2006 Boeing

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.
Boeing Commercial Airplanes

Market Analysis
P.O. Box 3707, MC 21-28
Seattle, WA 98124-2207 USA
www.boeing.com/commercial/cmo
Boeing is a trademark of Boeing Management Company. Copyright 2006 Boeing. All rights reserved.
Printed in U.S.A. CMO68247 09/06
FUTURE AIR
TRANSPORT
An industry dedicated
to continuous improvement
in global air travel.
HIGHLIGHTS OF
THE OUTLOOK >> ...............................................2
AIRPLANE DELIVERY
FORECAST >> ......................................................3
New Airplane Markets .............................................. 4
More Travel Choices ................................................ 6
Demand by Airplane Size .......................................1 0
Air Cargo Markets ...................................................14
TRAVEL DEMAND AND

AIRLINE MARKETS >> .....................................15
Air Transport in a Global Economy ........................1 6
Airline Strategies .....................................................1 8
THE OUTLOOK
BY REGION >> ................................................... 21
Region Comparison ................................................2 2
Asia Pacific Overview .............................................2 4
Middle East .............................................................2 9
North America .........................................................3 0
Europe .....................................................................3 2
Latin America ..........................................................3 4
Africa .......................................................................3 5
USEFUL
DATA >> ...............................................................35
Passenger Traffic ....................................................3 6
Fleet Size and Development ..................................3 8
New Airplane Deliveries ..........................................4 0
Traffic and Growth ..................................................4 2
THE BOEING COMPANY 2006

CURRENT MARKET OUTLOOK
THE NEXT
20 YEARS >>
PASSENGER AND FREIGHT

TOTAL MARKET VALUE >>
HIGHLIGHTS OF
THE OUTLOOK
MOVING TO LARGER JETS

REGIONAL JET DELIVERIES >>
$2.6T
3,450
HIGH-FREQUENCY MARKETS
SINGLE-AISLE DELIVERIES >>
16,540
NEW DIRECT SERVICES

TWIN-AISLE DELIVERIES >>
6,230
SERVING HIGH-DENSITY TRAVEL

LARGE AIRPLANE DELIVERIES >>
990
IMPROVING AIR TRAVEL FOR EVERYONE

TOTAL AIRPLANE DELIVERIES >>
27,210
TOTAL FLEET
END OF YEAR 2005 >>
NEW AIRPLANES
REPLACING OLD >>
NEW AIRPLANES
FOR GROWTH >>
AIRPLANES CONVERTED
TO FREIGHTERS >>
TOTAL FLEET
END OF YEAR 2025 >>
17,330
AIRPLANE DELIVERY
FORECAST >>
9,580
17,630
2,220
35,970
For fleet development, see page 5.

THE GLOBAL MARKET FOR NEW AIRPLANES

WILL BE WORTH $2.6 TRILLION
AIRPLANE DELIVERY
FORECAST >>
The market will require 27,210 new airplanes, and the fleet
will grow from 17,330 to 35,970 airplanes by 2025.
NEW AIRPLANE
MARKETS
The next 20 years will
see an annual world economic
growth rate of 3.1 percent,
a passenger travel growth rate
NEW AIRPLANE DELIVERIES AND MARKET VALUE

Deliveries by size
Deliveries by region
Single aisle
61%
Regional jets
13%
North America
35%
Asia Pacific
29%
747 and larger

3%
Latin America
6%
Twin aisle
23%
Europe
24%
Middle East 4%
Africa
2%
DELIVERIES BY SIZE AND REGION >> 27,210
of 4.9 percent, and a freight
Market value by size
growth rate of 6.1 percent.

Regional jets
4%
Single aisle
41%
Market value by region
North America
28%
Asia Pacific
36%
747 and larger

10%
Middle East 6%
Africa 2%
Twin aisle
45%
Latin America
4%
MARKET VALUE BY SIZE AND REGION >> $2.6 TRILLION, $2005
Europe
24%
Over the next 20 years

The growing world economy, world trade, and
airline competition in liberalized markets will generate
annual passenger traffic growth of 4.9 percent
and freight growth of 6.1 percent.
17,630 airplanes will be needed to accommodate
the anticipated growth in passenger travel
and air freight.
9,580 new airplanes, or 35 percent of the total,
will replace less efficient airplanes that will no
longer be used in their current roles. While most of
the airplanes replaced will be permanently retired,
2,220 passenger airplanes will be converted to
freighters and 770 new freighter will be delivered.
A diverse global market

The global market for new airplanes over
the next 20 years will be diverse across regions,
travel patterns, and airline business models.
Airlines in Asia Pacific will acquire the highest
value of new airplanes, with 36 percent of
the overall $2.6 trillion market.
Airlines in North America will require the largest
number of new airplanes, with 35 percent of
the overall 27,210 airplanes required, compared
to 29 percent for Asia Pacific and 24 percent
for Europe.
Airplane units
35,970
Removed
or converted
airplanes
10,790
Airplanes
converted to
freighters
1,210
17,630
ANNUAL
GROWTH
GDP
RPKs
RTKs
3.1%
4.9%
6.1%
DELIVERIES
CHANGE IN FLEET
HOW THE FLEET GROWS
WORLD TOTAL >>
747 and larger

Twin aisle
Single aisle
Regional jets
1,010
Airplanes
converted to
freighters
17,330
9,580
Value, $B
New airplanes
Regional jets
Single aisle
Twin aisle
747 and larger
2,600
27,210
3,450
16,540
6,230
990
TOTAL FLEET
2005
2025
17,330
35,970
0
Fleet 2005
17,330
FLEET DEVELOPMENT 2005 TO 2025 >>
New airplane deliveries
27,210
Fleet 2025
35,970
Fleet 2005
17,330
Fleet 2025
35,970
BY SIZE >>

A RESILIENT PASSENGER TRAVEL MARKET
AIRPLANE DELIVERY
FORECAST >>
The market for air travel is set to grow at an average

of 4.9 percent each year.
The resilience that global airline markets have shown over time is
reflected in average annual passenger traffic growth of 4.8 percent and
air cargo growth of 6.3 percent over the past 20 years. This growth was
founded on world economic growth of 2.9 percent and further stimulated
by liberalization of market regulations in many countries.
MORE TRAVEL
CHOICES
Looking ahead over the next 20 years, the world economy is set to
grow at 3.1 percent. Because airline passengers will continue to prefer
traveling on nonstop flights, growth will be accommodated mainly by
an increased number of flights (frequencies) rather than by larger
airplanes, as seen in the chart.
Global airline markets will

grow steadily over time.
AIR TRAVEL GROWTH PARAMETERS INDEXED TO 1990

Frequency growth
Air travel growth
Nonstops
Average airplane size
6.0
5.0
4.0
3.0
2.0
1.0
0
1990
1995
2000
End of year
2005
MORE FREQUENT, DIRECT FLIGHTS >>

For routes over 3,000 miles.
6
2010
2015
2020
End of year
2025
Fundamental importance of
liberalized markets
Reduced market regulation is a key component
of bringing wider availability of affordable air
travel, which is so critical to maintaining personal
relationships, developing future business,
transporting purchased goods, and improving
living conditions worldwide.
Liberalization typically stimulates immediate
market growth of 12 to 35 percent.1 Furthermore,
if markets connecting another 320 country pairs
were liberalized, 24 million new jobs would be
created, and an additional $490 billion would be
added to the world economy (GDP).
Airline business models
Competition in liberalized markets enables airlines
to implement service strategies, or business
models, tailored to their target markets.
The primary airline business models are short
haul, low cost; global and broad network; longhaul network; charter and inclusive tour (leisure);
and freight operators. Of these, the global and
broad network carriers will need the largest
share (59 percent) of new airplanes in the future,
with the short-haul, low-cost carriers needing
34 percent. There is further discussion of
airline business models on page 20.
1 The Economic Impact of Air Service Liberalization InterVISTAS-ga2 Consulting 2006.

2 ACAS.
The most efficient travel option

Airlines are operating at their most efficient levels
ever, as measured by utilization of their airplanes
and how full those aircraft are on each revenue
flight. This efficiency favors the use of the newest
airplanes, which have the highest utilization rates.
As airlines seek to build the profitability of their
business in an environment of high fuel prices,
they will tend to bring forward fleet replacement.
Airplanes have the highest levels of utilization of
any form of transport. The world average singleaisle utilization in August 2005 was 8.4 flight-hours
a day and that for all twin-aisle and large airplanes
was 10.7 flight-hours a day.2 2005 also saw the
highest global airline load factors ever (percentage
of available seats occupied by fare paying
passengers) at over 76 percent.
NEW AIRPLANE DELIVERIES

BY BUSINESS MODEL
Short haul,
low cost
34%
Charter and
inclusive tour
2%
Freight
operators
1%
Long-haul
network
4%
Global
and broad
network
59%
SHARE OF DELIVERIES BY AIRLINE TYPE >>

For more on airline business models, see page 20.
7

AIRPLANE DELIVERY
FORECAST >>
GLOBAL PASSENGER TRAVEL PATTERNS

Passenger travel is analyzed by regional traffic flow.
As people travel by air from one place to another, they do so either within or
between regions. In the Current Market Outlook passenger travel is analyzed
according to these flows at a very detailed level (see pages 36 and 37) and
is shown here aggregated into the main travel regions of the world.
Travel growth rates in each market are affected by factors in the countries
or regions at each end of, or within, the flow.
PASSENGER TRAFFIC DEVELOPMENT, RPKs (BILLIONS)
ANNUAL GROWTH RATE, 20052025

6.4%
Asia Pacific, including China
2,500
Within North America
3.6%
5.4%
Asia Pacific, excluding China

2,000
Within Europe
North Atlantic
1,500
3.4%
4.5%
8.8%
Within China
EuropeAsia Pacific
Transpacific
1,000
North AmericaLatin America

EuropeLatin America
500
5.5%
5.8%
4.9%
5.1%
6.9%
Within Latin America

0
AfricaEurope
End of year
2005
ASIA PACIFIC WILL BECOME THE LARGEST REGION >>
End of year
2025
Middle EastAsia Pacific
WITHIN OR BETWEEN REGIONS >>
5.0%
6.0%
Factors affecting growth in each market

The size of each economy and its growth rate have
the largest effect on the growth of passenger travel
in each market. The rate of change of airfares will
affect travel growth (to airlines, this means changing
yields, or revenue per passenger kilometer). In
many markets, the biggest influence on growth
rates is the degree to which governments open
market access to airlines based either within
their own territory or outside (i.e., the degree
of liberalization in each countrys markets).
The varying relationship between GDP and

passenger travel (and also air freight traffic) is
clearly shown for each region in the section
The Outlook by Region, beginning on page 21.
Other important factors to consider include the

propensity for people of a given culture to travel,
especially to distant countries, and the outlook
for change in any government-imposed
restrictions on travel.
Although the large internal markets of North

America and Europe will see lower growth rates
than other markets, their size will result in
large amounts of additional traffic.
Passenger market growth by region

Asia Pacific (including within China) will become
the largest internal market over the next 20 years,
overtaking the market within North America.
Markets in Asia Pacific have powerful combinations
of large economies, rapid economic growth,
and liberalizing markets.
Airplane use on each flow

Airline service in markets connecting distant
regions generally needs larger airplanes than that
within regions, which tend to offer more flights
on a given day (i.e., higher frequencies) and often
a choice of airports close to the larger cities.
The exception is markets within Asia Pacific,
which can involve long flights or very high
traffic volumes with restricted choice of airports
that can be served. This suits the use of
larger airplanes.
Concentration of single-aisle
demand within regions
The need for single-aisle airplanes is focused on
serving markets where low fares and choice of
destination airports are highly essential to travelers.
These markets tend to be within regions, particularly
where internal market regulations are highly
relaxed or there is a free market.
AIRLINE CAPACITY BY AIRPLANE SIZE

3,500
3,000
Annual ASKs (billions)
The EuropeLatin America and North America

Latin America markets are almost the same
size as each other at both the beginning and end
of the period because they are both expected
to grow at around 5 percent each year.
2,500
2,000
1,500
1,000
500
0
2005 2025
Asia-Europe
2005 2025
Transpacific
2005 2025
North Atlantic
2005 2025
Asia Pacific
TWIN-AISLE AIRPLANES FOR LONGER DISTANCE >>
2005 2025
Europe
2005 2025
North America
747 and larger

Twin aisle
Single aisle
Regional jets
9

AIRPLANE SIZE BY REGION
AIRPLANE DELIVERY
FORECAST >>
Demand by region where the airline is based.
DEMAND BY
AIRPLANE SIZE
Traffic volumes, competition,
route distance, and airline strategies
shape demand for airplane
In contrast to the previous section, which discusses demand for

airplanes to serve traffic flows within and between geographic regions, the
fleet development discussion here refers to the fleets of airlines according
to where they are based. Freight airplanes are included in the charts
and numbers in this section.
Distinct influences on choice of airplane size
Traffic volumes, distances in key markets, competitive strategies, availability
of alternative forms of transport, and market access influence the size of
airplane used in any given region.
In general, if market regulation allows airlines to make their own choices
regarding how to compete, they will use smaller aircraft and provide
more frequent service.
size in each region.

NEW AIRPLANE DELIVERIES BY SIZE AND REGION
747 and larger
Twin aisle
Single aisle
Regional jets
10,000
8,000
6,000
4,000
2,000
0
North
America
Asia
Pacific
27,210 NEW AIRPLANE DELIVERIES >>

For new and converted freighters, see page 15.
10
Europe
Latin
America
Africa and
Middle East
Already common in developed markets, this

approach is also the prevalent trend in market
development foreseen in the most rapidly
growing regions. The result will be more frequent
service on existing routes and more pairs of
cities connected for the first time.
Reduced size of airplanes for
most long-range markets
Medium- and long-range markets are primarily
served with twin-aisle and large airplanes.
The shifting balance toward smaller
twin-aisle airplanes in the future is driven by
passengers who prefer to travel directly between
their points of origin and destination. Airlines
are able to provide more economical service on
an increasing number of these routes through
the improvement in operating economics
of each new generation of airplane.
Some markets need larger airplanes
Scheduling constraints and market regulations
in a few of the worlds intercontinental markets
limit the number of possible flights any one
airline can offer. On these routes and those with
particularly high demand, airplanes of 747 size
and larger will be required. Good examples
of such routes would be Singapore or
Hong Kong to London Heathrow.
HOW THE FLEET WILL DEVELOP OVER THE NEXT 20 YEARS

Fleet end of the year 2005
Region
Regional jets
Single aisle
Twin aisle
747 and larger
Regional total
1,890
4,300
1,060
170
7,420
Asia Pacific
170
1,800
830
470
3,270
Europe
560
2,760
640
230
4,190
Latin America
20
950
120
10
1.100
Africa and Middle East
70
770
420
90
1,350
2,710
10,580
3,070
970
17,330
Regional jets
Single aisle
Twin aisle
747 and larger
Regional total
3,200
7,820
2,330
240
13,590
Asia Pacific
670
5,340
2,830
770
9,610
Europe
550
5,270
1,660
240
7,720
Latin America
440
1,920
350
10
2,720
Africa and Middle East
180
1,120
900
130
2,330
5,040
21,470
8,070
1,390
35,970
North America
WORLD TOTAL >>

Fleet end of the year 2025
Region
North America
WORLD TOTAL >>
For deliveries by airplane size and region, see pages 40 and 41.
11

AIRPLANE DELIVERY
FORECAST >>
New passenger
airplane deliveries
26,440
THE AIRPLANE MARKET LIFE CYCLE

A systematic view of the airplane life cycle.
As airplanes age, some of the oldest ones
are removed from the system and new ones
are acquired for replacement or growth. In an
environment of high fuel prices, replacement
of older airplanes is accelerated. Airplanes
that are retired are those that are no longer in
service at the end of the forecast period.
Movement within the fleet
There is also considerable movement within
the overall fleet; most of the 2,220 airplanes that
will be converted from passenger to freight roles
will be acquired by different operators. Over the
past decade, the majority of airplanes converted
have been between 15 and 19 years old, although
the optimum conversion age varies by airplane
type and condition. Some of the fleet will change
operators through sale, lease, or other
forms of exchange.
Aircraft become less productive with age
Newer airplanes are used more intensively
than older ones: around 9 flight-hours a day for a
current generation single-aisle airplane in passenger
service compared to 7 to 8 hours a day for a
15-year-old airplane and as low as 2 to 3 hours
a day for a 25-year-old converted freighter.
2005 passenger fleet 15,540

>> PASSENGER FLEET
IN SERVICE
Converted
to freighter
2,220
PARKED
USED
2025 passenger fleet 32,400

7,360
retired passenger
airplanes
2005 TOTAL PASSENGER AND FREIGHTER FLEET >> 17,330
12
New freighter
airplane deliveries
770
2005 freighter fleet 1,790
FREIGHTER FLEET <<
IN SERVICE
Converted
from passenger
2,220
PARKED
USED
2025 freighter fleet 3,570

1,210
retired freighter
airplanes
Newer airplanes favored as the fleet ages

The passenger fleet is getting older at a slowing rate, with its average
age now stabilizing at around 12 years. New airplanes added to the fleet
have much better performance, economic, and environmental
characteristics than those that are removed.
The cost of periodic maintenance increases as aircraft age, although each
new generation of airplanes has a longer period of lower initial maintenance
costs. As operating expenses such as fuel, crew, and online engine and
airframe maintenance increase for older airplanes compared to newer ones,
older airplanes are more likely to be retired and replaced with newer types.
Regulations governing aircraft noise and emissions or aircraft age limits
may also prompt airplane retirement.
Airplanes parked for a variety of reasons
An airplane may be parked for a few weeks or months during maintenance,
modification, conversion, or transfer between owners. In these cases, the
airplane may be in a hangar or parking area at an airport or maintenance
facility. When an airplane is no longer economically viable to operate, it may
be stored for longer periods at a dedicated facility, perhaps with its engines
removed, doors and windows sealed, and in dry desert conditions. The
age and condition of the airplane, its model type, and overall market
conditions will affect the length of time it is parked.
Larger numbers of airplanes are becoming economically obsolete and
are being scrapped. Efforts to appropriately dispose of airplanes include
disassembling them to salvage parts and components and separating
valuable materials for reclamation. These actions increase aircraft
scrap values, enable reuse of their structural materials, and
reduce the environmental impact of recycling airplanes.
2025 TOTAL PASSENGER AND FREIGHTER FLEET >> 35,970
13

CONTINUOUS STRONG GROWTH IN AIR FREIGHT
AIRPLANE DELIVERY
FORECAST >>
7.3 percent annual growth in world trade value will help drive
a 6.1 percent average yearly increase in air cargo (ATKs).
580 billion revenue tonne-kilometers by 2025
The world's total annual air cargo market will grow from its current
180 billion RTKs to more than 580 billion RTKs per year by 2025. There
will be a slight shift away from carrying freight in the belly (under-floor)
holds of passenger airplanes to more use of dedicated freighters, which
will provide more than half the world's total air cargo capacity.
AIR CARGO
MARKETS
A shift toward highly capable
Since 1994, the widebody freighter fleet has grown from less than
250 to nearly 900 today and will continue to grow. Widebody freighters
will increase in share from 50 percent of the current fleet to 64 percent
of the fleet in 2025. Of the freighter airplanes retiring, most are older
standard-body freighters, many of which will be replaced with
medium-widebody airplanes.
new widebody freighters.
HOW THE FLEET GROWS
CHANGE IN FLEET
Airplane units
3,570
Removed or
retired freighter
airplanes
1,210
770
1,790
2,220
Fleet 2025
35,970
0
Fleet 2005
1,790
FREIGHT FLEET DEVELOPMENT 2005 TO 2025 >>
14
Added freighters
2,990
Fleet 2025
3,570
Fleet 2005
1,790
BY SIZE >>
Fleet 2025
3,570
Dedicated freighter fleet will shift toward widebodies

The freighter fleet will just about double over the next 20 years,
from 1,790 to 3,570 airplanes. There will be 1,210 retirements and
2,990 airplanes added to the freighter fleet by 2025.
Three-quarters (2,220) of the airplanes added to the freighter fleet
will come from converted passenger or combi airplanes.1 The remaining
770 airplanes added will be new production freighters, with a market
value of $169 billion. Many airlines prefer the advanced technical features,
improved reliability, and better fuel efficiency of new airplanes. Nearly
62 percent of all additions to the fleet will be widebody airplanes
because of airline needs for long-range, low-unit-cost service.
TRAVEL DEMAND AND

AIRLINE MARKETS >>
Operators in Asia Pacific will account for more than 37 percent of

world freight capacity and 38 percent of the freighters added. Airlines
in North America will account for 32 percent of world capacity but
will require 48 percent of all deliveries, taking a higher proportion
of standard-body freighter airplanes.
NEW AND CONVERTED FREIGHTERS
2,000
Large
(more than 75 tonnes)
Medium-widebody
(40 to 75 tonnes)
Standard-body
1,000
(less than 45 tonnes)
0
North
America
Asia
Pacific
Europe
Latin
America
Africa and
Middle East
BY SIZE AND REGION >>

1 Mixed passenger and freight configuration, such as the 747-400 Combi.
15

TRAVEL DEMAND AND

AIRLINE MARKETS >>
AIR TRANSPORT IN A
GLOBAL ECONOMY
JASMINE
Takes a break
from studying by
going on a long
weekend in Spain
twice a year, thanks
to low-cost airlines.
Air transport is crucial to personal

relationships, to future business,
FAMILY TRAVEL >>
to transporting purchased goods,

and to improving living conditions
around the world.
BUSINESS TRAVEL >>
URGENT FREIGHT >>
16
LEISURE TRAVEL >>

ALFREDO
Works near
Miami, likes to visit
family back home
in Brazil once in
a while with wife
and two kids.
SAKAMOTO SAN
Developing international business that
supports the livelihood of 14,800 employees.
Often undertakes long, multistop trips such
as from Tokyo to London via Dubai,
returning back home after three weeks
of meetings with customers.
PUNITA
A research biologist who urgently needs samples for her
study to assist humanitarian aid programs. Expensive, heavily packed
samples that will degrade beyond use if they aren't delivered in time
are dispatched from New York. Fortunately, they are sent on
the air freight service that stops in Delhi on its
way around the world.
Flights
Kilometers
28 million
34 billion
LOWEST FARE
Distance
Passengers
Airfare
Yield
1700 km
1
$155
9 per km
TXL > PMI > TXL
AIR TRANSPORT
Of the world economy, air transport contributes
8%
Leisure travel
contributes
3%
ECONOMY
Distance
6600 km
Passengers
4
Airfare
$1,124
Yield
17 per km
MIA > GRU > MIA
Global air transport
Visiting
family and
friends
contributes
2%
SPENDING
The additional
spending by
all travelers on
these trips
contributes a
further 2%.
World trade:
Exported
goods and
services
contribute
34%
GROWTH RATES
Measure
GDP
Passenger traffic
Air cargo
PERIOD >>
Historic
2.9%
4.8%
6.3%
Future
3.1%
4.9%
6.1%
19852005
20052025
World
aggregate
gross
domestic
product
(GDP)
BUSINESS
Distance
23000 km
Passengers
1
Airfare
$10,866
Yield
47 per km
Business
travel
contributes
2%
NRT > DXB > LHR > NRT

FREIGHT
Distance
Weight
Airfare
Yield
13000 km
20 kg
$434
3 per km
Air transportation of cargo

contributes
1%
JFK > DEL
17

GROWING IN COMPETITIVE MARKETS
TRAVEL DEMAND AND

AIRLINE MARKETS >>
Airlines match service levels to demand to

maximize their return on investment.
AIRLINE
STRATEGIES
Well over 500 scheduled
airlines compete in worldwide
passenger travel markets.
Airline investment in capital facilities, equipment,

highly skilled personnel, and building market
presence demands high utilization of these assets
to maintain a viable business. Growth brings
economies of scale but often brings them into
more competitive markets.
Competitive pressure and this need for growth
has driven a high rate of new technology adoption
and innovation in the airline business.
Driven to high load factors
Because an airlines product is the service it
provides, once the airline product is delivered,
it cannot be recovered and used again. If a seat
on Tuesdays flight from Delhi to Kuala Lumpur
is empty once the flight has left, it cannot be sold
at a later date. This generally drives airlines to
maintain as high a proportion of seats filled as
possible (i.e., to achieve high load factors).
To do this, airlines offer a product as close as
possible to anticipated passenger demands. The
main criteria they strive to meet are cost, time,
place, and service quality.
18
EuropeAsia Pacific
Within Europe
Transpacific
Within Asia Pacific
North Atlantic
World
Providing direct services

Most passengers like to get to their intended
destination as quickly as possible, taking a
nonstop flight whenever they can.
Generally, minimal market regulation gives rise to

more competition and service more directly tailored
to passenger needs, rather than tailored to meet
government-imposed regulations regarding price,
frequency, and identity of service provider.
While a hubbing strategy enables a high

number of cities to be reached from smaller cities
through a central transfer point, if providing direct
service in a given market is viable, this is
typically preferred.
It is for this reason that the anticipated continual

liberalization of markets around the world will bring
a 50 percent increase in the number of airport
pairs connected every 15 years.
NUMBER OF AIRPORT PAIRS CONNECTED INDEXED TO 1985
About 3 million routes would exist if all viable

points of origin and destination around the world
were connected with direct service. Only around
half a percent of these possible routes are actually
served todayaround 15,500 airport pairs.
Looking back over the past 20 years, the chart
shows the rate at which routes have been
added in each of the worlds major markets.
Strong potential for new routes
The fastest rate of adding new airport pairs
was seen in EuropeAsia Pacific markets, with
more than three times the number of routes
served in 2005 as 20 years ago.
The extension of Europes internal free market
to additional countries and the completion of
deregulation there generated continual growth
in new market opportunities.
3.0
2.5
Markets within Asia Pacific, within Europe, or

connecting Europe and Asia Pacific were hardly
affected immediately after 2001. Those regions
that did suffer a reduction in airport pairs
connected are seeing more connections added
and approaching their pre-2001 levels of
network spread.
2.0
1.5
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1.0
Within the North American market, the

most developed in the world, there has been
continual long-term growth in the number
of routes served.
WORLD: 1.7 TIMES MORE AIRPORTS CONNECTED IN 2005 THAN IN 1985 >>
19

TRAVEL DEMAND AND

AIRLINE MARKETS >>
AIRLINE FINANCIAL PERFORMANCE
LARGEST PROFITS
HIGHEST MARGIN
Strong airline financial performance is not limited to particular

regions or business models.
Top 30 airlines with the largest

reported operating profits.1
Top 30 airlines with the highest

reported operating margin.1
BY REGION >>
IN 2005 >>
Airlines purchase new airplanes largely to improve their financial

performance, replacing older airplanes with more efficient types and
acquiring the capacity to address growth markets.
A review of the most profitable airlines worldwide shows that, by this
measure, there is no dominant region or business model. The rankings
shown are compiled by Airline Business each year and change considerably
between reporting periods so should be considered only as illustrative.
While Airline Business top 30 airlines by each profitability measure
are shown here, the analysis behind the Current Market Outlook considers
about 1,000 operators from around the world, of all sizes and operating
across the complete variety of business models.
Larger airlines generally deliver higher absolute profits
The top 10 airlines in terms of absolute operating profit are largely
carriers with global networks. They are led by a freight airline and include
a U.S. low-cost operator and originate from four of the six world regions
(see pages 22 and 23). Perhaps surprisingly, four U.S. regional airlines also
appear in this top 30. Some of the worlds largest airlines by revenue were
not in the 2005 list but can be expected to reappear in the near term.
A third of the most profitable airlines do not appear on the list of those
with the highest operating margin, indicating that their relative size generates
a larger scale of income. The lowest operating margin of any airline in the
operating result list is around 2 percent.
NUMBER OF
AIRLINES
Africa
Asia Pacific
Europe and CIS
Latin America
Middle East
North America
1
10
7
3
1
8
Africa
Asia Pacific
Europe and CIS
Latin America
Middle East
North America
4
7
6
2
2
9
TOTAL
TOTAL
30
30
BUSINESS MODEL >>
IN 2005 >>
NUMBER OF
AIRLINES
NUMBER OF
AIRLINES
Broad network
8
Charter, inclusive tour 0
Freight operators
2
Global network
12
Low cost
4
Regional
4
Broad network
11
Charter, inclusive tour 1
Freight operators
3
Global network
5
Low cost
4
Regional
6
TOTAL
TOTAL
30
30
1 Airline Business, August 2006.
20
NUMBER OF
AIRLINES
Operating margin ignores airline size and business model

Operating margin is the ratio of operating profit to operating revenues.
This indicates how profitable airlines are regarding their own business
operations, rather than in relation to how large they or their competitors
are. This measure shows an even greater spread of the top performers
in 2005 across regions and business models.
The operating margins reported by airlines represented in the right-hand
table range from 43 percent to 7 percent. Most are below 23 percent,
and about half are below 10 percent.
THE OUTLOOK
BY REGION >>
The highest profit margins are widely spread

The operating margin ranking is particularly interesting as it reflects
an even greater spread across airline size, business model, and region.
All six world regions are represented by the top seven airlines, and
six of the top 30 are from Africa or Latin America.
The five main types of business model are also represented in the
top 10, with only one being a global network carrier.
Future strategies
In a global sense, there will not be a dominance of one particular region
or business model in defining the profitable airlines of the future.
We are likely to see a mixture of specialist airlines addressing their
area of strength and multiple strategies being executed within single
airline groupings. Some midsized airlines can also clearly
demonstrate strong profitability.
21

THE OUTLOOK
BY REGION >>
REGION
COMPARISON
ASIA PACIFIC
China, Oceania, Northeast Asia,
Southeast Asia, Southwest Asia
2005
0%
VALUE >>
22
$740 BILLION
9,490
new airplanes
2025
$930 BILLION
EUROPE
21%
Delivery units
4,190
7,720
airplanes airplanes
6,600
new airplanes
2025
3% 7%
100%
75%
75%
50%
50%
25%
25%
62%
Share of fleet
Share of fleet
2005
2%
15%
0%
54%
25%
VALUE >>
2005
7%
50%
a unique significance.
100%
7%
32%
75%
of the world compared here has
7,420 13,590
airplanes airplanes
2025
100%
Every one of the six major regions
NORTH AMERICA
7,900
new airplanes
3,270
9,610
airplanes airplanes
22%
68%
0%
Delivery units
VALUE >>
$620 BILLION
Share of fleet
Delivery units
AIRPLANE MARKET BY REGION
747 and larger

Twin aisle
Single aisle
Regional jets
MIDDLE EAST
Highlights
Asia Pacific has the highest value market, while North America
will take the most airplane deliveries.
1,110
new airplanes
630
1,300
airplanes airplanes
2005
Demand for air travel on the worlds major traffic flows

is translated into a requirement for passenger and freight
airplanes for the airlines of each region.
2025
7%
Europe is second of the six regions in each of the single-aisle,

twin-aisle, and large-airplane sectors.
5%
100%
39%
75%
50%
In Latin America, regional jets and single-aisle airplanes account

for 86 percent of airplane deliveries.
49%
25%
0%
VALUE >>
$160 BILLION
LATIN AMERICA
Central America, South America
Africa has the largest shift in fleet share toward twin-aisle airplanes.
Share of fleet
Delivery units
1,100
2,720
airplanes airplanes
1,680
new airplanes
2005
2025
100%
$110 BILLION
AFRICA
2005
15%
2025
1%
15%
100%
75%
75%
50%
50%
25%
25%
73%
Share of fleet
430
new airplanes
720
1,030
airplanes airplanes
1%
11%
0%
VALUE >>
The average new Middle Eastern airplane will be worth

50 percent more than the world average.
26%
58%
0%
Delivery units
VALUE >>
$40 BILLION
Share of fleet
Delivery units
23

ASIA PACIFIC
THE OUTLOOK
BY REGION >>
The only region with more than half

its traffic in internal markets.
ASIA PACIFIC
OVERVIEW
Growing faster than other parts
of the world, with high economic
growth rates and many developing
markets, to become the largest
region in terms of passenger
traffic by 2025.
The Asia-Pacific region is so extensive and fast

growing that it is analyzed in five distinct areas
that are presented on pages 25 to 28.
These regions are
China............................................................ 25
Northeast Asia.............................................. 26
Southeast Asia ............................................. 27
Oceania (Australasia) .................................... 27
Southwest Asia (including India).................... 28
The rates of growth for both passenger
and freight traffic are the fastest of any major
world region.
The highest value market
$930 billion worth of new airplanes will be
delivered, a higher market value than for any
other region.
The focus on widebody airplanes (39 percent
of deliveries) is stronger than in any region except
the Middle East, although the widebody market
in Asia Pacific is five times the size of that in
the Middle East.
Single-aisle and regional jets will account
for 61 percent of deliveries.
24
ASIA PACIFIC >>

ANNUAL
GROWTH
GDP
RPKs
RTKs
3.8%
6.2%
7.0%
DELIVERIES
Value, $B
New airplanes
Regional jets
Single aisle
Twin aisle
747 and larger
930
7,900
580
4,230
2,520
570
TOTAL FLEET
2005
2025
3,270
9,610
1 China National Bureau of Statistics.

2 Chinese Academy of Social Sciences.
3 World Tourism Organization.
CHINA
Potential for domestic growth

Liberalization of all Chinese markets will
continue, as will the formation of partnerships
and alliances with foreign airlines intent on
benefiting from the growth in China.
China is the largest commercial aviation

market outside the United States.
Rapid economic growth
Chinas economy currently benefits from annual growth rates in excess
of 9 percent and is expected to average 6.6 percent growth over the next
20 years. New airplane deliveries to China will account for more than
35 percent of demand in the Asia-Pacific region.
As Chinas wealth increases, the proportion of the population classified as
middle class is expected to rise from 13 percent in 20101 to around 40 percent
in 2020.2 By 2020, China is forecast to rise to the worlds top most popular
tourist destination, with 180 million tourists each year, from fourth place today.
Also by that time, more than 100 million outbound travelers will make China
the fourth largest source of outbound travel in the world.3
AVERAGE AIRPLANE SIZE IS ABOUT THE SAME AS 15 YEARS AGO
Average seats per airplane per trip
300
95
250
90
150
2000 < Trunk routes
1990 1990
1995
< All Chinese domestic markets >

2000
50
1,000
1,500
1
1
3
Value, $B
280
New airplanes 2,880
Regional jets
290
Single aisle 1,840
Twin aisle
660
747 and larger 90
3
3
3
3
5
5
2,000
2,500
1,030
3,900
More than 700 domestic airport pairs serve

1.3 billion Chinese people today, compared to
2,550 airport pairs and a population of around
300 million in the United States. The number
of flights and airline capacity within China are
both forecast to grow fivefold over 20 years.
The decline in domestic average airplane size
since 2000 will continue, reflecting passenger
demand for more frequent service and more
nonstop flights. The Golden Triangle shown in the
chart (Beijing, Shanghai, Guangzhou) represents
around 10 percent of domestic capacity and
the trunk routes a further 40 percent.
Balanced demand by airplane size
As the highly varied Chinese market continues
to develop, the mix of airplane requirements by
size will be very close to the world average.
4
3
Ranked by the 10 regions discussed

in detail in this section.
Weekly ASKs, million

500
6.6%
7.9%
7.1%
DELIVERIES
2005
2025
2005
100
GDP
RPKs
RTKs
TOTAL FLEET
2005
95
ANNUAL RANK
GROWTH 110
August OAG, including Hong Kong and Macau.
2000 < Golden Triangle

2005
200
CHINA >>
3,000
3,500
4,000
4,500
DOMESTIC CHINESE AIRPLANE SIZE >>
25

THE OUTLOOK
BY REGION >>
NORTHEAST ASIA
A large market with a unique emphasis
on widebody airplanes.
Northeast Asia has a unique emphasis on twinaisle airplanes, with more than half (51 percent) of its
future demand for new airplanes being of this size,
the largest proportion for any world region. This will
drive up the average value of each new airplane
delivered to $150 million.
The regions overall economy ranks third after
North America and Europe, with South Korea to
join Japan in the top 10 economies by 2025.
MORE THAN HALF THE NEW DELIVERIES

WILL BE TWIN-AISLE AIRPLANES
800
New airplane deliveries 2006 to 2025
International routes
Within Northeast Asia
600
400
200
0
Regional
Single aisle
Twin aisle
MAINLY FOR INTERNATIONAL ROUTES >>
26
Large
Northeast Asia is highly urbanized with many

densely populated cities. The economy relies
heavily on imported resources and its people have
a significantly higher propensity to travel than the
world average. Recently expanded air service
agreements will draw new airlines to enter the
increasingly fragmented China-Japan-Korea
market, where competition will generate more
frequent flights. Air travel within Northeast Asia
is expected to grow by 5.4 percent each year,
with 5.7 percent annual traffic growth to
and from Northeast Asia.
A strong 6.9 percent freight traffic growth rate
will lead to many of the new large airplanes being
delivered as freighters.
Investment in new airport infrastructure
Investment in airport capacity will help expand
market access and stimulate air travel growth.
Capacity is being added at Koreas Incheon airport
(Seoul), Japans Narita and Haneda (both serving
Tokyo), Kobe, Kansai (Osaka), and at new
regional airports such as at Nagoya.
About a third (540) of the 1,570 new airplanes
needed will be added to serve markets within
Northeast Asia, with the remaining two-thirds
(1,030) for routes to North America, Europe, and
other Asia-Pacific markets. In particular, many new
intermediate twin aisles will be used to provide a
greater choice of nonstop destinations.
NORTHEAST ASIA >>

ANNUAL RANK
GROWTH 110
GDP
RPKs
RTKs
1.8% 10
5.6% 5
6.9% 5
DELIVERIES
Value, $B
240
New airplanes 1,570
Regional jets
40
Single aisle
530
Twin aisle
810
747 and larger 190
5
6
9
7
3
2
TOTAL FLEET
2005
2025
630
1,780
7
6
SOUTHEAST ASIA
OCEANIA (AUSTRALASIA)
Important local and long-haul markets

driving airplane requirements.
Strong strategic response to domestic

and international competition.
4
6
6
Southeast Asia will take delivery of more airplanes

of 747 size or larger than any other region. A third
of the 240 new large airplanes will be freighters.
At the same time, growth in local markets in
Taiwan, Indonesia, and Malaysia in particular will
require the most single-aisle airplanes (910) of
any Asian region outside China.
Oceania has highly competitive markets,

pioneering airlines and the second highest
freight traffic growth (7.6 percent) of any region.
Further liberalization of international air service
agreements will increase competition as
additional carriers enter the market.
4
4
5
5
4
1
Endorsement of the low-cost airline business

model has been accompanied by dedicated
facilities such as low-cost terminals at major
airports, leading to some of the fastest growth
rates for such markets anywhere in the world. In
contrast, some of the more established carriers
have recently been forced to restructure to address
poor financial performance. Travel within Asia
accounts for 63 percent of airline capacity.
SOUTHEAST ASIA >>

ANNUAL RANK
GROWTH 110
GDP
RPKs
RTKs
4.4%
5.5%
6.6%
DELIVERIES
Value, $B
260
New airplanes 1,990
Regional jets
170
Single aisle
910
Twin aisle
670
747 and larger 240
TOTAL FLEET
2005
2025
960
2,250
5
5
Extending international networks

The region is rooted in international trade and
finance, and larger airlines have capitalized on its
strategic location to develop extensive, profitable
global networks. Longer range twin-engine
airplanes will enable the regions airlines to serve
a wider selection of important North American
markets with direct service.
OCEANIA >>
ANNUAL RANK
GROWTH 110
GDP
RPKs
RTKs
2.5% 8
3.7% 10
7.6% 2
DELIVERIES
Value, $B
60 9
New airplanes 440 9
Regional jets
20 10
Single aisle
210 10
Twin aisle
180 9
747 and larger 30 7
TOTAL FLEET
2005
2025
340 9
540 10
Inbound tourism is a major source of travel

demand. Flights to Europe are mostly routed
through Asia or the Middle East, but nonstop
flights are likely as the capabilities of longer
range twin-engine aircraft are proven.
Competitive strategies
Within Oceania, the influence of international
carriers is strong. It has the largest share of
service within the region accounted for by airlines
from outside, at around 5 percent compared
to less than 1 percent in most other regions.
Local airlines have established strategies to
reduce cost complexity and maintain profitability
through service innovation, separate lower
cost business units, and investment in
overseas markets.
27

SOUTHWEST ASIA (INCLUDING INDIA)

Global interest in liberalized markets are
stimulating rapid air transport growth.
The largest air transport market in Southwest Asia
is that of India, where government policy toward
market liberalization has produced strong growth.
Air travel in the Indian domestic market has grown
rapidly as a result of fare dilution of 35 to 50
percent. Almost three-quarters of the requirement
in the region will be for single-aisle aircraft, much
of which is simply catching up from a decade of
limited growth. The current order backlog for
370 jets is larger than the entire fleet in any
of the past 20 years.1
Current growth trend >
120
Liberalized market >
SOUTHWEST ASIA >>

ANNUAL RANK
GROWTH 110
GDP
RPKs
RTKs
5.4%
7.1%
9.1%
Value, $B
90
New airplanes 1,030
Regional jets
70
Single aisle
750
Twin aisle
200
747 and larger 10
TOTAL FLEET
2005
2025
GROWTH CATCHING UP >>
MARKET LIBERALIZATION >>
2005
2003
2001
1999
1997
1995
1993
1991
1989
1 Airclaims, August 2005.

1987
2005
2003
2001
1999
1997
1995
1993
1991
1989
1987
1985
8
8
6
6
7
8
310 10
1,140 8
40
2
2
1
DELIVERIES
80
28
12
10
1990s growth trend >
160
Investment in growth
Global companies are particularly encouraged
to outsource to the region, advancing the case
for investment in the infrastructure necessary
to support growing air services.
NUMBER OF AIRLINES IN INDIA
PASSENGER JETS IN INDIA

200
Transfer from rail services

In 2005, domestic Indian air travel amounted
to 22 billion RPKs. The 49,000-mile Indian rail
network has for a long time been the only practical
mode of intercity travel. Around 40 percent of the
nearly 5 billion rail passengers each year travel on
intercity services. If all premium class rail travelers
(around 3 percent of total rail passengers) flew
instead, this would represent a gain of around
5 to 10 billion RPKs in any year.
1985
THE OUTLOOK
BY REGION >>
MIDDLE EAST
Carefully planned economic development
in concert with far-reaching global
airline networks.
Emphasis on long-haul services
The Middle East region stretches from Egypt
to Iran and includes the Arabian Gulf. Most
countries are well developed and their airlines
have grown rapidly through use of a business
model that could be described as providing
independent global connectivity. As there are no
internal markets in countries such as the UAE
nations, Qatar, and Bahrain, highly effective liberal
air service agreements have been used to gain
access to international markets. Other airlines
rely more on local service or to the neighboring
continents of Africa, Europe, and Asia.
Services to Europe accounted for 36 percent
of traffic in 2005, but a focus on growing longer
haul routes will lead to a shift in share to Asia and
North America, which will respectively grow to
38 percent and 14 percent of the market over
20 years. Demand for these services is reflected
in an emphasis on long-range, twin-aisle
airplanes in the current order backlog,
as shown in the chart.
MIDDLE EAST >>

ANNUAL RANK
GROWTH 110
GDP
RPKs
RTKs
4.1%
5.5%
6.9%
5
6
4
DELIVERIES
Value, $B
160
New airplanes 1,110
Regional jets
60
Single aisle
430
Twin aisle
540
747 and larger 80
6
7
8
8
6
6
Ambitious growth plans

The ambitious development of centers of
commerce and tourism, along with a modern
air transport infrastructure, has been carefully
coordinated to ensure sustainable growth.
Much of the required labor originates from
outside the region, particularly Southwest
and Southeast Asia.
The competitive success of individual
airlines has forced a refocusing of traditional
state airline enterprises on specific hub
operations or diversification to include
independently branded lower cost shortor medium-haul products.
FLEET AND ORDER BACKLOG

350
TOTAL FLEET
2005
2025
630
1,300
40%
250
7
7
747 and larger

Twin aisle
Single aisle
Regional jets
49%
300
200
150
62%
100
9%
50
0
2%
2005 fleet: 630 airplanes
25%
4%
9%
Backlog: 200 airplanes
TWIN AISLES DOMINANT >>

29

THE OUTLOOK
BY REGION >>
NORTH AMERICA
Structural shifts continue in the worlds
largest air travel market.
World leader in passenger traffic
The sheer size of the North American market
means that it will absorb the largest share of
global demand for new airplanes, with 9,490 new
deliveries forecast, or 35 percent of the world total.
62 percent of these will be single-aisle airplanes,
and 17 percent will be twin aisles and
large airplanes.
Fundamental shifts are under way in the North
American market. Low-cost airlines continue
to increase their market share.
Regional airlines are expanding with

larger aircraft and network carriers are both
using their assets more efficiently and shifting
capacity from domestic to international routes
to optimize earnings and margins.
Increasing use of airplane assets
Low-cost airlines produced a 20 percent share
of domestic airline capacity (ASKs) in 2005, and
hold nearly 60 percent of the firm order backlog for
single-aisle airplanes. This demonstrates the strong
growth in the low-cost airline sector. At the same
time, network carriers with large fleets of singleaisle airplanes to be replaced and expanded have
focused on making the most of their existing
airplane assets by increasing utilization through
better scheduling and reduced turntimes.
INCREASE IN DOMESTIC NONSTOP MARKETS WITH SMALLER AIRPLANES
NUMBER OF NONSTOP MARKETS >>
30
ANNUAL RANK
GROWTH 110
GDP
RPKs
RTKs
2.9%
4.1%
5.7%
7
9
8
DELIVERIES
Value, $B
740
New airplanes 9,490
Regional jets 2,040
Single aisle 5,880
Twin aisle
1,410
747 and larger 160
1
1
1
1
2
4
TOTAL FLEET
AVERAGE AIRPLANE SEATS >>
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
2005
2025
1996
40
2006
0
2005
60
2004
500
2003
80
2002
1000
2001
100
2000
1500
1999
120
1998
2000
1997
140
1996
2500
NORTH AMERICA >>
7,420
13,590
1
1
Shifting capacity to international routes

Network carriers will continue the redeployment of
airplanes to international routes where the revenue
environment has continued to be strong. They take
advantage of liberalized air service agreements to
make use of the intercontinental range capability of
airplanes formerly used for domestic service, such
as the 757 (550 airplanes in fleet) and 767 (345
airplanes). Current expansion is focused
on Europe and South America.
Growth to Asia Pacific and Latin America
Routes to Asia Pacific and Latin America will
grow the fastest, at 4.9 percent and 5.8 percent,
respectively. As seen in the chart, these two regions
will grow from 23 percent to 28 percent of total
capacity on North American traffic flows.
Network carriers will require large numbers

of new airplane deliveries during the next
20 years.
Driven by the preference of many passengers
for direct service, the lowest fares, and a distinctive
travel experience, U.S. low-cost airlines have
innovated in areas such as focusing on internetbased ticket sales, one-way pricing without
restrictions, leather seats with free live television,
buy-on-board meals, and other services.
CAPACITY SHARE BY REGIONS

100%
80%
60%
40%
20%
0%
2005
2025
SHIFT TO INTERNATIONAL MARKETS >>
The new generation of long-range, twin-aisle

airplanes will allow airlines to satisfy passenger
demand for direct service in the many smaller
long-distance markets that are not flown today.
Cost challenges well managed
As airlines feel the effect of high fuel prices,
they have taken tactical measures to conserve
fuel, such as starting engines during taxi and
cruising at more economical speeds. Beyond
parking older aircraft and implementing fuel
hedges, there is little more that airlines can do
to mitigate rising fuel costs until they take delivery
of newer, more efficient airplanes. Just replacing
older types will require more than 4,500 new
airplane deliveries in North America.
At some airlines, the distressed financial
environment has driven revised labor agreements
and successful renegotiation of pilot pay and
contract clauses (scope clause). This has created
the improved operating economics necessary for
network carriers to acquire increased numbers
of 90- to 100-seat airplanes for operation in the
mainline network, stimulating a likely concentration
on orders for these airplanes in place of more
50- or 70-seat regional jets.
Other
To Latin America
To Asia Pacific
North Atlantic
31

THE OUTLOOK
BY REGION >>
EUROPE
Expansion moderating as new European
Union member countries are consolidated.
Europe is home to the largest airline group in the
world by revenues, the most profitable passenger
airline in 2005 by absolute earnings, and the airline
with the fourth highest operating margin.1 Both
network and low-cost airline business models have
been consistently profitable for larger airlines
in European markets.
EXPANDING THE EUROPEAN UNION
Members prior to 2004

10 nations joined in 2004
Joining in 2007
Official candidate countries
Potential candidate countries
POTENTIAL EUROPEAN UNION BY 2025 >>
32
This is largely due to continual innovation in

service development, pioneering use of technology
to lower costs, and a focus on labor productivity
driven by relatively high employment costs in
much of Europe.
Airline capacity growth has been cautious, with
traffic growing faster than capacity in every market.
Record high load factors averaged 76 percent
over the year 2005 for all markets.
The largest economic area
Influence of the expanding European Union on
the wider European region is profound as countries
joining the Union have gained full access to the
worlds largest single economic area. Economic
growth will be stimulated as the less well off gain
the opportunity to earn higher incomes elsewhere
in the Union. The size of the EU population is
two-thirds higher than that of the United States,
and its share of world trade is disproportionately
large at 44 to 52 percent depending on the
class of trade measured.
The 2004 enlargement added 10 nations,
19 percent more people, and 10 percent more
economic activity (GDP). If Turkey joins the
European Union, which is possible by 2015, this
will add a further 74 million people (15 percent)
and $660 billion GDP (5 percent).2 It will also
substantially change the ethnic mix and bring
closer cultural ties to the Middle East.
EUROPE >>
ANNUAL RANK
GROWTH 110
GDP
RPKs
RTKs
2.1%
4.3%
5.4%
9
8
9
DELIVERIES
Value, $B
620
New airplanes 6,600
Regional jets
440
Single aisle 4,530
Twin aisle
1,460
747 and larger 170
2
2
2
2
1
3
TOTAL FLEET
2005
2025
4,190
7,720
1 Airline Business.
2 CIA/Wikipedia, at 2005 levels.
3 AEA, 1st half 2006.
2
2
Central to intercontinental traffic flows

The central position of Europe in traffic flows
between major world regions and the long-standing
strength of its world influence provide the opportunity
for profitable service on both direct routes between
emerging economic centers and connecting
travelers between other continents.
Some European airlines have succeeded in
subcontracting delivery of their mainline service to
lower cost providers in specific market segments,
such as on leisure oriented routes or to developing
nations. This has enabled them to continue selling
flights into markets carrying higher commercial
risk while maintaining profitable service.
Although only a tiny proportion of the possible

routes from Europe to Asia Pacific are currently
served, it is the worlds most developed market
in that sense, showing a strong preference for
nonstop connections (see page 19). Europe
will take the largest number of twin-aisle
airplanes smaller than the 747 (1,460 new
deliveries) to support growth on these
direct long-haul services.
Mixed approach to charges

All airlines give visibility of tax and charges
in advance of ticket purchases, with a careful
balance struck between lower initial fares
and additional charges.
Internet fare search and booking allows
the consumer to make an informed choice
between schedule and fare flexibility.
For a typical highly competitive route within
Europe, the chart on the left shows sample total
prices paid for a one-way ticket, and that on
the right illustrates the varying level of
fees included.
Total fare from London to Warsaw

1 day ahead
1 week
1 month
6 months
TAXES AND CHARGES
CHEAPEST FARE AVAILABLE

300
300
250
250
200
200
One-way fare,
Migration of the workforce within Europe

on a temporary basis (as often as weekly, even
for those on low incomes), is in part facilitated by
the affordability of travel on low-fare airlines and
contributes to the growth of those carriers.
Fleet emphasis on the middle market

The single-aisle market will benefit from the move
of many airlines up from the larger regional jets
they have historically favored.
One-way fare,
Slower internal growth

Looking into the next 20 years, a slowdown
in traffic growth within Europe is expected. The
additive effect of the recent and most significant
European Union enlargement will lessen, while
travel outside the region will continue to grow
substantially. The fastest growing passenger traffic
flows are currently to Latin America (up by 13
percent), Asia Pacific (up 12 percent) and North
Africa (up 8 percent).3
150
100
50
150
100
50
0
British
Airways
easy
Jet
Wizz
Air
LOT
Poland
INCLUDING TAXES AND CHARGES >>
Central
Wings
British
Airways
easy
Jet
Wizz
Air
LOT
Poland
Central
Wings
EXCLUDES BOOKING AND BAGGAGE FEES >>
33

LATIN AMERICA
THE OUTLOOK
BY REGION >>
New low-fare airlines and market liberalization.

Fastest growth within the region
Traffic growth within Latin America (at around
7 percent each year) will continue to outpace traffic
growth into the region. 90 percent of new deliveries
are expected to be in the regional jet or single-aisle
categories, as many new airlines have adopted a
low-cost, low-fare model using standardized
fleets of single-aisle airplanes.
Liberalization and an influx of private investment
capital have benefited established network carriers
in Brazil, Chile, and Panama, enabling expansion
through subsidiary airlines in neighboring countries.
TRANSFERRING FROM BUS TO AIR TRAVEL

24 hr
100
23 hr
One-way fare, US$
80
2.5 hr
14 hr
60
6 hr
2 hr
2 hr
18 hr
Foreign visitation will be a key influence

Business and tourism contribute to the growth
of travel from outside Latin America, with foreign
visitors increasing 7.9 percent in 2005 (compared
to the world average of 5.6 percent). The regions
second largest tourist market, Brazil, is only a
quarter the size of the largest, Mexico, but in
2005 grew by 12 percent, twice as fast as that
in Mexico. Even the smaller market to Argentina
boosted tourism earnings by more than 30 percent
as foreign visitors flocked to attractions such as
Buenos Aires, Patagonia, and the Iguau Falls.
Focus on single-aisle airplanes
Strong internal markets will demand a focus
on single-aisle airplanes, accounting for nearly
three-quarters of future deliveries.
1 hr
1 hr
40
1.5 hr
Volume traffic transfer from roads

In the past six years, 2.5 million Mexican
and 6 million Brazilian households have joined
the middle class. Many of these people are
transferring from bus to air travel due to the time
savings for air travel compared to long, arduous
bus trips as shown in the chart. Personal and
business travelers will take advantage of growth
in the flight network and as they do so will
stimulate regional economies.
6 hr
20
0
Rio de Janeiro
So Paulo
So Paulo
Curtiba
So Paulo
Brasilia
BRAZIL: BUS VERSUS AIRPLANE >>
34
So Paulo
Porto Alegre
Belo Horizonte Rio de Janeiro

Salvador
Salvador
Bus travel
Air travel
LATIN AMERICA >>

ANNUAL RANK
GROWTH 110
GDP
RPKs
RTKs
3.8%
6.2%
6.1%
6
3
7
DELIVERIES
Value, $B
110 7
New airplanes 1,680 5
Regional jets
260 4
Single aisle 1,220 4
Twin aisle
190 8
747 and larger 10 10
TOTAL FLEET
2005
2025
1,100
2,720
3
4
AFRICA
An expansive market with rapid
economic growth.
AFRICA >>
ANNUAL RANK
GROWTH 110
GDP
RPKs
RTKs
4.4% 3
5.7% 4
4.8% 10
DELIVERIES
Value, $B
40 10
New airplanes 430 10
Regional jets
60 7
Single aisle
250 9
Twin aisle
110 10
747 and larger 10 9
TOTAL FLEET
2005
2025
720
1,030
6
9
With more than 50 nations, and home to more

than 12 percent of the worlds people, the African
continent is second only to Asia in area and
population. Air traffic is expected to grow at an
average 5.7 percent per yearconsiderably faster
than the world average of 4.9 percent. Driving this
rapid growth is an economy that is expanding
4.4 percent per year, 40 percent faster than
the global average.
USEFUL
DATA >>
Already one of the fastest growing tourist

destinations for Europeans, expansion from
other regions will continue to drive leisure travel
upwards. Its beach resorts, wildlife, natural
wonders, and cultural heritage appeal strongly
to travelers seeking to broaden their
holiday experience.
Increasing proportion of twin aisles
New twin-aisle airplanes are particularly
suited to the long distances and rapidly growing
passenger numbers that characterize African
airline markets. As a consequence, the share
of twin-aisle airplanes in Africa will rise faster
than in any region other than Oceania, by
11 percent over the next 20 years.
35

GROWTH BY REGIONAL FLOW
USEFUL
DATA >>
RPKs in billions
PASSENGER
TRAFFIC
World passenger traffic will grow
from 4,020 billion RPKs in 2005
to 10,550 billion in 2025.
Africa-Africa
Africa-Europe
AfricaMiddle East
AfricaNorth America
AfricaSoutheast Asia
Central AmericaCentral America
Central AmericaEurope
Central AmericaNorth America
Central AmericaSouth America
China-China
China-Europe
ChinaNorth America
ChinaNortheast Asia
China-Oceania
ChinaSoutheast Asia
CIS RegionIS Region
CIS RegionInternational
Europe-Europe
EuropeMiddle East
EuropeNorth America
EuropeNortheast Asia
EuropeSouth America
EuropeSoutheast Asia
EuropeSouthwest Asia
Middle EastMiddle East
Middle EastNorth America
Middle EastNortheast Asia
Middle EastOceania
Middle EastSoutheast Asia
Middle EastSouthwest Asia
North AmericaNorth America
North AmericaNortheast Asia
North AmericaOceania
North AmericaSouth America
North AmericaSoutheast Asia
North AmericaSouthwest Asia
Northeast AsiaNortheast Asia
Northeast AsiaOceania
Northeast AsiaSoutheast Asia
Oceania-Oceania
OceaniaSoutheast Asia
South AmericaSouth America
Southeast AsiaSoutheast Asia
Southeast AsiaSouthwest Asia
Southwest AsiaSouthwest Asia
Rest of the world
WORLD TOTAL >>
36
1985
1990
1995
2000
2001
13.5
43.0
5.2
1.2
0.3
12.8
17.9
43.3
3.3
8.4
9.6
7.8
6.8
3.0
8.1
175.8
15.9
170.0
43.4
158.6
17.0
12.2
26.6
11.9
17.7
5.0
0.1
0.0
15.1
14.5
470.6
46.9
11.0
14.5
8.0
0.0
32.3
6.1
16.0
18.6
12.2
29.5
17.7
5.7
10.5
5.6
14.7
47.7
7.4
1.3
0.9
14.3
27.6
63.7
3.5
18.3
16.9
13.4
10.9
5.8
14.5
224.2
24.1
258.3
41.5
230.7
29.3
22.3
46.4
17.5
19.5
6.6
0.1
0.0
11.0
16.6
589.1
95.2
19.0
19.6
15.3
0.0
50.0
12.9
32.5
26.2
24.3
33.8
29.9
5.8
11.6
7.2
14.8
57.2
6.5
2.6
3.2
18.3
44.2
71.1
4.3
56.6
26.6
21.6
16.0
9.2
23.0
63.4
33.9
306.8
44.9
278.9
46.5
32.9
65.9
20.7
20.7
10.3
0.3
0.0
20.6
23.2
670.5
121.5
24.1
35.9
25.9
0.0
67.4
31.8
44.3
42.7
33.1
39.7
53.8
8.1
15.2
8.9
19.4
99.4
9.8
4.4
3.2
24.0
66.4
90.1
7.3
76.7
40.1
33.2
19.4
12.1
29.3
39.4
42.9
440.1
65.0
420.0
63.6
53.2
95.8
26.2
27.8
16.1
1.5
0.0
24.0
29.4
857.5
140.2
30.0
47.2
32.1
0.0
79.0
24.1
48.5
49.2
46.2
53.5
53.7
10.9
16.0
13.7
19.9
96.2
10.6
4.6
3.4
23.0
69.8
88.6
7.2
86.9
40.2
36.2
18.4
12.4
31.7
43.5
48.1
449.3
59.8
373.8
55.8
52.1
95.9
27.5
27.1
12.0
1.2
0.0
22.9
29.9
812.8
127.5
27.6
44.8
29.3
0.0
80.2
22.5
47.8
50.7
47.6
50.8
57.0
11.6
16.6
14.9
1,573
2,182
2,567
3,381
3,290
PERCENT PER YEAR

2002
2003
2004
2005
2025
19852005 20052025
21.2
97.2
13.2
4.3
3.6
23.4
68.1
87.7
7.1
101.5
42.6
33.2
24.5
13.2
36.9
46.9
51.4
453.8
58.6
346.0
53.3
49.2
96.4
27.6
27.5
10.4
1.2
0.4
24.0
31.1
783.5
121.2
26.5
42.7
30.5
0.0
85.0
24.5
54.4
50.2
46.6
52.7
60.6
12.6
17.4
15.2
22.5
99.1
13.9
4.4
3.7
24.8
69.8
92.0
7.1
106.9
37.5
24.9
20.1
10.6
27.7
50.2
56.4
474.7
58.9
349.5
48.3
49.5
95.0
29.5
28.1
9.6
1.2
1.2
26.4
33.8
828.3
103.0
25.9
37.6
26.8
0.0
86.1
22.8
45.7
55.5
42.0
47.9
59.4
12.5
17.7
15.8
24.0
105.2
13.9
3.9
3.9
26.0
75.7
103.5
8.3
143.8
51.2
34.4
27.3
15.0
41.2
54.7
63.0
521.2
67.7
375.7
59.8
57.9
104.5
35.7
32.0
12.6
2.2
4.1
29.2
35.6
927.7
120.8
30.1
39.9
33.6
1.5
83.6
27.1
61.5
58.8
54.6
52.9
73.9
14.9
21.3
18.8
28.1
112.5
16.4
3.8
4.7
26.8
79.6
109.1
9.6
163.8
60.1
43.6
29.0
19.1
48.9
55.8
65.5
557.2
78.5
387.7
60.9
69.7
110.6
43.0
34.6
14.4
3.6
4.5
30.5
37.9
954.6
128.1
31.3
43.6
38.3
2.0
83.1
25.7
70.2
63.0
58.6
59.3
84.4
18.9
24.4
23.1
91.8
298.6
53.5
15.6
16.6
103.6
184.7
243.7
33.1
885.1
196.6
153.7
89.5
45.3
145.5
159.9
180.6
1,087.5
204.4
935.0
188.1
215.1
282.6
130.3
91.8
46.3
11.6
21.5
89.0
121.6
1,936.6
395.6
69.9
156.4
130.0
22.3
238.0
70.9
200.8
95.5
138.7
225.0
260.6
63.0
134.5
91.1
3.7
4.9
5.9
5.8
15.2
3.8
7.8
4.7
5.5
16.0
9.6
9.0
7.6
9.7
9.4
-5.6
7.3
6.1
3.0
4.6
6.6
9.1
7.4
6.7
3.4
5.4
21.9
0.0
3.6
4.9
3.6
5.2
5.4
5.7
8.1
0.0
4.8
7.5
7.7
6.3
8.2
3.6
8.1
6.2
4.3
7.3
6.1
5.0
6.1
7.4
6.5
7.0
4.3
4.1
6.4
8.8
6.1
6.5
5.8
4.4
5.6
5.4
5.2
3.4
4.9
4.5
5.8
5.8
4.8
5.7
5.0
6.0
6.0
8.2
5.5
6.0
3.6
5.8
4.1
6.6
6.3
12.8
5.4
5.2
5.4
2.1
4.4
6.9
5.8
6.2
8.9
7.1
3,279
3,304
3,754
4,018
10,551
4.8
4.9
37

FLEET BY SIZE
USEFUL
DATA >>
End of year
2005
2005
2025
2025
Airplanes in
service
Fleet
share
Airplanes in
service
Fleet
share
Total regional jets
2,710
16%
5,040
14%
Single aisle
90 to 175 seats
More than 175 seats
9,040
1,540
52%
9%
18,560
2,910
52%
8%
10,580
61%
21,470
60%
Twin aisle
Small
Medium
Large
1,800
1,270
970
10%
7%
6%
4,390
3,680
1,390
12%
10%
4%
Total twin aisle
4,040
23%
9,460
26%
TOTAL FLEET >>
17,330
100%
35,970
100%
Size
category
FLEET SIZE AND

DEVELOPMENT
Total single aisle
The fleet, including freighters,

will grow from 17,330 to 35,970
airplanes by 2025.
SINGLE AISLE
TWIN AISLE
Regional jets
90 to 175 seats
More than 175 seats
Small
Medium
Large
Fokker 70, F28

BAe 146-100, -200
Avro RJ70, RJ85
Bombardier CRJ
Embraer 170, 175
ERJ-135, -140, -145
Boeing 717-200, 727

Boeing 737-100 through -500
Boeing 737-600, -700, -800
Airbus A318, A319, A320
Boeing/MDC DC-9, MD-80, MD-90
Fokker 100
BAe 146-300, Avro RJ100
Embraer 190, 195
Boeing 707, 757

Boeing 737-900
Airbus A321
Boeing/MDC DC-8
2 class: 230 to 310 seats


3 class: more than 400 seats
Boeing 767, 787

Airbus A300, A310, A330-200
Airbus A350
Boeing/MDC DC-10
Lockheed L-1011
Boeing 777
Airbus A330-300, A340, A350
Boeing/MDC MD-11
38
Boeing 747
Airbus A380
Bold: In production or launched.
FLEET DEVELOPMENT, PASSENGER AND FREIGHTER

Size
category
HOW THE FLEET GROWS

35,970
2025
1,010
Airplane units
Removed
from service
Converted
to freighter
New deliveries
20062025
End of
year 2025
Total regional jets
2,710
1,120
3,450
5,040
Single aisle
90 to 175 seats
More than 175 seats
8,450
1,230
5,160
880
14,440
2,100
17,730
2,450
Total single aisle
9,680
6,040
1,140
16,540
20,180
Twin aisle
Small
Medium
Large
1,390
1,070
690
1,110
660
650
3,030
2,770
650
3,310
3,180
690
Total twin aisle
3,150
2,420
1,080
6,450
7,180
Total passenger
15,540
9,580
2,220
26,440
32,400
Freighter
Standard-body
Medium widebody
Large
900
410
480
750
180
280
1,140
600
480
250
520
1,290
1,080
1,200
1,790
1,210
2,220
770
3,570
17,330
10,790
2,220
27,210
35,970
Total freighter
TOTAL FLEET >>
17,630
2005
End of
year 2005
17,330
9,580
10,790
1,210
27,210
0
Fleet 2005
FLEET DEVELOPMENT 2005 TO 2025 >>
Fleet 2025
Total fleet
Removed or converted airplanes
Airplanes converted to freighters
New airplane deliveries
39

DELIVERIES BY SIZE
USEFUL
DATA >>
NEW AIRPLANE
DELIVERIES
Single-aisle airplanes account
for the most deliveries, 61 percent.
Twin-aisle airplanes account for the
highest market value, 55 percent.
40
20062025
Market value
Market share
Deliveries
Market share
Size category
2005 $B
$ value
New airplanes
Units
90
4%
3,450
13%
890
190
34%
7%
14,440
2,100
53%
8%
1,080
41%
16,540
61%
520
650
260
20%
25%
10%
3,270
2,960
990
12%
11%
3%
Total twin aisle
1,430
55%
7,220
26%
TOTAL >>
2,600
100%
27,210
100%
Regional jets
Single aisle
90 to 175 seats
More than 175 seats
Total single aisle
Twin aisle
Small
Medium
Large
DELIVERIES BY REGION
Size category
Asia Pacific
North America
Europe
Middle East
Latin America
Africa
World
580
2,040
450
60
260
60
3,450
Single aisle
4,230
5,880
4,530
430
1,220
250
16,540
Twin aisle
2,520
1,410
1,460
540
190
110
6,230
570
160
160
80
10
10
990
7,900
9,490
6,600
1,110
1,680
430
27,210
Asia Pacific
North America
Europe
Middle East
Latin America
Africa
World
Regional jets
15
50
12
90
Single aisle
280
380
300
30
70
17
1,080
Twin aisle
480
270
260
110
30
20
1,170
747 and larger
150
40
50
20
260
$930
$740
$620
$160
$110
$40
$2,600
Regional jets
747 and larger

TOTAL DELIVERIES >>
Delivery numbers above 20 are rounded to the nearest 10.
MARKET VALUE BY REGION

Size category
MARKET VALUE >>
Market value is in dollars in billions, and numbers above 20 are rounded to the nearest 10.
41
THE BEING COMPANY 2006

USEFUL
DATA >>
TRAFFIC AND
GROWTH
Relatively slow growth in the
PASSENGER TRAFFIC
WITHIN AND BETWEEN REGIONS
Traffic within regions in 2025, RPKs (billions)
1,940
1,090
360
90
90
more traffic than rapid growth in
Asia
Pacific
750
800
240
17
240
North
America
940
400
50
16
270
390
Europe
400
200
300
150
150
Latin
America
80
14
80
Middle
East
50
110
16
Africa
690
950
560
100
30
30
many of the smaller markets.
Traffic between regions in 2005
2,370
Traffic within regions in 2005, RPKs (billions)
42
Traffic between regions in 2025
largest markets can generate
HOW TO READ THE TABLES

Look up from the region name and
across for future data or down and across
for historic data.
For example
2025 traffic within Asia Pacific
will be 2,370 billion RPKs.
2005 traffic between Europe and Africa
was 110 billion RPKs.
PASSENGER TRAFFIC GROWTH RATES

WITHIN AND BETWEEN REGIONS
Future growth between Asia Pacific

and Europe is 5.5 percent.
6.4%
3.6%
3.4%
6.9%
5.0%
6.1%
Asia
Pacific
5.9%
5.5%
8.8%
6.0%
6.3%
6.1%
North
America
4.5%
4.9%
6.0%
7.4%
7.5%
4.6%
Europe
5.1%
4.9%
5.0%
14.5%
5.0%
8.3%
Latin
America
8.7%
4.9%
5.4%
3.0%
Middle
East
6.1%
11.4%
5.8%
4.9%
2.9%
5.9%
Africa
8.1%
3.6%
6.1%
3.8%
3.4%
3.7%
Past growth between North America

and Middle East was 5.4 percent.
Future growth between regions
Historic growth between regions
Future growth within regions, 20052025
Because growth between Latin America

and the Middle East is at an early stage
of development, the data available
is insufficient to represent in
these tables.
Historic growth within regions, 19852005
43
DATA SOURCES
GLOSSARY
EXAMPLES
ACAS
ASK: Available seat-kilometers.

The number of seats on an airplane multiplied
by the number of kilometers flown by that
airplane; i.e., airline capacity.
Capacity: If an airplane with 100 seats flies

1000 km, a capacity of 100 x 1000 = 100000
available seat-kilometers (ASK) is generated
by that flight.
CIS: Commonwealth of Independent States.

The former Soviet Union, with the addition of
Mongolia and exception of the Baltic states.
Load factor: If 76 fare paying passengers

are on the airplane, 76% of the seats available
will be occupied, which represents the load
factor of the flight.
Airclaims
Air Transport Association
Association of Asia Pacific Airlines (AAPA)
Association of European Airlines (AEA)
Boeing primary research
European Regions Airline Association (ERA)
Global Insight
International Air Transport Association
International Civil Aviation Organization (ICAO)
Jet Information Services
Official Airline Guide (OAG)
Regional Airlines Association (RAA)
ROM Associates
U.S. Department of Transportation (Form 41)
Historical data are in some cases estimates based on
Boeing analysis. Data for 2005 may be subject to revision.
44
GDP: Gross domestic product. The total output

of goods and services produced within a country.
Liberalization: The removal or reduction in
government-imposed regulation of the market
for air services. Also known as deregulation.
Load factor: The measure of how full flights are.
The number of fare paying passengers divided
by the total number of seats on that flight.
RPK: Revenue passenger-kilometers.
The number of fare paying passengers multiplied
by the number of kilometers they fly; i.e.,
airline traffic.
Yield: Revenues divided by revenue passengerkilometers; i.e., the money received by an airline
for each kilometer flown by each passenger.
Traffic: The traffic generated by the 76 passengers

on the 1000-km flight will be 76 x 1000 = 76000
revenue passenger-kilometers (RPK).
Yield: If the average net fare received from
each of the 76 passengers is $200, the yield is
$200/1000 = $0.20 per passenger-kilometer.
PHOTO CREDITS
David Morrell ..........................pages 12 and 13
Massimo Pesenti ................................. page 10
Anthony Ponton........................pages 8 and 42
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.
Boeing Commercial Airplanes

Market Analysis
P.O. Box 3707, MC 21-28
Seattle, WA 98124-2207 USA
www.boeing.com/commercial/cmo
Boeing is a trademark of Boeing Management Company. Copyright 2006 Boeing. All rights reserved.
Printed in U.S.A. CMO68247 09/06

2006 Boeing

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TRAVEL DEMAND AND

THE BOEING COMPANY 2006

PASSENGER AND FREIGHT

MOVING TO LARGER JETS

NEW DIRECT SERVICES

SERVING HIGH-DENSITY TRAVEL

IMPROVING AIR TRAVEL FOR EVERYONE

For fleet development, see page 5.

THE BOEING COMPANY 2006

THE GLOBAL MARKET FOR NEW AIRPLANES

NEW AIRPLANE DELIVERIES AND MARKET VALUE

747 and larger

DELIVERIES BY SIZE AND REGION >> 27,210

of 4.9 percent, and a freight

Market value by size

growth rate of 6.1 percent.

Market value by region

747 and larger

MARKET VALUE BY SIZE AND REGION >> $2.6 TRILLION, $2005

Over the next 20 years

A diverse global market

HOW THE FLEET GROWS

WORLD TOTAL >>

747 and larger

FLEET DEVELOPMENT 2005 TO 2025 >>

New airplane deliveries

THE BOEING COMPANY 2006

A RESILIENT PASSENGER TRAVEL MARKET

The market for air travel is set to grow at an average

Global airline markets will

AIR TRAVEL GROWTH PARAMETERS INDEXED TO 1990

MORE FREQUENT, DIRECT FLIGHTS >>

1 The Economic Impact of Air Service Liberalization InterVISTAS-ga2 Consulting 2006.

The most efficient travel option

NEW AIRPLANE DELIVERIES

SHARE OF DELIVERIES BY AIRLINE TYPE >>

THE BOEING COMPANY 2006

GLOBAL PASSENGER TRAVEL PATTERNS

PASSENGER TRAFFIC DEVELOPMENT, RPKs (BILLIONS)

ANNUAL GROWTH RATE, 20052025

Asia Pacific, including China

Within North America

Asia Pacific, excluding China

North AmericaLatin America

Within Latin America

ASIA PACIFIC WILL BECOME THE LARGEST REGION >>

Middle EastAsia Pacific

WITHIN OR BETWEEN REGIONS >>

Factors affecting growth in each market

The varying relationship between GDP and

Other important factors to consider include the

Although the large internal markets of North

Passenger market growth by region

Airplane use on each flow

AIRLINE CAPACITY BY AIRPLANE SIZE

The EuropeLatin America and North America

TWIN-AISLE AIRPLANES FOR LONGER DISTANCE >>

747 and larger

THE BOEING COMPANY 2006

AIRPLANE SIZE BY REGION

Demand by region where the airline is based.