50 SKY SHADES - World aviation news

Boeing aims to hike revenue and profits, smooth out cyclical pattern

Download: Printable PDF Date: 11 May 2016 23:59 category:
Publisher:
Boeing aims to hike revenue and profits, smooth out cyclical pattern - Manufacturer publisher
Tatjana Obrazcova
Country: United States Aircraft: Airplanes
Source: Reuters

Boeing Co's top executives laid out an ambitious, five-year strategy on Wednesday to increase revenue and profits and secure the company's future for the next 100 years, promising to boost efficiency, return free cash to shareholders and expand the after-market services and parts business.

But the executives, speaking to analysts at a conference, faced some skepticism about whether Boeing can tame the commercial aircraft business cycle, and the company gave few new details about plans to modify existing planes to better match market needs to counter competitive threats from Airbus and Bombardier .

Boeing expects to lift profit margins to a double-digit percentage next year and has an "aspirational target ... towards the end of the decade of getting to mid-teen margins," Boeing Chief Executive Dennis Muilenburg told the conference.

The company is re-engineering itself to become more flexible and efficient in designing and building jetliners, using automation, 3-D printing and other measures.

These moves, Muilenburg said, would allow Boeing to create a steady, sustainable business in what has historically been a highly cyclical industry.

Boeing aims to be not only a "global industrial champion" but "the industry leader in cash generation," Muilenburg said. Over the next decade, Boeing aims to achieve "sustained top- and bottom-line growth" in all of its businesses, he added.

Boeing said 777 jetliner output would fall to about 5.5 a month in late 2018 and 2019, in line with some analysts' predictions, as it shifts to the successor 777X jet. The rate is 8.3 now, and will fall to 7 a month next year. Muilenburg said the changes are factored into Boeing's cash and profit margin expectations.

Boeing described how it will pay back nearly $30 billion in deferred costs from the 787, saying 70 percent would come from selling larger, more profitable versions of the plane and higher prices.

Boeing also addressed whether its output will overshoot demand if there's a downturn in the aerospace cycle. New plane orders have slowed, and by 2020, Boeing will be making more than 900 planes a month, a position some analysts questioned.

Ray Conner, head of Boeing's commercial plane unit, said the factory has to be flexible and Boeing has to watch the market. "But particularly on the single aisles, where we have taken the rates really high, we are feeling pretty strong about that."



Loading comments for Boeing aims to hike revenue and profits, smooth out cyclical pattern...


Recommended

Boeing, Adient Launch New Company to Design and Build Airplane Seats

Adient Aerospace will develop, manufacture and sell a portfolio of seating products to airlines and leasing companies Boeing and Adient announced the formation of Adient Aerospace, a joint ven...

airBaltic Serves Over 3.5 Million Passengers In 2017

The Latvian airline airBaltic in 2017 has transported a total of 3 523 300 passengers or 22% more than last year to its network spanning Europe, Scandinavia, Russia, CIS and the Middle East. It is the...

Ryanair New Cabin Bag Policy Goes Live

Ryanair’s new bag policy went live today (15 Jan) offering: – Lower check-in bag fees (down from €/£35 to €/£25 per check-in bag) – Bigger check-in bag allo...

Flight delayed due to extraordinary circumstances: what if airline is wrong?

Consumer watchdog Which? analysis reveals than in UK on average every fourth flight is late to reach its destination. Extraordinary circumstances have become favorite airlines’ excuse to avoid p...

airBaltic Carries 99% Transfer Passengers on Time in 2017

The Latvian airline airBaltic carried over 900 000 transfer passengers in 2017 out of whom only 1.08% lost their connection due to different circumstances, including delays caused by strikes in E...