Boeing plans to stand-up a third business unit dedicated to dramatically expanding the company’s position in the aerospace services market will proceed as scheduled on 1 July, the company announces.
The launch of Boeing Global Services in Plano, Texas, will consolidate a roughly $17 billion portfolio of existing companies focused on pilot training, electronic flight bags and documentation, spare parts distribution and aircraft maintenance, modifications and repairs.
Boeing chairman, president and chief executive Dennis Muilenburg has set an “aspirational target” for BGS to become a $50 billion company by 2025, standing shoulder-to-shoulder with the size of Boeing Commercial Airplanes and Boeing Defense, Space and Security today.
“Our services expertise, the global reach of our business, and our strong customer partnerships have us well positioned to compete and win in this important sector," says Muilenburg in a statement released on 30 June.
The aerospace services market is worth $2.5 trillion over the next 10 years, according to Boeing.
As the sector grows, BGS plans to apply an evolving suite of data and analytics tools to help airlines diagnose maintenance problems faster, and, in some cases, predict component or part failures long before they occur.
But Boeing’s hopes to triple the size of its services business could have dramatic implications in the wider market, as original equipment manufacturers reclaim areas long ceded to third-party providers, which, in some cases, are affiliates of Boeing’s airline customers.
The company’s strategy also will push Boeing’s new unit to provide maintenance services for aircraft made by competitors, including Airbus.
"We've been talking with our customers over the past few months as we've prepared for this transition, and tomorrow they can begin to see the value of this dedicated services unit that allows us to deliver agile, cost-competitive solutions so they can reduce costs, drive efficiency and ultimately optimize their operations," says Stan Deal, BGS president and CEO.