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© B
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ubsid
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Bombardier
Aerospace
Market Forecast
2013-2032
14 June 2013
© B
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bard
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This presentation includes forward-looking statements, which may involve, but are not limited to: statements with respect to our
objectives, guidance, targets, goals, priorities, our market and strategies, financial position, beliefs, prospects, plans, expectations,
anticipations, estimates and intentions; general economic and business outlook, prospects and trends of an industry; expected
growth in demand for products and services; product development, including projected design, characteristics, capacity or
performance; expected or scheduled entry-into-service of products and services, orders, deliveries, testing, lead times, certifications
and project execution in general; our competitive position; and the expected impact of the legislative and regulatory environment and
legal proceedings on our business and operations. Forward-looking statements generally can be identified by the use of forward
looking terminology such as “may”, “will”, “expect”, “intend”, “anticipate”, “plan”, “foresee”, “believe”, “continue”, “maintain” or “align”,
the negative of these terms, variations of them or similar terminology. By their nature, forward-looking statements require us to make
assumptions and are subject to important known and unknown risks and uncertainties, which may cause our actual results in future
periods to differ materially from forecasted results. While we consider our assumptions to be reasonable and appropriate based on
information currently available, there is a risk that they may not be accurate. For additional information with respect to the
assumptions underlying the forward looking statements made in this presentation, refer to the respective Guidance and forward-
looking statements sections in Overview, Bombardier Aerospace and Bombardier Transportation sections in the Management’s
Discussion and Analysis (“MD&A”) of the Corporation’s annual report for the fiscal year ended December 31, 2012.
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 our business environment (such as risks associated with
the financial condition of the airline industry and major rail operators), operational risks (such as risks related to developing new
products and services; doing business with partners; product performance warranty and casualty claim losses; regulatory and legal
proceedings; to the environment; dependence on certain customers and suppliers; human resources; fixed-price commitments and
production and project execution), financing risks (such as risks related to liquidity and access to capital markets, exposure to credit
risk, certain restrictive debt covenants, financing support provided for the benefit of certain customers and reliance on government
support) and market risks (such as risks related to foreign currency fluctuations, changing interest rates, decreases in residual
values and increases in commodity prices). For more details, see the Risks and uncertainties section in Other in the MD&A of the
Corporation’s annual report for the fiscal year ended December 31, 2012. Readers are cautioned that the foregoing list of factors
that may affect future growth, results and performance is not exhaustive and undue reliance should not be placed on forward-looking
statements. The forward-looking statements set forth herein reflect our expectations as at the date of this presentation and are
subject to change after such date. Unless otherwise required by applicable securities laws, we expressly disclaim any intention, and
assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or
otherwise. The forward-looking statements contained in this presentation are expressly qualified by this cautionary statement.
1
Forward-looking statements
ALL AMOUNTS ARE EXPRESSED IN U.S. DOLLARS UNLESS OTHERWISE INDICATED.
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2
Leading the industry and our customers into the future
The Bombardier Business and
Commercial Aircraft Market Forecasts are
a key foundation of our strategic planning
process
The Forecasts are built on common
baseline assumptions
The Forecasts are primarily driven by
econometric modeling, adjusted for
certain qualitative factors
The output, a 20-year delivery forecast, is
used to frame our strategies and help us
better serve our customers
© B
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Forecasted economic recovery has been delayed
two years in a row
Source: IHS Global Insight, 2011 to 2013
GDP growth is a major driver of new aircraft demand
3
World GDP 20-Year Forecast [%, 2008-2032]
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032
Actuals 2011 Forecast 2012 Forecast 2013 Forecast
20-Year Average GDP
Growth
2011 Forecast 3.3%
2012 Forecast 3.2%
2013 Forecast 3.2%
Today
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$1.4 $5.3
$1.3 $3.6
$2.2
$1.3
$14.9
$8.5 $15.5
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
4 Source: IHS Global Insight, February 2013
World Average: 3.2%
India China Africa Europe Asia
Pacific
North
America
Latin
America
CIS Middle
East
Mature economies will show slower growth rates, but on a larger base
India and China will be the fastest growing major
economies over the next 20 years
Bubble Size =
2012 GDP in Trillion
20-Year GDP Growth by Region
[%, Regions]
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Source: Energy Information Administration Annual Energy Outlook 2013
Sustained high oil prices are expected
5
Higher oil prices drive demand for more efficient commercial aircraft
$-
$20
$40
$60
$80
$100
$120
$140
$160
2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032
Forecast Actuals
20-Year Oil Price Forecast
[Brent 2011 $ per barrel, 2008-2032]
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Commercial aircraft market is building momentum
Improved stability in the US and most emerging economies, while inertia continues to
drag the European economies
Exploding middle-class population in growth markets will speed up the demand for
new aircraft
High oil prices continue to be the most critical factor influencing airline fleet decisions
Worldwide, traffic demand remains strong and yields are stabilizing
US scope clause relaxation in 2012 will open up new opportunities for more regional jets
in the near term
7
Bombardier is confident in the long-term prospect of the 60- to 149-seat market
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8
Our key market drivers suggest a bright future for the
commercial aircraft market
Long-Term Commercial Aircraft Market Drivers
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E.g.:
•LCC business model
•Air travel tax scheme
•Airport infrastructure
1
10
100
1,000
10,000
100 1,000 10,000 100,000
Se
ats
pe
r 1
millio
n p
op
, (l
og
sc
ale
)
GDP per capita ($, log scale)
NORTH AMERICA
LATIN AMERICA
ASIA
MIDDLE EAST
& AFRICA
EUROPE
Economic growth is driving commercial aircraft
penetration worldwide
9 Sources: Fleet iNet, IHS Global Insight and IMF, Bombardier analysis
1st driving
force: GDP
growth
2nd driving
force:
removal of
barriers
Typical
growth path
20- to 219-seat aircraft per capita vs. GDP per capita [Seats, $]
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3,500 2,600
4,800
250
5,650
6,900
2,700
1,300
3,000
1,050
6,950 8,700
World fleet forecasted to grow to 16,700 units in
the 20- to 149-seat market by 2032
10 Source: Bombardier Commercial Aircraft Market Forecast 2013-2032
Total Fleet 2012 Deliveries Retirements Fleet 2032
20- to 149-seat 10,900 12,800 7,000 16,700
20- to 59-seat 60- to 99-seat 100- to 149-seat
2012
Fleet
Fleet
2032
Deliveries Retirements
Demand will shift away from 20- to 59-seat category
20-Year Commercial Aircraft Fleet Forecast [Units, 2012-2032]
2012
Fleet
Fleet
2032
Deliveries Retirements 2012
Fleet
Fleet
2032
Deliveries Retirements
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Source: Bombardier Commercial Aircraft Market Forecast 2013-2032
Energy Information Administration - Brent
Higher fuel prices will influence mix between
turboprops and jets
11
20- to 99-Seat Fleet Mix [%, 2002, 2012, 2013-2032]
86%
55% 52%
14%
45% 48%
2002 Actual 2012 Actual 2013-2032 Forecast
Oil @ $108 / barrel Oil @ $31 / barrel Oil @ $112 / barrel
Turboprops
Regional Jets
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North America, Greater China and Europe to lead in terms
of aircraft deliveries
Source: Bombardier Commercial Aircraft Market Forecast 2013-2032
Total Deliveries: 12,800 Units
12
Total Deliveries: 12,800 Units
Regional 20-Year Delivery Outlook [Units]
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3 4 4 4
6 5 4
24
34
2012 2022 2032
100- to 149- seats
20- to 99- seats jets
20- to 99-seats turboprops
Annual industry revenues to grow to $43B in 2032
Sources: Bombardier Commercial Aircraft Market Forecast 2013-2032
$11B
$34B
$43B
13
$646 billion in revenues in the 20- to 149-seat market over the next 20 years
Annual Industry Revenues [$B, 2012, 2022, 2032]
20-Year Revenues
20- to 99-seat turboprops $81B
20- to 99-seat jets $105B
100- to 149-seat jets $460B
Total $646B
100- to 149-seat
20- to 99-seat jets
20- to 99-seats turboprops
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Business aircraft market continues to recover from the
recent industry downturn
Current market indicators remain mixed, but signs of forward momentum are beginning to
emerge
Industry net orders up in 2012
Pre-owned inventory levels continue to gradually improve
Deliveries and aircraft utilization remain stable
Orders and deliveries in 2013 are expected to remain comparable to those of 2012
The long-term outlook for business aircraft demand remains solid
15
Bombardier remains confident in the strong long-term potential for the
business aircraft market
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The strong potential for the business aircraft industry is
based on long-term business aircraft key market drivers
16
Long-Term Business Aircraft Market Drivers
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Wealth creation will continue to drive rate of business jet
adoption in each region
17 Sources: ASCEND, IHS Global Insight and IMF, Bombardier analysis
1
10
100
1000
10000
100 1,000 10,000 100,000
GDP per Capita (USD, Log Scale)
Fle
et
pe
r 1
00
Mill
ion
Po
pu
lati
on
(L
og
Sc
ale
)
2nd driving
force:
removal of
barriers
1st driving
force: GDP
growth
NORTH AMERICA
LATIN AMERICAEUROPE &
RUSSIA
ASIA
MIDDLE-EAST &
AFRICA
Average
growth path
NORTH AMERICA
LATIN AMERICA
MIDDLE-EAST
& AFRICA
ASIA
EUROPE & CIS
1st driving
force: GDP
growth
2nd driving
force:
removal of
barriers
Typical
growth path
Fleet per capita vs. GDP per capita [Units, $]
E.g.:
•Infrastructure
•Regulatory regime
•Airspace Access
GDP per capita ($, log scale)
Fle
et
pe
r 1
00
millio
n p
op
, (l
og
sc
ale
)
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World fleet forecasted to grow to 30,975 units by 2032
18 Source: Bombardier Business Aircraft Market Forecast 2013-2032
14,875
9,800
3,150
21,525
14,200
4,750
30,975
Fleet 2032 Retirements Deliveries Fleet 2022 Retirements Deliveries Fleet 2012
Retirements expected to accelerate over next 20 years as a result of emerging
environmental concerns, new regulations and airspace modernization
20-Year Business Aircraft Fleet Forecast [Units, 2012-2032]
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Our forecast calls for 24,000 business jet deliveries worth
$650 billion over next 20 years
19 Source: Bombardier Business Aircraft Market Forecast 2013-2032
$119B
(18%)
$238B
(37%)
$293B
(45%)
Large
Medium
Light
8,000
(33%)
10,500
(44%)
5,500
(23%)
Total
$650B
Total
24,000 units
Units Revenues
The Light category will account for the largest share of deliveries, while the Large
category will account for the largest share of revenues over the next 20 years
20-Year Forecast Deliveries and Revenues
[Units, $B]
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.
North America, Europe and Greater China will be the
largest markets for business jet deliveries
20 Source: Bombardier Business Aircraft Market Forecast 2013-2032
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Total Deliveries: 24,000 Units
Regional 10-Year and 20-Year Delivery Outlook [Units]
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Conclusion
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Bombardier is well-positioned to benefit from the next
business aircraft industry up-cycle
22
Market category: Light business jets
Models: Learjet 701, Learjet 751, Learjet 60XR and Learjet 851
Competitive advantages2: The Learjet heritage of high performance is upheld by each Learjet
product. The Learjet family of aircraft features exceptionally fast cruise speeds, high climb rates and
operating ceilings, along with competitive operating costs. The Learjet 85 will be the largest and most
comfortable Learjet ever built.
LEARJET family of aircraft
Market category: Medium business jets
Models: Challenger 300, Challenger 3501, Challenger 605 and Challenger 800 series
Competitive advantages2: The Challenger aircraft are productivity-enhancing business tools, with
the widest, most spacious cabins in their category. Each aircraft offers low operating costs, high
reliability, and can be customized with leading-edge cabin communication equipment.
CHALLENGER family of aircraft
Market category: Large business jets
Models: Global 5000, Global 6000, Global 70001 and Global 80001
Competitive advantages2: The Global family of aircraft offers an ideal balance of performance and
comfort for long-range missions. The Global 7000 and Global 8000 aircraft are being developed as
an extension to the Global family of aircraft and will give Bombardier the broadest market coverage in
the upper end of the business aircraft market.
GLOBAL family of aircraft
1.Currently under development.
2.Under certain operating conditions, when compared to aircraft currently in service.
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Our family of commercial aircraft is optimized to thrive in
the fast-growing 60- to 149-seat market
23
Market category: 60- to 90-seat turboprops
Models: Q400 NextGen
Competitive advantages1: For short-haul operations, the optimized Q400 NextGen airliner is a fast,
fuel-efficient and low-emission large turboprop. It is the only in-production turboprop that offers jet-like
speed and an extended range, along with competitive operating costs and product commonality across
the Q-Series family of turboprops.
Q-SERIES turboprop aircraft
Market category: 70- to 100-seat regional jets
Models: CRJ700 NextGen, CRJ900 NextGen and CRJ1000 NextGen
Competitive advantages1: Designed for hub expansion and point-to-point service, the CRJ family of
aircraft is optimized for medium to long distance routes. The family features best-in-class operating
costs, fuel burn and greenhouse gas emissions, as well as commonality across the family, including
the CRJ100 and CRJ200 aircraft.
CRJ regional jet family of aircraft
Market category: 100- to 149-seat commercial jets
Models: CS1001 and CS3002
Competitive advantages3: Designed for the growing 100- to 149-seat market, the 100% new CSeries
family of aircraft will offer 15% cash operating cost and 20% fuel burn advantage over in-production
aircraft in its class. The CSeries aircraft clean-sheet design ensures that the aircraft will achieve
greatly reduced noise and emissions, as well as superior operational flexibility, exceptional airfield
performance and a range of 2,950 NM (5,463 km).
CSERIES mainline single-aisle jet family of aircraft
1.Under certain operating conditions, when compared to aircraft currently in service for short-haul flights up to 500 NM.
2.Currently under development. 3.All data and specifications are estimates, subject to change in family strategy,
branding, capacity and performance during the design, manufacture and certification process (based on 500 NM trips).
© B
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