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TRANSCRIPT
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BOEING is a trademark of Boeing Management Company.
Copyright © 2011 Boeing. All rights reserved.
Proprietary: The information contained herein is proprietary to The Boeing Company and shall not be reproduced or disclosed in whole or
in part or used for any reason except when such user possesses direct, written authorization from The Boeing Company.
John Byrne Vice President, AM&S
Boeing Commercial Airplanes September 2011
Titanium Conference
BOEING is a trademark of Boeing Management Company.
Copyright © 2011 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 than
that intended by Boeing.
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COPYRIGHT © 2011 THE BOEING COMPANY
SCM&O | AM&S
787 Dreamliner – It’s More Than A Dream
| 2
Boeing, ANA celebrate
1st 787 Dreamliner
delivery
We celebrate a significant
moment in the history of
flight -- first delivery of the
game-changing 787
Dreamliner.
Employees in Everett celebrate 787 delivery (September 26, 2011)
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COPYRIGHT © 2011 THE BOEING COMPANY
SCM&O | AM&S
| 3
Current Market Outlook (CMO)
Market trends and realities
Boeing product strategy and development
Agenda
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COPYRIGHT © 2011 THE BOEING COMPANY
SCM&O | AM&S
| 4
Agenda
Current Market Outlook (CMO)
Market trends and realities
Boeing product strategy and development
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COPYRIGHT © 2011 THE BOEING COMPANY
SCM&O | AM&S
| 5
2011 CMO By The Numbers
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COPYRIGHT © 2011 THE BOEING COMPANY
SCM&O | AM&S
| 6
Drivers Of Air Travel
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COPYRIGHT © 2011 THE BOEING COMPANY
SCM&O | AM&S
| 7
World Air Travel Has Grown 5% Per Year Since 1980
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COPYRIGHT © 2011 THE BOEING COMPANY
SCM&O | AM&S
| 8
Air Travel Becoming More Diverse Geographically
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COPYRIGHT © 2011 THE BOEING COMPANY
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Airlines Will Need 33,500 New Airplanes Valued At $4.0 Trillion
Airplane deliveries: 33,500 2011 - 2030
Market value: $4.0T 2011 - 2030
0
5,000
10,000
15,000
25,000
1,980 regional jets
6%
23,370 single-aisle
70%
7,330 twin-aisle
22%
820 large 2%
0
500
1,000
1,500
2,500
Airp
lane
uni
ts
Mar
ket v
alue
, $ b
illio
ns
$70B regional jets
2%
$1,950B single-aisle
48%
$1,770B twin-aisle
43%
$270B large 7%
20,000 2,000
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COPYRIGHT © 2011 THE BOEING COMPANY
SCM&O | AM&S
| 10
Older, Less Efficient Airplanes Will Be Replaced By More Efficient, Newer Generation Airplanes
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COPYRIGHT © 2011 THE BOEING COMPANY
SCM&O | AM&S
| 11
Forecast Summary Market Share By Business Model
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COPYRIGHT © 2011 THE BOEING COMPANY
SCM&O | AM&S
| 12
Agenda
Current Market Outlook (CMO)
Market trends and realities
Boeing product strategy and development
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COPYRIGHT © 2011 THE BOEING COMPANY
SCM&O | AM&S
| 13
Market Forecast Drivers And Considerations
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COPYRIGHT © 2011 THE BOEING COMPANY
SCM&O | AM&S
| 14
Emerging Markets Are Driving The Economic Growth
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COPYRIGHT © 2011 THE BOEING COMPANY
SCM&O | AM&S
| 15
Air Travel Growth Has Been Met By Increased Frequencies And Nonstops
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COPYRIGHT © 2011 THE BOEING COMPANY
SCM&O | AM&S
| 16
Air Travel Growth Varies By Market
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COPYRIGHT © 2011 THE BOEING COMPANY
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Aircraft Will Continue To Be Long-lived Assets
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COPYRIGHT © 2011 THE BOEING COMPANY
SCM&O | AM&S
| 18
Boeing And The Industry Are Tracking Climate Change
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COPYRIGHT © 2011 THE BOEING COMPANY
SCM&O | AM&S
| 19
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
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COPYRIGHT © 2011 THE BOEING COMPANY
SCM&O | AM&S
| 20
Agenda
Current Market Outlook (CMO)
Market trends and realities
Boeing product strategy and development
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COPYRIGHT © 2011 THE BOEING COMPANY
SCM&O | AM&S
| 21
Airlines Are Focusing On The Future
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COPYRIGHT © 2011 THE BOEING COMPANY
SCM&O | AM&S
| 22
Boeing Product Forecast In-line With The Realities Of The Market
Large
Twin-aisle
Single-aisle
Regional jet
Size category
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COPYRIGHT © 2011 THE BOEING COMPANY
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Long Term Development Needs For Airframe Structure
Titanium can be utilized in several ways to decrease airlines operating costs
Maximum titanium utilization toward this goal will require reducing the cost of
titanium hardware
Titanium cost reduction/performance improvement approaches
Reduce buy:fly
Welding
Powder metallurgy
Hot stretch forming
Extrusions
SPF – SPF/DB
Improved machining technology – machinability
Improved performance
Strength
Temperature capability
Lower temperature SPF alloys
Information courtesy of Rodney Boyer | 23
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|
Titanium’s Value Chain Challenges
Titanium is the highest cost of raw material options
Titanium BTF costs are significantly higher than other raw materials
Long lead times increase inventory level in supply chain
Difficult to quickly respond to market fluctuations
Boeing hopes to utilize emergent Titanium technologies and alloys on
the next generation of Boeing aircrafts to reduce cost and improve
performance
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All Programs Fly Weight - Ti
| 25
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Demand Profile With Inventory Burn Down
| 26
Based on 3Q Firing Order
Current Ti Buy
Inventory Mound
Inventory burn
from reductions
Demand
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Optimized processing and machinability
Reduced price with closed loop scrap
recovery
Superior performance
Safer airplanes
More affordable airplanes
New applications for Ti
- New Alloys
- New products
- New Processes
- New Technologies
However - today new,
efficient uses for Aluminum
and Carbon Fiber are being
incorporated which
minimizes Titanium usage
in commercial airplanes.
Key Messages
Titanium Industry