Boeing Services Revenue Rises On Commercial Activity Boost

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Credit: Boeing

An uptick in commercial activity helped Boeing Global Services (BGS) boost revenues 10% sequentially last quarter and has the company bullish on short-term aftermarket prospects as travel demand continues to rise in key markets.  

“We saw improved demand in the second quarter as we are rebounding from the trough and as airlines prepared for the summer season,” Boeing CEO Dave Calhoun said during the company’s 2021 second-quarter (Q2) earnings call July 28. “We expect this trend to continue near term, slightly ahead of our expectations.” 

BGS posted revenue of $4.1 billion last quarter, a 17% increase over 2020’s comparable period and an 8% bump over the 2021 first quarter (Q1). Commercial revenue totaled $1.8 billion in Q2, a 32% year-over-year jump and an 11% sequential improvement. Commercial business represented 45% of BGS’s revenues last quarter, matching the Q1 split. 

“We saw incremental improvement in commercial services during the second quarter, and we expect the quarterly revenue trend to improve as we support increasing airline flight operations,” CFO Dave Dohnalek said. “That said, given the dynamic environment, we can expect to see variability in the revenue and margin trajectory from quarter-to-quarter at BGS.” 

Boeing’s recovery scenario aligns with many others in the air transport segment—a phased ramp-up that sees pre-COVID-19 passenger levels returning sometime in 2023-2024. Domestic traffic will lead the way, followed by intra-regional demand and then international long-haul. 

“Therefore, we expect demand for narrowbody aircraft to recover faster,” Calhoun said.  

Boeing also still anticipates a jump in official retirements as airlines finalize new fleet plans. 

“The number of aircraft being retired from the active fleet is significant, with around 1,500 airplanes and growing, retired or announced to be removed since the onset of the pandemic,” Calhoun said. “We anticipate this trend will continue as our customers focus on replacing the oldest, least efficient airplanes with new airplanes.” 

Sean Broderick

Senior Air Transport & Safety Editor Sean Broderick covers aviation safety, MRO, and the airline business from Aviation Week Network's Washington, D.C. office.