The Boeing Company Business Overview

The Boeing Company Business Overview

Commercial Aircraft

The Boeing Commercial Airplane Group, with approximately 66,000 employees, is the company’s largest operating unit and accounted for 71 percent of total company sales in 1995. The demand for new aircraft was stronger than the year before, with announced orders for 346 Boeing jetliners, compared with 120 in 1994. The value of these 1995 orders represents about a two-thirds share of all world orders for jet transports for the year.

Commercial Aircraft Operations:

Highlights for 1995. The third member of the new 737 series, the 737-600, seating 108-132 passengers, as launched in March, with deliveries to start in 1998. Demand for the new 737-600, -700 and -800 was strong during 1995, with customers announcing orders for 129 aircraft. The first 777-200 was delivered to United Airlines in May, and a new member of the 777 family, the 777-300 – which offers 20 percent more seating was launched in June. In October, the first 767 freighter was delivered to the program’s launch customer, United Parcel Service. In December, plans were announced to increase aircraft production rates in 1996 and 1997 on 747s, 777s, 767s and 737s. In early 1997, when all scheduled rate changes are in place, Boeing will be producing 22 jetliners per month, compared with 18 at the end of 1995.

Aircraft by Model:

Market Outlook. Growth in air traffic and airline profitability drive the demand for new aircraft. In 1995 worldwide passenger traffic increased by approximately 5 percent, and the airline industry, as a whole, sustained much stronger profits than the year before. If present trends continue, we look for continued improvement in the demand for new commercial aircraft. Over the next 20 years, Boeing projects a worldwide demand for nearly 16,000 airplanes, worth more than $1 trillion in 1995 dollars. Of the total, about three-fourths of the new aircraft demand will be required to meet the projected growth in air travel and the remainder to replace older airplanes in service.

Defense and Space

The Boeing Defense & Space Group accounted for 29 percent of total company sales in 1995. Sales were about 10 percent higher than the year before, mainly because of increasing revenues from the International Space Station program. The Group is organized into five product sectors: Military Airplanes, Helicopters, Missiles & Space, Information & Electronic Systems, and Product Support. The company’s defense and space business is broadly diversified, with no program accounting for more than 20 percent of total revenues over the past three years.

Defense and Space Operations:

Highlights for 1995. Boeing work on the International Space Station remained on track, with nearly 100,000 pounds of flight hardware completed. The F-22 fighter passed a critical design review in February, clearing the way for the assembly of 11 test aircraft. Boeing announced its first customer for Sea Launch, a joint venture with Norway’s largest shipbuilder and two aerospace concerns from Russia and Ukraine to launch commercial satellites from a floating platform at sea. Boeing delivered the fuselage of the first production-representative V-22 Osprey to program partner Bell Helicopter Textron. The Boeing-Sikorsky RAH-66 Comanche helicopter prototype was rolled out in May and made its first flight in January 1996.

Market Outlook. Despite the consolidation of the defense industry that has occurred in recent years, the Boeing market share in defense and space has not changed significantly. The company has streamlined and consolidated its operations to be more competitive in the current environment and is well positioned to remain a strong participant in this market. While the growth prospects are not as optimistic as for commercial airplanes, the company is participating in some large programs with long-term potential, and competing for other military and NASA projects that, if successful, could develop into sizable programs over the next 5-10 years. In addition, the company is pursuing commercial-type business opportunities.

*Exclusive of pretax charge associated with a special early-retirement incentive.