November 20, 2012
Credit: Credit: Boeing
Boeing expects to double revenue from its defense and security business in the Middle East over the next two years as recent turmoil in the region drives up demand for arms.
Gulf Arab states and other Middle Eastern countries that witnessed the Arab Spring uprising are “shopping” for new high-tech military equipment as they swap out older weaponry and invest in new capabilities, Jeff Johnson, president of Boeing Middle East said at the Reuters Middle East Investment Summit.
The U.S. planemaker, which also makes fighter jets, helicopters and anti-missile technology, expects to increase its annual revenue from defense in the region to about $4 billion over the next two years.
That would be part of a wider plan to lessen reliance on U.S. government work, which is being squeezed by spending cuts.
Boeing’s fighter jets as well as the U.S. company’s C-17 military transport aircraft have been in strong demand. Last year, Boeing signed a $29.4 billion deal to sell 84 F-15 fighter jets to Saudi Arabia, as well as a big defense sale to UAE.
“A lot of customers are shopping for the F-15 and F-18 Super Hornets and as we introduce more C-17s into the market, we will continue to see interest in that strategic area too,” Johnson said.
The Middle East accounts for a third of Boeing’s international defense business, Johnson said. This equates to an annual revenue of about $2 billion.
Asked if demand in the region would result in a doubling of this figure, Johnson said: “Yes, over the next couple of years. There is so much interest over a wide range of products.”
Revenue for Boeing’s defense business was about $31 billion last year and is expected to be about the same in 2012, with about 18 percent from its international clients, Johnson said.