May 11, 2016: Decisions Boeing has made today have been hard, but assure Boeing will be around another 100 years, says Ray Conner, CEO of Boeing Commercial Airplanes. “We compete every day with aggressive competitors.”
Note: Boeing is holding its annual investors’ day (really a half-day) today, with presentations by: Dennis Muilenburg , Chairman, President and ChiefExecutive Officer, Greg Smith , Chief Financial Officer and Executive Vice President of Corporate Development & Strategy, Ray Conner , Vice Chairman and Commercial Airplanes President and Chief Executive Officer and Leanne Caret , Executive Vice President and Defense Space & Security President and Chief Executive Officer. We’ll report on the presentations by Muilenburg, Smith and Conner, but not the DSS unit.
Conner sees continued growth in aircraft demand. Boeing’s backlog continues to grow, but Boeing also continues to monitor global conditions. But compared with 2001 after 9/11, Boeing’s backlog is more diverse in the world and among the type of customers. Deferrals, cancellations and skyline adjustments are “way, way below historical averages.”
Boeing has learned “hard lessons,” but has reached a “nice equilibrium” between innovation for innovation sake and innovation that is customer driven.
Conner says Boeing sees freighter demand recovering in 2019, which will be met by the 777F and the 747-8F.
“When it comes to the narrow body market…naturally we are in continuing discussion with our customers,” he said. “Our priority right now is completing the MAX and 777X programs.” There have been a lot of discussions about the MAX [7X and 737-10], but no decisions have been made, Conner said.
Two hundred of 250 737 customers have yet to make a decision between the MAX and Airbus A320neo, Conner said. The top five 737 customers, such as Southwest Airlines and Ryanair, have been “pretty conservative” about ordering the MAX, leaving a lot of opportunity for future sales. Airbus pursued a different strategy for growth, rather than growth and replacement, Conner said.
Boeing has surpassed 400 hours of flight testing for the MAX, Conner said.
Development of the MAX, 787-10 and the 777X is moving ahead “well,” says Conner. There is 95% commonality between the 787-9 and 787-10, which will reduce production costs.
“We have a lot of people who can retire in the next five years,” Conner said, allowing Boeing to use voluntary retirement to reduce head count. “By doing this, we are able to manage this in a much different way than in the past.”