Boeing Aviation Services (BAS) Is Paying Off

A new dedication to solving its customers' problems is paying off for Boeing -- and could be generate up to $9 billion annually by 2005.

Eighteen months ago the world's largest manufacturer of commercial airliners formed Boeing Aviation Services (BAS) to coordinate and market the dizzying range of services offered across the far-flung company. It was charged with tailoring total solutions involving anything from a spare part to financing a fleet renewal.

"Airplanes provide a powerful tool for us to sell services," said Bob Avery, head of all marketing for the Commercial Aviation Services business group to which BAS belongs. Boeing intends to capture $6-9 billion a year of the $60 billion market it has identified as ripe for opportunity.
Its most heralded deal to date was the purchase of 44 Boeing 757s from British Airways for conversion into freighters for DHL.

"British Airways came to us and said 'We've got too many seats in our fleet. Can you help us take them out?'" Avery told Show News. "At the same time DHL was looking for 757s to increase its cargo lift." The recent formation of Boeing Capital Corp. allowed BAS to engineer the solution: Buy the 757s from British Airways, lease them back to the airline to fill interim capacity needs, contract out their conversion to freighters, and lease them to DHL with a contract to maintain the aircraft awarded by Boeing to FLS as its maintenance partner.

Avery noted this package has fired the imagination of salesmen across the company, and more creative deals of the same magnitude (thought not similar in detail) are in the hopper. "They are all different. They can be triangular, or any geometric shape," he said. "But the important thing is we can do them. A great deal of creativity in this company is being unlocked."

Other major deals and new products include:

• A program to convert Boeing 747-300 Combis into full freighters;
• A landing gear alliance with BFGoodrich to offer maintenance, support and component exchange;
• Forming an international network of modification and engineering packages to provide retrofit packages for Boeing airliners;
• Certification of the MD-11 two-man cockpit retrofit to the DC-10, creating the MD-10 freighter;
• Signing a unique agreement with Volvo Aero to market and distribute surplus spare parts;
• Creation with British Airways of the innovative Global Airline Inventory Network, a new supply chain management service in which Boeing will manage the airline's expendable spare parts inventory;
• Offering in-flight entertainment (IFE) integration services to airlines, and signing an agreement to partner with a major IFE vendor, Sony Trans Com, on IFE upgrades in 747s.
• The fourth year of the Boeing PART Page, the industry's first online spares ordering and tracking system which now supports nearly 75% percent of the world's jet transport fleet.

Four areas are of particular interest for the rapid growth of BAS, according to Avery. They are:

• Cargo conversions. "The global forecast is very robust, for nearly 90 a year over the next 20 years," said Avery. "We aim to do more than half of them." Boeing and its worldwide network of partners will carry out 36 this year, 40 next year and 50 in 2002.
• IFE. As well as systems integration, BAS will market services involving Connexions by Boeing-the system based on a proprietary Boeing antenna that allows massive throughput of data to and from an airplane, bringing passengers live Internet and email access and live TV. But the system will also enable real-time telemetry of airplane systems. "We want to be the ones to put those boxes on the plane. We can do it during production, rather than retrofit, and that will be a big advantage," Avery said.
• CNS/ATM. Free flight technology is in place, but the diverse points need pulling together to make it work-the cockpit, air traffic control, and airports. "We're developing ways to sell this as a service," Avery said.
• E-Business. The Boeing PART page for ordering spares is already the second busiest E-commerce site in the U.S. Now it will be accompanied by the myboeingfleet.com website. The portal will offer Boeing customers a single source of online maintenance, engineering and flight operations data, including manuals, airworthiness directives, service bulletins and engineering drawings, customized to their individual requirements. Myboeingfleet.com will itself be integrated into the global aerospace trading exchange e-commerce venture being set up by Boeing, BAE Systems, Lockheed Martin and Commerce One.

"myboeingfleet.com is to the PART page as Amazon is to AOL," explained Avery. "This basic capability can be marketed to suppliers, and even outside the industry."

As if those goals aren't enough, BAS is planning two more steps.

"One is breadth, and the other is depth," said Avery. "And we're going to work on both real hard."

By John Morris