The chief executive of Boeing Global Services (BGS) leaves no doubt he thinks Boeing’s previous services strategy was flawed, saying the division has returned to prioritising its core priority of supporting the global fleet.
Chris Raymond, who became BGS chief in early 2024, also defends the current structure, with BGS operating as an independent business unit within the aerospace giant.
He says rolling services back into the company’s two other units – Boeing Commercial Airplanes and Boeing Defense, Space & Security – risks leaving the aftermarket business overshadowed.
“We’ll be cautious about making sure that there’s a support-the-Boeing fleet element to this,” Raymond says of his BGS strategy.
The business is now “more conservative” and aims to achieve “disciplined, profitable growth,” he adds.
That is a notable shift from several year ago.
Former Boeing CEO Dennis Muilenburg in 2017 separated Boeing’s services work from the commercial and defence divisions and into a third standalone business. Muilenburg said the restructuring positioned BGS to significantly expand. He set a goal for the business to achieve $50 billion in annual revenue within a decade, up from $13.9 billion in 2016.
Toward that end, BGS set out on an acquisitions streak, purchasing Florida parts distributor KLX Aerospace Solutions in 2018 and Texas software provider ForeFlight in 2019. In 2018, Boeing formed a joint auxiliary power unit business with Safran called Initium Aerospace (which has since been shuttered), and a joint aircraft seating business.
The plan did not proceed as expected; BGS’s revenue never came close to the target, hitting $20 billion in 2024 – though, in fairness, the entire company suffered under the 737 Max crisis and ensuring pandemic.
“That was sort of a bad chapter in history. It was growth for growth’s sake,” Raymond says of BGS’s prior strategy. “That was Dennis’s vision, and he was a visionary guy… In hindsight, I think that incentivised some bad behaviour for a couple years.”
BGS was “chasing top-line” growth without properly understanding some of the businesses it acquired or “the profitability or the cost”, Raymond adds.
Indeed, analysts have said Boeing’s broader problems in recent years also resulted from focusing too much on financial returns and too little on engineering.
BGS’s shift away from focusing on the revenue goal actually started under Ted Colbert, who held the position from 2019 to 2022. Stephanie Pope then took over before being succeeded by Raymond.
More changes are underway at BGS.
Boeing plans to sell several of BGS digital aviation businesses – including Jeppesen, ForeFlight, AerData and OzRunways – to investment firm Thoma Bravo for $10.5 billion. Chief executive Kelly Ortberg has described sale, scheduled to close this year, as a means to boost liquidity and help Boeing maintain an investment-grade credit rating.
Raymond does not expect BGS will divest more assets soon, saying, “I think we’ve got the portfolio that we like”.
He also does not view reintegrating BGS into Boeing’s commercial and defence businesses as sensible, saying services is not core to those division’s primary focus of developing aircraft.
“How much time and attention would [services] get when you’re trying to… build and certify airplanes?” Raymond says.
