Chris Jasper/LONDON
Boeing expects recently formed Boeing Capital Corporation (BCC), inherited when the Seattle giant acquired McDonnell Douglas (MDC) in 1997, to return growth rates of at least 15% a year over the next few years.
MDC regarded the McDonnell Douglas Finance Corporation (MDFC) as a profit generator and Boeing has retained that approach in combining the unit with its own financing operation, which had offered non-profit oriented support to help sell aircraft.
BCC, which effectively operates as an asset management/lease financing hybrid, has played a crucial role in two recent transactions - DHL Worldwide's lease of ex-British Airways 757s and American Trans Air's 737-800/757-300 deal.
BCC president Thomas Motherway describes today's asset portfolio value of $4 billion (of which around 50% comes from the former MDFC) as "very small" compared with fully fledged financial service companies, but says growth "in excess of 15%" is realistic.
"Rather than see financing as something we must do, we look at it as something we are willing to do and can profit from," he says.
Motherway says conflict with Boeing's lessor customers is unlikely, as Long Beach, California-based BCC does not plan to buy large numbers of aircraft and is concentrating on finance, not operating, leases. He adds that Boeing president Phil Condit has cleared BCC to finance rival Airbus aircraft where an order has been lost.
A key element of the BCC approach is to secure "total solution" deals, tying financing into the long-term provision of services. "You then see an aircraft as a 35-year asset," he says.
Citing GE Finance, which he says accounts for 40% of its parent's bottom line, as showing the potential of financing, Motherway says the defence and space markets also provide growth potential. BCC plans to add European and Asian bases to its six US offices.
• Recently formed Boeing Space and Communication Services is targeting annual sales growth from $500 million to up to $4 billion per annum within five years, says Rick Stephens, vice-president and general manager.
The division, which was established in May from three separate space and communication services businesses, is focusing on support services for government and commercial space programmes, including payload processing operations, engineering services and satellite ground operations.
Source: Flight International
