Boeing Targets Expansion in Emerging Markets

Boeing is eyeing expansion in emerging markets with growth slowing in developed economies.

The Seattle-based company is in talks with Turkish companies to sell the latest 787 Dreamliner, according to a top Boeing executive who spoke in Istanbul on Thursday.

“We are emphasizing the advantages of the model to our Turkish customers in size, performance and fuel efficiency,” Aldo Basile, Boeing Commercial Airplanes’ vice president, told the Hürriyet Daily News on the sidelines of a press conference. The company will start the first deliveries of the Dreamliner in two months.

Regarding the 12 jets to be delivered to Turkey by the end of the year, Basile said Turkey might need to purchase “around 300 more planes” in the next decade. Due to the country’s strong growth in civil aviation, the emergence of new companies and new direct flights started by Turkish Airlines will boost demand, according to the vice president. Budget airlines Pegasus, Sky and Saga also placed orders for 19 Boeing 737s. “Turkey has 57 pending orders worth $5.3 billion as of June.”

Waiting for competition

Responding to a question about the government’s stated target to manufacture “a 100 percent Turkish plane” by the year 2023, Basile said he had “heard about the decision.”

“Brazil, Russia and Japan are also manufacturing their own planes,” he said. “Boeing would be pleased to have competitors.”
According to Basile, the world might need around 31,000 planes, worth $4 trillion, in the next two decades.

“Turkey’s and emerging markets’ share in the demand we receive will increase. The U.S. and Europe used to command more than 80 percent of total demand. This is changing,” he said, adding that the share of U.S. and Europe could decline to 40 percent in 20 years.

Meanwhile, Boeing is urging governments to buy new 737-based military aircraft “sooner rather than later” as the commercial version of the plane will either face a redesign in a few years or retirement within the next decade, Bloomberg News reported Thursday.

The company’s review of the 737, the world’s most widely flown airliner, may affect production of the P-8 variant used as a submarine hunter, Vice President Chuck Dabundo, the program manager, said Wednesday at a briefing in Seattle, where Boeing’s commercial operations are based. Boeing is considering a mid-decade redesign to fit new, larger engines for the 737 to compete with the upgraded Airbus SAS A320neo, Dabundo said.

June 9, 2011