ron kent managing director, northeast asia regional ... · ron kent managing director, northeast...

Copyright © 2014 Boeing. All rights reserved. 1

Ron Kent Managing Director, Northeast Asia Regional Marketing

Boeing Commercial Airplanes

October 2014

../Videos/787_Dream Team .wmv


• Driven by China’s strong economic growth, air

travel and tourism have been growing at rapid

pace, and will continue to do so in the future.

• China is the largest domestic tourism market in

the world by number of trips, and will become

global tourism’s biggest source market by 2020*.

• Domestic and regional travel market will benefit

from the emerging Low Cost Carrier (LCC)

segment in China.

• Air travelers have shown preference for

enhanced “connectivity”: more direct and more

frequent.

• Boeing’s most comprehensive and preferred

product lineup is strategically positioned to

support sustainable growth of China’s tourism

industry.

Executive Summary

*Source: “China Travel Trends 2012” by PATA, COTRI and Dragon Tail


Outline

• China Travel Market Outlook

• Air Travel Trends

• Boeing Airplane Product Line • Strategically positioned to

support China Tourism’s Development

• Summary

Copyright © 2014 Boeing. All rights reserved.


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Air travel and tourism are highly interrelated Both driven by economic growth, promote each other

• Air travel demand is directly driven by economic growth;

• About 48% of air travel are for leisure/tour

Travel Market Outlook


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International travel has seen rapid growth

Source: National Bureau of Statistics of China

0

5

10

15

20

25

30

35

40

45

0

20

40

60

80

100

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Number of Chinese

personal international

trips, millions

China’s GDP

per capita,

thousand RMB


GDP per capita

Number of international trips


Source: Global Insight (September 2013), ICAO, US DOT Form 41, MLIT, CAAC, MTOC, airline websites

Air travel should increase with GDP per capita China is becoming the largest origin country of international outbound tourists



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

Within China

Southeast Asia

Europe

North America

Northeast Asia

Middle East

Oceania

South Asia

Africa

China air traffic varies by market RPKs (billions)

7.4%

China Average

Growth: 6.9%

China GDP

Growth: 6.2%

6.6%

7.5%

6.1%

6.3%

5.0%

10.0%

6.6%

7.5%

2013 traffic Added traffic 2014 - 2033

Annual growth %



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More direct: Non-stop, direct flights

What’s trending in air travel?

More frequent: Increased flexibility

More affordable: Value-oriented purchase

decision

Air Travel Trends

Travelers demand and value enhanced “Connectivity”


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0.5

1.0

1.5

2.0

2.5

Air travel growth has been met by increased frequencies and nonstops

World

SOURCE: August OAG Index 1993=1.00

Frequency Growth

Nonstop Markets

Average Airplane Size

Air Travel Growth

Air Travel Trends


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0

50

100

150

200

2003 2013

0

500

1,000

1,500

2,000

2,500

2003 2013

0%

20%

40%

60%

80%

100%

2003 2013

10-year reflection on China’s aviation market growth

Passengers carried (mil)

City pairs flown by mainland carriers

Jet fleet

Airports for commercial services

0

100

200

300

400

2003 2013Source: CAAC

Source: CAAC

Source: Flight Global Ascend Online Database

Source: OAG August Schedules

Intra-China

Int’l

612

138 316

1,250

Air Travel Trends


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200

4,340

780 640

60 10

430

200 210

20

0

100

200

300

400

500

0

1,000

2,000

3,000

4,000

5,000

Regional jets 3%

Single- aisle 72%

Small wide-body

13%

Large wide-body

1%

Medium wide-body

11%

China will need over 6,000 new airplanes valued at $870 billion

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2,310

6,930

2013

910 Retained fleet

1,400 Replacement

23%

6,020

2033

4,620 Growth

77%

Number of

airplanes

Value,

billion $

Air Travel Trends


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0%

5%

10%

15%

20%

25%

30%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

China LCC growth will mirror worldwide growth LCC expansion to further stimulate more air traffic demand

Source: CAPA, OAG

China:

8%

World:

27.2% LCC capacity share

of total seats

Air Travel Trends


Strong growth opportunities exist for Chinese airlines on international market

Source: OAG, Sabre

Foreign Carriers,

59%

Chinese Carriers,

41%

61.7

78.0

50.0

60.0

70.0

80.0

Chinese Carriers Foreign Carriers

Yield/RPK,

RMB cent

ASK capacity market share in China’s

international long-haul market:

majority held by foreign carriers

Average yield on international

routes in/out of China:

improvement opportunity

26%

Air Travel Trends

Through network development and service innovation


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Boeing product line-up vs. the competition Superior value, efficient market coverage

A321neo

A320neo

A319neo

A380

A330-900

A350-900

A350-1000

A330-800 A350-800

200

150

100

500

450

400

350

300

250

550

600

Se

ats

200

150

100

500

450

400

350

300

250

550

600

Se

ats

Airbus Boeing

747-8

777-9X

777-8X

787-10

787-9

787-8

737 MAX 9

737 MAX 8

737 MAX 7

Boeing Product Line


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787 Most Efficient long range family

Unrivaled passenger experience

Better Economics than current and expected

alternatives

777X 12% lower fuel consumption and CO2 compared

to A350

10% lower operating costs

Largest and most efficient twin-engine jet

747-8 16% reduction in fuel and CO2

Lower trip cost per seat and per trip compared

to A380

30% smaller noise footprint

737 MAX 12 more seats than A320 and lower trip cost

Lower weight per seat and lower thrust

MAX retains economic and range advantage

over neo

Boeing product line supports China’s growing tourism industry

Boeing Product Line


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Over 70 new 787 routes through year-end 2014

Accra Addis Ababa

Auckland

Amsterdam

Aruba

Stockholm

Abu Dhabi

Bonaire

Bangkok

Mumbai

Boston

Bandar Seri Begawan

Curacao

Paris

Jakarta

Cairns

Copenhagen

Chengdu

Cancun Douala

Doha

Duesseldorf

Dubai Delhi

Moscow

Edinburgh

Fort Lauderdale

Rome

Kinshasa

Sao Paulo

Hong Kong Hanoi Hyderabad

New York

Jeddah

Johannesburg

Osaka

Los Angeles

London

Lome Chennai

Melbourne

Miami

Milan

Orlando

Tokyo

Nairobi

Oakland

Oslo

Gold Coast Perth

Shanghai

Beijing

Punta Cana

Malabo Singapore

San Francisco

Santiago

Sydney

Tel Aviv-Yafo

Toronto

Calgary

Vancouver

787 has the lowest operating cost:

787 Dreamliner opening new markets around the world

Boeing Product Line

* Seat-mile operating cost comparison for 6,000-nmi mission

A330-800neo A330-200

(Base) 787-8

-13% - 4% 0%

A330-900neo A330-300

(Base) 787-9

-15% - 4% 0%


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777X: A great new beginning

A new passenger experience level

New high-span wing Empennage

Systems New advanced GE engine

Modified landing gear

Fuselage

777-300ER 777-8X 777-9X

MTOW 351,530 kg

(775,000 lb)

351,530 kg

(775,000 lb)

351,530 kg

(775,000 lb)

Passengers 386 355 406

Boeing Product Line

777-8X: open long-range market with leading

flexibility and efficiency

777-9X: the most efficient twin-aisle uniquely

positioned for growth


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Strategic growth with

Lower fuel burn

Lower cost

Passenger appeal

No risk 787 technology

engines

New wing

Enhanced

systems

Advanced

materials

Innovative

interior design

Modern flight deck

Boeing Product Line

747-8: An incredible new airplane Better efficiency, higher revenue, less risk


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68” 78”

61”

Uses 14%

less fuel

737 MAX 8 162 seats

Uses 13%

less fuel

-6%

A320neo 150 seats

+7%

A320 150 seats

737-800W 162 seats

Base

MAX Efficiency: 14% Lower fuel consumption Fuel per seat comparison

CFM engines Typical mission rules 800-nmi trip Two-class seating 737-800 includes optional winglets

69”

-14%

Less efficient More efficient

Boeing Product Line

8% more efficient


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more 737s serving LCCs than A320 worldwide

Source: Centre for Asia Pacific Aviation, July 31 2014

737 operators

A320 operators

(1,948)

(1,603)

Boeing Product Line




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Title block bottom edge

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Title block top edge (one-line title)

Title block top edge (three-line title) Driven by China’s strong economic growth, both air travel and tourism will

continue to grow rapidly

Travelers tend to prefer and value enhanced connectivity: more non-stop

flights, more frequencies and more affordable

Boeing’s most comprehensive and preferred product lineup is strategically

positioned to support sustainable growth of China’s tourism industry

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ron kent managing director, northeast asia regional ... · ron kent managing director, northeast...

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