Boeing services unit seals US$1b deals

SINGAPORE: Boeing’s services unit announced yesterday deals worth nearly US$1 billion (RM3.9 billion) as part of its effort to more than triple the division’s annual revenue to US$50 billion in as little as five years.

The agreements included landing gear exchange deals with Japan’s ANA Holdings Inc and Malaysia Airlines and an order from cargo group DHL for a 767-300ER converted freighter.

The jet manufacturer has been looking to boost revenue in its services business which involves jet maintenance, repair and overhaul (MRO), data analytics and pilot training.

Revenue grew by 5.5% to US$14.6 billion in 2017 and the growth rate is forecast to be even higher this year, Boeing Global Services CEO Stan Deal told Reuters at the Singapore Airshow.

“Over the next 5 to 10 years we are going to accomplish that as a stretch objective,” he said of the US$50 billion target, adding it will “clearly involve” acquisitions.

Deal said areas of interest for acquisitions included aircraft interiors and data analytics.

The revenue split in the Dallas-based services division is about half military and half commercial services at present, but Deal said that balance was expected to shift toward commercial over time.

“Commercial is just more rapid because of the strong continued growth in commercial aviation and the continued strong growth projections particularly in the Asia-Pacific,” he said.