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Aerospace Futures Alliance | BCA Business Strategy and Marketing
Commercial AviationMarket Outlook
Mike BairVice President – Business Strategy and MarketingCommercial AirplanesThe Boeing Company
June 25, 2008
Copyright © 2008 Boeing. All rights reserved. 04/13/23
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Aerospace Futures Alliance | BCA Business Strategy and Marketing
The Boeing Company
World’s leading aerospace company153,000 employees in 48
U.S. states and 70 countries2007 revenue: $65 billionCustomers in more than
90 countriesSecond largest U.S. defense
contractorSuppliers in 100 countriesOne of largest U.S. exporters and
in top twenty U.S. importers
Partnering worldwide for mutual growth and prosperity
Copyright © 2008 Boeing. All rights reserved. 04/13/23
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Aerospace Futures Alliance | BCA Business Strategy and Marketing
Boeing Growth Perspective 1996 - 2006
1996 Revenue $23B
CommercialAirplanes
75%
Integrated Defense Systems
25%
Boeing…the global leader in aerospace
CommercialAirplanes
47%
Integrated Defense Systems
53%
2006 Revenue $61.5B
OrganicGrowth
Copyright © 2008 Boeing. All rights reserved. 04/13/23
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Aerospace Futures Alliance | BCA Business Strategy and Marketing
Boeing Employment In Washington –75,561 Employees
Auburn/Fredrickson7,021
Kent4,008
Everett31,102
Mukiteo712
Renton/Tukwila21,666
Seattle5,782
Seatac1,564
East Side3,478
As of May, 2008
Other62
Moses Lake8
Spokane34
McChord AFB124
Copyright © 2008 Boeing. All rights reserved. 04/13/23
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Aerospace Futures Alliance | BCA Business Strategy and Marketing
Boeing Enterprise Supplier Footprint ---- Washington State, By County
5 – 15 suppliers$1250 – 1750k
5 – 15 suppliers$1250 – 1750k
> 5 suppliers> $100k
> 5 suppliers$70 – 80 mil
25-35 suppliers$4500-5000k
5 – 15 suppliers$10 – 12 mil
> 5 suppliers$200-400k
> 5 suppliers> $100k
> 5 suppliers> $100k
> 5 suppliers$200 – 400k
10 - 20 suppliers$3250 – 3750k
15 – 25 suppliers$100 – 300k
0 - 10 suppliers$300 – 500k
1950-2050 suppliers$2700 - 2720 mil
15 - 25 suppliers$100 - 120 mil
> 5 suppliers$500 - 700k
5 - 15 suppliers$1500 – 2000k
> 5 suppliers> $100k
310-330 suppliers$280 - 300 mil
> 5 suppliers> $100k
25 - 35 suppliers$10 – 12 mil
370 - 390 suppliers$750 – 770 mil
40 - 50 suppliers$180 - 200 mil
> 5 suppliers> $100k
60 - 70 suppliers$4000 – 4500k
> 5 suppliers> $700 – 900k
15 - 25 suppliers$1750 – 2250k
5 - 15 suppliers$1250 – 1750k
10 - 20 suppliers$26 – 28 mil
3150 - 3250 Suppliers $4,050 – 4,070m Annual Spend2007
Copyright © 2008 Boeing. All rights reserved. 04/13/23
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Aerospace Futures Alliance | BCA Business Strategy and Marketing
Airlines Will Need Over 29,300 New Airplanes over the next 20 years
29,370 airplanes
9%
23%
65%
747 and largerTwin-aisleSingle-aisleRegional jets
3%
$3.2T
2007 delivery dollars
43%
9%
46%
2%
Copyright © 2008 Boeing. All rights reserved. 04/13/23
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Aerospace Futures Alliance | BCA Business Strategy and Marketing
Market for new airplanes set to become more diversified
Latin America
6%
Middle East5%
Africa2%
C.I.S.3%
Europe24%
Asia-Pacific
31%
North America
29%
Where they’ll go How they’ll operate
Freighters 3% Charter/IT3%
Low Cost18%
IntermediateNetwork
29%
Broad Network47%
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Aerospace Futures Alliance | BCA Business Strategy and Marketing
Strong backlog validates Boeing’s product strategy
$255
$174
$124
$70
$271
0
50
100
150
200
250
300
2004 2005 2006 2007 1Q08
Backlog $Backlog $
$ Billions
ModelModel
Single-Aisle31%
Twin-Aisle61%
Large8%
747
777
737
767
787RegionRegion
Americas
Europe
Leasing Leasing & Gov't& Gov't
S.E.Asia
Middle East
& Africa
Asia-Pacific
China & East Asia
Russia
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Aerospace Futures Alliance | BCA Business Strategy and Marketing
Boeing and Our Competition
Single-Aisle126-200+ Seats
Large400+ Seats
Twin-Aisle230-399 Seats
SmallSingle-Aisle90-125 Seats
Regional30-89 Seats
Russian (Sukhoi) Superjet 100
Chinese (AVIC1) ARJ21
Updated 04/01/08
Bombardier CSeries
Bombardier CRJ1000
Bombardier CRJ 700/900
Japanese (MHI) MRJ
Bombardier CRJ 200
Embraer 190/195
Embraer 170/175
Embraer ERJ 135/140/145
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Aerospace Futures Alliance | BCA Business Strategy and Marketing
Boeing is working with the industry to address important environmental issues facing aviation
Working with industry partnersto research and demonstrate sustainable alternative lowcarbon life cycle fuels
Initiated first comprehensive airplane recycling program — Aircraft Fleet Recycling Association
Promoting and demonstratingair traffic management improvements
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Aerospace Futures Alliance | BCA Business Strategy and Marketing
Near term assessment for commercial aviation
Weakening U.S. economy, tightening credit markets impacting passenger traffic growth
Airline operating environment remains challenging– Fuel prices– Environmental pressures– Congestion
Airline profitability under pressure; recent bankruptcies
Liberalization continues
Significant replacement demand
Copyright © 2008 Boeing. All rights reserved. 04/13/23
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Aerospace Futures Alliance | BCA Business Strategy and Marketing
BCA Cyclical Workforce History
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YEARS
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Aerospace Futures Alliance | BCA Business Strategy and Marketing
Things to remember
•Long-term market outlook is strong
•Near term challenges persist, but data suggests a longer, stronger delivery up-cycle
•Boeing product strategy is focused on meeting passenger and airline requirements
•Environmental pressures will increase