1
John Leahy CCO of Airbus
North America Investor Forum 2004New York – December 3rd, 2004
AirbusFoundations of Leadership
2
Airbus today
12 models5,093 aircraft sold to197 customers
3,722 delivered290 2004 deliveries
to end NovemberData to end November 2004
3
Revenues
$37.5 billion$37.5 billion
Airbus$17.7B
47%
Boeing$19.8B
53%
2004 order share and value
Data to end November 2004
Airbus218 aircraft
51%
Boeing207 aircraft
49%
425 firm orders425 firm orders
Units
4
2004 orders by size category
100-200 seater
304 orders
717737757
125 a/c41%
A320 Family179 a/c
59%
200-275 seater
67 orders
A300A310
A330-2006 a/c9%
7677E7
61 a/c91%
275-375 seater
44 orders
77711 a/c25%A330-300
A34033 a/c75%
375+ seater
10 orders
10747
100%
0 A3800%
Data to end November 2004
5
Order evolution - gross
% share of gross unit orders: 1995 – end November 2004
0
20
40
60
80
100
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Airbus18%
Boeing82%
Boeing49%
Boeing49%
Airbus51%Airbus51%
6
Deliveries
Airbus261 aircraft
52%
Boeing238 aircraft
48%
499 aircraft delivered499 aircraft delivered
2004 to end October
Airbus305 aircraft
52%
Boeing281 aircraft
48%
586 aircraft delivered586 aircraft delivered
2003
7
Delivery trend
294 311 325 303 305 315
620489 527
381281 287
0
200
400
600
800
1000
1999 2000 2001 2002 2003 2004E
AirbusAirbus
BoeingBoeing
800 852
684586
914
602
32%
52%
Airbus’ delivery share
8
2004 world traffic to grow at 11.4% vs 2003
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
E
% year over year change - RPK
Source: ICAO, Airbus forecast
9
World air transport operating result (EBIT)
-10
-5
0
5
10
15
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
E*
Billions US$
Source: IATA, Airbus estimates for 2004
An average of $40 / Barrel will reduce EBIT from ~ $3.5B to ~ $1An average of $40 / Barrel will reduce EBIT from ~ $3.5B to ~ $1BB
2004 averagefuel price
$30 / barrel
$40 / barrel
10
Only a small part of the current parked fleetis likely to return to active service
0
200
400
600
800
1000
1200
1400
1600
1800
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
YtD
OldMidNew
Source : Airclaims End Oct 2004
Number of western built passenger jets parked at year endby generation
Only 250 to 300 currently parked aircraft will return to service
11
No oversupply of aircraft
29
1
23
37
1
Airbus Boeing
End September 2004
MD-80/90
757-200
737NG
737SG
717
91
26
12
A closer look at parked A320 Family
• Of 26 A320 Family parked
– 8 temporarily parked
– 15 have known placements
– 3 no current placement (0.1% fleet)
• Availability far lower than perceived
• Parked fleet is very dynamic - not same aircraft month-to-month
12
8
5
3
16
A319 A320 A321
Available (no current placement)Known placementTemporarily parked by operator
End September 2004
13
A320 Family lease rates have made a strong recovery
• Negative impacts on lease rates:– General market conditions post 9/11– 6 major bankruptcies
- SAB, CMM, AAA, SWR, AES & AEF- 128 A320 Family released
– Chapter 11 filings· USA, UAL, ACA· 550+ A320 Family involved with
potential for many ‘rejections’
• Drivers of a strong recovery– Planned production increase not
implemented & strict ‘no white tail’ policy– Proactive role of Airbus with lessors and
other owners to place aircraft– Rapid expansion of operator base– Improvement of general market
conditions, especially outside North America
50%
60%
70%
80%
90%
100%
2000 2001 2002 2003 2004
14
Leasing markets and aircraft availability
15
Leasing companies’ backlog (end October 2004)
1399 aircraft
AirlineBacklog:
987aircraft70.5%
LeasingBacklog:
412 aircraft29.5%
16
Lessor placement rates
0%
20%
40%
60%
80%
100%
2005
UnplacedPlaced
8 open slots
17
Leasing placement trend
0
25
50
75
100
125
150Number of aircraft
106
2004
52
114
138
2002 20032001
171 aircraft placed in the last 12 months proves clear recovery of the market
65106
Last 12 months: 171 a/c
18
19
A321 & A330-200 : a new wave in the “mid-market”
A321
A330-200
A300/A310
767
757
0%
20%
40%
60%
80%
100%
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Early 1990s757 & 767 captured
80% of the market sector
New WaveA321 & A330-200 capture
>80% and rising
Deliveries share
20
Cost ofOwnership
(40%)
Economic realities
Fuel(30%)
Landing & nav.fees (21%)
Flight crew(27%)
Maintenance(22%)
CashOperating
Cost(60%)
Typical cash operating cost breakdown
TotalOperating
Cost
21
Similar operating costs per seat
1.83.612.9Flight crew
0.61.17.6Landing & nav
-1.5-2.9-8.5Fuel
As % of Total Operating Cost
per seat
As % of COCper seat
Delta %7E7-8 vs. A330-
200 as datum
0.51.65.6Maintenance
Total +3.0% +1.4%
7E7 @ 217 seatsA330-200 @ 245 seats
22Subject to launch
23
250 & 300 seat 20-year demand
• 250 seats: 1800 aircraft- 767-300ER- 7E7-8- A330-200- A350-800
• 300 seats: 1300 aircraft- 777-200ER/LR- 7E7-9- A330-300- A340-300- A340-500- A350-900
2020--year market is 3100 aircraftyear market is 3100 aircraft
24
A350 highlights
All new cabinAll new cabin
Full titanium pylonFull titanium pylon Centre wing box in CFRPCentre wing box in CFRP
CFRP outer wing boxCFRP outer wing box Optimised fuselage Optimised fuselage design (Aldesign (Al--Li)Li)
Rear fuselageRear fuselageAlAl--Li or CFRPLi or CFRP
New HTPNew HTPPassive and active Passive and active
load alleviationload alleviation
New high bypass New high bypass enginesengines
Wing drag Wing drag improvementsimprovements
25
A350-800 competitive highlights
Seats (3-class)
Full passenger load range (nm)
Block fuel / seatCash cost / seat
MWE per seat
Noise classification Londonarrivaldeparture
A350-800 7E7-8
245 217
8600nm 8500nm
Datum +2.5%Datum +7%
Datum +3%
QC 0.5 QC 0.5QC1 QC1
26
A350-900 competitive highlights
Seats (3-class)
Full passenger load range (nm)
Block fuel / seatCash cost / seat
MWE per seat
Noise classification Londonarrivaldeparture
A350-900 7E7-9 777-200ER
275 257 290
7600nm 8100nm 7700nm
Datum equal +20%Datum +3% +6%
Datum same +10%
QC 0.5 QC 0.5 QC 1QC1 QC 1 QC 2
27
28
560t
555 seats8000 nmEIS 2006
590t
150 t5620 nmEIS 2008
A380 – an all new, state-of-the-art design
29…now 139 firm orders
& commitments
Strong market confidence
10 A380
2 A38010 A380F
12 A3806 A380
10 A3805 A380 & 5 A380F
6 A38015 A380
5 A3804 A380
41 A380 & 2 A380F
6 A380
30
23 commitments in the last 14 months
October 2003October 2003Korean Air 5 A380s
December 2003December 2003Malaysia Airlines6 A380s
July 2004July 2004Etihad (MOU)4 A380s
December 2003December 2003Qatar Airways2 A380s
August 2004August 2004Thai (MOU) 6 A380s
31
Top 20 airlines by RPK
-10.0%
-5.0%
0.0%
5.0%
10.0%
15.0%
Thai
Cat
hay
Paci
ficEm
irate
sSi
ngap
ore
Qan
tas
Briti
sh A
irway
sSo
uthw
est
Kore
an
Lufth
ansa
AMR
Iber
iaAi
r Fra
nce
ANA
US
Air
Con
tinen
tal
Uni
ted
Air C
anad
aN
orth
wes
tJA
LSD
elta
1Q2004 for JALS, Air France includes KLM
1st Half 2004 net profit margin in %
A380
A380
A380
A380A38
0A38
0
A380
32
747747--400400
Superior range and economics
COC per m2 of cabin Datum --26%26%
A380A380--800800
Seats 412 555555
Max TOW (tonnes) 397 560560
Max range (nm) 7100 80008000
COC per seat Datum --17%17%
33
* gross area less cut-outs for stairs/lifts and minimum regulatory aisles / assist space
Datum747-400 A380
+50%Relativenet usable*floor area
35%moreseats
More volume, more seats, more comfort
More comfort per
seat
A380 walk through
A new life in the air – new version with 16m
35
The GREEN GIANT for our planet
* 5000 nm sector, Typical International Flight Profile, 555 pax
The first long-haul aircraft with less than3 litres per pax/100km fuel consumption*
36
350 400 450 500 550 600 650 MTOW (t)
London departure
QC8
QC2
747-400875 klb MTOW
QC4
747-400X910 klb MTOW
A380A380
35% more pax & half the noise
A380 A380 -- the low noise answer for growththe low noise answer for growth
37
Growth by both fragmentation and consolidation
The real world: fragmentation The real world: fragmentation andand consolidationconsolidation
CONSOLIDATIONCONSOLIDATION
• More cost-effective
• Hub dominance
• Global network
• Linking major hubs
• The logic behind alliances
FRAGMENTATIONFRAGMENTATION
• Hub by-passing
• Market development
• Frequency on thin routes
• The business traveller’spreference
38
Large aircraft operations are concentrated
KIXKIXFUKFUK
NRTNRT
HKGHKG
LHRLHR
TPETPEBKKBKK
ANCANC
ICNICN
SINSIN
LAXLAXHNDHND
FRAFRA
JFKJFK
AMSAMS
SYDSYD
CDGCDG
SFOSFOORDORD
DXBDXB
KULKUL
CTSCTS
PVGPVG ITMITM
MNLMNL
PEKPEK
RUHRUH
JNBJNB
BOMBOM
AKLAKL
HNLHNL MIAMIAOKAOKA
DELDEL
LUXLUX
MELMEL
JEDJED
80% of all 747 movements are concentrated into just 37 airports
All of these airports, and many more, are either ready, preparedAll of these airports, and many more, are either ready, preparedor planning for A380 operations or planning for A380 operations
39
Europe-Asia scheduling constraints
Airport curfews & passenger convenience mean all flights are Airport curfews & passenger convenience mean all flights are constrained to very limited time windowsconstrained to very limited time windows
LON 12 13 14 15 16 17 18 19 20 21 22 23 24 01 02 03 04 05 06 07 08 09 10 11 12
HKG 19 20 21 22 23 24 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19
LHR-HKG November 11 2004CX 250 18.50 744BA 025 19.00 744BA 031 20.40 744CX 252 21.00 343VS 200 21.30 346CX 254 21.55 744BA 027 22.05 744
HKG-LHR November 12 2004BA 026 23.25 744VS 201 23.35 346BA 032 23.45 744CX 251 23.55 744CX 255 00.25 343QF 029 01.20 744
40
Origin/destination passengers to mainland China
Source: MIDT 2003
Beijing
ShanghaiGuangzhou
Mainland ChinaFinal destination cities
90% to 3 cities90% to 3 cities
ChicagoBoston
Honolulu New York
Los Angeles
SanFrancisco
Washington
USAFirst origin cities
70% from 3 cities70% from 3 cities
Origin-destination traffic between U.S. and China
41
Meeting passenger expectations
5% 4% 4%1% 1%
7%
14%17%
11%
33%
3%
0%
10%
20%
30%
40%
Price
Convenient schedule
Frequent flier
Non-Stop flights
Previous g
ood experience
Other
Safety reputation
Loyalty to ca
rrier
Employer policy
In-flight se
rvice
On-time re
putation
Airline criteria of choice on US int’l flightsWhat is your main reason for flying on this airline?
Source: US Commerce Department Survey (ITA ), 2004
% of respondents
42
A380 routes - 2008
43
As one era ends…
0
20
40
60
80
100
120
140
160
180
1997 1998 1999 2000 2001 2002 2003 2004
159159
102102
7777 7777
A380A380LaunchLaunch
Data to end September 2004
62625252
3737 3636
……another one begins another one begins
85859595
129129139139
25F
747A380
44
Introduction of 747 at New York
Mar. 70 Jun. 70 Sep. 70 Mar. 71 Jun. 71
Competition & Competition & product preferenceproduct preference forced all airlinesforced all airlinesto rapidly introduce the 747 at New Yorkto rapidly introduce the 747 at New York
15 months
747707BOAC
Air France 747707
Lufthansa 747707
Pan Am 747
747TWA
JAL 747DC8
Source: ICAO
45
Introduction of 747 at Tokyo
Dec. 71 Mar. 72 Jun. 72 Sep. 72 Dec. 72
747707Air France
747DC8JAL
747707Lufthansa
747707Pan Am
747747Northwest
6 months
Source: ICAO
Competition & Competition & product preferenceproduct preference forced all airlinesforced all airlinesto rapidly introduce the 747 at Tokyoto rapidly introduce the 747 at Tokyo
46
Introduction of 747 at London
Mar.70 Jun. 70 Mar. 71 Jun. 71 Sep. 71
747707JAL
747Pan Am
18 months
747707BOAC
TWA 747
Source: ICAO
Competition & Competition & product preferenceproduct preference forced all airlinesforced all airlinesto rapidly introduce the 747 at Londonto rapidly introduce the 747 at London
47
Introduction of 747 at Hong Kong
Source: ICAO
Dec. 71 Mar. 72 Jun. 72 Sep. 72
747707Air France
747707Lufthansa
747707Pan Am
747747Northwest
9 months
747707BOAC
Sep. 71
Competition & Competition & product preferenceproduct preference forced all airlinesforced all airlinesto rapidly introduce the 747 at Hong Kongto rapidly introduce the 747 at Hong Kong
48
49
Certain of the statements contained in this document are not historical facts but rather are statements of future expectations and otherforward-looking statements that are based on management‘s beliefs. These statements reflect the Company‘s views and assumptionsas of the date of the statements and involve known and unknown risk and uncertainties that could cause actual results, performance orevents to differ materially from those expressed or implied in such statements.
When used in this document, words such as “anticipate”, “believe”, “estimate”, “expect”, “may”, “intend”, “plan to” and “project” areintended to identify forward-looking statements. Such forward-looking statements include, without limitation, projections forimprovements in process and operations, new business opportunities, revenues and revenues growth, operating margin growth, cashflow, deliveries, launches, compliance with delivery schedules, performance against Company targets, new products, current andfuture markets for the Company products and other trend projections.
This forward looking information is based upon a number of assumptions including without limitation:· Assumption regarding demand· Current and future markets for the Company‘s products and services· Internal performance including the ability to successfully integrate EADS‘ activities to control costs and maintain quality· Customer financing· Customer, supplier and subcontractor performance or contract negotiations· Favourable outcomes of certain pending sales campaigns
Forward looking statements are subject to uncertainty and actual future results and trends may differ materially depending on varietyof factors including without limitation:· General economic and labour conditions, including in particular economic conditions in Europe and North America,· Legal, financial and governmental risk related to international transactions· The Cyclical nature of some of the Company‘s businesses· Volatility of the market for certain products and services· Product performance risks· Collective bargaining labour disputes· Factors that result in significant and prolonged disruption to air travel world-wide· The outcome of political and legal processes, including uncertainty regarding government funding of certain programs· Consolidation among competitors in the aerospace industry· The cost of developing, and the commercial success of new products· Exchange rate and interest rate spread fluctuations between the Euro and the U.S. dollar and other currencies· Legal proceeding and other economic, political and technological risk and uncertainties“
Additional information regarding these factors is contained in the Company‘s document de référence”dated 1st April 2004.The Company disclaims any intention or obligation to update these forward-looking statements. Consequently the Company isnot responsible for any consequencies from using any of the above statements.
Safe Harbor Statement