September 2008, Issue 12

This issue of Point-to-Point focuses on the long-term prospects for the aviation industry projected in the Boeing Current Market Outlook for 2008 to 2027. Walt Skowronski, senior Boeing vice president for Boeing Capital Corporation discusses how the diversification of air transport demand and airline business strategies is building resilience into the aircraft market and creating $3.2 trillion of financing opportunities over the next 20 years. We recap Noteworthy Developments, including key program milestones. As always, we welcome your feedback and suggestions for future Point-to-Point articles.

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Aviation Confronts the Challenge of Climate Change

A Clear Investment Horizon for Global Aviation

Looking beyond the shocks currently weighing on financial markets and economies around the world reveals that global GDP will continue to rise at an average rate of 3.2% over the next 20 years. As global business expands and more of the world’s people gain more disposable income, airline passenger demand will increase 5% per year and demand for air cargo services will grow 5.8% per year. To meet this demand, the world’s air carriers will take delivery of 29,400 airplanes, creating financing opportunities valued at $3.2 trillion.
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Aircraft Financiers Are Helping Shape Potential Aviation Regulation
Walt Skowronski, President
Boeing Capital Corp.

What Forecasted Market Shifts Mean for Financiers

The high cost of fuel creates significant pressure for airlines to replace older aircraft with new, more efficient airplanes. Replacement airplanes will therefore gain a larger share of the total aircraft market, compared to the historical trend. The accelerated retirement rate will create a large pool of relatively recent-vintage candidates for conversion to freighters. Fleet renewal plans will favor single-aisle jetliners over regional jets. Airlines will tend to replace retiring airplanes with airplanes of the next larger size to gain seat-mile cost advantages. This trend stops at about the 400-seat level, where trip costs and flexibility issues begin to favor large twin-engine airplanes over very large four-engine aircraft.
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11/5   BCC Asia Pacific Financiers and Investors Conference, Hong Kong
11/6-7   Asia-Pacific Airfinance Conference
11/12-13   China Aeroleasing Summit, Beijing
12/8-10   Aircraft Finance Conference 2008, New York
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