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BOEING is a trademark of Boeing Management Company.Copyright © 2010 Boeing. All rights reserved.

The statements contained herein are based on good faith assumptions and provided for general information purposes only. These statements do not constitute an offer, promise, warranty or guarantee of performance. Actual results may vary depending on certain events or conditions. This document should not be used or relied upon for any purpose other thanthat intended by Boeing.

Randy TinsethVice President, MarketingBoeing Commercial AirplanesJuly 2010

CURRENT MARKET OUTLOOK


The statements contained herein are based on good faith assumptions and provided for general information purposes only. These statements do not constitute an offer, promise, warranty or guarantee of performance. Actual results may vary depending on certain events or conditions. This document should not be used or relied upon for any purpose other thanthat intended by Boeing.

COPYRIGHT © 2010 THE BOEING COMPANY

Agenda

Current Market Outlook (CMO)

Market trends and realities

20-year forecast


Long-term forecast reflects today’s market realitiesBoeing has publicly issued its Current Market Outlook for more than 40 years. During that time, the Outlook has reflected both sizeable upturns and downturns. Our industry has faced significant market challenges, including the Asian Financial Crisis, SARS, terrorist acts, three major world recessions, two Gulf wars….all clearly with their own dynamics and their own impact on global air travel. What we have learned is that our industry, which is based on the need to transport passengers and freight via our global aviation system, is extremely resilient.

Based on that perspective, as we always do, we have developed the forecast in a manner that considers today’s market environment but, just as importantly, takes a long-term view of the market and the fundamentals that drive commercial aviation. These drivers include economic growth, world trade, market liberalization, new aircraft capabilities, etc.

So, while acknowledging our near-term challenges, let’s take a longer-view look. Over the next 20-years, the basic factors underlying new airplane demand are strong.


Boeing Current Market Outlook

Published since 1964

All jets 30 seats and above

No turbo props

No business jets

Scheduled and nonscheduled flying

Freighters


Entirely web-based CMOhttp://www.boeing.com/commercial/cmo/

Real-time

Interactive

Downloadable

Popular (last 12 months)

Visits: 710,122

Downloads: 259,971


Boeing product forecast in-line with the realities of the market

0%

25%

50%

75%

100%

Boeing forecast2000 – 201922,315 units

RegionalJet19%

Single-aisle55%

Twin-aisle21%

Large5%

*Deliveries 2000 thru May 14, 2010 plus backlog

LargeTwin-aisleSingle-aisleRegional jet

Size category

Airplane demand2000 – Present*

17,796 units

RegionalJet14%

Single-aisle62%

Twin-aisle21%

Large 3%


A380LargeTwin-aisleSingle-aisle

Size category

0%

25%

50%

75%

100%

Airbus forecast2000 – 201914,661 units

Single-aisle55%

Twin-aisle35%

A3809%

Airplane demand2000 – Present*

14,698 units

Different view of the market has led to different strategies

* Deliveries 2000 thru May 14, 2010 plus backlog (passenger jets only, excluding RJs)

Boeing forecast2000 – 201917,318 units

Single-aisle71%

Twin-aisle25%

Large4%

Single-aisle75%

Twin-aisle23%

Large 2%


Agenda



20-year forecast


Single-aisle* demand exceeding expectations

Growth driven by:

Low Cost Carriers

Emerging markets

Replacement demand

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Airbusforecast**

4,726

Boeingforecast

5,228

Airplanedeliveries

6,084

*Single-aisle defined as all single-aisle aircraft >90 seats** Airbus forecast estimated by Boeing from GMF

10-year forecast, 2000 - 2009


Air travel becoming more diverse geographically

58%72%

Air traffic, RPKs (billions)

4,000

6,000

8,000

10,000

12,000

14,000

2009 20290

2,000

1990

Other

China

Asia(excl. China)

Europe

NorthAmerica

45%

Middle East


2029

Emerging business models are growing and gaining market share

Emerging business models

Network& other

Air traffic, RPKs (billions)

4,000

6,000

8,000

10,000

12,000

14,000

2,000

200919900

75%86%

62%

38%

25%

14%

*Emerging business models include LCCs, 6th Freedom Gulf carriers and Chinese carriers


Passengers wanting– and getting– more frequencies and nonstop service

0.8

0.9

1.0

1.1

1.2

1.3

1.4

1.5

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Frequency Growth

Nonstop Markets

Average Airplane Size

Air Travel Growth

August OAG

WorldIndex 2000=1.00

All routes


Long-range twins dominating as airlines meet the demands of their customers

All jets

0

200

400

600

800

1000

1,200

1,400

1,600

1,800

2,000

2,200

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2000-2009Deliveries

8:18:1

Year-end 2009Backlog

7:17:1

Twin-aisles Large Twin-aisles Large


Volatile fuel prices impacting the industry Spot $/Barrel (Brent Crude Oil / Rotterdam Jet Fuel)

Crude Oil

Jet Fuel

Historical data source: EIA

Ended economic viability of small regional jets Forced airlines to Accelerate fleet

renewal Improve non-fuel

cost management Streamline fleet

operations Encouraging

development of alternative fuel sources0

20

40

60

80

100

120

140

160

180

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Averageannualprices

$292000$242001$252002

2003 $292004 $382005 $552006 $652007 $722008 $972009 $62


Market trends and realities summary

Single-aisle airplane demand stronger and more resilient than expected

Emerging markets and business models creating a more diverse and balanced marketplace

Passengers getting what they want-- more frequencies and nonstop service-- spurring strong demand for long-range twins

Rising and volatile fuel prices will continue to change our industry


Agenda



20-year forecast


Market forecast drivers and considerationsTraffic forecastTraffic forecast

7.8

7.5

5.8

6.6

5.1

6.6

7.0

5.6

5.1

3.2

4.1

4.3

4.9

0 2 4 6 8

China

Southwest Asia

Africa

Southeast Asia

CIS

Middle East

South America

Central America

Oceania

North America

Europe

Northeast Asia

WORLD

Annual growth, 2009 - 2028

Percentage

7.8

7.5

5.8

6.6

5.1

6.6

7.0

5.6

5.1

3.2

4.1

4.3

4.9

0 2 4 6 8

China

Southwest Asia

Africa

Southeast Asia

CIS

Middle East

South America

Central America

Oceania

North America

Europe

Northeast Asia

WORLD

Annual growth, 2009 - 2028

Percentage

High speed railHigh speed railEnvironmentEnvironment

Airplane capabilitiesAirplane capabilitiesEconomic growthEconomic growth

Fuel priceFuel price

$70-90/barrel

InfrastructureInfrastructure

Airline strategies &Airline strategies &business modelsbusiness models

Market liberalizationMarket liberalization

Network developmentNetwork development


World air travel has grown 5% per year since 1977

RPKs = Revenue Passenger KilometersSources: ICAO Scheduled Traffic

0.0

1.0

2.0

3.0

4.0

5.0

6.019

7719

7819

7919

8019

8119

8219

8319

8419

8519

8619

8719

8819

8919

9019

9119

9219

9319

9419

9519

9619

9719

9819

9920

0020

0120

0220

0320

0420

0520

0620

0720

0820

0920

10F

Trend

RPK

s (tr

illio

ns)


20-year forecast: strong long-term growth

3.2%World

economy(GDP)

3.3%Airplane fleet

5.3%Airlinetraffic(RPK)

5.9%Cargotraffic(RTK)

2009 to 2029

Numberof airline

passengers4.2%

20-year traffic growth rates are higher than last year's forecast because they are calculated off a lower base year

4.9%

5.4%


Air travel growth has been met by increased frequencies and nonstops

Frequency GrowthNonstop Markets

Average Airplane Size

Air Travel Growth

August OAG

WorldIndex 1988=1.00

All routes

0.5

1.0

1.5

2.0

2.5

3.0

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009


Airlines will need 30,900 new airplanes valued at $3.6 trillion

Airplane deliveries: 30,9002010 - 2029

Market value: $3.6T2010 - 2029

0

5,000

10,000

15,000

25,000

1,920regional jets

6%

21,160single-aisle

69%

7,100twin-aisle

23%

720large2%

0

400

800

1,200

1,800

Airp

lane u

nits

Marke

t valu

e, $ b

illion

s

$60Bregional jets

2%

$1,680Bsingle-aisle

47%

$1,630Btwin-aisle

45%

$220Blarge6%

20,000 1,600


Older, less efficient airplanes will be replaced with more efficient, newer generation airplanes

Units

18,89018,890

36,30036,300

0

10,000

20,000

30,000

40,000

2009

5,400Retained fleet

13,490Replacement

44%

17,410Growth

56%

30,90030,900

2029


World fleet will nearly double by 2029

202920293%

68%

23%6%

18,890airplanes

2009200920192019

Large Twin-aisle Single-aisle Regional jet

3%

67%

20%10%

61%

19%16%

27,060airplanes

36,300airplanes

4%


1.9

NortheastAsia

SoutheastAsia 4.3

4.6AsiaPacific

Emerging markets are driving the economic growth

Source:Global Insight

Annual GDP growth2010 – 2029

1.4

2.7

2.7

3.2

3.3

4.0

4.0

4.4

6.1

7.3

Europe

NorthAmerica

Oceania

World

CIS

LatinAmerica

MiddleEast

Africa

SouthAsia

China


North America – Latin America

Middle East – Asia Pacific

Europe – Asia Pacific

Air travel growth varies by market

2009 traffic2009 traffic

Europe – Latin America

RPKs, billions*includes within China

Africa – Europe

Within CIS

Within Latin America

Transpacific

North Atlantic

Within China

Within Europe

Within North America

Asia Pacific*

Added traffic2010-2029

Added traffic2010-2029

AnnualAnnualgrowth%growth%

7.9%5.6%

4.8%7.1%

5.3%4.6%

4.6%4.8%

4.3%7.5%

4.1%2.8%

7.1%

World Average Growth:

5.3%

0 500 1,000 1,500 2,000 2,500 3,000 3,500


Market for new airplanes set to becomeconsiderably more geographically balanced

34%

23%

23%

8%7%

2%

37%

19%

22%

11%

3% 2%

New airplane deliveries by region2010–2029

Market value by region2010–2029

Region AirplanesAsia Pacific 10,320North America 7,200Europe 7,190Middle East 2,340Latin America 2,180C.I.S. 960Africa 710

World Total 30,900

Region $BAsia Pacific 1,320North America 700Europe 800Middle East 390Latin America 210C.I.S. 90Africa 80

World Total $3,590B

3% 6%

30,900 $3.6T


World Air Cargo ForecastProjected traffic

Current Market OutlookPassenger and combi airplane forecast

Freighter airplanerequirement

minusminus

equalsequals

Integrated top-down/bottom-up freighter fleet forecast methodology

Total cargo liftDemand

Total cargo liftDemand

Lower-hold liftSupply

Lower-hold liftSupply

Needed freighter liftSupply

Needed freighter liftSupply


Future freighter deliveries will be led by demand for large widebodies

New freighter deliveries: 7402010–2029

Airp

lane u

nits

Market value: $180 billion2010–2029

Marke

t valu

e

0

100

200

300

400

600

0

25

50

75

100

150

210Medium40 to 80tonnes

1%

29%

$40BMedium40 to 80tonnes

23%

<1%$1B

StandardLess than 45 tonnes

$140BLarge

More than80 tonnes

77%

10StandardLess than45 tonnes

520Large

More than 80 tonnes

70%125500


Future freight740 new and 1,750 converted

Market value: $180 billion

Size categoryLargeMore than 80 tonnes

Medium40 to 80 tonnes

StandardLess than 45 tonnes

2009Freighters

1,750

2029Freighters2,980

2010 to 2029freighters

2,490

1,070

520

250

210430 10


54%

14%

15%

17%

48%

18%

20%

14%

3%

59%16%

22%

European airlines business model shifts

Source: Boeing CMOs

ASKs

LCC Charter/IT Broad Network Other Networks

20192019

2000200020092009


Europe air traffic growth varies by market

Europe Average Growth: 4.4%

Region’s Average GDP Growth: 1.9%

2009 traffic2009 traffic

RPKs, billions

To and fromSouth America

To and fromSoutheast Asia

To and fromMiddle East

To and fromAfrica

To and fromNorth America

WithinEurope

To and fromNortheast Asia

To and fromChina

0 200 400 600 800 1,000 1,200 1,6001,400

To and fromSouth Asia

To and fromCentral America

4.1%

4.3%

6.0%

5.5%

6.0%

5.0%

AnnualAnnualgrowth %growth %

Added traffic2010 - 2029

Added traffic2010 - 2029

4.1%

3.7%

7.1%

4.6%


European airlines will need 7,190 new airplanes

LargeTwin-aisleSingle-aisleRegional jet

Size category

Market value: $800 billion

2010 to 2029New airplanes

7,190

Share of fleet Delivery units

2009Airplanes

4,300

2029Airplanes7,460

2%

75%

19%4%


Units

7,4607,460

2009 2029

A large demand for replacing older, less-efficient aircraft

3,160Growth

44%

4,030Replacement

56%

270Retained fleet

7,1904,3004,300

0

2,000

4,000

6,000

8,000


European airlines’ environmental strategy means more new airplanes

4%Remaining

airplanes

96%New airplanes

Better for:• Environment• Passengers• Airlines

2029Airplane fleet

7,460

Share of fleet100%

75%

50%

25%

0%


Full market coverage from 100-500 seats

Environmentally progressive

Operational commonality

Long-range, fast, reliable

Low operating cost

Standardization

Passengerexperience

Lifecycle solutions

Full market coverage from 100-500 seats

Environmentally progressive

Operational commonality

Long-range, fast, reliable

Low operating cost

Standardization

Passengerexperience

Lifecycle solutions

Market-driving products and services


L.America& Africa

Asia Pacific

Leasing & Gov't

North America

Russia

ME,Central

&S. Asia

China, East &

SE AsiaEurope

Substantial, balanced backlog validates Boeing’s product strategy

Backlog $Backlog $ ModelModel

RegionRegion

Single-Aisle 32%

Twin-Aisle

60%

747

737

767

$ = Billions

787

777Large

8%

250250279

255

174

0

50

100

150

200

250

300

2006 2007 2008 2009 1Q 2010


Single-aisle47%

Large6%

RJ2%

Twin-aisle45%

(in 2009 $)

Unsold$2.6T

Single-aisle49%

Twin-aisle44%

Large5%

RJ2%

737

787

777

747

767

Unmet demand provides tremendous opportunity for the future

Forecast$3.6T

737

787

777

747

767


Things to remember Boeing CMO: long-term forecast reflecting realities of today’s market Shapes our product strategy Supports our long-range business plan Provides valuable data in our airline planning process

Aviation industry resilient; long-term market outlook is strong Passenger air travel will grow at 5.3%, cargo at 5.9% Airlines will need 30,900 new airplanes valued at $3.6 trillion,

European airlines will need 7,190 airplanes valued at $800 billion Boeing’s market-driving products and services are ideally matched to

the market today… and in the future


There are 52 weeks in a year

0

200

400

600

800

1,000

1,200

1,400

1,600

2005 2006 2007 2008 2009

Actual year-end net orders4,234 4,234 toto 4,2634,263

AirbusBoeing

Net orders at the end of the year are what count

0

50

100

150

200

250

300

350

400

450

2005Paris

2006Farnborough

2007Paris

2008Farnborough

2009Paris

Airshow “announcements”1,2611,261 toto 477477

AirbusBoeing


For more information, please visit our CMO website: http://www.boeing.com/cmo

You can also visit my blog, Randy’s Journal: http://boeingblogs.com/randy/

Download - 2010 farnborough presentation

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