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Boeing Shifts Focus to Space, Military Unit
Boeing Company will shift its focus to space, communications and missile operations from the traditional core of commercial aircraft in the aftermath of the September terror attacks, reports said Friday.
Since the September 11 attacks that killed over 5,000 people in New York and Washington, the U.S. airline industry suffered the worst blow ever from a dramatic reduction in air travel. Boeing officials anticipated a 20 percent drop in air travel, Boeing Vice Chairman Harry Stonecipher was quoted by Bloomberg TV as saying.
The commercial aircraft industry, dominated by Boeing, has traditionally counted on annual growth rates of 4 percent to 6 percent in air travel. As much as US$35 billion of Boeing's annual US$57 billion in revenue come from its commercial aircraft business, with the balance coming from its rocket, satellite, missile and military aircraft businesses.
In view of the current crisis in the airline industry, Stonecipher estimated that the share of revenue from commercial aircraft will shrink to less than 50 percent in the next three to five years, the report added.
Boeing, which moved its headquarters this summer from Seattle to Chicago, is expected to focus more on its plants in Southern California, the base of its space and communications units which employ 43,000 workers.
The near term will be decisive for Boeing. Its next-generation rocket, the Delta 4, is slated for launch in April 2002, and the Pentagon will announce on October 26 which company will be chosen to build the Joint Strike Fighter, for which Boeing is fighting with Lockheed Martin Corp.
The deal to build as many as 6,000 of the next-generation warplanes could be worth well in excess of US$200 billion.
Boeing said it will go ahead with development of the Sonic Cruiser, a passenger airliner that would fly just under the speed of sound. The jet is slated to fly around 2007.
The company also expects to see growth in its work on building a national ballistic missile defense program as well as commercial satellite, missile and air traffic management businesses.
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