While all eyes were on another 737 Max misstep at Boeing, the U.S. OEM quietly recorded another solid quarter for its aftermarket business.
In the final three months of 2023, Boeing Global Services (BGS) reported revenue of $4.8 billion, up 6% year on year, as well has a healthy jump in operating margin to 17.4%, from 13.9% a year earlier. It also opened a new parts distribution center in India.
Boeing said that better profitability was due to more commercial contracts for BGS, which also provides. defense support work.
Fourth-quarter earnings for BGS were $842 million – a third higher than in the prior-year period.
BGS was also the only Boeing division to report a profit for the full year, which at $3.33 billion was up 22% on 2022. That was achieved on a 9% increase in sales.
Through the year, the backlog of BGS grew to almost $19.9 billion, up from $19.3 billion at the start of 2023.
Another aircraft OEM, Embraer, saw its aftermarket backlog grow even faster last year – by 19% to $3.1 billion, partly due to the strength of its business jet activities, for which the company has contracted to double its maintenance capacity in the U.S..
Embraer Services & Support caters mainly to the commercial and business aircraft segments, and the Brazilian OEM said its bigger backlog included renewed contracts for integrated logistical support services and comprehensive airframe maintenance programs.
These include its pool program for commercial aviation and ‘Embraer Executive Care’ for business jets. These long-term contracts in the backlog cover pool contracts as well as spare parts, repair, maintenance, and technical services.
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