Boeing’s Big Push Into Services Will Bolster Revenues And Returns, Reduce Cyclicality (From Forbes)

Boeing, America’s biggest exporter, disclosed Monday that it will reorganize its business with the goal of tripling services revenues to $50 billion over the next ten years.  It also revealed that the next head of its commercial-aircraft unit will come from GE Aviation, a company that generates most of its returns from aftermarket services.  The moves signal the Boeing will seek to greatly increase its market share in aerospace services, a segment of the business that it has largely left to third-party providers in the past.  This is the logical next step for a company that has accumulated a backlog of $462 billion in orders, but now faces the prospect to softening demand for its signature jetliners.  I have written a commentary for Forbes here.