Boeing Defense, Space and Security (BDS) expects a sizable chunk of its international business growth over the next five years to come from Asia, as the company continues to seek opportunities abroad in the face of a shrinking US defence budget.
Non-US business made up 16% of BDS's total business last year, worth $34 billion in all, says chief executive Dennis Muilenburg. The company expects this to increase to 20-25% five years from now, and business from Asia, which takes up half of that international business segment, is expected to see strong growth, adds Muilenburg.
"The Asia fraction of that will grow a little above 50% just because of the strength of the market and the opportunities that we see here. While we do see some pressure in the core US defence budget, we see offsetting growth in some of the adjacencies and international [market]."
India will be a key market, and is expected to be worth $30 billion over the next 10 years, says BDS vice-president for international business development Mark Kronenberg. Boeing already has a strong relationship in India through the presence of Boeing Commercial Airplanes and the relationship is set to become stronger, adds Muilenburg, pointing out India's letter of request for 10 C-17s earlier this year.
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© BoeingThe first five RAAF Super Hornets fly over their new Amberley home |
Following its success in Australia, Boeing is also offering the F/A-18E/F Super Hornet to India, which Muilenburg says is a "great cost capability match" for the contest.
"We continue to invest in industrial partnerships in India as well. All of those trends point in a positive direction and we see that as a big part of our future."
In Asia overall, Muilenburg expects more demand for rotorcraft, surveillance aircraft, and unmanned aircraft systems. Rotorcraft, in particular, will be a strong growth area, he adds. "Both our Chinook, and our Apache represent opportunities there and we see strong demand both in the USA and [the] international marketplace."
In India, for example, Boeing has offered the AH-64D Apache and CH-47F Chinook for the air force's request for 22 attack and 15 transport helicopters.
There is also potential interest in Asia in the AH-6I light attack reconnaissance helicopter as a complement to Chinooks and Apaches, says Muilenburg.
Surveillance and reconnaissance capabilities will remain in demand in the region, with India signing up last year to be the first non-US customer of the P-8I maritime reconnaissance and anti-submarine warfare aircraft, Muilenburg points out.
Boeing's 737 airborne early warning and control system also has a presence in South Korea and Australia, and it expects to see more demand in that area, Muilenburg says.
On the unmanned air systems front, Boeing has seen "continued strong interest", says Muilenburg. "Our ScanEagle system has been gaining a lot of interest. The Singapore navy, for example, expressed some interest in that capability so we've done some initial trials there."
Boeing stood up its new UAS division late last year and recently rolled out its Phantom Ray UAS. Muilenburg says the division is "off to a good start".
He adds: "It's beyond just platforms. It's also [about] the payloads that the unmanned systems carry and the kind of services that could be provided with those, both commercial and defence applications. All that capability has been captured in our unmanned division," he adds.
The drive to increase BDS's international business segment comes as the company seeks to expand its focus beyond military aircraft. Formerly known as Boeing Integrated Defense Systems, it assumed its new name at the start of 2010.
Muilenburg, who took over the helm from predecessor Jim Albaugh in September 2009, says the transition is going smoothly. Defence continues to form the core of the business, but BDS is also extending into adjacent markets, he adds.
"That name change was all part of the fact that internally and externally, we wanted to communicate the fact that we are broadening our perspective of what the company is about.
"I think that over time we will add growth opportunities and the transition is going smoothly and I think we're making good progress," Muilenburg says.
Source: Flight International
