMarket value: $240 billion25050020010015017%83%
  17. 17. Current Market Outlook2013 –2032Current Market Outlook2013 –203218 Copyright © 2013 Boeing. All rights reserved.MiddleEastEuropeLatinAmericaAsia PacificCISNorth AmericaAfricaWorld regionsMarket value: $4,480 billionDelivery units6%2%9%13%70%2013 to 2032New airplanes35,280100%0%75%50%25%Share of fleet2032Airplanes41,2402012Airplanes20,310New Shareairplanes by sizeLarge widebody 760 2%Medium widebody 3,300 9%Small widebody 4,530 13%Single aisle 24,670 70%Regional jets 2,020 6%Total 35,2802012 2032Fleet FleetLarge widebody 780 910Medium widebody 1,520 3,610Small widebody 2,310 5,410Single aisle 13,040 29,130Regional jets 2,660 2,180Total 20,310 41,240GrowthmeasuresEconomy (GDP) 3.2%Traffic (RPK) 5.0%Cargo (RTK) 5.0%Airplane fleet 3.6%MarketsizeDeliveries 35,280Market value $4,840BAverage value $140MWorld regionsKey indicators and new airplane markets•Regional jets •Single aisle •Small widebody •Medium widebody •Large widebodyWorld regionsNew airplane market by regionGlobalized demandAs aviation continues to become an integral part of life, it isbringing people closer together. As emerging markets continueto grow and new business models expand, airplanemanufacturers are seeing greater geographical diversity in theircustomer base. In 1992, more than 70 percent of all traffic wascarried by airlines in Europe or North America. By 2032, thatproportion will shrink to 42 percent. Asia Pacific and Middle Eastairlines are becoming prominent in global aviation. The low-costbusiness model is becoming a viable option in emerging markets,offering consumers access to a wider range of destinations andthe opportunity to choose the speed and convenience of flyingover traditional modes of transportation. In addition, moderntwin-aisle airplanes enable smaller operators in developingeconomies to compete on longer routes traditionally dominatedby foreign carriers. Rapidly evolving aviation services in theseregions are broadening the geographical balance of airplanedemand, spurring a worldwide requirement for 35,280 new jetairplanes, of which 24,670 will be single aisle.Regional focusDifferent regions will still have varying conditions with specializedrequirements. Middle Eastern airlines will still favor twin-aisleairplanes and premium passenger services to take advantage ofthe area’s centrality and prominence in business travel. Europeanand North American airlines respond to growing competitionfrom low-cost carriers by replacing older, fuel inefficient airplaneswith larger, more economical single-aisle models. In Asia, risingdemand across the board will require a mix of single- andtwin-aisle airplanes.All regions will face similar challenges of fuel price volatility,emission control regimes, and ever-increasing airport congestionas the growing world fleet tries to keep pace with swellinginternational and local demand for air travel.World Regions
  18. 18. Current Market Outlook2013 –203219Copyright © 2013 Boeing. All rights reserved.Growing marketsAsia Pacific economies continue to exhibit strong growth.Intrinsic strength, progressive trade agreements among theregion’s countries, and recovering global demand are helpingmost economies in the region maintain healthy growth. Led byChina and India, the region’s economies will grow 4.5 percentper year over the next 20 years, outpacing the world’s averagegrowth rate. The region’s share of world GDP will expand from28 percent today to 36 percent by 2032.Rising traffic levelsDuring the next 20 years, nearly half of the world’s air trafficgrowth will be driven by travel to, from, or within the Asia Pacificregion. Total traffic for the region will grow 6.3 percent peryear. Fueled by national economic growth and the increasingaccessibility of air transport services, traffic within the region willgrow faster than traffic to and from other regions. Domestic andinternational travel within the regionwill grow 6.5 percent per year.Air cargo plays a critical role in the region’s economy, transportinggoods over difficult terrain and vast stretches of ocean. Some ofthe world’s largest and most efficient cargo operators are locatedin Asia. The region’s air cargo will grow 5.8 percent per yearduring the next 20 years. Carriers within the region are expectedto take 370 new freighters, with an additional 490 conversions.Asia Pacific airlines will need 12,820 new airplanes, valued at$1.9 trillion, over the next 20 years. The number of airplanes in theAsia Pacific fleet will nearly triple, from 5,090 airplanes in 2012 to14,750 airplanes in 2032. New low-cost carriers and demand forintra-Asia travel have spurred a substantial increase in single-aisleairplanes, a trend that will continue as single-aisle airplanes gainan increasing percentage of the region’s traffic.Liberalization expands marketsThe structure of the Asia Pacific airline industry is changingas regulations liberalize and carriers expand beyond nationalboundaries. Cross-border franchise agreements and directinvestment in foreign carriers allow established airlines accessto new markets and promote expanded air service to smallermarkets. The growth of air travel as low-cost carriers reduce faresand open new markets testifies to the effects of liberalization.To compete, established airlines are forming low-cost enterprises,often through joint ventures with recognized LCCs. The improvedaffordability and accessibility of air travel will stimulate demandin established markets and meet emerging travel needs of therising middle class.Asia PacificKey indicators and new airplane marketsAsia PacificMarket value: $1,890 billionAsia PacificNew airplanes 12,8202013 to 2032New airplanes12,8202012Airplanes5,090Delivery units2% 3%11%15%69%100%0%75%50%25%Share of fleet2032Airplanes14,750•Regional jets •Single aisle •Small widebody •Medium widebody •Large widebodyNew Shareairplanes by sizeLarge widebody 260 2%Medium widebody 1,470 11%Small widebody 1,860 15%Single aisle 8,810 69%Regional jets 420 3%Total 12,8202012 2032Fleet FleetLarge widebody 330 350Medium widebody 500 1,550Small widebody 660 2,080Single aisle 3,470 10,350Regional jets 130 420Total 5,090 14,750GrowthmeasuresEconomy (GDP) 4.5%Traffic (RPK) 6.3%Cargo (RTK) 5.8%Airplane fleet 5.5%MarketsizeDeliveries 12,820Market value $1,890BAverage value $150MNortheastAsiaOceaniaSouthAsiaChinaSoutheastAsiaWorld RegionsAsia Pacific
  19. 19. Current Market Outlook2013 –203220Copyright © 2013 Boeing. All rights reserved.The US airline industry continues to restructureThe US airline industry continues to evolve into a financiallystable industry due to the merger activity and resulting capacityand fleet rationalization that have occurred over the past fiveyears. The fourth and final legacy airline merger betweenAmerican Airlines and US Airways is pending governmentapproval. If the merger is approved, further capacity rationalizationis expected. In the interim, airline consolidation continues asSouthwest integrates AirTran into its system, and United andContinental continue to merge their operations. Once theAmerican-US Airways merger has been consummated, thefour largest US airline operators will dominate other domesticcompetitors with at least 80 percent of available capacity.Low-cost carriers lead capacity growthFor the fourth consecutive year, the US commercial airlineindustry has posted an increase in traffic growth, as measuredby revenue passenger-miles (RPMs). Total RPMs flown by thenetwork and low-cost carriers grew 1 percent in 2012 comparedto the previous year. The low-cost carriers posted a year-over-year capacity increase of 4 percent while capacity for the legacycarriers was flat. The average annual load factor of 83 percentfor the US carriers was an increase of half a percentage pointfrom 2011.Financial results for US airlines continue to show improvementas the industry restructures. Excluding American Airlines, whichwas engaged in corporate restructuring, the US airline industryhad a net profit of US$1.9 billion for the year. Net margins,however, averaged slightly above 1 percent. With jet fuelrepresenting between 35 and 40 percent of operating expenses,the airline industry will continue to focus on revenue growth andcost reductions to further improve financial performance thatis necessary to fund future capital investment.Passenger traffic to slightly outpace GDP growthLong-term moderate capacity growth, renewed focus on financialreturns, ongoing investment in the fleet, and further product andtechnological enhancements are expected as US airline industryrestructuring continues. North American passenger trafficgrowth will slightly outpace GDP and grow at an annual rate of2.7 percent over the next 20 years. Both GDP and traffic wererevised downward slightly from the previous year’s forecast dueto the expectation of a long-term US economic recovery. Cargorevenue ton-mile projections were also revised downward to3.8 percent per year compared to the previous forecast of4.5 percent as the air freight industry undergoes its own fleetand capacity rationalization.North AmericaGrowth of 2,200 aircraft by 2032Aircraft requirements• Totalfleet2032• In servicefleet201210,0005,0000• Replaced• Retained• Grow6,5908,810North AmericaMarket Value: $810 billionDelivery units2013 to 2032New airplanes7,250100%0%75%50%25%Share of fleet2012Airplanes6,590Delivery units69%100%0%75%50%25%Share of fleet2032Airplanes8,810•Regional jets •Single aisle •Small widebody •Medium widebody •Large widebody1%15%5%10%North AmericaKey indicators and new airplane marketsNew Shareairplanes by sizeLarge widebody 30 >1%Medium widebody 390 5%Small widebody 760 10%Single aisle 5,000 69%Regional jets 1,070 15%Total 7,2502012 2032Fleet FleetLarge widebody 120 60Medium widebody 290 500Small widebody 710 1,040Single aisle 3,760 6,140Regional jets 1,710 1,070Total 6,590 8,810GrowthmeasuresEconomy (GDP) 2.5%Traffic (RPK) 2.7%Cargo (RTK) 3.8%Airplane fleet 1.5%MarketsizeDeliveries 7,250Market value $810BAverage value $110MWorld RegionsNorth America
  20. 20. Current Market Outlook2013 –2032Current Market Outlook2013 –203221 Copyright © 2013 Boeing. All rights reserved.Strength despite uncertaintyThe European aviation market remained strong in 2012, despiteuncertainties from the sovereign debt crisis and recessions insome economies. Europe’s GDP was flat in 2012 and is forecastto grow by 1.8 percent annually through 2032. The Association ofEuropean Airlines reports that member airlines carried 1.5 percentmore passengers in 2012. Members of the European Low FaresAirline Association (ELFAA) reported a 7.2 percent increase inpassengers over 2011 levels. European airlines acquired morethan 230 new airplanes in 2012, of which 74 percent weresingle aisle.Aviation growth is expected to continue over the next 20 years,with European airlines forecast to acquire 7,460 new airplanesvalued at $530 billion. Single-aisle airplanes will account for themajority of deliveries, representing a 73 percent share.Although aviation growth in Europe is not as rapid as in theworld’s emerging economies, the region’s large installed baseof almost 4,400 airplanes sustains a substantial demand forreplacement airplanes. This demand will account for 51 percentof Europe’s new-airplane market.Leading strategic changeAirline operations continue to evolve with the launch of newventures and new business models. Long-haul service byEuropean low-cost carriers (LCC) is becoming a reality in 2013with the delivery of the 787 to LCC Norwegian Air Shuttle. Thenext 20 years are expected to bring additional mergers andacquisitions, along with increased collaboration with alliancepartners around the world.Large Middle East carriers have captured significant long-haulshare from European network carriers by providing one-stopservice from Europe to markets such as India, Australia, andSoutheast Asia. These carriers are also changing the way thatthey compete for European business: one by entering an alliance,another by acquiring an equity stake in a European carrier,and a third through a cooperative agreement with anon-European partner.Large network airlines are tending to shift away from short-haultraffic, which is targeted by LCCs, and toward flowing passengersthrough their hubs on longer itineraries. LCCs have continued toadd service in short-haul markets, with ELFAA members providing35 percent of capacity on intra-Europe flights in 2012. Smallerflag carriers and charter airlines will be challenged to compete inan environment where LCCs dominate short-haul, point-to-pointservice, and large network carriers and their alliance partnersexploit the cost advantages of mega-hubs for long-haul traffic.Source:Sabre ADIEuropeMarket share is being eroded to Gulf carriersO-D market share (%)O-D traffic Europe to:Indian Subcontinent17% 35%32% 15%20022012Southeast Asia14% 20%22%20022012Oceania12%16% 4%0% 20% 40% 60%20022012 33%Indian subcontinentSoutheast AsiaOceania3%100%0%75%50%25%EuropeMarket Value: $1,020 billion2%2013 to 2032New airplanes7,4602012Airplanes4,390Delivery units3%9%11%75%Share of fleet2032Airplanes8,010•Regional jets •Single aisle •Small widebody •Medium widebody •Large widebodyEuropeKey indicators and new airplane marketsNew Shareairplanes by sizeLarge widebody 170 2%Medium widebody 650 9%Small widebody 850 11%Single aisle 5,610 75%Regional jets 180 3%Total 7,4602012 2032Fleet FleetLarge widebody 180 200Medium widebody 360 690Small widebody 340 990Single aisle 3,160 5,930Regional jets 350 200Total 4,390 8,010GrowthmeasuresEconomy (GDP) 1.8%Traffic (RPK) 4.2%Cargo (RTK) 3.8%Airplane fleet 3.1%MarketsizeDeliveries 7,460Market value $1,020BAverage value $140MWorld RegionsEurope
  21. 21. Current Market Outlook2013 –203222Copyright © 2013 Boeing. All rights reserved.Many growth strategiesGrowth of Middle Eastern aviation outpaced the global averageand will continue to do so, supported by a variety of growthstrategies. Fleet expansion is the predominant strategy, withEmirates as the foremost practitioner.Alliances and partnerships also contribute, as with the 2012Emirates-Qantas codeshare agreement, or Qatar Airways’pending membership in the oneworld alliance.Low-cost carriers tend to pursue growth through businessmodel innovation: reducing short-haul fares, setting up nationalsubsidiaries, and opening new avenues of access to airtransport services.Other strategies include the purchase of equity shares in otherairlines. For example, Etihad invested in airberlin and Jet Airways,in order to grow quickly and gain access to new marketswithout fleet expansion.Liberalization gains groundFurther support for growth could come from liberalization ofindustry regulations. The Kingdom of Saudi Arabia (KSA) tooksignificant steps in 2012 toward opening its markets. Gulf Air(Bahrain) and Qatar Airways have been granted rights to operatedomestic flights within the KSA. Competition will be allowed inthe markets for ground services, and it is expected that Saudiawill be privatized. More vigorous competition should result inbetter, more frequent, and lower cost services.The opportunity to relax price controls on domestic KSA flightsremains, though it has not been adopted as a policy goal. Pricederegulation could bolster industry health, enhancing servicequality over the long term.Liberalization of the region’s bilateral agreements is havingimportant impacts. In the wake of Etihad’s investment in JetAirways, the UAE and India are set to increase weekly seatingentitlements from 13,300 to nearly 50,000 seats by 2015.These entitlements, which will be available to qualified airlineson both sides, will spur competition.Infrastructure and airspace developmentInfrastructure development is a long-term concern. Although theregion’s airspace is not yet crowded, large sections remain undermilitary control, limiting the airspace available for commercialtraffic. The region’s air traffic control (ATC) is not centralized,leaving airlines to manage flights within a patchwork of differentATC systems. Further, investment tends to target new runwaysand terminals, rather than ATC modernization. Awareness ofinfrastructure challenges is growing, and ongoing discussionsbetween the Gulf Cooperation Council countries and theirneighbors signal progress.Source:IATAMiddle EastOutpaces the world in international traffic growthMiddle EastMarket value: $550 billionDelivery units100%0%75%50%25%Share of fleet Delivery units1%10%26%16%47%100%0%75%50%25%Share of fleet•Regional jets •Single aisle •Small widebody •Medium widebody •Large widebody2013 to 2032New airplanes2,6102032Airplanes2,8502012Airplanes1,14035%30%25%20%15%10%5%0%5%200120022003200420052006200720082009201020112012•Middle East•WorldMiddle EastKey indicators and new airplane marketsNew Shareairplanes by sizeLarge widebody 280 10%Medium widebody 670 26%Small widebody 410 16%Single aisle 1,240 47%Regional jets 10 1%Total 2,6102012 2032Fleet FleetLarge widebody 80 250Medium widebody 270 700Small widebody 230 450Single aisle 500 1,420Regional jets 60 30Total 1,140 2,850GrowthmeasuresEconomy (GDP) 3.8%Traffic (RPK) 6.3%Cargo (RTK) 6.6%Airplane fleet 4.7%MarketsizeDeliveries 2,610Market value $550BAverage value $210MWorld RegionsMiddle East
  22. 22. Current Market Outlook2013 –2032Current Market Outlook2013 –203223 Copyright © 2013 Boeing. All rights reserved.Lower but steady growthThe World Bank semiannual report projects 3.5 percent GDPgrowth in Latin America and the Caribbean for 2013, better thanlast year’s 3 percent, but still lagging the 5 percent historical trendand the 6 percent growth in 2010. The Economic Commission forLatin America and the Caribbean predicts Latin America’s fastestgrowing economies will be Paraguay (10 percent), Panama(8 percent), and Peru (6 percent). Growth in Brazil and Argentinawill not meet previous expectations.Political and macroeconomic stability, solid growth, povertyreduction, and a fairer income distribution buoyed regional growthin the 2000s. The World Bank projects that future growth will relymore on a demand-driven domestic economy and less on cheaplabor, exports, and undervalued currency. A robust aviation sectoris crucial to growth. Brazil, the world’s seventh largest economy,has the third largest domestic aviation industry. Total domesticRPKs have nearly doubled from 44 million RPKs in 2007 to87 billion RPKs in 2012. A majority of interstate passengersnow travel by air.A wave of consolidationsLATAM Airlines Group, established as the parent of LAN andTAM, is the largest instance of a massive consolidation trendthat includes the mergers of Avianca with TACA, Gol with Webjet,and Azul with Trip. The region’s fleet, meanwhile, has grownfrom 950 airplanes to more than 3,790 and will need 2,900 newairplanes with a value of $300 billion by 2032. Average airplaneage in the region’s fleet has been reduced from 14.8 years to9.7 years since 2003, giving Latin America a younger fleet thanthose in the United States and Europe. Major carriers are cuttingunprofitable routes and reducing capacity to achieve a moresustainable business environment.Rise of the low-cost carriersLCCs have grown quickly in Brazil and Mexico, Latin America’stwo largest markets. LCCs now account for more than 50 percentof Latin American capacity. The Ryanair-backed Viva Groupalready controls VivaAerobus and VivaColombia and is said to beeyeing expansion. LCCs are also extending their reach throughpartnerships. With only six LCCs in the region, the potential forexpansion is great.World RegionsLatin AmericaLatin AmericaStrong backlog in region120Latin American backlog2013201514201716201918202120220 40 80•Regional jets•Single aisle•Small widebodySource:Flight Global AscendOnline DatabaseLatin AmericaMarket value: $300 billion2013 to 2032New airplanes2,9002012Airplanes1,280Delivery units6%1%9%84%100%0%75%50%25%Share of fleet2032Airplanes3,790•Regional jets •Single aisle •Small widebody •Medium widebody •Large widebodyNew Shareairplanes by sizeLarge widebody - -Medium widebody 40 1%Small widebody 270 9%Single aisle 2,420 84%Regional jets 170 6%Total 2,9002012 2032Fleet FleetLarge widebody - -Medium widebody 20 50Small widebody 120 380Single aisle 1,050 3,150Regional jets 90 210Total 1,280 3,790GrowthmeasuresEconomy (GDP) 4.0%Traffic (RPK) 6.9%Cargo (RTK) 6.0%Airplane fleet 5.6%MarketsizeDeliveries 2,900Market value $300BAverage value $100MWorld regionsKey indicators and new airplane markets
  23. 23. Current Market Outlook2013 –203224Copyright © 2013 Boeing. All rights reserved.Younger, more efficient fleetThe outlook for aviation demand in the Commonwealth ofIndependent States (CIS) continues to grow. The region isforecast to take delivery of a total of 1,170 new airplanes overthe next 20 years, valued at $140 billion. In the mid-1990s,Western-built airplanes represented less than 2 percent of theCIS fleet, with only a few dozen Boeing and Airbus airplanes inoperation. Today, around 70 percent of the fleet consists of moreefficient Western-built airplanes, which can fly more hours perday than the average airplane of the fleet operating in the 1990s.The switch to more efficient airplanes is allowing carriers tomeet market demand with fewer airplanes.Regional economies recoveringThe economies of the CIS region grew moderately in 2011.GDP expanded at a rate of 3.8 percent in 2012, slowing from a5.0 percent rate in 2011. Overall, regional growth is expected tocontinue, with GDP averaging 3.4 percent annual growth overthe next 20 years. Russia’s economy continues to be the region’slargest, accounting for more than 70 percent of the region’sGDP in 2012. The economies of Ukraine and Kazakhstan followRussia in size.The Russian Transport Ministry’s Federal Air Transport Agencyreported that the number of passengers carried by Russianairlines rose to 74.0 million in 2012, an increase of 15.5 percentcompared to 2011. Over the next 20 years, Boeing forecaststhat air traffic to and from the CIS region will grow at a rate of4.4 percent annually.Strong demand for single-aisle airplanesThe potential for domestic growth will create demand for anestimated 860 new single-aisle airplanes over the next 20years. The region’s geographical size and diverse terrain makeairline travel an attractive transportation option. Air travel shouldincrease over the coming 20 years as personal incomes rise andliberalization of air transport regulations makes aviation servicesmore available and affordable.CISKey indicators and new airplane marketsSource:OAG andBoeing analysisCISTraffic varies by marketCISMarket value: $140 billionNew Shareairplanes by sizeLarge widebody 20 2%Medium widebody 60 5%Small widebody 130 11%Single aisle 860 73%Regional jets 100 9%Total 1,1702012 2032Fleet FleetLarge widebody 60 50Medium widebody 20 70Small widebody 170 190Single aisle 680 1,100Regional jets 200 120Total 1,130 1,530GrowthmeasuresEconomy (GDP) 3.4%Traffic (RPK) 4.5%Cargo (RTK) 4.5%Airplane fleet 1.5%MarketsizeDeliveries 1,170Market value $140BAverage value $120M2%2013 to 2032New airplanes1,1702012Airplanes1,130Delivery units9%5%11%73%100%0%75%50%25%Share of fleet2032Airplanes1,530•Regional jets•Single aisle•Small widebody•Medium widebody•Large widebody20322012• Intra-CIS• Asia• Middle Eastand Africa• Europe• Latin andNorth AmericaASMs(millions)12,00010,0008,0006,0004,0002,000World RegionsCIS
  24. 24. Current Market Outlook2013 –2032Current Market Outlook2013 –203225 Copyright © 2013 Boeing. All rights reserved.Robust air travel demand outlookOptimism about the strength and sustainability of Africa’seconomic growth has increased recently. Sub-Saharan Africaweathered the financial crisis of 2008 and 2009 and commodityprice volatility particularly well, continuing to achieve above-world-average economic growth. Accordingly, both the IMF andWorld Bank increased their expectations for sub-Saharan Africa’seconomic growth over the next two years, despite a relativelyweak global outlook.Africa’s long-term economic growth rate of 4.4 percent iswell above the world average. Commodity markets are expectedto remain the primary driver of the continent’s economic growth,but recent indicators show increasing diversification among theregion’s economies. According to the World Bank, this can beseen in foreign direct investment (FDI) flows, where the numberof manufacturing and services investments is increasing. Risinginvestments and trade foster demand for air travel to andfrom the region.Air travel network developmentConsistent with economic growth, air travel demand to, from,and within Africa is forecast to outpace world average growthat 5.7 percent annually. Growth to and from other emergingmarkets is expected to lead the way, as airlines both in Africaand other emerging market regions are planning to increaseinter-regional connectivity.Prospects for intra-African growth are also rising. Airlines inthe region are exploring new business models and developmentof intra-regional hubs. Growth in pan-African airline networkscan bring the efficiency of air travel to the continent’stransportation system. The flexibility of aviation networks andthe relatively low cost per network kilometer make aviationinfrastructure investment very attractive compared to investmentin other modes.Capacity to and from Europe will remain the largest single flowover the next decades, but long-term capacity growth will beslower than in other regions where trade and economic growthdrive air travel demand more strongly.Increased travel demand drives fleet growthAfrica is forecast to require close to 1,100 new airplanes overthe next 20 years. Approximately 70 percent of forecast deliverieswill support growth. Replacement of the existing aging fleet is alsoan important component of demand in Africa where the averagein-service age of the fleet has declined by almost 20 percent since2004. Single-aisle airplanes will account for the largest share ofdeliveries, while widebody airplanes will account for nearly halfof the value of deliveries to Africa.Delivery units7%2%23%68%2013 to 2032New airplanes1,070100%0%75%50%25%Share of fleet2032Airplanes1,5002012Airplanes690•Regional jets •Single aisle •Small widebody •Medium widebody •Large widebodyAfricaMarket value: $130 billionAfricaCapacity to become more diverseSource:Boeing Analysisand OAG50 10 15Weekly ASMs(billions)2002201220222032• Africa-Europe• Other Africa traffic flows• Within AfricaNew Shareairplanes by sizeLarge widebody - -Medium widebody 20 2%Small widebody 250 23%Single aisle 730 68%Regional jets 70 7%Total 1,0702012 2032Fleet FleetLarge widebody 10 -Medium widebody 60 50Small widebody 80 280Single aisle 420 1,040Regional jets 120 130Total 690 1,500GrowthmeasuresEconomy (GDP) 4.4%Traffic (RPK) 5.7%Cargo (RTK) 6.6%Airplane fleet 4.0%MarketsizeDeliveries 1,070Market value $130BAverage value $120MAfricaKey indicators and new airplane marketsWorld RegionsAfrica
  25. 25. Current Market Outlook2013 –2032Current Market Outlook2013 –203226 Copyright © 2013 Boeing. All rights reserved.RPK: Revenue passenger-kilometers. The number of fare-paying passengers multiplied by the number of kilometers they fly (i.e., airline traffic).Note: Taiwan has been moved from Southeast Asia to Northeast Asia.RegionsRPKs in billionsAfrica – AfricaAfrica – EuropeAfrica – Middle EastAfrica – North AmericaAfrica – Southeast AsiaCentral America – Central AmericaCentral America – EuropeCentral America – North AmericaCentral America – South AmericaChina – ChinaChina – EuropeChina – North AmericaChina – Northeast AsiaChina – OceaniaChina – Southeast AsiaCIS – CISCIS – InternationalEurope – EuropeEurope – Middle EastEurope – North AmericaEurope – Northeast AsiaEurope – South AmericaEurope – Southeast AsiaEurope – South AsiaMiddle East – Middle EastMiddle East – North AmericaMiddle East – Southeast AsiaMiddle East – South AsiaNorth America – North AmericaNorth America – Northeast AsiaNorth America – OceaniaNorth America – South AmericaNorth America – Southeast AsiaNortheast Asia – Northeast AsiaNortheast Asia – OceaniaNortheast Asia – Southeast AsiaOceania – OceaniaOceania – Southeast AsiaSouth America – South AmericaSoutheast Asia – Southeast AsiaSoutheast Asia – South AsiaSouth Asia – South AsiaRest of worldWorld totalAverage growth2012 to 20326.3%4.8%7.5%5.8%6.7%4.6%4.5%4.2%6.5%6.9%6.1%6.3%4.8%6.4%7.5%4.5%4.9%3.6%5.0%3.5%3.2%4.8%5.0%7.2%5.7%6.4%6.6%7.5%2.3%2.2%4.2%6.1%6.5%2.5%3.5%4.9%4.5%5.1%7.4%7.5%8.4%9.6%5.0%7.7%200943.88128.1732.868.774.0929.8077.08104.6713.97287.3677.3360.8843.2322.7945.2976.8683.62624.92131.16405.4059.3679.3495.9251.2968.5941.5646.7064.81915.13120.1834.8156.8710.2981.9315.0974.3273.2954.6586.9395.9921.8943.8169.354,564.19200841.58125.6024.906.285.3732.2983.29115.7713.08236.5382.5262.7048.4421.3750.5988.9377.73660.55115.15432.3868.9775.17101.5355.4863.3729.5445.3649.46974.07139.3732.2652.689.3384.8520.8187.7372.0157.4281.6093.2224.3440.0855.494,639.17201151.06134.1339.4511.405.9132.2373.67114.5119.19380.1194.1985.4351.4531.3562.99103.07124.10659.48153.27430.2063.7689.82100.4354.0582.3850.3261.3183.05976.35135.4138.3066.6711.2981.9316.6392.3283.8266.89134.39130.7229.1758.5797.415,262.17201048.66135.4536.4111.315.6131.2973.82112.6518.31335.4482.1271.3751.8127.4354.7187.55101.55640.17143.81418.5864.2782.9597.1153.8077.9145.7056.2875.11946.28128.3834.8560.9310.3284.6518.1579.6078.3761.14115.85113.1528.5249.5087.854,938.73201255.76140.4648.9812.344.0235.8975.61122.4023.02403.3198.9086.0463.1733.2973.36104.18133.13710.02177.39441.8371.7594.51100.4951.8578.3252.7764.0586.97978.19140.9338.6469.1310.4497.3116.33102.1895.5169.55136.38151.9831.8460.05109.375,551.622032190.72362.07208.2438.1314.6188.21183.97279.2881.401,523.24325.34293.46159.97115.55313.32253.19349.061,448.03470.64881.39135.95242.08265.72207.66235.17182.46229.52372.411,538.67219.7287.81224.6837.11160.7632.22267.03231.67189.00566.54644.70161.24374.54485.8114,672.32200535.97106.3716.793.334.0726.6567.05100.5910.22164.2163.1048.1439.6817.5548.0473.1458.07561.8887.28390.7160.7263.8998.0043.4248.7216.0829.5036.06972.26146.2729.0646.2382.7921.2411.7774.6165.2554.4964.0779.1120.4425.1631.494,043.46200737.31125.3223.094.895.1829.6880.71106.8311.01223.1291.0354.5249.3119.4049.3480.7681.59634.21106.59420.6167.9070.7596.8458.5160.2723.4441.1446.491,022.41143.7432.1152.0688.7921.0511.2586.3274.3552.3683.0893.3920.5636.2944.294,561.90200635.56121.9520.874.334.1228.1874.15104.9910.33189.7975.2751.4442.4119.2644.5777.3463.64593.3299.18403.3760.5967.3695.8853.2653.6820.6533.3641.97977.36140.6630.5850.689.4587.3921.5080.1470.8451.9174.2578.7819.3731.3138.564,253.61Airline passenger trafficGrowth by regional flowPassenger Traffic
  26. 26. Current Market Outlook2013 –203227Copyright © 2013 Boeing. All rights reserved.Total airplanes in serviceSizeRegional jetsSingle aisleSmall widebodyMedium widebodyLarge widebodyTotalPassenger airplanes in serviceSizeRegional jetsSingle aisleSmall widebodyMedium widebodyLarge widebodyTotalFreighter airplanes in serviceSizeLarge*Medium widebodyStandardTotalAirplane demandSizeRegional jetsSingle aisleSmall widebodyMedium widebodyLarge widebodyTotalPassenger airplane demandSizeRegional jetsSingle aisleSmall widebodyMedium widebodyLarge widebodyTotalFreighter airplane demandSizeLarge*Medium widebodyStandard bodyTotal20322.18029,1305,4103,61091041,24020322,18028,1004,6302,90062038,43020321,0007801,0302,810Airplanes2,02024,6704,5303,30076035,280Airplanes2,02024,6704,3202,81061034,430Airplanes640210–85020122,66013,0402,3101,52078020,31020122,61012,4901,7201,29047018,58020125405906001,730$B802,2901,1001,0902804,840$B802,2901,0609402304,600$B20040–240*Large passenger and large freighter categories differ.Demand and value by regionRegionAsia PacificEuropeNorth AmericaLatin AmericaMiddle EastCISAfricaWorldDeliveries by airplane size and regionRegionAsia PacificEuropeNorth AmericaLatin AmericaMiddle EastCISAfricaWorldMarket value by airplane size and region*RegionAsia PacificEuropeNorth AmericaLatin AmericaMiddle EastCISAfricaWorldSmallwidebody1,8608507602704101302504,530Smallwidebody460210170701003060$1,100Singleaisle8,8105,6105,0002,4201,24086073024,670Singleaisle8405304602101207060$2,290Regionaljets4201801,07017010100702,020Regionaljets10104010–10–$80Mediumwidebody1,4706503904067060203,300Mediumwidebody490210130102301010$1,090$B1,8901,0208103005501401304,840Largewidebody26017030028020–760Largewidebody906010–10020–$280Airplanes12,8207,4607,2502,9002,6101,1701,07035,280Totaldeliveries12,8207,4607,2502,9002,6101,1701,07035,280Totaldeliveries1,8901,020810300550140130$4,840*2012 $B, catalog prices. Values above 10 have been rounded to the nearest 10.Passenger and freighter airplanesMarket value and demand by regionPassenger and freighter airplanesIn service and future fleetAirplanes Required
  27. 27. Current Market Outlook2013 –2032Current Market Outlook2013 –203228 Copyright © 2013 Boeing. All rights reserved.Market by airplane sizeSizeLarge*MediumSmallTotal twin aisleMore than 175 seats90 to 175 seatsTotal single aisleTotal regional jetsTotal fleetPassenger fleet developmentSizeLarge*MediumSmallTotal widebodyMore than 175 seats90 to 175 seatsTotal single aisleTotal regional jetsTotal passenger fleetFreighter fleet developmentSizeLarge*Medium widebodyStandard bodyTotal freighter fleetTotal fleetSizePassenger fleetFreighter fleetTotal fleetMarketshare units2%9%13%24%14%56%70%6%100%End ofyear 20326202,9004,6308,1505,45022,65028,1002,18038,430End ofyear 20321,0007801,0302,810End ofyear 203238,4302,81041,240New airplanedeliveries7603,3004,5308,5905,04019.63024,6702,02035,280New deliveries2013 to 20326102,8104.3207,7405,04019,63024,6702,02034,430New deliveries2013 to 20326402100850New deliveries2013 to 203234,43085035,280Marketshare value6%22%23%51%11%36%47%2%100%Convertedto freighter–––510––94001,450Convertedto freighter1303809401,450Convertedto freighter1,4501,4501,450Market value2012 $B2801,0901,1002,4705401,7502,290804,840Removedfrom service4601,2001,4103,0701,2107,8509,0602,45014,580Removedfrom service3104005101,220Removedfrom service14,5801,22015,800End ofyear 20124701,2901,7203,4801,62010,87012,4902,61018,580End ofyear 20125405906001,730End ofyear 201218,5801,73020,310*Large passenger and large freighter categories differ.Passenger and freighter airplanesMarket value and fleet developmentFleet Development
  28. 28. Current Market Outlook2013 –203229Copyright © 2013 Boeing. All rights reserved.In service850New freighters1,220Removed freighters1,730Freighter fleet in 201218,580Passenger fleet in 20122,810Freighter fleet in 203238,430Passenger fleet in 2032Used––In serviceParkedParked14,580Removed airplanesUsed+34,430New airplanes++1,450Convertedtofreighter13,130Permanentlyretired1,220PermanentlyretiredAirplane fleetHow the fleet develops as airplanes are added and removedFlow of Airplanes
  29. 29. Current Market Outlook2013 –2032Current Market Outlook2013 –203230 Copyright © 2013 Boeing. All rights reserved.Fleet by airplane sizeSizeLarge*MediumSmallTotal widebodyMore than 175 seats90 to 175 seatsTotal single aisleTotal regional jetsTotal fleetFleet by region in 2012RegionAsia PacificNorth AmericaEuropeLatin AmericaMiddle EastCISAfricaWorldFleet by region in 2032RegionAsia PacificNorth AmericaEuropeLatin AmericaMiddle EastCISAfricaWorldFleet share20322%9%13%24%14%56%71%6%100%Totalfleet5,0906,5904,3901,2801,1401,13069020,310Totalfleet14,7508,8108,0103,7902,8501,5301,50041,240Airplanes inservice 20329103,6105,4109,9305,85023,28029,1302,18041,240Largewidebody3301201800806010780Largewidebody350602000250500910Fleet share20124%7%12%23%9%55%64%13%100%Mediumwidebody5002903602027020601,520Mediumwidebody1,5505006905070070503,610Airplanes inservice 20127801,5202.3104,6101,84011,20013,0402,66020,310Smallwidebody660710340120230170802,310Smallwidebody2,0801,0409903804501902805,410Singleaisle3,4703,7603,1601,05050068042013,040Singleaisle10,3506,1405,9303,1501,4201,1001,04029,130Regionaljets1301,71035090602001202,660Regionaljets4201,070200210301201302,180*Large passenger and large freighter categories differ.Fleet growthBy size and regionFleet by Region
  30. 30. Current Market Outlook2013 –203231Copyright © 2013 Boeing. All rights reserved.Asia Pacific fleet growthBy size and regionFleet by airplane sizeSizeLarge*MediumSmallTotal twin aisleMore than 175 seats90 to 175 seatsTotal single aisleTotal regional jetsTotal fleetFleet by region in 2012RegionChinaNortheast AsiaOceaniaSoutheast AsiaSouth AsiaAsia PacificFleet by region in 2032RegionChinaNortheast AsiaOceaniaSoutheast AsiaSouth AsiaAsia PacificFleet share20323%17%9%29%16%51%68%4%100%Totalfleet1,9107104801,1404704,710Totalfleet5,9801,3709503,4801,89013,670Airplanes inservice 20324602,2901,2003,9502,2207,0109,23049013,670Large80804013010340Large14012050150–460Fleet share20127%15%8%30%8%59%67%3%100%Twinaisle280300903101001,080Twinaisle1,3105802509803703,490Airplanes inservice 20123407003801,4203902,7803,1701204,710Singleaisle1,4903003406803603,170Singleaisle4,2205806502,2801,5009,230Regionaljets60301020–120Regionaljets31090–7020490*Large passenger and large freighter categories differ.Fleet by RegionAsia Pacific
  31. 31. Current Market Outlook2013 –2032Current Market Outlook2013 –203232 Copyright © 2013 Boeing. All rights reserved.Major Traffic FlowsAirline traffic flowsBy regionAirline passenger growth rates 2012 to 2032RPKsAsia PacificNorth AmericaEuropeMiddle EastLatin AmericaAfricaAirline passenger traffic in 2012RPKs in billionsAsia PacificNorth AmericaEuropeMiddle EastLatin AmericaAfricaAirline passenger traffic in 2032RPKs in billionsAsia PacificNorth AmericaEuropeMiddle EastLatin AmericaAfricaAsiaPacific6.5%AsiaPacific1,208.1AsiaPacific4,229.2NorthAmerica4.5%2.3%NorthAmerica288.4978.2NorthAmerica694.51,538.7Europe5.5%3.5%3.6%Europe323.0441.8710.0Europe934.7881.41,448.0MiddleEast7.3%6.4%5.0%5.7%MiddleEast208.152.8177.478.3MiddleEast853.1182.5470.6235.2LatinAmerica5.7%5.0%4.7%—6.9%LatinAmerica3.8191.5323.0—195.3LatinAmerica11.6504.0426.1—736.1Africa7.1%5.8%4.8%7.5%8.7%6.3%Africa17.812.3140.549.02.755.8Africa70.138.1362.1208.214.2190.7Bold: Share within region.
  32. 32. Current Market Outlook2013 –203233Copyright © 2013 Boeing. All rights reserved.How to read the tablesRead down the selected column; for example:• In 2012, traffic within North America accounted for 50% of all the total traffic to, from, within North America.• In 2032, traffic within North America accounted for 40% of all the total traffic to, from, within North America.Airline traffic distributionBy regionTraffic in 2012RPKsAsia PacificNorth AmericaEuropeMiddle EastLatin AmericaAfricaTotal traffic to and from regionTraffic in 2032RPKsAsia PacificNorth AmericaEuropeMiddle EastLatin AmericaAfricaTotal traffic to and from regionAfrica6%4%51%18%—20%100%Africa8%4%41%24%2%22%100%LatinAmerica—10%9%—35%1%100%LatinAmerica—13%9%—44%2%100%MiddleEast37%9%31%14%—9%100%MiddleEast44%9%24%12%—9%100%Europe16%23%36%9%9%7%100%Europe21%19%32%10%9%8%100%NorthAmerica15%50%22%3%10%1%100%NorthAmerica18%40%23%5%13%1%100%AsiaPacific59%14%16%10%—1%100%AsiaPacific62%10%14%13%—1%100%Bold: Share within region. Sum data down the table only. Excludes other small flows that are not included in the summary table (less than 1% of each region).Traffic by Region
  33. 33. Current Market Outlook2013 –2032Current Market Outlook2013 –203234 Copyright © 2013 Boeing. All rights reserved.Passenger and freighterAirplane market sector definitions90 to 175 seatsBoeing 717, 727Boeing 737-100 through -500Boeing 737-600, -700, -800Airbus A318, A319, A320Boeing-MDC DC-9, MD-80, -90AVIC ARJ-900BAe 146-300, Avro RJ100Bombardier CRJ-1000Bombardier CS100, CS300Embraer 190, 195COMAC C919Fokker 100UAC MS 21-200 -300Ilyushin IL-62Tupolev TU-154Yakovlev Yak-42Medium widebody40 to 80 tonnesBoeing 767Lockheed L-1011SFBoeing-MDC DC-10Boeing 787Airbus A330Boeing 777-A SFIlyushin IL-76TDMediumTwo class: 340 to 450 seatsThree class: 300 to 400 seatsBoeing 777Boeing-MDC MD-11Airbus A340Airbus A350-1000Ilyushin IL-86Single-aisle passenger airplanesRegional jetsAntonov An-148AVIC ARJ-700Avro RJ70, RJ85BAe 146-100, -200Bombardier CRJDornier 328JETEmbraer 170, 175Embraer ERJ-135, -140, -145Fokker 70, F28Mitsubishi MRJSukhoi Superjet 100Yakovlev Yak-40UAC MS 21-400Freighter airplanesStandard bodyLess than 45 tonnesBAe 146Boeing-MDC DC-8, -9Boeing 737Boeing 727Tupolev TU-204Boeing 707Boeing-MDC MD-80Boeing 757-200Airbus A318, A319, A320, A321Widebody passenger airplanesSmallTwo class: 230 to 340 seatsThree class: 200 to 300 seatsBoeing 767, 787Boeing-MDC DC-10Airbus A300, A310Airbus A330-200, -300**Airbus A350-800, -900**Lockheed L-1011Ilyushin IL-96More than 175 seatsBoeing 707, 757Boeing 737-900ERAirbus A321Tupolev TU-204, TU-214Large*More than 80 tonnesBoeing-MDC MD-11Boeing 747-100 through -400Boeing 777Airbus A340-600 SFAirbus A350Ilyushin IL-96TAntonov An-124747-8FLarge*Three class: more than 400 seatsBoeing 747-8Boeing 747-100 through -400Airbus A380Bold: Airplanes in production or launched. Production and conversion (SF) models assumed for each type unless otherwise specified.*Large passenger and large freighter categories differ. **A330-200 and A350-900 moved from the medium category to the small category.Airplane Categories
  34. 34. Current Market Outlook2013 –203235Copyright © 2013 Boeing. All rights reserved.Opinion and FeedbackWe value your opinionPlease provide your name, position, company, and address below, or attach your business card.FeedbackWhat do you think?Send your comments to usOur contact details are below.Your perspective• What will be the mainfactors to affect futureair transport markets?• What will bethe likely impactof these factors?Your feedback• What do you think ofweb-only access to forecastinformation (with a PDF foryou to print locally)?• If you have used theinteractive forecast data-base on our website, tellus what you think of it.• What areas wouldyou like to see coveredin more detail in theCurrent Market Outlook?• What additional datawould you like us tomake available?• What didyou find mostvaluable?• Was thereanything youdisliked?Your commentsAny other questions or comments? WarnerSenior ManagerMarket AnalysisE-mailBoeingCurrentMarketOutlook@Boeing.comFax1.206.766.1022AddressBoeing Commercial AirplanesMarket AnalysisP.O. Box 3707, MC 21-28Seattle, WA 98124-2207