The Boeing’s (BA) at Bernstein Strategic Decision Conference

CEO Dennis Muilenburg

Strong growth in commercial passenger traffic

“Commercial airplanes continues to be a very strong marketplace and we are seeing sustained passenger traffic growth, historically 5% to 6% a year — year-to-date commercial passenger traffic is growing little over 8% around the globe with very strong growth continuing in Asia Pacific and Middle East region….we see commercial airplanes as a strong growth market for the future.”

More diversified backlog, less cyclical market

“…the global marketplace is a much less cyclical market, passenger traffic patterns today are much different than they have been in the past. We have a backlog that seven years instead of two years, a backlog that’s geographically diversified not a U.S., Europe dominated backlog. So from a market standpoint, it’s less cyclical.”

The strongly oversold position may go higher

“Even against that production profile, we are strongly oversold and market demand signals are telling us, it could go even higher. So it is part of our effort to keep supply and demand in balance, have a long-term growth plan.”

The future is the 787 and 737 as cash generators

“we can see very clear lines to driving productivity and cash performance on 787 and the data says that we are making good steady solid progress on that. That is one of the biggest cash generation levers that we have. And this is operating on nearly 700 airplanes in backlog. That combined with 737 ramp-up just going to volume ramp-up at 57 a month. Those two things are the cash generators in the company — additional cash generators over the next five years.”

Boeing (BA) at Morgan Stanley Laguna Conference

CEO Dennis Muilenburg

A near term positive outlook for top-line growth

“…on balance, aerospace marketplace is looking solid and growing. Combine that with our backlog position, where we continue to be roughly in unprecedented backlog position near record level…So that combination of market and backlog gives us strong expectation going forward for growth and we expect to see top-line growth in the business over the five year time period.”

Hesitancy in placing orders

“…there is some hesitation in the marketplace right now. Some of that driven by cargo traffic just being generally down. I think some of that is general slow GDP growth globally and some of the political unrest that we see around the world I think is driving some hesitancy there.”

2017 expectations: Flat revenue growth, strong bottom line

“…while you are going to see flattish revenues top-line, you are going to see strong bottom-line performance and in particular you are going to see year-over-year cash growth.

The aerospace sector is fundamentally strong.

“…when I look across deferrals and cancellations, load factors utilization rate, here is a lot of fundamental strength in the marketplace and you look at places like China, well it’s a scenario where a lot of people are keeping a close watch given some of the moderation in GDP growth even at a more modest GDP growth rate of 6% to 7%. We continue to see passenger traffic in China growing at 13% to 15%. That’s very clear that passenger traffic is outpacing GDP growth and that’s part of what’s adding to the fundamental strength of the aerospace sector compared to other sectors.”

Lower oil prices have contributed to higher plane purchases

“…there is one theory that as oil prices come down, the value of our new airplanes and new technology is going to go down I think. The operating cost advantages is of less value. But actually what we’ve seen is that oil prices have come down it’s added to airline’s profitability which has increased their ability to buy and refresh their fleets and that is the more dominating behavior.”

Strong Passenger traffic growth in the Asia-Pacific region

“Despite oil prices, despite currency fluctuations, passenger growth is just very strong and if you look at the Asia-Pacific region, we have a 100 million people that are entering the traveling public for the first time every year. Right, so just the population dynamics and the growth ahead of us in Asia-Pacific in particular is going to create a lot of growth.”