Boeing is seeking to take a larger share of the market for modification of its airliners. It is forming a business unit to provide conversion, upgrade and engineering services to airlines and maintenance centres.
The new Boeing Airplane Services unit is built around the company's Wichita, Kansas-based 747 passenger-to-freighter conversion business and the MD-10 modification programme run out of Long Beach, California. It includes a Seattle-based design engineering group. Employment at the three sites is expected to grow from 1,600 people to about 2,300 by year-end.
Boeing is looking for significant growth from the new unit, according to Airplane Services president Joe Gullion. Revenues of "several hundred million dollars" are expected in the first year of operations, he says, with services on offer including avionics upgrades, interior reconfigurations and performance upgrades, as well as passenger-to-freighter aircraft conversions.
Growth will be driven by the predicted demand for freighters, says Gullion, with Boeing forecasting a "conservative" requirement for 1,500 conversions over the next 15 years. "That's 100 aircraft a year," he says. "We do 18 a year now at Wichita, so we would need five or six Wichitas to meet the demand."
The manufacturer plans to team with airlines and third-party centres, providing them with engineering data to perform modification work and maintenance. "Our data is our biggest asset," says Gullion. "We don't see ourselves getting into the pure maintenance arena."
Boeing was criticised by customers such as Lufthansa in 1997 when it annnounced plans to enter the maintenance market through its now-defunct Enterprises unit. "Our focus is different this time," says the company. "We are not looking at maintenance, but are concentrating on post-delivery modifications."
Talks are under way with "eight to 10" companies, and the first agreements are expected to be in place by year-end. The new unit plans to use Wichita as a "proofing facility" for passenger-to-freighter conversions of the 737, 757 and 767, which the company expects to launch within the next 36 months, says Gullion. "We will do the first article at Wichita, to proof the engineering packages and supply chain for our partners."
He says the new unit is looking at the role of Boeing Aerospace Support's new modification centre at Kelly AFB, Texas. Although focused on military work, Kelly is performing its first DC-10 passenger-to-freighter conversion under the MD-10 programme. "We see potential for expanding Kelly," says Gullion.
Source: Flight International
