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Boeing Anticipating Surge in International Orders as Programs Mature

Jun. 17, 2013 - 03:45AM   |  
Boeing's P-8 Poseidon
Boeing's P-8 Poseidon (Boeing)
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PARIS — Several key programs in the Boeing portfolio are reaching maturity, and international orders may soon follow, company executives predicted at a media round table Sunday ahead of the opening of the Paris Air Show.

Discussing the V-22 Osprey, P-8 Poseidon and the KC-46 tanker, the executives said interest in the three systems has spiked and negotiations for potential deals are underway.

Chris Raymond, Boeing Defense Space & Security (BDS) vice president for business development and strategy, said the company thinks new tankers could be delivered to international customers as soon as 2018, possibly late 2017.

“There are discussions going on with a number of people, with the US government’s obvious knowledge and involvement, but yeah, we’re starting to have initial discussions with people,” he said.

Those discussions have included personnel from the tanker program office, who have traveled with the Boeing team to provide technical details for potential customers.

Customers may be ordering roughly 20 aircraft very soon, said Jeff Kohler, BDS vice president for international business development. P-8 orders are also expected soon, he said.

“P-8 international is picking up a lot of steam as well,” he said. “Tanker, based on the customers that we’ve been talking to, just initially it’s probably up to at least 20 platforms, and we expect on the P-8 probably 25 in play right now. That could happen fairly soon.”

Even the V-22, at times criticized for a difficult development process that included several crashes in the 90s, is seeing an uptick in interest. Israel is poised to purchase several of the tilt-rotor aircraft, with others in the Middle East expected to follow suit.

“We’ve had people looking pretty hard at it,” Raymond said. “The fact that it’s operational now, costs are better understood, the full capability is getting realized, that’s bringing people forward now.”

The push to sell equipment overseas isn’t unique to Boeing, as US defense contractors increasingly look to international markets to offset a stagnant domestic defense market facing budget pressures and the automatic sequester cuts. European companies, facing their own domestic budget challenges, have been busy pushing for more US business.

“It’s clear that if you’re not inside the United States, you’re trying to get into the United States market, and if you’re in the United States you’re trying to get more into the global market,” Raymond said.

The sequester’s toll will be obvious at the air show, as the three aircraft won’t be making the trek. The US Defense Department declined to pay for flying aircraft to the show, and US contractors largely eschewed the cost as well, with only a dozen aircraft on display and none of the most high profile programs represented.

The Boeing executives said they didn’t anticipate any immediate harm to potential deals due to the aircraft skipping the show.

“My view is that I don’t think that it affects us that much,” Kohler said. “Our customers are still coming in to see us. They know what our products are, and they don’t need them parked on the ramp.”

Asked whether international sales could offset US spending pressures to preserve Boeing industrial capacity, Raymond said he wasn’t sure.

“I think it’s a little early to make that prediction.” ■

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