BOEING COMMERCIAL AIRPLANES Marketing June 2003

NORTHEAST ASIAAnnual GDP growth in Northeast Asia is forecast at 2.1% over the next20 years. Japan is a relatively mature economy with low population growth.Korea will grow at a faster rate because it is still a developing economywith an expanding manufacturing base.Although air travel involving Japan and Korea is currently below whatone would expect given their level of wealth, liberalization and globalizationare having a positive effect.Already, the domestic Japanese Northeast Asia Deliveries2003–2022market is deregulated. Still, airSmaller regional jetsSingle-aisle8%travel markets are not fullyTwin-aisle12%747 andderegulated, distribution channels larger27%are tightly held, and internationalroutes are controlled with53%bilaterals. As changes occur, theregion will experience rapidlyexpanding air travel, which is1,470 airplanesforecast to average 5.7% annually$192 billion*over the next two decades.* In year 2002 dollarsThe percentage of theNortheast Asia fleet consisting of intermediate-size airplanes willrise from 40% to 52% over the next 20 years. Routes across the Pacificand to Europe will be subject to increasing fragmentation as moreairport pairs are served with more frequencies usingintermediate-size airplanes.CMO 2003_4-6Northeast Asia FleetPercentage of fleet10075502502002630airplanes20221,716airplanesNortheast Asia ASK MixDomiciled AirlinesScheduled Nonstops, 2000Northeast Asia to:Northeast Asia . . . . . . . . 37%North America . . . . . . . . 31%Europe . . . . . . . . . . . . . . . 11%Southeast Asia . . . . . . . . 10%Oceania . . . . . . . . . . . . . . 6%China . . . . . . . . . . . . . . . . . 4%Southeast Asia . . . . . . . . . 1%Regional Summaries 22 Current Market Outlook 2003