Boeing Looks To Add Value and Grow Revenue throughout Aircraft Lifecycle

 - October 8, 2010, 6:33 AM

Boeing’s Commercial Aviation Services (CAS) division is gaining ground in its strategy to deliver services for the entire lifetime of the aircraft that it manufactures. The airframer has for a long time offered services beyond just manufacturing airplanes and that strategy has accelerated since CAS president Lou Mancini joined the group in 2002. Boeing has made strategic acquisitions, including its largest ever, the $2 billion purchase of parts distributor Aviall in 2006, as well as the $1.5 billion purchase of navigation data provider Jeppesen in 2000. More recently, Boeing has consolidated all of its non-manufacturing functions under CAS’s four services divisions–Material Services, Fleet Services, Flight Services and Information Services–in a bid to be more customer-driven.

Airlines can buy any of these services separately or spend the time and money to create them on their own or source services from third parties. But Boeing hopes that airlines will find advantage in one-stop shopping and efficiency improvements by having all of these services integrated by one provider.

Part of why CAS is able to pull all these services together under the lifecycle umbrella is because modern airplanes are so full of information (“e-enabled,” in Mancini’s words) and increasingly able to share that information with airlines and manufacturers. Boeing Fleet Services’ Airplane Health Management (AHM)–which monitors the maintenance status of the airplane, in many cases in real time–now has 37 customers tracking more than 1,100 airplanes. AHM has been extended further to create the GoldCare product, where Boeing serves as the technical manager of an airline’s fleet. For launch customer TUI, Boeing has set up a separate GoldCare operations room where a dedicated team will manage the TUI fleet’s technical needs, including monitoring every airplane in flight and arranging for maintenance with TUI's MRO provider Monarch Engineering.

Boeing’s Training Center is expanding to bring pilot and maintenance training facilities closer to customers and is now part of Flight Services. Also combined into Flight Services are the performance engineering and publications departments. Pilots and mechanics can train with the latest information using the same curriculum and airplane configuration so they have flexibility on where and when to train.

CAS represents about 15 percent of Boeing Commercial Airplanes’ revenues. Growth in the services business should continue, both through adding new Boeing-developed programs like the 747-400 and 767-300 freighter. “The next frontier is going to be to optimize the white spaces between organizations with more integrated solutions,” concluded Mancini. “A lot of that is based on technology. We think we can do a lot more for our customers. We have a very active pipeline of ideas that we’re developing and taking to market.”