Key insights
- Boeing's services executive stated the company can provide aftermarket support for a 200-jet order from China, provided the parts are approved for global sale. This indicates continued business despite geopolitical tensions and supply chain challenges. While engine and flight deck window parts remain difficult due to shortages, Boeing has a parts warehouse in China. The deal is an initial tranche, suggesting potential for larger future orders, which could positively impact Boeing's stock and the aerospace sector.
By Allison Lampert
SAO PAULO, June 6 (Reuters) - Boeing’s top services executive said on Saturday that the planemaker can provide aftermarket parts support to China to back a 200-plane order announced by the planemaker following a visit by U.S President Donald Trump to Beijing earlier this year.
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Chris Raymond, Chief Executive of Boeing Global Services, told Reuters that there would be no problem for China to access parts to support the deal “if it’s a part that we’re allowed to sell globally,” adding that the planemaker has a parts warehouse in the country.
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China’s deal to buy 200 jets would be firmed up later this year and is only an "initial tranche" of a potentially far bigger deal, the planemaker’s CEO Kelly Ortberg has said.
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The Chinese commerce ministry has said that the U.S would need to provide the country with supply guarantees for aircraft engine parts and components under the Boeing deal.
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Raymond said flight hours in most regions are still showing modest to good growth in terms of flight hours, and that there is demand for plane modifications despite the war in Iran.
-Raymond added that engine components that Boeing distributes, as well as parts like flight deck windows, remain challenging due to supply chain shortages.
- His division is looking to trim costs through efficiency gains due to the use of analytics, not layoffs, the executive added.
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