Airbus Cargo Global Market Forecast 2011-2030

Airbus Global Market Forecast

Roles & objectives
Airbus Market and Product Strategy

aircraft market, and the aerospace industry and relate it to our business Assess market trends (demand) for our current aircraft Impact Production rates, design changes, financing, sales : Identify and integrate the support, market requirements to define future programmes Recommend Forecasting travel demand product strategy Impact : Define decision making for generic aircraft designs, establish business plans, Influence all stakeholders and market our strategy Support sales campaigns

Market Research and Forecasts Assess the economy, the

Engineering Finance Programmes Commercial

European Commission
(Alfa -Bird, Cleansky, )

Governments
(experts working groups)

International Organisations

Source: Airbus GMF 2011 Page 2

AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

Agenda

GMF freight forecast methodology

Analysis of today's air freight market

20 year global freight traffic forecast

20 year freighter fleet forecast

Page 3
AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

GMF freight forecast overview

20 years freighter aircraft demand forecast (jet freighters > 10 tons)
Traffic forecast modeling 150 distinct traffic flows Fleet build-ups covering 207 freight carriers

Freighters fleet divided in 3 segments:

Segment Small Jet Freighters Mid-Sized Freighters Large Freighters

Payload 10 to 30 tonnes 30 to 80 tonnes Over 80 tonnes

Aircraft types in service BAe 146, DC-9, 727, 737, TU-204 DC-8, 757, 767, 747 Combi, DC10, A300, A310, A330 MD-11, 777, 747

Source: Airbus GMF 2011 Page 4

AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

Airbus freighter demand forecast process

Freight Traffic Forecast Base year calibration
Base year freighter fleet & operations Economic forecasts Historical traffic (country to country) Freighter capacity Belly capacity

Belly capacity forecast*

Pax operations & load factors forecast
Baggage Base year

Belly capacity forecast per flow (ATKs)

Econometric Models

traffic allocation for each flow

Freighter load factors Belly load factors

Belly traffic forecast

Load factor evolution

Total FTKs forecast (region to region)

Freighter FTKs forecast (region to region)

Load factors evolution

Belly FTKs forecast (region to region)

Freighter ATKs forecast

Fleet attrition & backlog Fleet utilization evolution
* From passenger GMF
Source: Airbus GMF 2011
Page 5
AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

Freighter Demand
- per segment - per airline - per flow - per year

Market shares capture

Freighter demand forecast

20 year freight traffic forecast

Traffic forecast for 146 directional flows is based on selected economic variables
Data source Selection of variables, building equations.

Choosing the right model (eg. Europe North America)

20 18 16 14 12 10 8 6 4 2 0 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022 2025 2028 FTKs [billion]

Industrial production: Europe & CPI North America North America, CPI Europe & Real GDP Europe North America & CPI Europe

History

Forecast

Source: Airbus GMF 2011 Page 6

AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

Agenda

GMF freight forecast methodology

Analysis of today's air freight market

20 year global freight traffic forecast

20 year freighter fleet forecast

Page 7
AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

Air freight market is very volatile, but has proven resilient to the previous crisis
30% 20% 10% 0% -10% -20% -30%

09/11

SARS

Subprimes

Passenger traffic

30% 20% 10%

55%
35%

0%
-10% -20% -30%

Freight traffic

Air freight volatility has increased over past years

Source: International IATA + domestic ATA + domestic AEA. RPKs/FTKs year over year change
Page 8
AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

Freighter fleet evolution in the past decade

Regional Freighters (small & mid-sized) Intercontinental Freighters (mid-sized & large)

Freighter fleet

Freighter fleet

1300 1250 1200 1150 1100 1050 1000 950 900

650 600 550 500 450 400 350 300

Change in air freight environment drives shift from small-jet to wide-body freighters
Segment Regional Freighters Intercontinental freighters Small and Mid-size Mid-size & large Aircraft type in service BAe 146, 727, 737, TU-204, DC-8, DC-9, DC10-10 757, 767-200, A300, A310 DC10-30, 767-300, DC10, A330, MD11, 777, 747

Source: Ascend Page 9

AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

Market focusing on operational efficiency

Operators are looking to optimize fleet efficiency by: - Optimizing fleet utilization - Using opportunistically belly capacity - Flying new aircraft to improve efficiency on long haul routes
New deliveries ratio increasing for intercontinental freighters
80% % of new deliveries vs. conversions 60% Intercontinental freighters (mid-size & large)

High oil price:

160 140 120 100 80 60 40 20 0
Oil price (Current US$)
History Forecast

Average Barrel Price >$120

40%

20%

Regional freighters (small & mid-size) 2005 2006 2007 2008 2009 2010 2011

0%

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

The age of cheap fuel is over

Source: Airbus GMF 2011 Page 10
AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

October 2011

Fuel is the largest factor in operational efficiency

Fuel at $25 per barrel Fuel at $100+ per barrel

Fuel 20%
Fuel 50%

Operating costs

Operating costs

Cost of fuel drives need for fuel-efficient freighters

Source: Airbus Page 11
AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

Cost of fuel drives the need for fuel-efficient freighters

Annual costs (mil $) 60 50 40 30 20 10 0 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Fuel at $100+ per barrel Fuel at $25 per barrel DC-10F A330-200F DC-10F

A330-200F

Annual utilization (hrs)

The utilization threshold required to compensate higher acquisition costs gets significantly lower as fuel prices increase
Source: Airbus Page 12
AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

2011 Freighter fleet regional distribution

WORLD
Operators 207 Fleet 1595
Fleet per region

North America Latin America

19%
Africa

Europe & CIS

Operators Fleet 288
4% 4%

18% 51%
Middle-East

Europe & CIS

Asia-Pacific
5%

North America
Operators 41 Fleet 808

48

Middle East

Asia - Pacific
Fleet 56 Operators 51 Fleet 301

Central America
Operators 7 Fleet 21

Operators 14

Africa South America

Operators 17 Fleet 60 Operators 31 Fleet 61

Beginning 2011, jet freighter >10 tons

Source: Airbus GMF 2011, Ascend Page 13
AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

Agenda

GMF freight forecast methodology

Analysis of today's air freight market

20 year global freight traffic forecast

20 year freighter fleet forecast

Page 14
AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

Freight traffic will nearly triple over the next 20 years

600
World freight traffic history & forecast (billions FTKs, inc. belly)

500

International represents 88% of world FTKs

2011-2030 CAGR + 5.1%

400
International represents 86% of world FTKs

300

200

2011-2030 CAGR
100 International Domestic US 0 2000 2005 2010 2015 2020 2025 2030 Domestic BRIC

+ 5.1% + 2.3% + 7.9%

Main growth drivers: - International trade expansion (in particular from & to PRC and India), - Domestic express freight development in China, India & Brazil (while traditional domestic markets are maturing)
Source: Airbus GMF 2011 Page 15
AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

Intercontinental air freight traffic will grow nearly threefold in the next 20 years
Intercontinental air traffic flows (all flows from & to the region) 2010
Europe & CIS North America PRC Asia & Pacific Latin America Indian Subcontinent Africa Middle East
0

2020

2030
X 2.7 X 2.8 X 3.8 X 2.2

Intercontinental traffic CAGR: + 5.3%

X 2.8 X 3.5 X 2.7 X 2.8

50 100 150 200

Billions FTKs
250

Air freight is a key enabler for a global world

Source: Airbus GMF 2011 Page 16
AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

Emerging markets will drive growth

2000
8%

2010
14%

2020
16%

2030
18%

550 500 450 400 350 300 250 200 150 100 50

World freight traffic (billions FTKs, inc. belly)

2011-2030 CAGR

History

Forecast

Developed to emerging + 5.6% Emerging to developed + 5.7% Between & within developed + 3.2% Between & within emerging + 6.5%

0
2000 2005 2010 2015 2020 2025 2030

and therefore demand for dedicated freighters

Source: Airbus GMF 2011 Page 17
AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

Emerging regions: Africa, Asia, Central America, Indian Subcontinent, Middle-East, PRC, South America Developed regions: CIS, Europe, Japan, North America, Pacific

China is sowing seeds for air freight development within emerging areas
Domestic express freight in China
is ready to take off, together with: - The sharp and continued increase of Chinese wages - The development of Western China - The booming of Chinese e-commerce, - The ambitious airport infrastructure development plans We expect China express traffic to grow over 10% CAGR in the next 20 years:
PRC domestic express traffic (bn. FTKs)
6.0 5.0 4.0 3.0 2.0 1.0 2005 2010 2015 2020 2025 2030

China opening new markets

for air freight within emerging areas, through massive investments in emerging countries (Africa, Eastern Europe, Indian sub continent, ) China & Africa relationship is a clear example: China provides infrastructure, funding and workforce, preparing ground for efficient business relations and new markets In return, China obtains privileged access to African market & resources: - Africa provides nearly one third of China oil needs - Total trade between Africa & China exceeded US$100bn in 2010, growing over 10 folds in the last decade

- China began to import African-manufactured value-added goods, (e.g. processed foods & household consumer goods)

Such growth enablers are easily found across Asia, Middle East, India and Latin America !
Source: Airbus GMF 2011 Page 18
AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

Continued imbalance on main intercontinental flows

2010
2.8
PRC-North America

2030
2.7 1.1
X 4.1

PRC-Europe

1.1 1.1 1.1

X 2.2

X 3.7

Europe-North America

1.0
Asia-North America

1.1 1.4
X 2.3

X 2.3

1.1
Europe-Asia

1.3
Europe-South America

1.2
X 2.6

Imbalances
Direction:

IR*

1.5
Europe-Indian Sub.

2.0
X 3.8

1.2
Europe-Africa

1.1
X 2.5

1.2
South America-North America

1.2 1.7
10

X 2.6

*Imbalance Ratio: (FTKs)

Biggest flow Smallest flow

2.4
Indian Sub.-North America 0

X 2.8
20 30 40 50 60 70

Billions FTKs
80 90

Market imbalances will continue to challenge operating economics

Source: Airbus GMF 2011 Page 19
AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

Agenda

GMF freight forecast methodology

Analysis of today's air freight market

20 year global freight traffic forecast

20 year freighter fleet forecast

Page 20
AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

Freighter fleet in service to nearly double in the next 20 years

Freighter aircraft fleet composition in 2030 vs. beginning 2011
Aircraft in service

3,500

3,015
3,000 2,500 2,000

+3.2% CAGR
Growth 1,420

Demand for

1,595
1,500
Replacement 1,311

2,731
freighter aircraft

1,000
500
Stay in service 284

Beginning 2011

2030

Source: Airbus GMF 2011 Page 21

AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

20 year demand for more than 2,700 freighter aircraft

1,400
1,200 New freighters: 834 aircraft Conversions: 1,897 aircraft 1,327 429
New build freighter market (US$ bn): Mid-size: US$ 74.7bn Large freighter: US$ 124.3bn Total: US$ 199.0 bn

150
1,000 800 600 400 200 594 898 810 405

150

405

0
Small Jets Mid-size

150
Large

Mid-size freighters remain the core of the market

Source: Airbus GMF 2011 Page 22
AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

Growth and replacement needs drive demand for freighter aircraft

20 years freighter aircraft demand

1,400 1,200

1,327 757

Growth: 1,420 aircraft Replacement: 1,311 aircraft

1,000
810 800 600 400 570 200 0 Small Jets Mid-size Large 401 340 594 470

193

Replacement will account for nearly half of the demand

Source: Airbus GMF 2011 Page 23
AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

High replacement needs in the coming years

45 40 35 30 25 20 15 10 5 0 Small jet freighter Average fleet age: Small jets: Mid-size: Large: Replacement wave from 2012 2011 2016 2021 2026 Large freighter 60 28 years 21 years 14 years

Mid-size freighter 70 60 50 40

50
40 30 20 Continuous replacement demand 2011 2016 2021 2026 10 0 2011 2016 Replacement wave from 2020 2021 2026

30
20 10

650 freighter aircraft will retire in the next 10 years

Source: Airbus GMF 2011 Page 24
AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

2011-2030 freighter fleet evolution

20 years fleet growth per segment (in service freighter aircraft)
700 600 500 400 300 429

Small jets

+1.9% CAGR

622

594
-0.6% CAGR

BRIC Express 242

- Small jet demand is mainly driven by Express development in PRC, India and Brazil - Twin aisle A/C growth mainly driven by world exports, in particular growing imports from south countries

200
100 0

Others 352

28
Beginning 2011 2030

Retained in service
1,200

Conversions

New

1,600 1,400 1,200 1,000 800 600 400 200 0 678

Mid-size

1,435

Large
1,000 958

+3.8% CAGR

429
800 600 400

+3.4% CAGR
488

405

898

405

200

36
Beginning 2011 2030

148
0
Beginning 2011 2030

Source: Airbus GMF 2011 Page 25

AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

20 years freighter demand & 2030 fleet per region

2030 Fleet, 20 years fleet growth & demand by airline domicile
WORLD
Demand 2,731 2030 fleet regional distribution
North America

+89%
Fleet 3,015

27% 15%

49%

Latin America Africa Middle-East Europe & CIS Asia-Pacific

Europe & CIS

Demand

+75%
Fleet 446
3% 2% 4%

North America
Demand

+83%
Fleet

400

1,374

1,475

Middle East Central America +70%

Demand 30 Fleet 36 Demand 89

+81%
Fleet 102

Asia - Pacific
Demand 706 PRC: 409 Ind.sc:101

+135%
Fleet 817 PRC: 442 Ind.sc:101

Africa
South America
Demand
86

-23%
Fleet 47

+53%
Fleet
92

Demand 46

Asia-Pacific (i.p. China) is leading the growth for dedicated freighter aircraft
Source: Airbus GMF 2011 Page 26
AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

Freighter GMF 20112030: main highlights

Traffic Fleet 5.1% CAGR 3,2% CAGR
1,500

Freight traffic to almost triple in the next 20 years Freighter fleet to almost double over the period
1,327
New freighters: 834 aircraft Conversions: 1,897 aircraft

429

UNITS: 20 years demand for freighter aircraft

1,000

810 594 405 898 405

500

Small Jet Freighters

10t < payload < 30t

Mid-Size Freighters
30t < payload < 80t

Large Freighters
payload > 80t

Continued strong traffic growth, led by emerging countries, will drive demand for 2,700 freighters, of which more than 800 will be new build
Source: Airbus GMF 2011 Page 27
AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.

 AIRBUS S.A.S. All rights reserved. Confidential and proprietary document. This document and all information contained herein is the sole property of AIRBUS S.A.S. No intellectual property rights are granted by the delivery of this document or the disclosure of its content. This document shall not be reproduced or disclosed to a third party without the express written consent of AIRBUS S.A.S. This document and its content shall not be used for any purpose other than that for which it is supplied. The statements made herein do not constitute an offer. They are based on the mentioned assumptions and are expressed in good faith. Where the supporting grounds for these statements are not shown, AIRBUS S.A.S. will be pleased to explain the basis thereof. AIRBUS, its logo, A300, A310, A318, A319, A320, A321, A330, A340, A350, A380, A400M are registered trademarks.

AIRBUS S.A.S. All rights reserved. Confidential and proprietary document.