商用飞机：燃油价格驱动的低迷？过去的完美风暴会重现并扼杀市场吗？需要关注什么

Commercial Aircraft: Fuel price driven downturn? Will perfectstorms of the past reappear and kill the market? What to watch We have not seen a fuel price driven downturn in commercial aircraft in over 30years. But, that is now a possibility.It all comes down to global airline profits, which linktightly to global GDP trends - i.e., not just fuel prices. Past history shows three periods whensuch a scenario did happen (1990-91, 1974-75, 1979-80), with very negative impact. Adifference today is that we would only expect the impact to be on aftermarket and not OEperformance. With extraordinarily high backlogs, Airbus and Boeing deliveries should be Douglas S. Harned, Ph.D.+1 917 344 8430douglas.harned@bernsteinsg.com Adrien Rabier+44 20 7676 6820adrien.rabier@bernsteinsg.com Jennifer Ma+1 917 344 8408jennifer.ma@bernsteinsg.com The war in Iran has provided a shock to the commercial aircraft industry at a timewhen all segments were booming. There appeared to be no negative catalysts on thehorizon. We have now seen a sharp drop in Middle East traffic and sharp rise in jet fuelprices. March traffic in the Middle East fell by 56%. But, global traffic in March was down Cyriaque Blanchet+44 20 7676 7342cyriaque.blanchet@bernsteinsg.com Specialist Sales Steve Song+1 917 344 8401steve.song@bernsteinsg.com The leading concern is soaring fuel prices, with jet fuel now more than double its2025 average.High fuel prices become a problem when airlines cannot pass throughcosts to customers through higher fares. LCCs in Asia and Europe appear most exposed.This is why the GDP outlook is critical. If fuel prices rise because of high demand (e.g.,2006-8, 2011-12), it is possible to pass through the costs.Even a supply shock (e.g., James Brady+44 20 7762 5272james.brady@bernsteinsg.com The keys to watch here are GDP trends, along with fuel prices, combined into airlineprofitability.Remember, this is global, with Asia-Pacific profits particularly important.When airlines are cash strapped, they cut MRO spend and attempt to push back newdeliveries. With high fuel prices, MRO spend is cut by parking older aircraft - especiallythose in need of near-term overhauls (low engine green time).This can affect shop visitswithin six months, although backlogs are currently so high, that shop visit schedules With Strait of Hormuz closure, jet fuel prices are currently highest in Asia-Pacific,with LCCs there especially vulnerable.Long haul flights are also disproportionatelyimpacted by fuel costs.Should we see the perfect storm arise (recession, high fuel),the impact would be greatest on the engine OEMs who benefit most from the legacyaftermarket (i.e., GE, RTX, Safran, Rolls-Royce, MTU). For these companies, highestmargins come from legacy engine aftermarket (e.g., CFM56, V2500, Trent 700, GE90),which places them at the highest risk.Expect low impact on companies that are notbiased toward high profits on legacy aftermarket(e.g., Airbus, Boeing, Howmet, Hexcel BERNSTEIN TICKER TABLE INVESTMENT IMPLICATIONS High oil prices place risks on the outlooks for companies exposed to the commercial aircraft aftermarket. The end result willdepend on how long high fuel prices persist (tied to ensuring transport through the Strait of Hormuz and the Red Sea) and howthe global economy fares. Should the conflict in Iran end within two three months or economic growth be sufficient to supporthigher airfares, we can be back to the high growth outlook of two months ago. But, if high fuel prices lead to an economic DETAILS FIRST - WHAT IS A DOWNTURN AND WHAT DOES IT DO? Assessment of two recessions - Neither fuel price driven In Exhibit 1 we show two examples of downturns from the past. The first is the recession that occured post-9/11 (actuallystarted before 9/11 in 2001). The second is the Global Financial Crisis. Neither downturn was associated with high fuel prices.The first downturn period is unusual because we saw the sudden parking of much of the North American fleet after 9/11. In Airline traffic.Traffic growth fell as the recessions hit, in both 2001 and 2009. Airline margins.Airline operating margins immediately fell as the recessions hit. The margin declines were due to pressureon yields combined with underutilization of the fleet. •Fleet becomes younger.Older aircraft were parked, so that aircraft over 15 years old represent a smaller portion of thefleet. Aircraft nearing a heavy check were parked to conserve cash. •New deliveries.Slowdown (or decline) in delivery ramp. In the 2001-02 downturn deliveries fell sharply, as at that timebacklogs were low relative to active fleet size (22%). When airlines refused to take deliveries, there were few options to placethe slots. In 2008-09, deliveries continued to ramp, when one takes into account the Boeing strike in H2 2008, although ata slower rate. That was because of the record backlog size that was 39% of the active fleet. Airbus and Boeing were able to •Impact on aftermarket.Aftermarket