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Boeing Commercial Airplanes: The Growth Driver

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Apr. 9 2015, Updated 12:20 p.m. ET

Introduction

The Boeing Company (BA) has two main business segments and three support units that integrate with its business segments. The two business segments are Boeing Commercial Airplanes and Boeing Defense, Space, and Security. The three support units are Boeing Capital Corporation; Boeing Engineering, Operations, and Technology; and Shared Services Group.

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Boeing Commercial Airplanes

Boeing’s Commercial Airplanes segment is involved in the design, development, production, and marketing of commercial jetliners. The segment also offers aviation services support, aircraft modification, spare parts, technical advice, training, and maintenance documents to commercial and government customers across the globe.

Boeing also trains maintenance and flight crews in the 100-seat and above airliner market through Boeing Training and Flight Services. Apart from assembling aircraft, the company also offers a complete family of freighters to carry cargo across the globe.

Boeing jetliners are designed to meet a wide range of passenger and cargo requirements. The company’s aircraft line features the workhorse 737 narrow-body jetliner, including the quiet technology 737 MAX series. Its wide-body aircraft line includes the 747, 767, 777 (including the twin-aisle 777X), and the 787 Dreamliner.

Boeing’s revenue drivers

Boeing has a robust market reach, and roughly 75% of the world’s fleet comprises Boeing’s commercial aircraft, while 90% of the world’s cargo is carried on Boeing planes. The Commercial Airplanes business is the company’s main revenue driver, contributing about 66% of the company’s total revenues in 2014, with a record delivery of 723 aircraft during the year. The segment also has a considerable backlog of $440,118 million at the end of 2014.

The company’s major customers in this segment are United Continental (UAL), Southwest Airlines (LUV), and Delta Air Lines (DAL). ETFs that have exposure to airline company stocks include the SPDR S&P Transportation ETF (XTN) and the iShares Transportation ETF (IYT).

Next, let’s take a look at the company’s Defense, Space, and Security segment.

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