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Global Airline Capacity – Winter 2013/14 Boeing Commercial Airplanes

Network, Fleet and Schedule

Strategic Planning

Module 19 : 14 March 2014

Istanbul Technical University

Air Transportation Management

M.Sc. Program

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World Regional Definitions

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Market factors suggest continued passenger demand resilience – Global indicators support economic forecast for accelerating growth heading into 2014 – Near-term oil price outlooks moderating due to rising U.S. shale oil production, potential Iran deal – Load factors at all time highs (global passenger traffic up 5% YTD on 4% capacity growth)

Winter 2013/4 capacity growth continues above average trend that started summer 2013 – Overall December capacity up 7.6% driven primarily by 5.6% frequency growth – Single aisle continues to lead market up 8.7% – 6.6% twin aisle capacity growth more than double last winter’s growth – Most major flows seeing growth; MidEast (Gulf 3) growth to SE Asia surging – Recent airline schedule changes indicate fairly stable airline outlook / forward bookings

Regional, network and fleet trending – Top 25 airline capacity up 5%, key drivers: Gulf 3, Turkish, Chinese airlines, U.S. majors return to growth – LCC capacity growing at almost twice the rate of overall market, led by double-digit growth across Asia – Airlines continue to shift capacity to in-production airplane models (+10%) from out-of-production (-5%)

Global Capacity Report– Summary December 2013 vs. December 2012

Copyright © 2014 Boeing. All rights reserved.

Global capacity trends December 2009-2013

130

135

140

145

150

155

Airplane size1,730

1,740

1,750

1,760

1,770

1,780

1,790

1,800

1,810

1,820

1,830

Avg Stage Length1,800

1,850

1,900

1,950

2,000

2,050

2,100

2,150

2,200

2,250

Monthly Frequencies200

220

240

260

280

300

320

340

360

Monthly Seats

(kms) (thousands) (millions)

2009 2010 2011 2012 2013

2013 capacity +7.6% over 2012 driven by frequencies, seat size growth

(avg seats/flight)

Source: Innovata, November 2013 database, commercial jets >=30 seats

+5.6%

+1.7%

+0.2%

+7.4%

Copyright © 2014 Boeing. All rights reserved.

World passenger capacity growth by aisle

0%

2%

4%

6%

8%

10%

1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14

YoY ASK growth

Capacity growth continues above long-term average through winter 2013

Single Aisle

Twin Aisle

Source: Innovata

Copyright © 2014 Boeing. All rights reserved.

World passenger capacity growth by domiciled region

Global single aisle capacity up 8.7%, twin aisle up 6.6%

Source: Innovata, November 2013 database, commercial jets >=30 seats

YoY ASK growth (December 2013 vs. December 2012)

14.6%

9.7% 9.7%

3.6%

7.3%

0%

5%

10%

15%

20%

N.America Europe Asia-Pac LatAm Others

Single Aisle Twin Aisle

4.0%5.1% 4.6%

16.0%

6.2%

0%

5%

10%

15%

20%

N.America Europe Asia-Pac MidEast Others

Copyright © 2014 Boeing. All rights reserved.

Global capacity growth by flow Top 20 flows, ranked by YoY growth volumes

6%11%8%7%

6%

7%

17%

4%

36%

14%7% 10%

9%

7% 8% 7% 6%1%

0% -1%-1,000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Intra

-Chi

na

Intra

-N.A

mer

Intra

-Eur

ope

Mid

East

-SE

Asia

Euro

pe-N

.Am

er

Intra

-SE

Asia

Chin

a-SE

Asi

a

Euro

pe-M

idEa

st

Intra

S.A

mer

C.Am

er-N

.Am

er

NE A

sia

- SE

Asia

Intra

-CIS

Afric

a-Eu

rope

Intra

-NE

Asia

Oce

ania

- SE

Asi

a

Mid

East

-SW

Asi

a

Intra

-Oce

ania

N.Am

er-N

E As

ia

Euro

pe-S

.Am

er

Euro

pe-S

E As

ia

YoY Change in ASKs, millions (change December 2013 v. 2012)

High Gulf 3 growth to SE Asia – Bangkok, Kuala Lumpur, Jakarta, Saigon Source: Innovata, November 2013 database, commercial jets >=30 seats

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Global scheduled passenger capacity

4%

6%

8%

10%

Oct13 Nov13 Dec13 Jan14 Feb14 Mar14

09/13 sched snapshot 10/13 sched snapshot 11/13 sched snapshot

8 Source: Diio/Innovata, Boeing analysis

Airlines trimming winter capacity growth, still above average

Copyright © 2014 Boeing. All rights reserved.

Top 25 airlines ranked by capacity December 2013 v. December 2012

2%2%4%19%19%19%10%

-5%0%-1%

10% 1%

3%3%

5%

12%

4%2%

4%

0% 2% 1% 33% 21%

-5,000

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Am

eric

an (+

US)

Uni

ted

Del

ta

Emira

tes

AF-

KLM

Lufth

ansa

BA

-Iber

ia

Sout

hwes

t

Chi

na S

outh

ern

Qan

tas-

Jets

tar

Cat

hay-

Dra

gon

Sing

apor

e-Sc

oot

LATA

M

Air

Chi

na

Chi

na E

aste

rn

Turk

ish

Qat

ar

Air

Can

ada

AN

A

Thai

Kor

ean

JAL

Rya

nair

Etih

ad

Aer

oflo

t

2013 chgDec. 2012 ASKs

Top 25 airline capacity up 5%, US majors returning to growth Source: Innovata, November 2013 database, commercial jets >=30 seats

-1%

Weekly ASKs, millions (December 2013 v. 2012)

Copyright © 2014 Boeing. All rights reserved. Source: Innovata, November 2013 database, commercial jets >=30 seats

LCCs All airlines

5% 4%

7% 8%

22%

6%

18%11%

3% 1%

11%

17%14%

21%

10%19%

8%

3%15%

88%

N. America

Latin America Africa

Oceania

Europe

C.I.S.

NE Asia

SE Asia South Asia

MidEast

China

Capacity (ASK) growth by airline domicile December 2013 v. December 2012

LCC capacity growing at almost twice the rate of total capacity growth

29%

32%

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World passenger capacity growth by airplane type

Airlines continue to shift capacity to in-production models Source: Innovata, November 2013 database, commercial jets >=30 seats

Monthly seats, millions (December 2013/12)

0

20

40

60

80

100

120

A320 B737NG B737C E-Jet B757 MD-80

2013 2012

0

5

10

15

20

25

B777 A330 B767 B747 A340 A380 B787 A300

+11%

+12%

-12% +15%

+1%

+13%

+9%

-7% -10%

+19%

-3%

-9%

Single Aisle Twin Aisle

-7% +85%

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Top 25 global airports Year over year seat growth

5%

5%6%6%5%8%9%9%

8%7%

7%14%

11%14%16%

12%

6%2% 3% 2% 3%

2%1%

-1%-2%

-100,000

0

100,000

200,000

300,000

400,000

500,000

Dub

ai (D

XB)

Kua

la L

umpu

r (K

UL)

Ban

gkok

(BK

K)

Jaka

rta

(CG

K)

Shan

ghai

(PVG

)

Toky

o (H

ND

)

Los

Ang

eles

(LA

X)

Hon

g K

ong

(HK

G)

Ista

nbul

(IST

)

Del

hi (D

EL)

Cha

rlotte

(CLT

)

Sing

apor

e (S

IN)

Gua

ngzh

ou (C

AN

)

Fran

kfur

t (FR

A)

Chi

cago

(OR

D)

San

Fran

cisc

o (S

FO)

Am

ster

dam

(AM

S)

Bei

jing

(PEK

)

Lond

on (L

HR

)

Atla

nta

(ATL

)

New

Yor

k (J

FK)

Dal

las/

Fort

Wor

th (D

FW)

Seou

l (IC

N)

Den

ver (

DEN

)

Paris

(CD

G)

YoY Change in departing seats (% chg) July 2013 v. 2012

Top 25 airports averaging 6% seat growth led by Asia, Dubai, Istanbul Source: Innovata, November 2013 database, commercial jets >=30 seats

Asia

MidEast

Europe N.Amer

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QUESTIONS?