Presentation to National Academies Aeronautics Research and Technology Roundtable Washington, DC Richard Aboulafia Vice President, Analysis

Transcription

1 The Great Jetliner Hope Issues In Civil Aviation Competitiveness Presentation to National Academies Aeronautics Research and Technology Roundtable Washington, DC Richard Aboulafia Vice President, Analysis Teal Group Corporation February 2012

2 Aircraft Markets, Through Good And Bad Years Worldwide Deliveries By 2012 $ Value CAGR CAGR Change Change Large Jetliners 7.6% 6.5% 20.8% 8.0% Business Aircraft 17.5% -13.7% -35.8% -10.7% Regionals 4.1% -10.1% -27.3% -2.0% Civil Rotorcraft 17.1% -7.6% -21.2% 3.8% Military Rotorcraft 87% 8.7% 13.5% 46.2% 12.6% Fighters 1.5% 7.4% 23.9% 4.5% All Civil 9.8% -0.2% -0.7% 3.7% Total 8.1% 1.7% 5.2% 3.8%

3 Our Forgotten Nemesis...Cyclicality (Value in '12 $Bns) $70 $60 Large Jetliner Deliveries By Value %CAGR 7.6% 20.8% CAGR $50 $40 $30 $20 $ % CAGR; -65% peak-trough % CAGR % CAGR; -45% peak-trough % CAGR; -41% peak-trough % CAGR; -28.8% peak-trough OR % CAGR; -37.3% peak-trough $0 '59 '63 '67 '71 '75 '79 '83 '87 '91 '95 '99 '03 '07 '11

4 GDP Year/Year Growth Rates 10% 8% 6% 4% 2% 0% -2% -4% '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11f Source: Morgan Stanley World EU US Asia Ex-Japan

5 Historical Jetliner Orders And Deliveries Four Great Book-To-Bill Years, Followed By A Cliff Dive; Good Recovery, But Driven By Long-Term Orders (Number of aircraft) 0 '69 '71 '73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 Deliveries Net orders All Airbus and Boeing aircraft

6 What s Different With This Cycle High fuel prices. Stronger emerging markets. Government export credit finance. From 15% to ~35%. Other government support (sovereign funds, government banks and airlines). Global flight to safe assets ( excessive demand?). Need to forestall emerging g competition? The primes really need cash. With declining defense, everyone needs a growth story.

7 Y/Y Traffic: Nice Recovery; Cargo A Concern 2011Totals:RPKs69%ASKs82%FTKs-06% 6.9%, 8.2%, -0.6% 30% 20% 10% 0% -10% -20% Jul '08 Sep Nov Jan '09 Mar May Jul Sep Nov Jan '10 Mar May Jul Sep Nov Jan '11 Mar May Jul Sep Nov Dec Source: IATA RPKs ASKs FTKs

8 Do You Believe In Super Cycles? History And OEM Plans For Large Jet Transport Deliveries By Value (Value in '12 $ Bns) $100 $80 $60 $ % CAGR 184.3% Growth % CAGR 112.7% Growth % CAGR, 175.1% Growth; % CAGR $20 $0 '59 '63 '67 '71 '75 '79 '83 '87 '91 '95 '99 '03 '07 '11 '14f

9 Comparative Order Values (Value in '12 $bns) Boeing Airbus Bombardier

10 Comparative Delivery Values 40.0 (Value in '12 $bns) Boeing Airbus

11 Comparative Backlog Values (Value in '12 $Bns) Mid '97 Mid '01 End '04 End '05 End '06 End '07 End '08 End ' End '10 En End '11 Boeing Airbus Bombardier

12 70 Jetliner Segment Deliveries Single Aisles--Two Families--Were 54% Of 2011 Deliveries, 53% Of Deliveries i (Deliveries By Value In '12 $bns) '73 '75 '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 Single Aisle 200/ / Mainline only

13 Boeing Commercial Aircraft IR&D: Hitting New Heights 16 (% of Sales) (IR&D in then-year $ Bns) '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 ' As % of BCA Sales BCA IR&D

14 Airbus Commercial IR&D...Just Getting Started With A350XWB, A320neo 12 (% of Sales) (IR&D in then-year euro mns) '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10e As % of Airbus Sales Airbus IR&D

15 Market Share Outlook By Deliveries Value (Value in '12 $Bns) Assumes A350 XWB EIS 2Q '77 '79 '81 '83 '85 '87 '89 '91 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 Boeing Airbus Douglas/Lockheed Bombardier/COMAC

16 US Jetliner Industrial Policy Today The former approach: no direct aid, but some cash for advanced, high-risk R&D. The new approach: lots of direct aid, less cash for advanced R&D. Manifestation: Ex-im bank jetliner transaction funding, now augmented by supplier aid program. Transaction funding goal is level playing field. That s valid, but nobody seems to want to disarm.

17 Regional Market Entrances Possible; Exits More Common $10 (Value of deliveries in '12$ Bns) $8 $6 $4 $2 $0 '93 '95 '97 '99 '01 '03 '05 '07 '09 '11 '13 '15 '17 '19 '21 Bombardier Embraer Other ATR Saab BAE Fokker MRJ SuperJet ARJ21

18 Business Jet Manufacturer Market Shares By Deliveries Value, Vs % 30% 25% 29.9% 32.8% 26% 29.7% 20% 15% 10% 5% 0% 18% 16.4% 13.9% 10.5% 8.4% 6.2% 6.4% 1% 0.4% 0.6% Bombardier Hawker Dassault Cessna Gulfstream Embraer Other Excludes jetliners, RJs, turboprops '02-11 '12-21

19 7 Civil Helicopter Deliveries By (2012 $ Bns) Manufacturer '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 Bell Eurocopter Sikorsky AgustaWestland Other

20 The Big Aircraft Builders 200 (Deliveries in '12 $ bns) Other Sikorsky Dassault Finmeccanica Textron Gulfstream Embraer Bombardier Lockheed Martin EADS Boeing

21 Aerospace Trade: Strong US Surplus 100 ($ billions) CAGR: Expor ts 4.4%, 60 Im ports 5.3% '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 Source: US ITC US Aerospace Imports US Aerospace Exports

22 US Aircraft Industry: Global Sources Aircraft Parts Imports To US By Origin (Value in Then-Year $ Mns) '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 Japan Canada United Kingdom France Italy Korea Germany Mexico China Israel Source: ITC NAIC ; top 10 countries (in order, as of 2010)

23 Growth Rates By Supplier Nation Source (To US); Excludes Engine Primes (UK, France, Canada); Largest to Smallest Engines/Parts AC Parts Germany 2.7% 8.5% Japan 9.7% 5.8% Mexico 23.7% 17.1% Italy 14.1% 1% 7.4% Israel 10.4% 12.1% Poland 38.5% 27.2% China 22.0% 23.3% Singapore 18.5% 5.9% Sweden 45% 4.5% 11.5% Belgium 8.4% 10.0% Korea 8.2% 10.0% Total US Imports 37% 3.7% 85% 8.5%

24 Supplier Dynamics China, Mexico growth strong (from low base); otherwise all high skill/high wage countries. If anything, balance shifting back towards high h skill/high h wage countries. Skilled wage inflation in developing economies. Higher freight costs. Trend towards advanced materials. Greater manufacturing automation/capital intensiveness. But, OEMs increasingly able to disaggregate manufacturing. WTO-ATCA remarkably effective ( r-79.pdf ). But greater military export importance means more civil offset work for military contracts.