Supply chain disruption largely resulting from the fallout of the Covid pandemic continues to raise hurdles for aircraft manufacturers and their airline customers. The situation has challenged the Boeing Global Services (BGS) team to proactively respond to difficulties encountered by some suppliers and sub-tier contractors, Dan Abraham, the business unit’s vice president of commercial services sales and marketing, told AIN ahead of the Singapore Airshow.
“We are closely coordinating operational contingency plans to maintain business continuity and mitigate risks across the supply chain and continue to monitor the dynamic situation in affected regions and around the world as we navigate this challenging time together as an industry,” said Abraham.
While the Asia-Pacific region hasn’t escaped the effects of supply chain disruptions, BGS’s strong presence there reflects the company’s belief that Southeast Asia and adjacent regional markets will continue to progress toward a solid commercial aviation market recovery. According to Abraham, some of the fastest-growing commercial services markets reside in Southeast Asia and Boeing thinks the number of its airplanes there could double over the next five to 10 years, creating corresponding demand for aftermarket services required to support those fleets. Boeing estimates that Asia-Pacific countries also will require commercial aircraft aftermarket services valued at $3.7 trillion over 20 years.
“As the industry works to recover to pre-pandemic levels, many airlines in this region have implemented beneficial changes to their networks and business strategies,” said Abraham. “And while vaccination rates and new waves of the pandemic may challenge some areas in the near-term, Boeing’s forecast anticipates that the region’s long-term growth drivers for air travel will remain solid.”
In terms of flight operations, customers used Boeing’s crew and operations planning programs to manage the schedules of more than 460,000 crew members flying on more than 9,700 airplanes prior to the pandemic. As Covid-19 disrupted crew schedules around the world, those crew and operations planning tools have proved vital to adapting to the volatility, allowing global airlines to quickly re-plan and optimize resources, understand effects, and reduce costs, explained Abraham.
Overall, Boeing sees an eventual return to a long-term growth trajectory resulting in an annual fleet growth of 3.1 percent. By 2040 it expects the global fleet to reach 49,405 airplanes, driving a need for well over 2 million pilots, cabin crew, and mechanics over the next 20 years. “Our global network of simulators and training centers is well-positioned to take advantage of this continued growth in the global industry,” said Abraham. “This same growth trend will drive our parts businesses, both managed parts businesses, where we use the scope and scale of our customer base to lower the risk and capital outlay of our customers as well as our transactional parts business, where we keep airplanes flying every day through our industry-leading availability and on-time delivery.”
In the meantime, BGS has already benefitted from a surge in cargo demand due to pandemic-related shortage of belly capacity in passenger airliners, resulting in orders and commitments last year for more than 100 Boeing 737-800BCF and 767-300BCF passenger-to-freighter conversions, marking its best sales year ever for that business. In Southeast Asia, the company has opened its third 767-300BCF line at ST Engineering’s facility in Singapore. It also saw the first 737-800BCF enter service in Thailand with K-Mile, a joint venture of Ireland’s ASL Aviation Holdings.
Boeing’s commercial outlook forecasts a demand for 1,200 standard-body and 520 widebody converted freighters over the next 20 years.
Established as one of three distinct divisions in 2017, Boeing Global Services accounts for 35 percent of the total revenue the Boeing Company expects to generate over the next 10 years.