1. AEROSPACE
INDUSTRY OUTLOOK
MAY 2013

2. Mise en garde concernant les énoncés prospectifs
• La présentation qui suit contient des énoncés prospectifs. Les énoncés prospectifs se reconnaissent habituellement à l’emploi de termes comme
« pouvoir », « prévoir », « avoir l’intention de », « estimer », « planifier », « entrevoir », « croire », « continuer », la forme négative de ces termes
ou de leurs variations ou une terminologie semblable. En raison de leur nature même, les énoncés prospectifs sont assujettis à d’importants risques
et incertitudes, connus et inconnus.
• Bien que nous jugions les prévisions raisonnables selon l’information dont nous disposons à la date du rapport, la possibilité existe qu’elles ne soient
pas exactes. Ce rapport se fonde sur plusieurs sources externes.
• Parmi les facteurs qui pourraient faire en sorte que les prévisions diffèrent de manière importante de la réalité, notons les risques liés à la
conjoncture économique, la situation financière de l’industrie aérienne, etc. Le lecteur est prévenu que la présente liste de facteurs n’est pas
exhaustive et qu’il ne faudrait pas s’y fier indûment.
Cautionary Notice Regarding Forward-Looking Statements
• The following presentation includes forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking
terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “plan,” “foresee,” “believe,” “forecast” or “continue” or the negatives of these
terms or variations of them or similar terminology. By their nature, forward-looking statements are subject to important known and unknown risks
and uncertainties.
• While we consider these forecasts to be reasonable based on current information available, there is a risk that they may not be accurate. This report
is based on many external sources.
• Certain factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include risks associated
with general economic conditions, risks associated with the business environment (such as the financial condition of the airline industry), etc.
Readers are cautioned that the foregoing list of factors is not exhaustive and undue reliance should not be placed on forward-looking statements.
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3. 1. Market Drivers
2. Aerospace Markets
- Large Jetliners
- Regional Aircraft
- Business Jets
- Helicopters
SUMMARY
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4. • 2012 global passenger traffic growth (RPK)=5.3%. Despite the long-term traffic
growth, airlines increased capacity (ASK) by less than the increase in traffic –
boosting load factors. 2012 performance in line with long term traffic growth of
5%/year. Traffic should double over the next 15 years as it did in the past 15 years.
• Cargo (FTK) a concern -1.5% Y/Y
MARKET DRIVERS
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5. • 2012 traffic growth shows contrast between mature & emerging markets.
MARKET DRIVERS
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6. • Global GDP forecast. Expected growth of 3.3% on an annual average basis in 2013,
about the same as the 3.2% growth seen in 2012. Growth expected to rise to 4.0%
in 2014, assuming recovery takes place in the euro zone economy.
MARKET DRIVERS
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7. MARKET DRIVERS
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• Private demand in the United States has been
showing strength as credit and housing markets
show positive signs. But larger-than-expected
fiscal adjustment is projected to keep real GDP
growth to about 2 percent in 2013. Canada
dependent on US and commodities.
• In the euro area, real GDP is projected to
contract by about ¼ percent this year before
growing again in 2014. Credit channels are
broken: better financial conditions are not yet
passing through to companies and households
because banks are still halted by poor
profitability and low capital.
• Growth in emerging markets and
developing economies is expected to remain
robust, strengthening from about 5 percent in
2012 to 5.3 percent in 2013 and 5.7 percent in
2014.
Emerging economies taking over half of future
aircraft deliveries.

8. • IATA 2013 commercial airlines net profit forecast: $10.6 billion, up from $7.6 billion
in 2012. $12 billion improvement in revenue and $9 billion increase in costs – most of
which related to fuel.
• Asia-Pacific airlines will generate the highest profits in margins and absolute dollars
this year. North American airlines are expected to be the second most profitable
region, due to consolidation and efficiency gains. Europe continues to lag, largely as a
result of the ongoing recession in home markets.
MARKET DRIVERS
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IATA, March 2013

9. • High load factors and aircraft utilization will be critical if the airline industry is to
improve profits this year in the face of a continuing high cost environment. Jet fuel
prices forecast = $130/b.
• Fuel bill is estimated to rise to $216B in 2013 or 33% of opex (2005=22%). Higher
fuel cost is a major driver for new technology and new plane demand.
MARKET DRIVERS
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10. • Low interest rates have made it easier for airlines to purchase new aircraft by
lowering ownership costs, another key component of airlines’ costs, along with fuel,
labor, and maintenance.
MARKET DRIVERS
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11. • Global airline load factor is historically high. Supports the addition of new aircraft to
meet rising demand.
MARKET DRIVERS
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12. • Replacement is a key source of aircraft demand. Around 28% of the world’s fleet, or
approximately 5,350 aircraft, is over 20 years of age. Another 12% of the fleet
(2,200 aircraft) is aged between 15 and 20 years old. These 7,550 aircraft aged over
15 years will support replacement demand over the next 5-10 years.
MARKET DRIVERS
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13. • In summary, conditions should remain favorable for aircraft demand over the next
few years.
- Traffic growth remains in the historical range of ~5% annually
- airline profitability is improving
- oil prices is in a similar range as the past two years
- interest rates remain low
- favorable replacement demand conditions considering the age of the fleet.
• Of course, a macro shock could change these underlying dynamics dramatically. A
severe recession would lower traffic growth to a point where current production plans
are no longer viable. A terrorist attack involving aircraft or the outbreak of an
epidemic, such as SARS, could quickly depress aircraft demand. Ultimately, we expect
the aircraft industry to remain a cyclical one and for changes in the demand
environment to result in a downturn one day.
MARKET DRIVERS
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14. • Performance of market segments varies widely over time. Large jetliners demand
remains strong over all periods.
AIRCRAFT MARKETS
7.40%
12.00%
29.40%
17.10%
-6.30%
5.70%
4.40%
-9.60%
-12.60%
17.20%
-5.40%
7.60%
9.70%
5.20%
20.40%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
2003-2008 2008-2012 2011-2012
Large Jetliners ($88.1 b)
Business Aircraft ($19.9 b)
Regionals ($6.2 b)
Civil Helicopters ($4.9 b)
All Civil ($119 b)
Worldwide Deliveries, CAGR, 2013 $ Value
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Source: Teal Group, 2013

15. • Large jetliners demand remains strong: High fuel prices make newer jets more
competitive, strong emerging markets, low interest rates. 2,252 orders and 1,189
deliveries in 2012. 2,529 orders and 1,011 deliveries in 2011.
• Backlogs at Boeing and Airbus support plans to increase rates. Airbus backlog=4,883.
Boeing=4,302. About eight years worth of production.
LARGE JETLINERS > 100 SEATS
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16. LARGE JETLINERS
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• 53% of backlog coming from emerging countries in 2012 (19% in 2000).

17. LARGE JETLINERS
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• Delivery forecast 2012-2016 (units). 20% growth.
Source: J.P. Morgan 2013

18. • Regional aircraft was the one segment of the
aviation business that grew the least during
the 2003-2008 boom market. In
1989, regional aircraft deliveries were 15%
of the total world transport market by value.
In 2011, they were 9.5%.
• 208 regional jets delivered in 2008 vs 97 in
2012.
• The only part of this market that has enjoyed
growth in the past decade is
turboprops, because of high fuel prices.
• Teal Group forecasts production of 2,993
regional aircraft between 2012 and 2021.
This includes 1,843 regional jets and 1,150
turboprops. Production during the 2002-2011
period totaled 3,240 aircraft comprising
2,460 regional jets and 780 turboprops.
REGIONAL AIRCRAFT < 100 SEATS
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Source: Teal Group, 2012

19. REGIONAL AIRCRAFT < 100 SEATS
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• Orders activity coming from US carriers. Age a catalyst. US carriers to take
advantage of pilot scope clause relief to refleet – replacing 50-seater planes with
more fuel-efficient 76+ seater planes. Delta placed order for 40 CRJ900s in early
December with option for 30 more. United order (30 E-175). Republic order (47 E-
175). Mitsubishi wins SkyWest order (100).
• American Airlines’ and USAir’s merger could open door for additional 70+ seaters.

20. • Bombardier deliveries – jets and props. 60% drop between 2008 and 2012. Slight
growth planned for 2012: 55 units (+10%).
• BBD doing better in terms of orders in 2012 with 123 net orders (73 CRJ and 50
Q400). Compared to only 11 orders in 2011. Embraer only 23 net orders in 2012 (86
in 2011). ATR 62 net orders (119 in 2011).
REGIONAL AIRCRAFT < 100 SEATS
0
20
40
60
80
100
120
140
66
54 61 56 45 36
55
62
56
60
41
33
14 CRJ
Q-Series
Units
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21. • CRJ backlog in 2012=107 units (39 CRJ1000, 15 CRJ700, 53 CRJ900). Challenge for
BBD: filling the skyline for Q400. BBD backlog not achieving production targets for
Q400. 13 months of production vs 18-21 months goal.
• Q400 more expensive than ATR. Good for developed market where
speed, size, comfort and range are important. Hard times winning orders in emerging
markets (price driven). BBD may come up with less expensive product to compete.
REGIONAL AIRCRAFT
48
214
290
65
24
224
107
154
305
170
38
221
0
50
100
150
200
250
300
350
BBD CRJ Embraer ARJ21 MRJ BBD
Q400
ATR
2011
2012
Regional Aircraft Backlog, December 31
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22. REGIONAL AIRCRAFT
• Many new entrants in a small market. Sukhoi Superjet 100, Comac ARJ 21, Mitsubishi
MRJ. Pricing pressure.
• BBD focused on the small end of the narrowbody market to compensate (CSeries).
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Source: Embraer, 2013

23. • 2012 deliveries down 1% y/y and 33% from 2008 peak of 1,136. OEMs delivered 678
jets in 2012, down 8 units y/y. By value, however, shipments were slightly up
because of a higher contribution from Heavy jets. Light jets and Medium jets lost
share by volume, dropping to 38% and 19% of the market, respectively, while Heavy
jets gained market share, increasing to 43% of the market.
BUSINESS JETS
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24. • Business jet demand has not recovered with corporate profits this time. 2013 US
corporate profits will be up ~50% from 2008, whereas bizjet deliveries have yet to
turn up much. The stigma attached to bizjets during the recent recession and a focus
on cost-cutting among corporate customers are two reasons why demand is lagging
corporate profit growth.
• Will probably need to wait at least until 2016 before coming back to 2008 delivery
levels. 2013 forecast: +5%. Higher growth expected in 2014.
BUSINESS JETS
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Source: J.P Morgan, 2013

25. • Overall industry backlog not growing.
BUSINESS JETS
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26. • Bombardier still maintains no.1 position in the market.
BUSINESS JETS
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27. • Bombardier deliveries. 3rd year of growth. +10% in 2012. 179 jets: Learjet 39 units
(33 in 2011), Challenger 86 units (79), Global 54 units (51). Bizjet is 53% of total
aerospace revenues.
• +6% expected in 2013.
BUSINESS JETS
0
50
100
150
200
250
FY07-08 FY08-09 FY09-10 FY10-11 2011 2012 2013
Budget
232 235
176
154 163
179
190
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28. • Bombardier net orders: +80% in 2012. Good momentum. NetJets=100 Challenger
jets, VistaJet=56 Global, AVWest=5 Global 6000, 32 Global 6000-8000 from 5
undisclosed clients. Global family boasts 3 years of backlog .
BUSINESS JETS
-100
0
100
200
300
400
500
FY07-08 FY08-09 FY09-10 FY10-11 2011 2012
452
251
-85
108
190
343
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29. • Bombardier backlog has surpassed competitors’ backlog over the last 3 years.
BUSINESS JETS
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Source: Bombardier, 2013

30. HELICOPTERS
• Deliveries of new civilian-use helicopters should increase from 4,900 to 5,600 over
the next five-year, 2013 to 2017. 4,300 deliveries from 2008-2012. The forecast
shows improved purchase plans for new helicopters in every region of the world.
North American buying plans increased for the first time in half a decade.
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Source: Honeywell Survey, 2013

31. In Summary
• Large Jetliners: Strong demand. Solid backlog.
• Regional Aircraft: Good demand for turboprops. Jet demand soft. Pricing pressure.
More orders to come from US carriers.
• Bizjet: Recovery not happening as fast as expected. Will probably need to wait at
least until 2016 before coming back to 2008 delivery levels. BBD doing well.
• Civilian Helicopter: Positive trend 2013-2017.
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32. SOURCES
• J.P. Morgan
• PWC
• National Bank Financial
• Desjardins
• Teal Group
• McKinsey
• Bombardier
• Pratt & Whitney
• GE Aviation
• Embraer
• Boeing
• Airbus
• Honewell
• Aviation Week
• Flight
• Capital IQ
• Speednews
• Etc.
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