Boeing Commercial Aviation Services (CAS) supports almost 12,000 aircraft and is expected to become a bigger contributor of revenue as it becomes 'smarter', with sophisticated health management and monitoring systems. "The market for services is at least as big as the market for aircraft and today we're a very small percentage player," says CAS senior vice-president Mike Cave. "We've got nowhere to go but up.
"With airlines consolidating and changes to the infrastructure, there have got to be big changes in the business model, and maybe some revolutionary changes in the service model over the next four to five years."
So far, growth has been slower than originally predicted, with only 10-15% of BCA revenues now CAS-related, but this may have been a blessing in disguise, says Cave. "Our modest growth has allowed us to learn tremendously and mature into the technology management side of the business. When the market comes back, we'll be growing differently and will be creating new business opportunities that are more consistent with our franchise."
CAS's change in direction is moving it away from the major conversions and heavy maintenance, repair and overhaul (MRO) activity originally planned, to a broader suite of products and services ranging from maintenance, modifications and technical services to spare parts. "Instead of being in a quagmire having bought all the MROs, we're doing what we know best," says Cave.
CAS's four business units comprise maintenance services, technical services and modifications, flight services and spares. The first of the four offers the biggest potential, says Cave. "We aren't the traditional MRO provider and don't have any aspirations to be one - but we have a valuable weight of talent. In particular, we want to take the standard maintenance programmes and reinvent them several times over. We can't compete with the traditional MROs, so it's our business to create new opportunities."
Through advanced aircraft health-management systems, running in prototype form in 2003 with American Airlines and Air France, CAS hopes to pave the way for predictive 'smart' maintenance programmes. The concept dovetails with the dream of the 'e-enabled' airline being promulgated by Connexion and the 7E7 design team, and is a classic target for the new Boeing. It also works with management tools such as the maintenance planning software packages developed under Boeing's Enterprise One initiative.
The technical services and modifications unit is being revised after the tough lessons learned by CAS during the difficult early days of the 757 passenger-to-cargo conversion programme for DHL. After originally being central to the conversion, CAS is now 'migrating' to provide engineering, kits of parts and partnerships with companies such as Aeronavali, TAECO and IAI. "We've pretty much decided we're not in the touch labour business," says Cave. Withdrawing from top-line conversion work will allow CAS to benefit from "low-line growth without the risk".
Flight services is also expected to be a big beneficiary of the e-enabled airline, thanks particularly to CAS's joint venture with Boeing subsidiary Jeppesen Sanderson and the development of the electronic flight bag, a laptop-like portable flight planning and operations system. Together with Alteon, the former FlightSafetyBoeing joint venture now wholly owned by Boeing, CAS has 21 flightcrew training bases around the world.
Source: Flight International
