Boeing expects 25% rise in international defence sales

Singapore: Boeing Co. expects defence revenue from outside the US to rise to much as 25 per cent of all its defence business in five years on demand for fighter jets and helicopters from Asia-Pacific countries.

International revenue makes up about 16 per cent of the defence division's total sales, Dennis Muilenburg, the head of the unit, said in Singapore yesterday. Business from the Asia-Pacific, which accounts for about half of international revenue, will increase 50 per cent during the next five years, he said.

"We see some growth certainly in countries like India and Australia," Muilenburg said. "We have seen some moderations and flattening in the U.S. defence budget and that has impacted us. We see our core business being stable."

Boeing is bidding for an order of 126 fighter jets from India, the world's biggest now in play, as countries in the region upgrade and expand their air forces. The Chicago-based company is seeking growth in Asia as military spending in the US continues to be under "significant budget pressures," Chief Executive Officer Jim McNerney said in April.

The defence unit's profits declined about 6.3 per cent in the first quarter to $664 million (Dh2.4 billion), as sales decreased 1.4 per cent to $7.61 billion, Boeing said April 22.

Boeing fell 3 cents to $64.31 in New York trading Thursday. The shares have gained 19 per cent this year.

International growth will be driven by F-15 and F/A-18 Super Hornet warplanes as well as helicopters such as the Apache and Chinook, Muilenburg said. Demand for the P-8A and Airborne Early Warning and Control aircraft will also gain, he said.

India's Air Force has completed flight tests for the fighter order, Boeing Vice President Mark Kronenberg said at the same conference. India's government has said the deal should cost about $10 billion.

India is evaluating Boeing's F/A-18 E/F Super Hornet, Dassault Aviation's Rafale, Lockheed Martin's F-16, Russia's MiG-35, Saab AB's Gripen and the Eurofighter Typhoon from a joint venture of Airbus, BAE Systems Plc and Italy's Finmeccanica SpA.