Boeing bullish on next 100 as it celebrates first century

As Boeing celebrates its 100th anniversary this week, the company is sounding a bullish note on the next 100 years — or at least the next few decades.

The company made big news this week at the Farnborough Air Show outside London with a staggeringly upbeat growth forecast for the next 20 years.

The number of people flying, and the number of jets needed to get them where they’re going will more than double by 2035, according to Randy Tinseth, Boeing’s Vice President of Marketing.

“We’re in a marketplace that continues to be very resilient. It’s driven by the world economy, it’s driven by new and exciting markets. So yeah, we’re very optimistic over the next 20 years,” he said.

Photos: Boeing reveals 777X Wing Center

The company’s future focus is firmly set on three jets: the new 737 MAX, the future 777X, and variants of the 787.

While the long-term outlook is bright, the company does face some short-term challenges. Veteran aviation analyst Richard Aboulafia says despite Tinseth’s unbridled optimism, the global economy is slowing, and soft demand for wide-bodied jets such as the current 777 are hampering the company.

“We’re starting to see traffic numbers soften and capacity has begun to rise so you’ve got to wonder about over-capacity being a problem out there that eventually shows up in slowed production output plans at the manufacturers,” Aboulafia said.

That could lead to continued job cuts, especially in Everett. The company has been slowly cutting payroll, offering buyouts where possible. But it has also had to lay off some workers.

The company is constantly trying to fend off rival Airbus. At Farnborough, as with past air shows, the European manufacturer has been shouting from the rooftops about winning the sales war with Boeing – touting far more sales of its single-aisle A-320neo jet family, with over 4,500 orders compared to just over 3,200 for the rival 737 MAX line.

But Tinseth dismisses those numbers out of hand.

“You know what? There’s only one scoreboard that counts in our business and it’s not the scoreboard about orders,” Tinseth said. “It’s the scoreboard in terms of deliveries. And we’ve been consistently out delivering our competition over the last few years and I think we’re going to continue to do that out into the future.”

One big question for both Boeing and Airbus is how much of a bite newer, smaller competitors will take out of both companies’ business.

Aboulafia says it’s still essentially a two-horse race, despite challenges from smaller jet makers in China, Brazil, and Canada.

“Is there really competition from newcomers? Nah, this is really a Boeing versus Airbus game,” Tinseth said.

But he isn’t quite so dismissive. He sees competitors like Bombardier and Embraer making real inroads.

“But we can’t focus on them. We have to focus on what we need to do,” he said.

And the key to that is continually finding ways to cut costs, and consistently deliver greater efficiencies for customers, Tinseth said. And that often leads to job cuts.

But although the unions might sound alarms about jobs continuing to move out of state because of that pressure, there’s near universal agreement Boeing remains firmly entrenched in Washington state with continued investments in the new 737 MAX in Renton and 777X and its composite wing plant in Everett. And that bodes well for another celebration 100 years from now.

“This is a game about talent, a game about experience. A skilled workforce is a huge part of that,” Aboulafia said.

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