Aircraft deliveries to emerging markets

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Boeing is called the engine room of the United States. The aircraft industry represents 9 percent of the value of the Dow Jones. Aircraft are an important part of American exports. For global air traffic, a sustained growth of 6 to 7 percent per year is expected. Recently, Boeing published a twenty-year plan that provides for 43,000 aircraft with a total value of $ 6000 billion.

Between free trade and sanction

The number of Asians who fly will increase by about 100 million annually. 39 percent of exports will be for Asia, from China to the Middle East. Because of the politics of Donald Trump, trading to these regions is subject to risk.

Traditionally, presidents of the United States have gone to trade exhibitions around the world. Trump has an idiosyncratic view of tasks. At the conclusion of the contract with Boeing with Russia valued at $ 11 billion, Donald proclaimed sanctions. Iran bought both Boeing and Airbus for $ 15 billion. Meanwhile, a ban is due to politics from Washington. For China, $ 37 billion is at stake and for Turkey $ 11 billion.

Orders grounded for Boeing and Airbus
The sailes that are currently blocked

Aviation is cross-border by nature and Boeing is a global player. The group recently signed a contract for investment in a factory in China to be built for the 737-max. This offers several advantages:

  1. Higher production capacity that delivers more and faster
  2. Because of the Chinese wage level, the costs are lower
  3. The establishment is part of a deal together with the sale of $ 39 billion in aircraft: a win-win situation

When this continues, Boeing in China will check the Airbus.

During a talk in South Carolina, Trump protested against the establishment: jobs would disappear from the United States. ” Despite this, Ceo Dennis Muilenburg maintains the plan. In this way, the world company counteracts nationalism and trade walls. Parts for Boeing are manufactured in different countries. For example, landing doors for the new type 787 come from Korea, panels from China and connecting elements from Italy.

The last two decades is a league match between Boeing and the French Airbus. Each Boeing plane has a similarity with an Airbus type:

Vliegtuig typen

Fiscal measures and other rules under the Trump government promote investment in innovation. The most technologically advanced type of Boeing is made of carbon-fiber. The 787 dreamliner is 20 percent more energy efficient. Due to medium size and large coverage, the device opens new routes between cities. The improved atmosphere and lighting in the cabin lead to less jet lag. The device was introduced two years ago. In the meantime 1400 orders have been placed for the dreamliner. Boeing can deliver 12 aircraft per month. Airbus came later with the A350 on the market and has 900 orders booked.

In both the 737 and the A320, the fusilage of the plain is extended to accommodate more passengers. In addition, the tanks under the wings have been made suitable for long distances. The smaller aircraft are the most popular in emerging markets. Boeing increases the production capacity of the 737-max from 47 to 57 devices per month.

Because of the rapid introduction of the 787 dreamliner as well as the regional distribution of activities to prevent trade barriers, Boeing’s stock price tripled in two years time:

Boeing share price

Competitive values ​​and norms versus agreement

ICT concerns have distinguished themselves with reliable policies regarding public interests such as health promotion (Microsoft), development of third world (Google) and privacy (Apple). These three big names in ICT kept themselves apart from military assignments. World companies are naturally averse to tariff barriers imposed by national governments. They work on a positive image to be able to do business successfully on all continents. The bar for conformity with public interests is higher than nationalistic unity in a single country. When asked about Boeing values ​​and standards, CEO Muilenburg says that he is involved every day in moral parameters: promoting safety, diversity, quality and excellence.

Some agreement exists between airports, airlines and aircraft manufacturers regarding the waiving of contracts with China Iran Russia and Turkey. Someone who has success with real estate transactions and has thus become elected president, could torpede a long-term plan carefully drawn up by a global group. Considerable growth markets are at stake. According to Euronews, the French Airbus contract with Iran includes 100 plains, the number delivered is 3.

Aircraft manufacturer between steel industry and meat import

They originated from rolling mills that were the motor of the nationalist war industry in the 20th century, but the steel industry has developed into a modern industry with often factories in many countries. Stakeholders and engineers have to ask themselves whether national tariff walls and boycotts ultimately serve their international business interest and the world’s progress. In addition, audiences in many different democracies make their own assessment of security in Asian countries and the Middle East. Not necessarily that agrees with a twitter from Trump.

Import duties on pig and beef from the United States were always high at 24 percent. An importer in Shanghai is not willing to pay more than 50. The American producers will suffer from this. He has now found alternative purchasing channels in Europe and Australia.

Space a domain of warfare

The US President’s wish to turn space into a domain of warfare does not support everyone. Nasa astronaut Scott Kelly believes that security in space can be looked after by the air force as it is happening now. The formation of a space-force will only have the effect that other countries will do so, according to Kelly.

It looks like Boeing – at the kitchen table with the Trump government – can free China from imminent trade restrictions. In addition to the planned expansion in China, Boeing’s Ceo is considering setting up a ‘rotocraft support center’ in Saudi Arabia. The number of jobs there will grow, this week was a bloody attack on a bus with schoolchildren in Yemen.

Dennis says that the helicopter activities will bring a lucrative deal closer with the sheikdom for the renewal of 22 airports over the next ten years. It is good that Muilenburg did a television talk about to standards and values.

Bert Kerkhof
Business strategist and volunteer employee for the European Commission

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