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  • Look at the trends and outlook of the global landscape for aerospace and defense especially during a time of significant recessions worldwide.Also look at opportunities rising at this time of difficulty within emerging nations, especially China and Brazil.
  • Commercial Aircraft industry is looking bright for the future. Airbus – Air resiliencyThis is air travel traffic, and how that translate into profits for the industry.Airbus – Profits through 2010PWC report – Profits 2011, biggest profits in history.Just to show you some examples you may be familiar with, these are some of the largest purchases in history and they happened in the past couple of years.
  • Commercial Aircraft industry is looking bright for the future. Airbus – Air resiliencyThis is air travel traffic, and how that translate into profits for the industry.Airbus – Profits through 2010PWC report – Profits 2011, biggest profits in history.Just to show you some examples you may be familiar with, these are some of the largest purchases in history and they happened in the past couple of years.
  • Commercial Aircraft industry is looking bright for the future. Airbus – Air resiliencyThis is air travel traffic, and how that translate into profits for the industry.Airbus – Profits through 2010PWC report – Profits 2011, biggest profits in history.Just to show you some examples you may be familiar with, these are some of the largest purchases in history and they happened in the past couple of years.
  • Commercial Aircraft industry is looking bright for the future. Airbus – Air resiliencyThis is air travel traffic, and how that translate into profits for the industry.Airbus – Profits through 2010PWC report – Profits 2011, biggest profits in history.Just to show you some examples you may be familiar with, these are some of the largest purchases in history and they happened in the past couple of years.
  • Government support and subsidies – Remember that there has been disputes and controversy around the WTO and both Boeing and Airbus receiving billions of dollars of unfair subsidies from their respective governments.Fuel prices going up have an inverse corelation to growth in air demand.
  • 1st – Boeing Here we see the world demand by type of aircraft Stats – AirbusAs a matter of fact Single Aisle or narrowbody planes compose… Single Aisle planes? – 737 and 757. Airbus – A320Another trend that we can see is that a large part of this demand is for new generation aircraft, which use fuel-efficient engines. 70% of the fleets in the world are now composed of fuel efficient aircraft like the new A320 and the 737MAX.Graph – AirbusAdditionally this demand of aircraft is largely coming from emerging and developing nations. Mention What the BRIC economies are!!!
  • 1st – Boeing Here we see the world demand by type of aircraft Stats – AirbusAs a matter of fact Single Aisle or narrowbody planes compose… Single Aisle planes? – 737 and 757. Airbus – A320Another trend that we can see is that a large part of this demand is for new generation aircraft, which use fuel-efficient engines. 70% of the fleets in the world are now composed of fuel efficient aircraft like the new A320 and the 737MAX.Graph – AirbusAdditionally this demand of aircraft is largely coming from emerging and developing nations. Mention What the BRIC economies are!!!
  • 1st – Boeing Here we see the world demand by type of aircraft Stats – AirbusAs a matter of fact Single Aisle or narrowbody planes compose… Single Aisle planes? – 737 and 757. Airbus – A320Another trend that we can see is that a large part of this demand is for new generation aircraft, which use fuel-efficient engines. 70% of the fleets in the world are now composed of fuel efficient aircraft like the new A320 and the 737MAX.Graph – AirbusAdditionally this demand of aircraft is largely coming from emerging and developing nations. Mention What the BRIC economies are!!!
  • 1st – Boeing Here we see the world demand by type of aircraft Stats – AirbusAs a matter of fact Single Aisle or narrowbody planes compose… Single Aisle planes? – 737 and 757. Airbus – A320Another trend that we can see is that a large part of this demand is for new generation aircraft, which use fuel-efficient engines. 70% of the fleets in the world are now composed of fuel efficient aircraft like the new A320 and the 737MAX.Graph – AirbusAdditionally this demand of aircraft is largely coming from emerging and developing nations. Mention What the BRIC economies are!!!
  • A trend we can see in this PWC graph, the US is that a large part of our military technology and aircraft is being exported. But where should they go? As GDP grows significantly, usually this allows for more money to be put in a defense budget. As we can see, the expected annual growth of GDP growth is being driven by Asian countries, Africa and Latin America.Boeing Global report
  • A trend we can see in this PWC graph, the US is that a large part of our military technology and aircraft is being exported. But where should they go? As GDP grows significantly, usually this allows for more money to be put in a defense budget. As we can see, the expected annual growth of GDP growth is being driven by Asian countries, Africa and Latin America.Boeing Global report
  • A trend we can see in this PWC graph, the US is that a large part of our military technology and aircraft is being exported. But where should they go? As GDP grows significantly, usually this allows for more money to be put in a defense budget. As we can see, the expected annual growth of GDP growth is being driven by Asian countries, Africa and Latin America.Boeing Global report
  • Research and Markets 2015 outlook predicts it to be a highly potential market after the recession. WAs the biggest defense budgets are declining, we need to look for opportunities in the rising nations.
  • Research and Markets 2015 outlook for A & D reported that despite the recession, this is a highly potential industry. While the US represent the biggest aerospace market in the world (followed by France, UK, Germany, and Canada), developing nations like China, India, Mexico and Brazil are expected to emerge as potential market places for aerospace products. 1. Brazil increase defense budget, starting to build competitive aircraft and technology in Sao Paulo2. China second place to US in second in global defense spending and has biggest demand of large aircraft. In need of solutions for growing pollution problem and high energy demands3. Mexico developed manufacturing niche ( 12 big companies paid visit to Tijuana to scope out aerospace market there)4. India has top demand for R& D. India has joined hands with Russia in the Russian-Indian Scientific and Technological Centre. They are working towards creating missiles as well as commercial aircraft. 5. United states 3rd target for manufacturing, biggest defense budget world-wide
  • Let’s just quickly see what the world sees when they think of Brazil in recent years….
  • This is all great, and it’s true that Brazil was a nation growing greatly, up to a 7% growth in 2010, millions of newly emerged middle class workers and an oil reserve that was discovered. However, in resent years the growth has slowed. In 2011, Brazil grew no more than mexico despite thriving factors and it is not expected to do better in the next couple of years. Additionally, its expensive taxes, especially those on imports, makes it hard for multinational or international companies to compete in Brazil. http://www.rosalienebacchus.com/articles/UnderstandingBrazilsTaxesOnImports_031210.html
  • This is all great, and it’s true that Brazil was a nation growing greatly, up to a 7% growth in 2010, millions of newly emerged middle class workers and an oil reserve that was discovered. However, in resent years the growth has slowed. In 2011, Brazil grew no more than mexico despite thriving factors and it is not expected to do better in the next couple of years. Additionally, its expensive taxes, especially those on imports, makes it hard for multinational or international companies to compete in Brazil. http://www.rosalienebacchus.com/articles/UnderstandingBrazilsTaxesOnImports_031210.html
  • Swedish Brazilian Resaearch Center --- transport and Logistics, Defence and Security, and Urban development with a focus on energy and the environment. Embraer jets -- http://www.macauhub.com.mo/en/2011/04/06/brazil%E2%80%99s-embraer-signs-agreement-with-chinese-leasing-company/
  • Increasing levels of wealth, pending selection of new aircraft fighter, growthin civil aviation. Air demand has tripled in the past decade. World cup, and olympics 2016 will drive new air demand by and to the country as well. Domestic tourism has doubled since 2006 – euromonitor reportAir demand expected to double – UBM Aviation worldwide limited
  • Increasing levels of wealth, pending selection of new aircraft fighter, growthin civil aviation. Air demand has tripled in the past decade. World cup, and olympics 2016 will drive new air demand by and to the country as well. Domestic tourism has doubled since 2006 – euromonitor reportAir demand expected to double – UBM Aviation worldwide limited
  • Biofuels research opportunitiesProjected commercial orders of 100 Bill by 2030Defense Budget has doubledFighter planePresidential plane
  • Olympic ceremony watched by 15% of the world population2nd Biggest economy in the world PICTURESSSSS.May see a growth rate of 7.5% in 2012, has been growing an average of 11% --- Source: Eureka ReportAdd a growing china
  • Olympic ceremony watched by 15% of the world population2nd Biggest economy in the world PICTURESSSSS.May see a growth rate of 7.5% in 2012, has been growing an average of 11% --- Source: Eureka ReportAdd a growing china
  • 20 of the 30 most polluted cities in the world are in china- cost the country 10% of the country’s GDP"China's tax on the import and leasing of aircraft is higher than most countries in Europe and the US. Many European countries, such as Germany and UK, levy no taxes on aircraft imports, so we are considering cutting the tax.“government’s plan to increase SEI’s share of GDP by government investment and fiat should yield significant opportunities for foreign companies due to the incentives that will be created for private investment. However, given China’s current drive to develop its indigenous innovation capabilities, these preferential policies may be biased toward domestic firms. Governemnt also has been known to “re-innovate” foreign technology.
  • Comac – still waiting for approval on regional jetA380 -- -wide body plane is biggest competition against the dreamliner. Competing directly with Boeing wide body plane. Boeing still winning – 25 in china, while only 15 A280
  • Stop Taiwan from indepence and prevent US intervention if the issue comes up (page iv)On Marc11.2 percent increase h 4, 2012, Beijing announced an in its annual military budget to roughly $106 billion. "is increase continues more than two decades of sustained annual increases in China’s announced military budget (page 6)PLA Air Force is attempting to increase its longrange transportation and logistics capabilities, to achieve greater strategic projection. HMost of the current military aircraft in China today are domestic, with a trend of adapting “re-making” other technologies such as: “China is also finalizing a tactical bomber H-7. JH-7 (Jianhong-7) is meant to replace the Q-5 attack aircraft, which is in fact a remake of the Soviet MiG-19. JH-7 is markedly superior on a number of indicators.”
  • Stop Taiwan from indepence and prevent US intervention if the issue comes up (page iv)On Marc11.2 percent increase h 4, 2012, Beijing announced an in its annual military budget to roughly $106 billion. "is increase continues more than two decades of sustained annual increases in China’s announced military budget (page 6)PLA Air Force is attempting to increase its longrange transportation and logistics capabilities, to achieve greater strategic projection. HMost of the current military aircraft in China today are domestic, with a trend of adapting “re-making” other technologies such as: “China is also finalizing a tactical bomber H-7. JH-7 (Jianhong-7) is meant to replace the Q-5 attack aircraft, which is in fact a remake of the Soviet MiG-19. JH-7 is markedly superior on a number of indicators.”
  • Forecasted to be the 2nd Largest market for new airplanes after the US– boeingThe 12th Five-Year Plan lists aerospace as a symbol and target of China’s “high-value” ambition.- 55 new airports buing built and new local competitors beginning to play a part in the industry. (COMAC)About 40 percent of the demand for twin aisleswill come from the Asia Pacific region. Increasing liberalization andthe region’s vast geography will promote the opening of new airroutes between a growing number of origins and destinations.Asia leads demand for large airplanesApproximately 43 percent of large airplane deliveries overthe next 20 years are expected to go to Asia, with China andSoutheast Asia accounting for most of the delivery demand.
  • Forecasted to be the 2nd Largest market for new airplanes after the US– boeingThe 12th Five-Year Plan lists aerospace as a symbol and target of China’s “high-value” ambition.- 55 new airports buing built and new local competitors beginning to play a part in the industry. (COMAC)About 40 percent of the demand for twin aisleswill come from the Asia Pacific region. Increasing liberalization andthe region’s vast geography will promote the opening of new airroutes between a growing number of origins and destinations.Asia leads demand for large airplanesApproximately 43 percent of large airplane deliveries overthe next 20 years are expected to go to Asia, with China andSoutheast Asia accounting for most of the delivery demand.
  • Forecasted to be the 2nd Largest market for new airplanes after the US– boeingThe 12th Five-Year Plan lists aerospace as a symbol and target of China’s “high-value” ambition.- 55 new airports buing built and new local competitors beginning to play a part in the industry. (COMAC)About 40 percent of the demand for twin aisleswill come from the Asia Pacific region. Increasing liberalization andthe region’s vast geography will promote the opening of new airroutes between a growing number of origins and destinations.Asia leads demand for large airplanesApproximately 43 percent of large airplane deliveries overthe next 20 years are expected to go to Asia, with China andSoutheast Asia accounting for most of the delivery demand.
  • Forecasted to be the 2nd Largest market for new airplanes after the US– boeingThe 12th Five-Year Plan lists aerospace as a symbol and target of China’s “high-value” ambition.- 55 new airports buing built and new local competitors beginning to play a part in the industry. (COMAC)About 40 percent of the demand for twin aisleswill come from the Asia Pacific region. Increasing liberalization andthe region’s vast geography will promote the opening of new airroutes between a growing number of origins and destinations.Asia leads demand for large airplanesApproximately 43 percent of large airplane deliveries overthe next 20 years are expected to go to Asia, with China andSoutheast Asia accounting for most of the delivery demand.
  • Forecasted to be the 2nd Largest market for new airplanes after the US– boeingThe 12th Five-Year Plan lists aerospace as a symbol and target of China’s “high-value” ambition.- 55 new airports buing built and new local competitors beginning to play a part in the industry. (COMAC)About 40 percent of the demand for twin aisleswill come from the Asia Pacific region. Increasing liberalization andthe region’s vast geography will promote the opening of new airroutes between a growing number of origins and destinations.Asia leads demand for large airplanesApproximately 43 percent of large airplane deliveries overthe next 20 years are expected to go to Asia, with China andSoutheast Asia accounting for most of the delivery demand.
  • Polution: China’s skies, waters and even sources of food are some of the most poisonously contaminated on Earth. Its efforts to curtail pollution and develop cleaner energy sources are some of the world’s most ambitious.Air traffic delays: Inefficient air-traffic control and airspace use is the main reason flights are more often delayed in China than in other major aviation countries; why their scheduled travel time, per mile flown, is much longer than in North America or Europe; and why they burn up to twice as much fuel per passenger mile in some stages of flight as their counterparts in Europe or North America.Bio fuel testing: In the effort to develop lower-carbon sources of aviation fuel, China has become the locus for efforts by Boeing and others to extract fuel more efficiently from biological sources. The concept is not a mystery. Algae, like some more complex plants, produce hydrocarbons that can be converted to a form of oil. Whatever biofuel the aviation industry creates must have the same “energy content” as current fuels, so that aircraft as big and heavy as today’s can fly at comparable speeds. It must be compatible with the design and technology of current jet engines. It must be compatible with the existing worldwide infrastructure of fuel storage and distribution. And—trickiest of all—it must be interchangeable with today’s jet fuel, which is stockpiled at airports around the world.

International Boeing International Boeing Presentation Transcript

  • International Market Analysis Deep-dive: Brazil and China 1
  • Objectives • Analyze the Aerospace and Defense outlook globally.• Investigate opportunities for Boeing the emerging nations of China and Brazil. 2
  • Agenda• Global trends and considerations > Commercial industry > Defense Industry > Countries to target• Deep Dive Brazil/China > Country Overview > Competition and Boeing > Defense Strategy > Commercial outlook > Insight > SWOT summary 3
  • GLOBAL TRENDS ANDCONSIDERATIONS 4
  • Commercial IndustryOverall outlook… 5
  • Commercial IndustryAir Resiliency +45% In the past 10 years. This is despite 3 major world crises. 6
  • Commercial IndustryWhat this means in profits: +45% 7
  • Commercial IndustryJust in the past couple of years: Notable Purchases Paris Show 2011: Airbus receives a record+45% number of orders. 74 Billion won. Singapore Airshow 2012: Lion Air has largest single order in aviation history: $22.4 Billion. 380 Boeing planes. Farnsborough 2012: Boeing finishes with $37 Billion won. 8
  • CommercialWhat drives Air Demand? > GDP growth > International Trade and Deregulation > Government Support and Subsidies > Fuel prices 9
  • CommercialBuying Trends and Forecast 1. Single Aisle planes still leading the way! 10
  • CommercialBuying Trends and Forecast 1. Single Aisle planes still leading the way! Single Aisle Planes Represent: 87% of all routes traveled today 71% of all deliveries through 2030 11
  • CommercialBuying Trends and Forecast 2. BRIC and Developing nations generating most traffic 12
  • CommercialBuying Trends and Forecast3. New Generation Engines making up most of the worlds fleets! 13
  • CommercialInsight> Commercial Air is still agrowing market> Commercial aircraftmarket is looking for fuelefficiency- Improved Air Traffic- Bio fuels- Fuel efficient aircraft • 787, 737MAX> Single Aisle plane demandis not decreasing • 737, best selling jetThe good news: Boeing has all ofthese solutions already. 14
  • Defense Industry BRIC Nations growing US Recession and Eurocrisis 15
  • Defense Industry US Exporting more and more military equipment 16
  • Defense IndustryDefense budget growth is dependent on GDP Growth. Who’s growing? BRIC Nations growing US Recession and Eurocrisis 17
  • Defense Insight• >US and Europe defense budget declining. Capitalize on growing economies with rising defense demands, and bigger GDP allotment.• >The BRIC nations, (especially Brazil, India and China) have growing needs for defense aircraft but are still only beginning to create domestic military aircraft technology. 18
  • A & D INSIGHT: MARKETS TOTARGET A& D continues to globalize to every corner of the world, such as: Brazil China • Mexico • India/Russia • USA 19
  • BRAZIL DEEP DIVE 20
  • Country Overview 21
  • Country Overview• Before 2010• Emerging Market > 35 Million Brazilians climbed to the middle class in recent years• Oil Reserves found, increasing country value 22
  • Country Overview• Today‟s Market Slowed economic growth > Projections around 3.0% yearly for the next decade > “I don‟t see how Brazil can ever grow 5% per year unless you change the Brazilian people.” – Brazilian National Development Bank and the countrys communications minister Carlos Mendonca de Barros• Expensive Nation > Big taxes, especially on imports 23
  • Competitive LandscapeAirbus Dassault Embraer SAAB Boeing• 33% of • Candidate in • Swedish- • Working with •Cooperating Brazilian Brazilian fighter plane with Boeing in Embraer on Fleet in 2011 contract. KC-390 Research and KC-390 Innovation • Currently use transport • Fighter Jet •3rd commercial Centre Dassault contract fight manufacturer • Financially fighter plane. • Research in the world investing in center in Sao •43% market domestic Paulo share of engineer regional jets Akaer • 34% of Brazilian fleet 24
  • Commercial Air Market x3 Air Demand in the past decade Why? x1.5 Revenue for airlines since 2003 Expected to Rise x2 Domestic tourism since 2006 2 of the biggest world events happening in the next 4 years 25
  • Commercial Air Market x3 Air Demand in the past decade Why? x1.5 Revenue for airlines since 2003 Expected to Rise x2 Domestic tourism since 2006 2 of the biggest world events happening in the next 4 years 26
  • Defense Strategy Prioritize Amazon Region • Want to independize from GPS system • Integrate all aerospace monitoring Airforce Development • Substitute current fighter plane Prioritize Air Surveillance Develop Satellite technology Acquire new presidential plane 27
  • Strengths Weaknesses• Strongest Economy in Latin America • Economy is finally reaching a slump• Becoming a center for World Events in growth.Country SWOT• Increasing defense budget as it • Difficult to tell if air travel will grow becomes a bigger world power. after world events in Brazil plateau in 2016.Opportunities Threats • If economy continues to slump, so will defense budget. • SAAB and Dassault already established in the countryDomestic and • Controversial situation involving Bio-Fuels BiofuelInternational Tourism Research Presidential Fighter Plane in Amazon. Plane • With growing Aerospace industry, domestic aircraft is a possibility 28
  • OpportunityDomestic and BiofuelInternational Presidential Research Fighter Plane Tourism Plane 29
  • CHINA DEEP DIVE 30
  • Country Overview 31
  • Country Overview Region/Country Average Growth (%) Contribution to 2006-2011 Global Growth World growth 3.7 3.7 Developing world 6.7 3.3 China 11 1.7 US .9 .2 32
  • Country Overview> High tax on import and leasing of aircraft.> Widely known for “Renovating” other countries‟ technologies> Pollution costs china 10% of its GDP 33
  • Competitive LandscapeAirbus Comac Northrop Boeing• 40% of market • Will be among Grumman • 48% of market share in 3 largest share in commercial air. •Awarded with commercial air manufacturer. contract in „10 to• A380 is the • Boeing and biggest • Plans to build provide ATC COMAC Create equipment competition for regional jet as Energy Boeing. well as twin Technology aisle planes Center in Beijing • China‟s military currently using 737 34
  • Defense Strategy Preserving Communist Party Stop Taiwan from gaining independence as a nation Prevent US intervention from helping china 35
  • Defense Strategy Preserving Communist Party Stop Taiwan from gaining independence as a nation Prevent US intervention from helping china 36
  • Defense Insight• > While relations with China are growing, it is noteworthy to point out that even in their national defense strategy they are weary of the US.• > Increase of defense budget, the political environment for Boeing to target China as a client does not seem promising. 37
  • Commercial Aircraft Expected to Rise 38
  • Commercial Aircraft Why? Expected to 2nd Largest market for new Rise airplanes x2.5 Air Traffic since 2010 55 New airports being built 5-7% Forecasted growth per year 39
  • Commercial Aircraft 40
  • Commercial Aircraft Expected to Rise China is increasing Twin Aisles and Large Aircraft. Maintaining Regional Jets stagnant. 41
  • Commercial Aircraft 42
  • Commercial Aircraft Insight• >With 55 new airports, air traffic increasing, and an emerging middle class the possibilities are growing for Boeing in China.• >The threat of new domestic entrants, like Comac is likely. Capitalize on products China lacks domestically > Twin Aisle, Large Aircraft, and Regional Jets 43
  • Strengths Weaknesses• 2nd Biggest economy in the • Communist nation and taxes on world and growing. importsCountry SWOT• 2nd Biggest aerospace market in • Far wider support for domestic companies and technologies than the world foreign• Growing defense budget • Weary of US government • Known to copy technologyOpportunities Threats • Comac forecasted as 3rd most competitive aircraft manufacturer. Pollution Air Traffic Regional • Airbus owns large percent of Biofuel Jets and Delays Testing Twin Aisle the marketshare. Planes 44
  • Opportunities Air Traffic Regional Pollution Biofuel Jets and Delays Testing Twin Aisle Planes 45
  • Overall…Globally Brazil China• Commercial air • Economic growth • Becoming extremely industry rising slowing powerful in the world• Defense industry • Room to grow in • Are not looking for reorganizing and domestic and international help in changing international flights defense • Prioritizing defense • Are becoming more competitive with local commercial air company 46
  • Questions? 47