1、Aerospace exports are important Rating upgrades are unlikely in 2010, but some outlooks have been revised to stable from negative, and this could continue Liquidity, stabilization of credit metrics, and backlogs provide downside protection in case of economic downturn or shock Global economy is a ke
2、y driver of the outlook, and two of Fitchs key 2011 concerns (LCA production and US defense budget) have eased4Outlook Overview (cont.) Tailwinds in 2010 and 2011 Aftermarket (spares, etc) should improve Full year impact of 2009 cost cutting actions US defense spending will continue to rise Boeing a
3、nd Airbus deliveries will rise in 2011 and 2012 Headwinds in 2010 and 2011 Some commercial OE will remain weak (business jets, regional aircraft) Pension funding requirements could rise Commodity and fuel price increases possible Some costs start returning (merit raises, bonuses, etc) Risks to outlo
4、ok Commercial global economy, shocks (terrorism, disease, etc), new aircraft programs (787, A380, A350), supply chain, oil, labor Defence government budget deficits, program risks (A400M), cash deployment, procurement reform5Outlook OverviewEconomic Assumptions: Global Economy Commercial Aerospace:
5、Industry Environment, Large Commercial Aircraft, Aftermarket, Business Jets, Regional AircraftEuropean Aerospace still seeing some in 2010511437YTD June160 130 127 40 83 9 31 142 153 55 Total39 123 117 34 56 4 30 67 101 28 Airbus121 7 10 6 27 5 1 75 52 27 Boeing20092008200720062005200420032002200120
6、00Source: Airbus, Boeing, FitchEstimated Order Cancellations14Jet Fuel Prices and FX: Always Key Variables0.00.20.40.60.81.01.21.4Jun 00 Sep 01 Dec 02 Mar 04 Jun 05 Sep 06 Dec 07 Mar 09 Jun 10050100150200250300350400450USD/EUR exchange rate (LHS)Jet fuel spot price (RHS)(Cents per gallon)(USD/EUR)Je
7、t Fuel Prices Airbus; FitchLatin America down 15% in 1H10 Fitch expects additional 5%-10% declines in 2010 peak-to-trough decline of nearly 50% is not unreasonable there may be risks of further production cuts Business jets are discretionary purchases and there are substitute forms of travel The ind
8、ustry was over-extended Fitch estimates that deliveries grew at a 20% CAGR over the five years since the last trough in 2003 Key development in recent years has been strong demand outside North America (50% of orders at most manufacturers, double the historical level) Drivers of the segment: Corpora
9、te profits, liquidity, replacement demand, and international growth Risks, other than the high volatility of this sector: Weak economy, new entrants, damaged perception, trade-ins, supply chain, and whitetails24Commercial Aerospace: Business Jets (cont.)02004006008001,0001,2001,4001996 1998 2000 200
10、2 2004 2006 2008 2010EUnitsShipments of Business Jets Manufactured Worldwide 1996-20010ESource: General Aviation Manufacturers Association, Fitch25Commercial Aerospace: Business Jets (cont.)200,000300,000400,000500,000Feb 07May 07Aug07Nov07Feb 08May 08Aug08Nov08Feb 09May 09Aug09Nov09Feb 10May 10Oper
11、ationsTotal Monthly Business Jet Operations Note: Domestic and international arrivals and departuresSource: Federal Aviation Administration26Commercial Aerospace: Regional Aircraft ( Segment is about two-thirds regional jets (RJs), one-third turboprops Bombardier, Embraer, ATR This segment has many
12、of the same drivers as LCA, but backlogs are lower Orders were weak in 2009, and the outlook is negative for 2010 RJ (BOMB and Embraer) deliveries probably fell 15% in 2009, and will likely fall 15% again in 2010, excluding possible deliveries from new entrants Shift to larger RJs continues, while 5
13、0-seat market has gone away Turboprops (Bombardier and ATR) rose modestly in 2009, but will likely decline about 5% in 2010 New entrants from Russia, China, and Japan are a concern to existing players first deliveries of the ARJ21 and Superjet 100 could happen in 201027Commercial Aerospace: Other To
14、pics Narrow-body decision for Airbus and Boeing re-engine A320/737 or new aircraft? 777 decision at Boeing Numerous new aircraft introductions in the next several years (787, 747-8, A350, CSeries, Superjet 100, MRJ, ARJ-21, C919, Irkut MC-21, new Embraer jet?) Can the supply chain manage the product
15、ion rate increases and new aircraft models over the next few years?28Outlook OverviewEconomic Assumptions: Global Economy Commercial Aerospace: Industry Environment, Large Commercial Aircraft, Aftermarket, Business Jets, Regional AircraftEuropean Aerospace & DefenceCredit Issues and Selected Company
16、 Credit ReviewsAgendaAppendix (US Credit Comps, US Defense, Green Aero, Industrials Outlook)29Industry Environment European Aerospace and Defence in 2010 Overall defence budgets in Europe are not rising procurement spending is likely to be flat in the medium term. At most risk are those companies he
17、avily exposed to European defence spending: Thales and Finmeccanica Consequently export activity has become more important than ever as a driver of top line growth Civil sector outlook has improved in the past few months following the recession and the overall sector remains in good shape owing to l
18、arge and quality order books Ratings have been very stable due to strong balance sheets and benign defence conditions actions have been driven by specific events like poor programme execution M&A appetite remains strong among the big players Rating actions are likely to be limited to company-specific events
