Boeing is bullish on its order backlog, deliveries and production ramp-up, although it expects an estimated revenue loss of $1.5 billion following the month-long strike by machinists in the third quarter of 2005.

New orders from domestic US low-cost carriers, coupled with growing demand for the 787 and for legacy aircraft will buoy orders in the next years, says recently installed chief executive Jim McNerney.

The company delivered 62 commercial aircraft in the third quarter, 21 fewer than forecast because of the strike. But “we haven’t lost an order because of the strike”, McNerney says, adding: “The final contract remained within the requirements of our number one negotiating principle, which is enhancing our competitiveness as a business.”

Nine fewer aircraft will be delivered in the fourth quarter than previously forecast because of the strike.

Boeing is forecasting total deliveries of 395 aircraft for 2006, with a slight increase in widebody shipments, as some deliveries are pushed back because of the strike, and because of an increase in widebody demand, McNerney says. Deliveries are expected to rise again in 2007.

In its Integrated Defense Systems segment, Boeing reported increased operating margins, despite an 11% fall in revenues to $7.4 billion. The sector has double-digit operating margins – 17.7% – and “intends to stay there”. Boeing Commercial Airplanes saw a 6% increase in revenues to $4.9 billion in the third quarter, compared with the same period a year earlier and is working towards double-digit margins, McNerney says.

The company has no formal plan in place to ramp up 787 production further, McNerney says. “We will look for opportunities to ramp it up if we can, but we don’t have a plan now.”

Boeing has completed the sale of its Arnprior sheet-metal fabrication plant in Canada, to newly created Consolidated Industries subsidiary Arnprior Aerospace, for an undisclosed sum.

Boeing says the transaction includes a long-term, single-source supply agreement for all parts and assemblies currently produced for Boeing at the Arnprior facility. Boeing Commercial Airplanes Fabrication vice-president and general manager Ross Bogue says: “Boeing will benefit from lower procurement costs, which, ultimately, will improve the value of our products and benefit our airline customers.”


Source: Flight International