Boeing Market Analysis

Topics: Boeing 747, Competition between Airbus and Boeing, Airbus Pages: 19 (7532 words) Published: April 18, 2008
The Boeing Company is a major player in the aerospace and defense industry with over 150,000 employees. As of 2006 they led the commercial and defense aircraft market as the company with the largest total revenue. (Defense News , 2007). The corporation is divided into five separate business units/services. Commercial Airplanes and Integrated Defense Systems are the two major components. The other three units span control over research and development, services and financial services; Phantom Works, Shared Services Group and Boeing Capital Corp, respectively. As of 2006, these three smaller units contributed only 2% of the revenue for the Boeing Company, but played a valuable role in their various supporting contributions to the main efforts of defense equipment and commercial aircraft production and sales. The Boeing Integrated Defense Systems division, producing weapons, aerospace and space systems, accounted for the majority, 52%, of the revenue for The Boeing Company, and 50% of the corporation’s combined earnings. The Boeing Commercial Airplanes division accounted for 46% of the revenue and 45% of the corporation’s earnings. (Boeing, AR06, 2007) It is on this final division that the remainder of this study will be focused on.

The Boeing Commercial Airplanes (BCA) division headquarters is located in Renton, Washington and is the largest revenue producing commercial aircraft manufacturer in the world. It employs more than 54,000 people and traces its origins back to the Pacific Aero Products Co., a company incorporated by William E. Boeing in 1916. (Wikipedia, 2007) Its’ mission statement has evolved over the decades as the market has evolved. In 1950 when it was just one of many commercial airplane manufacturers, its statement was to “become the dominant player in commercial aircraft and bring the world into the jet age. (BRS, 2007). It has certainly accomplished that mission. Through market growth, product development and acquisitions, its varied aircraft inventory has become the most proliferated in the world. The resulting mission statement has changed; “To deliver superior design, efficiency and support to airline customers and allow passengers to fly where they want to go, when they want to go” (Boeing, 2007).

Boeing’s main aircraft competition is the European conglomeration, Airbus within the large commercial airplane market. They both target the markets of the small-medium commercial aircraft up through the long-haul, wide-body aircraft. This encompasses the 100-500+ passenger markets. Boeing does not serve the regional aircraft market i.e. sub 100 passenger aircraft. There are however, a few notable encroachments into the two companies’ dominated upper market by the regional aircraft manufacturers, Embraer, in Brazil, and Bombardier, in Canada. Each of these companies has for the past couple of years produced or marketed future products that compete on the low-end of the Boeing/Airbus market. There are also a few encroachments in the works from startups in Russia, the United Aircraft Building Corporation, which combines Ilyushin and Tupolev aircraft and future Chinese aircraft entries. (Zolbin, 2006)

At Boeing, the two aircraft units compose the main effort for the commercial aircraft division. The Airplane programs unit focuses on current models and the 787 program focuses completely on bringing the newest aircraft model online. Even though many of Boeing’s aircraft models are out of production but still in service, the company continues to offer service support to these. However, BCA’s focus is on current production. The aircraft lines currently in production are the 787, 777, 767, 747 and the 737. Each of these has model variants that are targeted towards certain gaps in the market using such variables as focusing on range extension, bigger engines added, longer bodies added, etc,. (Boeing, 2007) In addition, the 767, 777, and 747 lines have freighter versions that are currently being...
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