Exclusive: Financial Hit From 737 MAX Will Not Slow Appetite For Services Deals – Boeing CEO

www.oann.com | 7/1/2019 | Staff
TimHyuga (Posted by) Level 3
EVERETT, Wash. (Reuters) – Boeing Co’s chief executive said on Tuesday that the financial fallout from the grounding of its 737 MAX jetliner would not slow the world’s largest planemaker’s appetite for deals in the higher-margin aircraft services sector.

“Our ability to do those continues to be strong,” Boeing CEO Dennis Muilenburg told Reuters at the company’s widebody manufacturing plant north of Seattle, referring to acquisitions it has made to enlarge its two-year-old Global Services division.

Capacity - MAX - Situation - Investments - Future

“We have the financial capacity to manage the MAX situation and continue to make our investments for the future,” he said.

Boeing’s fastest-selling, single-aisle jet was grounded in March after two deadly crashes. The company is working on a fix for software at the center of both crashes and is aiming to get the jet back in the air as soon as October. It has completed around 560 flights with the new software, Muilenburg said on Tuesday.

Quarter - Muilenburg - Progress - Schedule

“We still anticipate getting the return-to-service early in the fourth quarter,” Muilenburg said. “We are making progress on that schedule.”

Meanwhile, Muilenburg aims to expand the services business that includes aircraft parts, maintenance and analytics to $50 billion in revenue in a decade from its 2018 revenue of about $17 billion.

Boeing - Parts - Distributor - KLX - Inc

Boeing bought parts distributor KLX Inc last year for $4.25 billion including debt, in its largest deal since merging with McDonnell Douglas in 1997. Boeing and rival Airbus SE are pushing into the market for repairs, maintenance and analytics as airlines consider outsourcing more of such services in an effort to keep a lid on costs.

Boeing has had to divert resources to the 737 MAX from across the company as it works to win approval from aviation regulators for its software upgrade.

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