Services Remain Shining Light In Boeing Offering
Last month saw Boeing Global Services (BGS) post higher revenues and profits in the second quarter of 2022, largely as a result, the OEM said, of more activity in commercial aircraft services.
Operating earnings for the second quarter climbed 37% year on year to $728 million, the highest of any division within the wider company and with comfortably the best margin.
“Our services business … continues to benefit from growing commercial fleet and strong cargo markets, with several Boeing Converted Freighter and materials management agreements recently announced,” said Boeing’s chief financial officer, Brian West.
Commercial services revenue climbed 30% in the quarter to reach close to pre-pandemic levels, and comprised about 60% of BGS’s total revenue, with the remainder being government work.
Boeing CEO David Calhoun commented that the services business is “coming back and it's coming back in a rapid way,” adding that BGS’s revenues and “strong margins” made a key contribution to Boeing recovering to an overall positive operating cash flow position.
Over the next 20 years, Boeing forecasts a $3.6 trillion market for commercial aircraft services market, with 70% of that coming from MRO and modification work.
For its core aircraft production business, Calhoun highlighted the supply chain challenges that still exist across the industry, and in particular at the engine manufacturers, with a lack of engines causing Boeing to adjust its delivery expectations.
In the second quarter of the year Boeing delivered 121 commercial aircraft, including 103 737 narrowbodies.